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[CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS OF THIS AGREEMENT HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.] 

 
 

Exhibit 10.16    
    

 
  Execution Version (03.19.01)    
    

 
  AGREEMENT    
    

        This Agreement is made and entered into on March 19, 2001 (the "Effective Date"), by and among LECG, LLC, a California limited liability company ("LECG"),
and PA Consulting Group, Inc., a New Jersey corporation (the "Company"), and PA Holdings Limited, a United Kingdom corporation on behalf of its subsidiaries, affiliates, predecessors and
successors (collectively, "PA Holdings"). The Company and PA Holdings are collectively referred to herein as "PA." 

 
 

RECITALS    
    

	A.
	The
individuals listed on Exhibit A to this Agreement (collectively, the "Senior Staff") have been providing services to PA as
senior staff in PA's environmental practice group (the "Environmental Practice").

	B.
	Each
of the Senior Staff is a party to an employment agreement with PA which contains various restrictions regarding non-solicitation and non-performance of
work for certain clients, and/or non-solicitation and non-hiring of certain individuals (each such employment agreement being referred to herein as a "PA Agreement").

	C.
	All
of the Senior Staff have resigned from PA in order to accept offers of employment from LECG and LECG wishes to employ the Senior Staff without the Senior Staff being bound by
certain surviving terms of their respective PA Agreements.

	D.
	PA
has agreed to waive certain of its rights under the respective PA Agreement for each of the Senior Staff in accordance with the terms of the form of Termination Agreement attached
hereto as Exhibit B and incorporated herein by this reference, subject to the terms and conditions of this Agreement.

	E.
	LECG
also wishes to employ those principals, consultants, analysts and administrative or support staff from the Environmental Practice listed on  Exhibit C, attached hereto and incorporated herein by
this reference (each, a "Practice Staff Member") and PA is willing to agree to LECG's
employment of the Practice Staff Members, subject to the terms and conditions of this Agreement. 

        NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, LECG and PA agree as
follows: 

        1.     Acceptance of Resignations of Senior Staff. PA hereby accepts the resignations of the Senior Staff, subject to the terms
and conditions of the Termination Agreement executed by each such Senior Staff. All departures of the Senior Staff from PA must be completed on or before April 15, 2001. Except to the extent a
client directs PA in writing to release its original files (in which event PA will follow the directions of the client in that regard), PA agrees that the Senior Staff and any Practice Staff Members
who join LECG may make paper or electronic copies of (and thereafter remove such copies from PA) (i) all documents and information in whatever form obtained, produced, stored (e.g., hard copy,
microfilm, microfiche or computer files), with respect to those clients of the Environmental Practice who continue to utilize the services of the Senior Staff and Practice Staff Members after such
Senior Staff and Practice Staff Members join LECG and (ii) allocation models, insurance settlement methodologies, asbestos liability and projection models used or developed by the Environmental
Practice. Notwithstanding the foregoing, the Senior Staff and Practice Staff Members may not copy or remove the MIPAC program used by PA for internal administration and finance of client projects. 

 

        2.     Employment Discussions with Practice Staff Members. For the period commencing on the earlier of March 20, 2001 or
the date on which PA actually makes its announcement as provided in Section 5 below and ending on April 9, 2001 (the "Offer Period"), LECG will be free to approach any Practice Staff
Member in PA's Palo Alto and Los Angeles offices regarding possible employment with LECG and extend offers of employment. LECG will be free to contact Practice Staff Members in PA's Washington, D.C.
and Cambridge offices by telephone, with such initial telephone call having a duration of not more than one (1) hour, to discuss possible employment with LECG. After the initial telephone call
to Practice Staff Members in Washington, D.C. and Cambridge, LECG may respond to inquiries from such Practice Staff Members regarding possible employment in person, in writing or by telephone, and may
hire such Practice Staff Members, but LECG may not initiate contact independently (except to extend an offer of employment arising from the initial telephone call, if appropriate). LECG may also offer
employment to Practice Staff Members during the Offer Period, but such offer of employment must be accepted before the expiration of the Offer Period. The last day of the Offer Period (April 9,
2001) is referred to herein as the "Final Acceptance Date". All departures of Practice Staff Members from PA pursuant to offers of employment from LECG under this Section 2 must occur on or
before April 15, 2001. It is the expectation of LECG and PA that substantially all of the Practice Staff Members in the Palo Alto and Los Angeles offices will be interested in accepting offers
to join LECG and, in accordance with Section 5(b) below, the Company and PA will expressly encourage such Practice Staff Members to do so. PA represents and warrants that, prior to the earlier
of March 21, 2001 or the date on which PA actually makes the announcement as provided in Section 5 below, neither PA nor any of its officers, directors or employees will take any action
of any kind to encourage the Practice Staff Members in the Palo Alto or Los Angeles office to remain with PA. 

        3.     Non-Solicitation of Employees and Client.

        3.1   For
a period of fifteen (15) months commencing on the Final Acceptance Date, neither LECG nor any of its affiliates may solicit for employment or hire, whether on
behalf of itself or another person or entity, any person employed by PA in the Environmental Practice (or its successor practice headed by Gary Liberson and Jamie Heller) as a senior staff, principal,
consultant or analyst as of the business day immediately following the Final Acceptance Date. PA represents and warrants that the persons meeting the definition of this Section 3.1
(i) are listed as Practice Staff Members on Exhibit C attached hereto or (ii) may be engaged after the Final Acceptance Date by PA
and will report directly to Gary Liberson and Jamie Heller. 

        3.2   For
a period commencing on the Effective Date and expiring on April 27, 2002, neither LECG nor any of its affiliates may hire, whether on behalf of itself or
another person or entity, any person employed by PA as a "partner" (including any Partner, Associate Partner, Senior Partner, Managing Partner or any other "partner" title used by PA) or "managing
consultant" in any practice group of PA. Notwithstanding the foregoing, LECG may hire those two individuals who are managing consultants of PA with whom LECG has had discussions prior to the Effective
Date and whose names have been reflected in a writing delivered in trust to Folger Levin & Kahn, LLP on the Effective Date. 

        3.3   Notwithstanding
anything herein to the contrary, with respect to Firestone Tire & Rubber Company and Bridgestone Corporation (collectively, the "Firestone
Entities"), LECG hereby acknowledges and agrees, for itself and on behalf of its affiliates, that for a period equal to the shorter of either (i) the period during which John Butler or Daniel
Rubinfeld remains employed by LECG or (ii) one (1) year from the Effective Date (the "Firestone Restrictive Period"), LECG cannot undertake work for the Firestone Entities or their
outside counsel on any matter related to or arising from Firestone tire recalls, including (without limitation) matters relating to or arising from the existing work that PA is presently conducting
for Firestone Entities. However, as John Butler is presently working for the Firestone Entities on tire recall matters, and Daniel Rubinfeld is presently providing expert advice on matters related to
wrongful death class actions, then this 

2

 

work
may continue. In addition, John Butler may accept additional Firestone Entities' work, for which he may be supported by former PA employees and LECG employees below the "director" level, related
to the tire recall matters if requested by the Firestone Entities or their outside counsel, provided that this work does not replace the work that PA is presently or at that time undertaking for the
Firestone Entities. 

        4.     Termination of Employment Agreements. On the Effective Date, PA and each Senior Staff will enter into a Termination
Agreement in the form attached hereto as Exhibit B and incorporated herein by this reference. On the later to occur of (i) the Effective
Date or (ii) PA's receipt of a written resignation letter from a Practice Staff Member, PA and each Practice Staff Member will enter into a Termination Agreement in the form attached hereto as
Exhibit B. 

        5.     Announcement to Environmental Practice. By March 20, 2001, PA will make a written announcement to all senior staff,
principals, consultants, analysts and employees working in the Environmental Practice (whether or not such persons are Senior Staff or Practice Staff Members) with the following agreed content: 

        (a)   PA
will announce that it has reached an agreement with LECG whereby, with PA's approval, a number of individuals in the Environmental Practice will leave PA and join
LECG. PA will identify the Senior Staff and Practice Staff Members who have already agreed to join LECG as of the Effective Date; 

        (b)   PA
will announce that, with respect to PA's Palo Alto and Los Angeles offices, LECG may contact the Practice Staff Members in those offices to discuss employment
opportunities with LECG, and that PA expressly encourages the Practice Staff Members in those offices to explore such opportunities; 

        (c)   PA
also will announce that, with respect to the Practice Staff Members in PA's other offices, LECG may contact those Practice Staff Members to explore employment
opportunities with LECG, but that PA wishes to retain their services. 

        (d)   PA
also will announce that any Practice Staff Members wishing to accept employment with LECG must do so before the Final Acceptance Date and must actually depart PA on
or before April 15, 2001. 

        (e)   PA
may, in its discretion, describe the contents of Section 3 above. 

        (f)    To
the extent that PA's announcement covering the items in this Section 5 is in writing, LECG will be permitted to review such written announcement prior to
dissemination thereof to confirm the announcement's consistency with the provisions of this Section 5, provided that such review will not unreasonably delay PA's announcement. 

        6.     Departure Payments. LECG will make the following payments to PA: 

        (a)   $1,000,000
payable on April 15, 2001; 

        (b)   $1,000,000
payable on December 31, 2001, such payment to be evidenced by a promissory note in the form attached hereto as Exhibit D  and incorporated herein by this reference; and 

        (c)   a
payment on June 30, 2002 equal to the sum of the amounts set forth on Exhibit C under the column
"Departure Payment" for those Practice Staff Members who accept employment with LECG prior to the Final Acceptance Date; provided, however, that if any of the Practice Staff Members listed on  Exhibit C who accept employment with LECG prior to the Final Acceptance Date rejoin PA as an employee or independent contractor within two
(2) years from the Effective Date, PA must promptly refund to LECG any Departure Payment paid by LECG for such Practice Staff Member. Within five (5) business days after the Final
Acceptance Date, PA and LECG will determine the aggregate Departure Payments to be made by LECG to PA and LECG will deliver 

3

 

to
PA a promissory note substantially in the form of Exhibit D attached hereto (but including the repayment provision set forth in this
Section 6(c)) payable in the amount of such aggregate Departure Payments on June 30, 2002. Notwithstanding the foregoing, LECG will not be required to make a Departure Payment for any
person who has been made an offer to join the Environmental Practice at PA prior to the Effective Date but who has not accepted that offer as of the Effective Date or who has not yet begun performing
services for PA as of the Effective Date. LECG also will not be required to make a Departure Payment for each of Madeline Loh, Matthew Beving or Ariella Rosenberg if s/he is not employed by LECG on
April 15, 2002. 

        7.     Intentionally Omitted. 

        8.     Sublease of Palo Alto Office Space. LECG and PA will use commercially reasonable efforts to negotiate a sublease
arrangement with respect to PA's Palo Alto office on mutually agreeable terms. LECG expressly agrees that PA will have all contact with the landlord of the Palo Alto office prior to the execution of a
formal sublease and the acceptance thereof by the landlord. 

        9.     Survival of Obligations; Cooperation. All covenants and obligations contained in this Agreement shall survive the
consummation of the transactions contemplated by this Agreement. LECG and PA agree to cooperate in good faith in the transition of Senior Staff and Practice Staff Members from PA to LECG, as well as
the transition of client engagements from PA to LECG resulting from the departure of the Senior Staff. If LECG receives funds from clients of the Environmental Group that are properly attributable to
invoices issued by PA prior to the Effective Date or are properly attributable to work performed by Senior Staff or Practice Staff Members before such Senior Staff or Practice Staff Members began
performing services for LECG, LECG will promptly deliver and pay over such funds to PA. If PA receives funds from clients of the Environmental Group that are properly attributable to invoices issued
by LECG after the Effective Date or are properly attributable to work performed by Senior Staff or Practice Staff Members after such Senior Staff or Practice Staff Members began performing services
for LECG, PA will promptly deliver and pay over such funds to LECG. PA may deliver to all clients who wish to continue to use the services of Senior Staff or Practice Staff Members, after such Senior
Staff and Practice Staff Members join LECG, a letter notifying the client that the Senior Staff and Practice Staff Members have joined LECG; provided, however, that LECG may review and reasonably
approve the contents of such letter. 

        10.   Confidential Nature of Information. Each party 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 oral questions, interrogatories, requests for information or documents, subpoena, civil investigative demand or similar process) to disclose the
confidential information of another party (the "Disclosing Party"), the Recipient must provide the Disclosing Party with prompt notice of such request(s) so the Disclosing Party may seek an
appropriate protective order or other appropriate remedy and/or waive compliance with the confidentiality provisions of this Agreement. In the event that such protective order or other remedy is not
obtained, or the Disclosing 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 disclosure by such party or its agents, (iii) is required to be disclosed under applicable law or judicial process, but only to the
extent it must be disclosed, or (iv) such party reasonably deems necessary to disclose to obtain any of the consents or approvals contemplated hereby. 

4

   
        11.   Release. 

        11.1 PA,
on behalf of themselves and all of their respective parent, subsidiaries and affiliate entities worldwide (collectively, the "PA Releasors") and any person or
entity claiming through the PA Releasors (including, but not limited to, their respective predecessors, successors and assigns, and any current or former director, officer, employee or agent of each
of them), hereby release, forever discharge and agree not to sue LECG, LECG's parent, subsidiaries and affiliates and each of their respective past, present and future officers, directors, employees,
agents, attorneys, representatives, predecessors, successors and assigns (hereinafter collectively referred to as the "LECG Released Parties"), with respect to any and all claims, demands, causes of
action, orders, agreements, debts and liabilities, whether in law or in equity, and whether brought in a state, federal or local court, commission, department, agency or otherwise, which the PA
Releasors now have, have ever had, or may in the future have, whether known or unknown, against any of the LECG Released Parties for or related to anything occurring on or prior to the Effective Date,
including, without limiting the generality of the foregoing, any and all claims, demands, causes of action, orders, agreements, debts and liabilities which in any way result from, arise out of, or
relate to, whether by way of contract or otherwise, the termination of employment of the Senior Staff and the Practice Staff Members and their employment with LECG (all of the foregoing collectively
being referred to as the "Released Claims"). Notwithstanding anything to the contrary in this Section 11, the Released Claims do not include and nothing contained in this Section 11 will
apply to, or release any of the LECG Released Parties from a breach by LECG of any obligation of LECG under this Agreement. 

        11.2 The
PA Releasors also acknowledge that the PA Releasors are aware of and familiar with the provisions of California Civil Code Section 1542, which provides as
follows: 

        A
GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE
MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR. Having reviewed this provision, the PA Releasors nevertheless hereby voluntarily waive any and all rights under this statutory provision with
respect to the Released Claims. 

        11.3 The
PA Releasors hereby irrevocably covenant to refrain from, directly or indirectly, asserting any Released Claim against the LECG Released Parties, or commencing,
instituting or causing to be commenced, any proceeding of any kind against any or all of the LECG Released Parties, based upon any Released Claim. 

        11.4 Without
in any way limiting any of the rights and remedies otherwise available to any LECG Released Party, the PA Releasors, jointly and severally, will indemnify and
hold harmless each LECG Released Party from and against any and all loss and expense whether or not involving third party claims, incurred by any LECG Released Party in connection with or arising from
the assertion against any LECG Released Party by or on behalf of the PA Releasors of any Released Claim. 

        11.5 Nothing
in this Agreement is intended to be, or will be construed as, an admission by the LECG Released Parties that any of them violated any law, interfered with any
right, breached any obligation or otherwise engaged in any improper or illegal conduct with respect to the PA Releasors or otherwise. 

5

 

        12.   Notices. All notices or other communications required or permitted hereunder shall be in writing and shall be deemed
given or delivered when delivered personally or when sent by registered or certified mail or by private courier addressed as follows: 

	LECG, LLC

2000 Powell Street

Suite 600

Emeryville, CA 94608

Attention: President	 	 
	

PA Consulting Group, Inc.

123 Buckingham Palace Road

London SW1W 9SR

Attention: Jeremy Asher	
 	

 

or
to such other address as such party may indicate by a notice delivered to the other party hereto. 

        13.   Free Competition. With the exception of Section 3 hereof, nothing in this Agreement is intended to prevent either
LECG or PA from freely engaging in competitive business activities in the consulting business, including, without limitation, environmental consulting and litigation support. 

        14.   Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their
successors and assigns. 

        15.   Entire Agreement; Amendments. This Agreement contains the entire understanding of the parties hereto with regard to the
subject matter contained herein or therein, and supersedes all prior agreements, understandings or letters of intent between or among any of the parties hereto. This Agreement may not be amended,
modified or supplemented except by a written instrument signed by an authorized representative of each of the parties hereto. 

        16.   Interpretation. Titles and headings to sections herein are inserted for convenience of reference only and are not
intended to be a part of or to affect the meaning or interpretation of this Agreement. The Exhibits referred to herein shall be construed with and as an integral part of this Agreement to the same
extent as if they were set forth verbatim herein. 

        17.   Waivers. Any term or provision of this Agreement may be waived, or the time for its performance may be extended, by the
party or parties entitled to the benefit thereof. Any such waiver shall be validly and sufficiently authorized for the purposes of this Agreement if, as to any party, it is authorized in writing by an
authorized representative of such party. The failure of any party hereto to enforce at any time any provision of this Agreement shall not be construed to be a waiver of such provision, nor in any way
to affect the validity of this Agreement or any part hereof or the right of any party thereafter to enforce each and every such provision. No waiver of any breach of this Agreement shall be held to
constitute a waiver of any other or subsequent breach. 

        18.   Expenses. Each party hereto will pay all costs and expenses incident to its negotiation and preparation of this Agreement
and to its performance and compliance with all agreements and conditions contained herein on its part to be performed or complied with, including the fees, expenses and disbursements of its counsel
and accountants. Notwithstanding the foregoing, in the event of any claim, action, litigation, arbitration or other formal or informal proceeding arising out of or relating to this Agreement, or
arising out of the enforcement of any right or remedy hereunder, the prevailing party in such claim, action, litigation or proceeding will be entitled to reimbursement from the other party for all
reasonable attorneys' fees, court costs, and costs of experts and investigation incurred in connection therewith, whether any such costs and fees are incurred before or during any trial or hearing or
upon appeal. 

6

 

        19.   Partial Invalidity. Wherever possible, each provision hereof shall be interpreted in such manner as to be effective and
valid under applicable law, but in case any one or more of the provisions contained herein shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such provision shall
be ineffective to the extent, but only to the extent, of such invalidity, illegality or unenforceability without invalidating the remainder of such invalid, illegal or unenforceable provision or
provisions or any other provisions hereof, unless such a construction would be unreasonable. 

        20.    Telefacsimile Execution; Counterparts.    This Agreement may be executed in any number of counterparts, each of
which shall be considered an original instrument, but all of which shall be considered one and the same agreement, and shall become binding when one or more counterparts have been signed by each party
hereto and delivered to the other parties. Delivery of an executed counterpart of this Agreement by telefacsimile will be equally effective as delivery of an original executed counterpart of this
Agreement. Any party delivering an executed counterpart of this Agreement by telefacsimile also must deliver an original executed counterpart of this Agreement, but the failure to deliver an original
executed counterpart will not affect the validity, enforceability and binding effect of this Agreement. 

        21.   Governing Law. This Agreement shall be governed by and construed in accordance with the internal laws (as opposed to the
conflicts of law provisions) of the State of New York. 

        22.   Amendments. This Agreement may be modified or amended only by a writing duly executed by both LECG and PA. 

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

	LECG, LLC,

a California limited liability company	 	 
	

By:	
 	

/s/  J. GEOFFREY COLTON      
 J. Geoffrey Colton	
 	

 
	Its:	 	Chief Financial Officer	 	 
	
PA Consulting Group, Inc.,

a New Jersey corporation	
 	

 
	

By:	
 	

/s/  JEREMY ASHER      
 Jeremy Asher	
 	

 
	Its:	 	Group Chief Executive	 	 
	
PA Holdings Limited	
 	

 
	

By:	
 	

/s/  JEREMY ASHER      
 Jeremy Asher	
 	

 
	Its:	 	Group Chief Executive	 	 

	Attachments:	 	Exhibit A	 	List of Senior Staff
	 	 	Exhibit B	 	Form of Termination Agreement
	 	 	Exhibit C	 	List of Practice Staff Members and Departure Payment Amounts
	 	 	Exhibit D	 	Form of Promissory Note

7

EXHIBIT A

SENIOR STAFF

John Butler

Marcia Williams

Stephen E. Sellick

Jeffrey Zelickson

Christopher Warshaw

Stephen Johnson

Timothy W. Devitt

Rick White

 

1

 

EXHIBIT B

FORM OF TERMINATION AGREEMENT

 

 

(03.19.01)

 

EXHIBIT B

 

FORM OF TERMINATION AGREEMENT

 

This
Termination Agreement is entered into as of
                              ,
2001 (the “Effective Date”) between PA Consulting Group, Inc., a New Jersey
corporation (the “Company”), PA Holdings Limited, a company incorporated under
the laws of the United Kingdom on behalf of its subsidiaries, affiliates,
predecessors and successors (“PA Holdings”) and
                          (the
“Employee”).  The Company and PA
Holdings are collectively referred to herein as “PA.”

 

RECITALS

 

A.            The Employee and the
Company are parties to an employment agreement dated
        , 2000, as amended by that
certain letter agreement dated
         , 2000, relating to the
terms of Employee’s employment with PA (the “PA Agreement”); and the PA
Agreement contains (i) obligations of confidentiality and non-disclosure
regarding the Company’s and its affiliates’ confidential information (the
“Non-Disclosure Covenant”), (ii) obligations regarding inventions (the
“Inventions Covenant”), and (iii) obligations of the Employee regarding the
non-solicitation of clients of the Company and its affiliates for whom the
Employee rendered services on behalf of the Company and its affiliates during
the two years preceding the termination of his or her employment and regarding
the non-solicitation of the Company’s and its affiliates’ employees. [Note that this recital will have to be customized for
each Employee.]

 

B.            The Employee wishes to
leave the employ of PA and accept employment with LECG, LLC, a California
limited liability company (“LECG”).  PA
understands and accepts that clients of PA’s environmental practice group (the
“Environmental Practice”) may wish to continue to utilize the services of the Employee
after the Employee joins LECG (herein referred to singly as a “Client” or
collectively as “Clients”).

 

C.            PA and the Employee
desire to enter into this Agreement to provide for the waivers and releases
contained herein.

 

D.            This Agreement is
being entered into concurrently with and in reliance on the execution and
delivery of that certain Agreement between LECG and PA dated March 16, 2001
(the “LECG/PA Agreement”).

 

NOW,
THEREFORE, in consideration of the mutual promises and agreements contained
herein, the adequacy and sufficiency of which are hereby acknowledged, PA and
the Employee hereby agree as follows:

 

1.             Resignation of Employee.  Subject to the terms and conditions of this
Agreement, PA hereby accepts the voluntary resignation of the Employee and
agrees that the Employee’s employment with PA is hereby terminated.

 

 

2.             Suspension and Termination of PA Agreement.  With the exception of the Reserved
Covenants, as defined below, the PA Agreement will terminate and be of no
further force and effect on April 27, 2002. 
For the period commencing on the Effective Date and ending on the
earlier to occur of either April 27, 2002 or the date on which the Employee is
no longer an employee of or independent contractor for LECG (the “Suspension
Period”), the PA Agreement will be suspended in its entirety, and neither the
Employee nor PA will have any further obligation or liability with respect to
the PA Agreement during the Suspension Period, with the exception
of  (a) PA’s obligation to pay the
Employee (i) base compensation through and including the Employee’s last full
day of employment with PA, (ii) accrued but unpaid vacation pay through the
Employee’s last full day of employment with PA, (iii) accrued employer
contributions the PA 401(k) plan as of December 31, 2000, and (iv) reimbursement
for expenses properly incurred on behalf of PA in accordance with PA’s policies
on or before the Employee’s last full day of employment with PA ((i), (ii),
(iii) and (iv) referred to herein collectively as the “PA Payment
Obligations”); and (b) the Employee’s continuing obligations under the
Non-Disclosure Covenant, the Inventions Covenant, and the choice of law and
submission to jurisdiction provisions of the PA Agreement ((b) referred to
herein as the “Reserved Covenants”).  It
is expressly agreed that the Employee’s continuing obligations under the
Non-Disclosure Covenant are limited by and are to be construed in accordance
with the provisions of Section 1 of the LECG/PA Agreement.  If the Employee is no longer and employee of
or independent contractor for LECG prior to April 27, 2002, the rights and
obligations of PA andd the Employee under the PA Agreement will be reinstated
in their entirety and will continue in full force and effect until April 27,
2002.

 

3.             Cooperation by the Employee.  Employee agrees that s/he shall cooperate
fully with PA in the preparation of and submission of invoices to Clients for
all time and expense charges incurred by PA with respect to each Client through
and including the last date of employment of the Employee with PA and shall
promptly submit to PA all time sheets and vouchers related thereto through such
date.  Upon the request of a Client for
back up explanation of any PA invoice or other supporting data, the Employee
shall cooperate with PA and such Client to provide such explanation and
supporting data and shall generally cooperate in good faith with PA to permit
prompt payment of Client invoices to PA.

 

4.             Non-Solicitation of Firestone Entities.  Notwithstanding anything herein to the
contrary, the Employee agrees to comply with and be bound by the provisions of
Section 3.3 of the LECG/PA Agreement with respect to the Firestone Entities.

 

5.             Release of Claims by PA.

 

(a)           PA, on behalf of
themselves and any person or entity claiming through PA (including, but not
limited to, PA’s predecessors, successors and assigns, and any current or
former director, officer, employee or agent of PA), hereby release, forever
discharge and agree not to sue the Employee or the Employee’s past, present and
future spouses, family members, relatives (of any degree of kinship), agents,
attorneys, representatives, heirs, executors and administrators, and the
predecessors, successors and assigns of each of them (hereinafter jointly
referred to as the “Employee Released Parties”), with respect to any and
all claims, demands, causes of action, orders, agreements, debts and
liabilities, whether in state, federal or local court, commission, department,
or agency or otherwise, whether at law or in equity, which PA now has,

 

2

 

has ever had, or may in the
future have, whether known or unknown, against any of the Employee Released
Parties for or related to anything occurring on or prior to the Effective Date,
including without limiting the generality of the foregoing, any and all rights
which PA may have in respect of the PA Agreement to the extent suspended under
Section 2 hereof (all of the foregoing collectively being referred to as the
“Company Released Claims”). 
Notwithstanding the foregoing, the Company Released Claims do not
include and nothing in this Section 5(a) will apply to or release the Employee
Released Parties from any obligation of the Employee set forth in this
Agreement, or any breach by the Employee of the Reserved Covenants.

 

(b)           If the Employee is a
resident of California, PA also acknowledges that PA is aware of and familiar
with the provisions of California Civil Code Section 1542, which provides as
follows:

 

“A GENERAL
RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT
TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY
HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.”

 

Having reviewed this provision,
PA nevertheless hereby voluntarily waives any and all rights under this
statutory provision with respect to the Company Released Claims.

 

(c)           PA hereby irrevocably
covenants to refrain from, directly or indirectly, asserting any Company
Released Claim against any Employee Released Party, or commencing, instituting or
causing to be commenced, any proceeding of any kind against any Employee
Released Party, based upon any Company Released Claim.

 

(d)           Without in any way
limiting any of the rights and remedies otherwise available to any Employee
Released Party, PA will indemnify and hold harmless each Employee Released
Party from and against any and all loss and expense whether or not involving
third party claims, incurred by any Employee Released Party in connection with
or arising from the assertion against any Employee Released Party by or on
behalf of PA of any Company Released Claim.

 

Nothing in
this Agreement is intended to be, or shall be construed as, an admission by the
Employee or any Employee Released Party that any of them violated any law,
interfered with any right, breached any obligation or otherwise engaged in any
improper or illegal conduct with respect to PA or otherwise.

 

3.             Release of Claims by Employee.

 

(a)           The Employee, on behalf
of the Employee and anyone claiming through the Employee, including, but not
limited to, the Employee’s past, present and future spouses, family members,
relatives (of any degree of kinship), agents, attorneys, representatives,
heirs, executors and administrators, and the predecessors, successors and
assigns of each of them, hereby releases, forever discharges and agrees not to
sue PA (including, but not limited to, PA’s predecessors, successors and
assigns, and any current or former director, officer, employee or agent of PA)
(the “PA Released Parties”) with respect to any and all claims, demands, causes
of

 

3

 

action, orders, agreements,
debts and liabilities, whether in a state, federal or local court, commission,
department or agency or otherwise, which the Employee now has, has ever had, or
may in the future have, whether known or unknown, against any of the PA
Released Parties for or related to (i) Title VII of the Civil Rights Act of
1964, as amended, the Civil Rights Act of 1966, as amended, the Civil Rights
Act of 1964, as amended, the Americans with Disabilities Act, as amended, the
Worker Adjustment and Retraining Notification Act, the Employee Retirement
Income Security Act of 1974, as amended (“ERISA”), the California Fair
Employment and Housing Act, as amended, or the Age Discrimination in Employment
Act of 1967, as amended; and (ii) the Employee’s employment by PA including,
but not limited to compensation (including deferred compensation), debts and
sums of money (all of the foregoing collectively being referred to as the
“Employee Released Claims”).

 

(b)           Notwithstanding
anything to the contrary in Section 3(a), the Employee Released Claims do not
include and nothing in this Section 3 will apply to, or release any of the PA
Released Parties from (i) any obligation of PA contained in this Agreement or
the LECG/PA Agreement and the transactions contemplated hereby and thereby,
(ii) PA’s Payment Obligation, (iii) claims relating to material breaches of
fiduciary duty under ERISA or any ERISA governed plan, or (iv) any obligation
of PA to provide indemnification to the Employee with respect to acts or
failures to act by the Employee prior to the Effective Date in connection with
the Employee’s employment with or consulting for PA.  The Employee represents and warrants to PA that the Employee does
not currently know of any matter for which the Employee will seek
indemnification pursuant to any such obligation.

 

If the
Employee is a resident of California, the Employee also acknowledges that the
Employee is aware of and familiar with the provisions of California Civil Code
Section 1542, which provides as follows:

 

“A GENERAL
RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT
TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM
MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.”

 

Having reviewed this provision,
the Employee nevertheless hereby voluntarily waives any and all rights under
this statutory provision with respect to the Employee Released Claims.

 

(c)           The Employee hereby
irrevocably covenants to refrain from, directly or indirectly, asserting any
Employee Released Claim against any Company PA Party, or commencing,
instituting or causing to be commenced, any proceeding of any kind against any
PA Released Party, based upon any Employee Released Claim.

 

(d)           Without in any way
limiting any of the rights and remedies otherwise available to any PA Released
Party, the Employee will indemnify and hold harmless each PA Released Party
from and against any and all loss and expense whether or not involving third
party claims, incurred by any PA Released Party in connection with or arising
from the assertion against any PA Released Party by or on behalf of the
Employee of any Employee Released Claim.

 

4

 

(e)           Nothing in this
Agreement is intended to be, or shall be construed as, an admission by PA or
any PA Released Party that any of them violated any law, interfered with any
right, breached any obligation or otherwise engaged in any improper or illegal
conduct with respect to the Employee or otherwise.

 

4.             General. 
PA and the Employee have consulted such legal, financial, tax or
other advisors as each of them deems necessary or desirable before entering
into this Agreement.  Each party hereto
represents and warrants to the others that such party has read, knows,
understands and agrees with the terms and conditions of this Agreement.  Neither party has relied upon any oral
representations of any other party in entering into this Agreement.  The Employee and PA each acknowledge and
agree that, except for the PA Agreement, the Employee and PA are not parties to
any other employment, consulting, retention on similar agreement.

 

5.             Successors; Binding Agreement.  This Agreement shall inure to the benefit of
and be enforceable by the parties hereto and their successors and permitted
assigns; provided, however, that a party may not assign any of
his, her or its rights or obligations hereunder without the prior written
consent of the other parties.

 

6.             Notices.  All notices or other communications required or permitted
hereunder shall be in writing and shall be deemed given or delivered when
delivered personally or when sent by registered or certified mail or by private
courier addressed as follows: (i) if to PA, when addressed to the addresses set
forth below their signatures on the signature page to this Agreement, and (ii)
if to the Employee, addressed to the address set forth below the Employee’s
name on the signature page to this Agreement.

 

7.             Governing Law; Validity.  The interpretation, construction and
performance of this Agreement shall be governed by and construed and enforced
in accordance with the internal laws of the state in which the Employee resides
on the Effective Date, without regard to the applicable principles of conflicts
of laws.  Wherever possible, each
provision hereof shall be interpreted in such manner as to be effective and
valid under applicable law, but in case any one or more of the provisions
contained herein shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such provision shall be ineffective to the
extent, but only to the extent, of such invalidity, illegality or
enforceability without invalidating the remainder of such provision or
provisions or any other provisions hereof, unless such a construction would be
unreasonable.

 

8.             Counterparts; Facsimile.  This Agreement may be executed in any number
of counterparts, each of which shall be considered an original instrument, but
all of which shall be considered one and the same agreement, and shall become
binding when one or more counterparts have been signed by each party hereto and
delivered to the other parties. 
Delivery of an executed counterpart of this Agreement by telefacsimile
will be equally effective as delivery of an original executed counterpart of
this Agreement.  Any party delivering an
executed counterpart of this Agreement by telefacsimile also must deliver an
original executed counterpart of this Agreement, but the failure to deliver an
original executed counterpart will not affect the validity, enforceability and
binding effect of this Agreement.

 

5

 

9.             Miscellaneous.  No provision of this Agreement may be modified
or waived unless such modification or waiver is agreed to in writing and
executed by the Employee and by duly authorized officers of PA.  No waiver by a party hereto at any time of
any breach by any other party hereto of, or failure to comply with, any
condition or provision of this Agreement to be performed or complied with by
any other party shall be deemed a waiver of any similar or dissimilar
conditions or provisions at the same or at any prior or subsequent time.  Failure of a party to insist upon strict
compliance with any provision of this Agreement or to assert any right which
that party may have hereunder shall not be deemed to be a waiver of such
provision or right or any other provision of or right under this Agreement.

 

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT
BLANK]

 

6

 

IN WITNESS
WHEREOF, PA has caused this Agreement to be executed by its duly authorized
officers and the Employee has executed this Agreement, all as of the Effective
Date.

 

 

	
   

  	
  PA
  CONSULTING GROUP, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
   

  
	
   

  	
  PA HOLDINGS
  LIMITED

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  EMPLOYEE:

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

7

 

EXHIBIT C

PRACTICE STAFF MEMBERS AND DEPARTURE PAYMENT
AMOUNTS

 

	
  NAME OF PRACTICE STAFF MEMBER

  	
   

  	
  DEPARTURE
  PAYMENT

  
	
  (By Office)

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Palo Alto, CA

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Howekamp, David (25 hours per week)

  	
   

  	
  [***]

  
	
  Deason, Jeffrey

  	
   

  	
  [***]

  
	
  Plenys, Thomas

  	
   

  	
  [***]

  
	
  Lowe, Janis

  	
   

  	
  [***]

  
	
  Antalik, Laura

  	
   

  	
  [***]

  
	
  Ty, Fatima

  	
   

  	
  [***]

  
	
  Sato,

  	
   

  	
  [***]

  
	
  Loh, Madeline

  	
   

  	
  [***]

  
	
  Revilier, Sarina

  	
   

  	
  [***]

  
	
  Colman, Susan

  	
   

  	
  [***]

  
	
  Taylor, Millie

  	
   

  	
  [***]

  
	
  Oku - Ampofo, Ruth

  	
   

  	
  [***]

  
	
  Ip, Kenneth

  	
   

  	
  [***]

  
	
   

  	
   

  	
   

  
	
  Los Angeles, CA

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Menees, Robert

  	
   

  	
  [***]

  
	
  Weuste, Susan

  	
   

  	
  [***]

  
	
  Loos, Christopher

  	
   

  	
  [***]

  
	
  Pecuch, Alexsis

  	
   

  	
  [***]

  
	
  Kubuta, Janson

  	
   

  	
  [***]

  
	
  Abruzzo, Theresa

  	
   

  	
  [***]

  
	
  Beving, Matthew

  	
   

  	
  [***]

  
	
  Ellis Joy

  	
   

  	
  [***]

  
	
  Lim, Marina

  	
   

  	
  [***]

  
	
   

  	
   

  	
   

  
	
  Washington, D.C.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Wood, Lisa

  	
   

  	
  [***]

  
	
  Konar, Shameek

  	
   

  	
  [***]

  
	
  Harrison, Susan

  	
   

  	
  [***]

  
	
  Martinez, Rafael

  	
   

  	
  [***]

  
	
  Neeley, Alexandra

  	
   

  	
  [***]

  
	
  Robinberg, Ariella

  	
   

  	
  [***]

  
	
  McMichael, Robert

  	
   

  	
  [***]

  
	
   

  	
   

  	
   

  
	
  Cambridge, MA

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  McMartin, Susan

  	
   

  	
  [***]

  
	
  Chan, Christopher

  	
   

  	
  [***]

  
	
  Bucci, Alyasa

  	
   

  	
  [***]

  
	
  Seaman, Mary

  	
   

  	
  [***]

  

 

1

 

EXHIBIT D

FORM OF PROMISSORY NOTE

 

 

PROMISSORY NOTE

 

	
  $1,000,000

  	
   

  	
  March 19, 2001

  
	
   

  	
   

  	
  Arlington, Virginia

  

 

FOR VALUE RECEIVED, LECG, LLC a California limited liability company
(the “Maker”), promises to pay to PA Consulting Group, Inc., a New
Jersey corporation (the “Payee”) at its offices located at 1530 Wilson
Boulevard, Arlington, Virginia 22209 or at such other place as may be
designated in writing by the holder of this Note, the principal sum of ONE
MILLION DOLLARS ($1,000,000), payable in lawful money of the United States of
America, in immediately available funds, on December 31, 2001 (the “Maturity
Date”) without interest.

 

1.             REMEDIES
UPON DEFAULT; DEFAULT INTEREST. If the principal indebtedness is not paid
in full on the Maturity Date, the Maker shall thereafter pay interest on the
principal sum then remaining unpaid from the due date until the date on which
the principal sum then outstanding is paid in full (whether before or after
judgment), at the maximum per annum rate allowable by applicable law.  If Maker shall fail to pay any of its
obligations under this Note on the date when due, then the holder hereof may
declare the outstanding principal balance hereof immediately due and payable
and Maker shall immediately pay to the holder all such amounts, with interest
accrued but unpaid thereon to the date of payment in full at the applicable
rate provided herein.

 

2.             AUTHORITY.  The Maker (and the undersigned
representatives of the Maker, if any) represents that the Maker has full power,
authority and legal right to execute and deliver this Note and that this Note
constitutes a valid and binding obligation of the Maker.

 

3.             ENFORCEABILITY.
The Maker acknowledges that this Note and the Maker’s obligations under this
Note are and shall at all times continue to be absolute and unconditional in
all respects, and shall at all times be valid and enforceable irrespective of
any other agreements or circumstances of any nature whatsoever which might
otherwise constitute a defense to this Note and the obligations of the Maker
under this Note or the obligations of any other person or party relating to
this Note.  This Note and the
instruments and documents executed concurrently herewith (collectively and as
the same may be amended or otherwise modified from time to time, the “Documents”)
set forth the entire agreement and understanding of the Payee and the Maker,
and the Maker absolutely, unconditionally and irrevocably waives any and all
right to assert any set-off, counterclaim or crossclaim of any nature
whatsoever with respect to this Note or the obligations of the Maker hereunder
or thereunder, or the obligations of any other person or party relating hereto
or thereto or to the obligations of the Maker hereunder or thereunder, in any
action or proceeding brought by the Payee to collect the Note, or any portion
thereof (provided, however, that the foregoing shall not be deemed a waiver of
the Maker’s right to assert any

 

 

compulsory counterclaim maintained in a court of the United States, or
of the State of Virginia if such counterclaim is compelled under local law or
rule of procedure, nor shall the foregoing be deemed a waiver of the Maker’s
right to assert any claim which would constitute a defense, setoff,
counterclaim or crossclaim of any nature whatsoever against the Payee in any
separate action or proceeding).  The
Maker acknowledges that no oral or other agreements, conditions, promises,
understandings, representations or warranties exist with respect to this Note
or with respect to the obligations of the Maker under this Note, except those
specifically set forth in this Note and the Documents.

 

4.             WAIVER.  The Maker waives presentment, demand for
payment, notice of dishonor and any or all notices or demands in connection
with the delivery, acceptance, performance, default or enforcement of this Note
and consents to any or all delays, extensions of time, renewals, release of any
party to any Document, and any and all waivers or modifications that may be
granted or consented to by the Payee with regard to the time of payment or with
respect to any other provisions of any of the Documents, and agrees that no
such action, delay or failure to act on the part of the Payee shall be
construed as a waiver by the Payee of, or otherwise affect, in whole or in
part, its right to avail itself of any remedy with respect thereto.  No notice to or demand on the Maker shall be
deemed to be a waiver of the obligation of the Maker or of the right of the
Payee to take further action without further notice or demand as provided in
any of the Documents.

 

5.             DEFINED
TERMS. Whenever used, the singular number shall include the plural, the
plural the singular, and the words “Payee” and “Maker” shall
include, respectively, their respective successors and assigns.

 

6.             HEADINGS,
ETC.  The headings and captions of
the numbered paragraphs of this Note are for convenience of reference only and
are not to be construed as defining or limiting, in any way, the scope or
intent of the provisions hereof.

 

7.             AMENDMENTS.
This Note may not be modified, amended, changed or terminated orally, except by
an agreement in writing signed by the Maker and the Payee.  No waiver of any term, covenant or provision
of this Note shall be effective unless given in writing by the Payee and, if so
given by the Payee, shall only be effective in the specific instance in which
given.

 

8.             GOVERNING
LAW; SUBMISSION TO JURISDICTION; WAIVER OF TRIAL BY JURY.  THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF VIRGINIA, WITHOUT GIVING EFFECT TO
ITS CONFLICTS OF LAWS PROVISIONS.  MAKER
AND PAYEE HEREBY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE UNITED STATES
DISTRICT COURT FOR THE EASTERN DISTRICT OF VIRGINIA AND OF ANY STATE COURT
SITTING THEREIN FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR
RELATING TO THIS NOTE.  MAKER AND PAYEE
HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY
OBJECTIONS WHICH THEY MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF
ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH
PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN

 

2

 

INCONVENIENT FORUM.  MAKER AND
PAYEE HEREBY IRREVOCABLY CONSENT TO SERVICE OF PROCESS BY REGISTERED MAIL OR
ANY OTHER MANNER PERMITTED BY VIRGINIA LAW. 
NOTHING IN THIS NOTE AFFECTS THE RIGHT OF PAYEE TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW.  MAKER
AND PAYEE HEREBY IRREVOCABLY WAIVE ANY AND ALL RIGHT TO TRIAL BY A JURY IN ANY
LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS NOTE.

 

IN WITNESS WHEREOF, the Maker has duly executed this Note the day and
year first above written.

 

 

	
   

  	
  LECG, LLC

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ J. Geoffrey Colton

  	
   

  
	
   

  	
   

  	
  Name: J. Geoffrey Colton

  	
   

  
	
   

  	
   

  	
  Title:     Chief Financial Officer

  	
   

  

 

3

 

RESTATED PROMISSORY NOTE

 

	
  $893,171

  	
  October 25, 2001

  
	
   

  	
  Washington, D.C.

  

 

FOR VALUE RECEIVED, LECG, LLC a California limited liability company
(the “Maker”), promises to pay to PA Consulting Group, Inc., a New
Jersey corporation (the “Payee”) at its offices located at 1750
Pennsylvania Avenue, N.W., Suite 100, Washington, D.C. 20006, or at such other
place as may be designated in writing by the holder of this Note, the principal
sum of EIGHT HUNDRED NINETY-THREE THOUSAND ONE HUNDRED SEVENTY-ONE DOLLARS
($893,171), subject to adjustment as hereinafter provided, payable in lawful
money of the United States of America, in immediately available funds, on June
30, 2002 (the “Maturity Date”) without interest.  This Restated Promissory Note (“Note”) supersedes in its entirety
that certain Restated Promissory Note dated August 7, 2001 made by Maker in
favor of Payee in the amount of $848,171 (the “Original Note”).  The Original Note is hereby surrendered and
cancelled by Payee and will be immediately returned by Payee to Maker,
provided, however, that the failure of Payee to promptly return the Original
Note to Maker will not effect the validity of its surrender and cancellation in
accordance with this Note.

 

1.             ADJUSTMENT
OF PRINCIPAL BALANCE. The principal sum of this Note set forth in the
preamble hereof may be reduced prior to the Maturity Date (a) if one or more of
the individuals listed on the attached Schedule 1 (including Madeleine
Loh) leaves the employment of Maker and rejoins Payee as an employee or
independent contractor on or before the Maturity Date and (b) if Madeleine Loh
is not subject to (a) above and is not employed by Maker as of April 15, 2002.
The amount of such reduction will be determined on the Maturity Date and will
equal (i) the sum of the amounts set forth on Schedule 1 under the
column “Departure Payment” for each individual listed on Schedule 1 who
has rejoined Payee as an employee or independent contractor on or before the
Maturity Date plus (ii) with respect to Madeleine Loh, the sum of [***] if Ms.
Loh is not employed by Maker as of April 15, 2002, but only if she has not been
included under (i) above.  Nothing in
this Section 1 limits or alters the obligation of Payee to refund to Maker
Departure Payments paid by Maker for a period of two (2) years from March 19,
2001, as such obligation is set forth in Section 6(c) of that certain Agreement
dated March 19, 2001 between Maker, Payee and PA Holdings Limited.

 

2.             REMEDIES
UPON DEFAULT; DEFAULT INTEREST. If the principal indebtedness is not paid
in full on the Maturity Date, the Maker shall thereafter pay interest on the
principal sum then remaining unpaid from the due date until the date on which
the principal sum then outstanding is paid in full (whether before or after
judgment), at the maximum per annum rate allowable by applicable law.  If Maker shall fail to pay any of its
obligations under this Note on the date when due, then the holder hereof may
declare the outstanding principal balance hereof immediately due and payable
and Maker shall immediately pay to the holder all

 

 

such amounts, with interest accrued but unpaid thereon to the date of
payment in full at the applicable rate provided herein.

 

3.             AUTHORITY.
The Maker (and the undersigned representatives of the Maker, if any) represents
that the Maker has full power, authority and legal right to execute and deliver
this Note and that this Note constitutes a valid and binding obligation of the
Maker.

 

4.             ENFORCEABILITY.
The Maker acknowledges that this Note and the Maker’s obligations under this
Note are and shall at all times continue to be absolute and unconditional in
all respects, and shall at all times be valid and enforceable irrespective of
any other agreements or circumstances of any nature whatsoever which might
otherwise constitute a defense to this Note and the obligations of the Maker
under this Note or the obligations of any other person or party relating to
this Note.  This Note and the
instruments and documents executed concurrently herewith (collectively and as
the same may be amended or otherwise modified from time to time, the “Documents”)
set forth the entire agreement and understanding of the Payee and the Maker,
and the Maker absolutely, unconditionally and irrevocably waives any and all
right to assert any set-off, counterclaim or crossclaim of any nature
whatsoever with respect to this Note or the obligations of the Maker hereunder
or thereunder, or the obligations of any other person or party relating hereto
or thereto or to the obligations of the Maker hereunder or thereunder, in any
action or proceeding brought by the Payee to collect the Note, or any portion
thereof (provided, however, that the foregoing shall not be deemed a waiver of
the Maker’s right to assert any compulsory counterclaim maintained in a court
of the United States, or of the State of Virginia if such counterclaim is
compelled under local law or rule of procedure, nor shall the foregoing be
deemed a waiver of the Maker’s right to assert any claim which would constitute
a defense, setoff, counterclaim or crossclaim of any nature whatsoever against
the Payee in any separate action or proceeding).  The Maker acknowledges that no oral or other agreements,
conditions, promises, understandings, representations or warranties exist with
respect to this Note or with respect to the obligations of the Maker under this
Note, except those specifically set forth in this Note and the Documents.

 

5.             WAIVER.
The Maker waives presentment, demand for payment, notice of dishonor and any or
all notices or demands in connection with the delivery, acceptance,
performance, default or enforcement of this Note and consents to any or all
delays, extensions of time, renewals, release of any party to any Document, and
any and all waivers or modifications that may be granted or consented to by the
Payee with regard to the time of payment or with respect to any other
provisions of any of the Documents, and agrees that no such action, delay or
failure to act on the part of the Payee shall be construed as a waiver by the
Payee of, or otherwise affect, in whole or in part, its right to avail itself
of any remedy with respect thereto.  No
notice to or demand on the Maker shall be deemed to be a waiver of the
obligation of the Maker or of the right of the Payee to take further action
without further notice or demand as provided in any of the Documents.

 

6.             DEFINED
TERMS. Whenever used, the singular number shall include the plural, the
plural the singular, and the words “Payee” and “Maker” shall
include, respectively, their respective successors and assigns.

 

2

 

7              HEADINGS,
ETC.  The headings and captions of
the numbered paragraphs of this Note are for convenience of reference only and
are not to be construed as defining or limiting, in any way, the scope or
intent of the provisions hereof.

 

8.             AMENDMENTS.  This Note may not be modified, amended,
changed or terminated orally, except by an agreement in writing signed by the
Maker and the Payee.  No waiver of any
term, covenant or provision of this Note shall be effective unless given in
writing by the Payee and, if so given by the Payee, shall only be effective in
the specific instance in which given.

 

9.             GOVERNING
LAW; SUBMISSION TO JURISDICTION; WAIVER OF TRIAL BY JURY. THIS NOTE SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
VIRGINIA, WITHOUT GIVING EFFECT TO ITS CONFLICTS OF LAWS PROVISIONS.  MAKER AND PAYEE HEREBY SUBMIT TO THE
EXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE EASTERN
DISTRICT OF VIRGINIA AND OF ANY STATE COURT SITTING THEREIN FOR PURPOSES OF ALL
LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS NOTE.  MAKER AND PAYEE HEREBY IRREVOCABLY WAIVE, TO
THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTIONS WHICH THEY MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN
SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM. 
MAKER AND PAYEE HEREBY IRREVOCABLY CONSENT TO SERVICE OF PROCESS BY
REGISTERED MAIL OR ANY OTHER MANNER PERMITTED BY VIRGINIA LAW.  NOTHING IN THIS NOTE AFFECTS THE RIGHT OF
PAYEE TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.  MAKER AND PAYEE HEREBY IRREVOCABLY WAIVE ANY
AND ALL RIGHT TO TRIAL BY A JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATING TO THIS NOTE.

 

[Signatures follow on next succeeding page]

 

3

 

IN WITNESS WHEREOF, the Maker has duly executed this Note the day and
year first above written.

 

 

	
   

  	
  LECG, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ J. Geoffrey Colton

  	
   

  
	
   

  	
   

  	
  Name:   J. Geoffrey Colton

  
	
   

  	
   

  	
  Title:  Chief Financial Officer

  

 

 

The amendment and restatement of this Note and the cancellation and
surrender of the Original Note are hereby acknowledged and agreed as of this
25th day of October, 2001.

 

PA Consulting Group, Inc.,

a New Jersey corporation

 

 

	
  By:

  	
  /s/ [ILLEGIBLE]

  	
   

  
	
  Name:

  
	
  Its:

  

 

4

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Exhibit 10.16

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AGREEMENT

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[CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS OF THIS AGREEMENT HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.] 

***Confidential
treatment requested. 

Exhibit 10.17  

 
 

LETTER AGREEMENT    
    

June 12,
2002 

Administrative
Board

Arthur Andersen LLP

33 West Monroe Street

Chicago, IL 60603 

Re:          Insurance
Claims Practice of Value Solutions Unit 

        LECG,
LLC, a California limited liability company ("LECG"), proposes to offer employment positions to the partners, participating principals and national directors listed in
Schedule A-1 (collectively, the "Partners") of the existing Insurance Claims Practice and certain other portions of its Value Solutions Unit (the "Practice Group") of Arthur
Andersen LLP ("Andersen"), each of whom has agreed to separate (the "Separation") from Andersen. 

        This
letter ("Letter Agreement") sets forth the terms applicable to the Separation. The closing of the transaction will occur on the date hereof (the "Closing Date")(it being understood
that the separation of the Transferred Employees (as hereinafter defined) from Andersen shall be deemed to be effective on June 10, 2002 (the "Employment Effective Date")). 

        1.    Payment by LECG.    On the Closing Date, LECG will pay Andersen an aggregate amount of $2,907,559.25 consisting
of: (a) $850,000 [***] (b) $1,800,000 as consideration for certain rights of Andersen pursuant to the APH Contracts (as defined in Section 6) (the "APH
Contract Amount"); (c) $82,698 as reimbursement for certain accrued vacation payments made by Andersen pursuant to Section 11 hereof (the "Accrued Vacation Amount"); (d) $30,000
in consideration of Andersen's agreement that LECG would not assume any obligation or liability with respect to computer equipment leased or owned by Andersen and used by the Practice Group;
(e) $100,000 in consideration of a release of LECG from any obligation or liability with respect to Andersen's lease obligations in Houston, Texas; (f) $7,917 for the
pro-rated June lease payment for furniture, fixtures and equipment as contemplated by Section 5; (g) $16,268.25 for the equipment to be purchased by LECG as contemplated by
Section 5 (the "Equipment Consideration") and (h) $20,676 for the pro-rated June rent due pursuant to the Sublease contemplated by Section 4(a). The payment
contemplated by this Section 1 shall be made by wire transfer of immediately available funds to the account of Andersen set forth on Schedule B. 

        2.    Release of Partners and Other Transferred Employees.    

        (a)    Partners.    On the Closing Date, and, simultaneously with the receipt of the payments specified in
Section 1 above, the Partners shall be released by Andersen from any notice requirements to leave Andersen and any non-competition or other restrictive covenants under which they
may be bound by Andersen, or any of its affiliates. The release shall be effected by the execution by Andersen and the applicable Partner on or before the Closing Date of a Separation Agreement in the
applicable form attached as Exhibit A-1. Andersen also acknowledges that Gene L. Deetz previously separated from Andersen to join LECG effective May 1, 2002, but
Mr. Deetz will nonetheless be released by Andersen pursuant to a Termination of Non-Compete Agreement 

 

to
be executed by Andersen and Mr. Deetz. Upon joining LECG, the compensation and benefits received by the Partners from LECG will be based on market rate compensation approximately equal to
their Andersen compensation and benefits. 

        (b)    Additional Partners.    LECG and Andersen acknowledge and agree that in the event that LECG desires for any
partner, participating principal or national director of Andersen not included within the Partners to become associated (by way of a member arrangement, an employment arrangement or otherwise) with
LECG or an affiliate subsequent to the Closing Date ("Additional Partner"), LECG and Andersen shall in good faith attempt to agree on the terms pursuant to which Andersen would release such Additional
Partner from such Additional Partner's non-competition and other restrictive covenants. 

        (c)    Other Employees.    On the Closing Date, and, simultaneously with the receipt of the payments specified in
Section 1 above, Andersen shall also execute and deliver a Termination of Non-Compete Agreement in the form attached as Exhibit A-2 in favor of each Transferred
Employee (as defined below and other than the Partners) who has previously executed a non-competition agreement with Andersen or is otherwise subject to restrictions on competition in
favor or Andersen (which such Transferred Employees are identified with an asterisk on Schedule A-2) (the "Managers"). 

        3.    Hiring of Additional Personnel.    In addition to the Partners, LECG will, prior to the Closing Date, offer
employment to those client service professionals of Andersen and Practice Management Personnel who are identified on Schedule A-2 (collectively, the "Employee Group"). The offers of
employment to the Employee Group will be based on market rate compensation for such employee's current position, which shall be approximately equal to their base salary with Andersen immediately prior
to the Closing Date, plus any contractually guaranteed bonuses. Each member of the Employee Group, as well as each Partner, that accepts employment with LECG shall be referred to herein as a
"Transferred Employee." 

        4.    Office Space.    

        (a)   Prior
to the Closing Date, each of Andersen and LECG will use its commercially reasonable efforts to obtain for LECG, subject to the consent of the landlord (if such
consent is required), a sublease (the "Sublease") on approximately 16,000 square feet of office space located on the 18th floor at 33 West Monroe Street, Chicago, Illinois, which space
is leased by Andersen and, prior to the Closing Date, is occupied by Andersen's Global Corporate Finance Group (the "Subleased Space"). Unless otherwise agreed by Andersen and LECG, the Sublease will
have (i) a minimum term of three (3) years (with an option to renew for an additional two (2) years on the same terms), (ii) a pass-through rental rate equal to
the rent paid by Andersen for the Subleased Space pursuant to the primary lease and (iii) if acceptable to the landlord, appropriate non-disturbance and attornment language to
preserve LECG's occupancy of the Subleased Space regardless of the status of the primary lease. Andersen will use its commercially reasonable efforts to obtain such non-disturbance and
attornment language from the landlord (it being understood that Andersen shall not be required to make any payments of any kind in order to satisfy its obligations pursuant to this sentence). The
parties agree that, at the option of LECG, LECG shall have the right to lease the Subleased Space directly from the landlord rather than sublease the Subleased Space from Andersen so long as such
arrangement is agreeable to the landlord. 

        (b)   On
or prior to the Closing Date, all of the Partners and the Transferred Employees who are currently located in Andersen's office space in Houston, Texas (the "Houston
Space") shall vacate the Houston Space. It is acknowledged and agreed that LECG will acquire no rights to use or occupy the Houston Space. 

        5.    Furniture, Fixtures and Equipment.    At the closing of the transactions contemplated hereby (the "Closing"),
the parties will execute and deliver a Fixtures and Equipment Lease in the form of 

2

 

Exhibit B
hereto with respect to the leasing of furniture, fixtures and equipment that is located in the Subleased Space. A listing of the furniture, fixtures and equipment subject to the
Fixtures and Equipment Lease is attached hereto as Schedule C-1. At the Closing, LECG will purchase from Andersen the specific items of equipment listed on
Schedule C-2 attached hereto for a purchase price equal to the Equipment Consideration. The purchase contemplated by the previous sentence will be effected by the execution and
delivery by the parties of a Bill of Sale in the form of Exhibit C attached hereto. From the Closing Date until the earlier of (x) the date on which LECG obtains new direct inward dial
phone numbers for the Subleased Space ("New DID Numbers") and (y) the date that is thirty (30) days from the Closing Date, Andersen will make available to LECG, at LECG's sole cost and
expense, the direct inward dial phone numbers that are currently in effect for the Subleased Space (it being understood that LECG shall use its reasonable commercial efforts to obtain the New DID
Numbers as promptly as practicable after the Closing Date). 

        6.    Licensed Materials.    At the Closing, LECG and Andersen shall execute a License Agreement in the form of
Exhibit D hereto with respect to the intellectual property set forth on Schedule D hereto. 

        7.    APH Contracts.    In exchange for LECG's payment of the APH Contract Amount on the Closing Date, Andersen will
assign to LECG all of Andersen's right, title and interest in and to any compensation with respect to all contingent fee and value added asbestos pollution and health hazard ("APH") insurance claims
contracts, proposals and arrangement letters set forth on Schedule E (collectively, the "APH Contracts") which relate to all open APH insurance claims engagements as of April 24, 2002
(the "APH Rights"). It is acknowledged and agreed that the APH Contracts will be terminated pursuant to Section 10 hereof. 

        8.    Value Added Adjustment Collection Effort.    In accordance with paragraph 2B of the contract between
Andersen and [***], after the Closing Date LECG will allow the Partners to (and the Partners shall) use their best efforts to collect any "value added adjustments" that may be
due Andersen as a result of the tentative settlement between [***]. LECG will be entitled to a fee equal to 5% of any "value added adjustments" received by Andersen after the
Closing Date as compensation to LECG for the costs incurred by LECG in having the Partners devote professional time to support the finalization of the tentative settlement, to assist in the
documentation of the settlement agreement and to negotiate and collect such "value added adjustments." The fee is due and payable by Andersen to LECG, from time to time, within two (2) business
days after receipt of any "value added adjustment." LECG and the Partners do not
guarantee the collection of any "value added adjustments" and, absent the collection of any "value added adjustments," Andersen cannot guarantee the existence of the 5% fee. 

        9.    Accounts Receivable.    Except with respect to the APH Contracts, Andersen will retain all billed and unbilled
accounts receivable related to the Practice Group for all periods prior to the Closing Date (the "Receivables"). After the Closing Date, LECG shall cause the Partners to use their best efforts to
assist Andersen in the collection of the Receivables of those clients for which each of them had billing responsibility. If, following the Closing Date, the Partners (or LECG) receive any payments of
any kind from any person that is an obligor with respect to Receivables (or any affiliate of such obligor), the payments will not become the property of the Partners or LECG, the payments shall be
received in trust, and the Partners or LECG, as the case may be, shall promptly, and in any event within two (2) business days, remit such payment to Andersen. Neither LECG nor any Partner
guarantees the collection of any Receivable. 

        10.    In-Process Engagements.    The in-process engagements of the Practice Group that are
set forth on Schedule F hereto (collectively, the "Current Engagements") will be terminated on the Closing Date. The balance of the work required to complete the Current Engagements shall be
treated as a new engagement for LECG, and LECG shall enter into a new engagement with the applicable client in order to undertake the unperformed work. If, following the Closing Date, Andersen
receives payments 

3

 

of
any kind from any person that is an obligor with respect to a Current Engagement (or any affiliate of such obligor) for periods after the Closing Date ("LECG Funds"), the LECG Funds will not become
the property of Andersen, the LECG Funds will be received by Andersen in trust for LECG, and Andersen shall promptly, and in any event within two (2) business days, remit such payment to LECG.
Further, if Andersen determines (either internally or after notification from a client), that a client under a Current Engagement overpaid Andersen on invoices paid by such client prior to the Closing
Date (an "Overpayment"), Andersen will promptly reimburse the client for the Overpayment and LECG will have no liability or obligation with respect to such Overpayment. 

        At
any time from and after the Closing Date, and at the request of LECG (accompanied by a consent from a client in the form of Exhibit E-1), Andersen will deliver to
LECG copies, at LECG's expense, of certain identified work papers, files, and other documentation relating to clients of Partners that become clients of LECG, including in respect of Current
Engagements, subject to (i) the procedures set forth in the Client Record Access Master Agreements attached in Exhibit E-2 to be executed by Andersen and LECG on the Closing
Date, and (ii) applicable tax advisor privilege, attorney-client privilege or other privilege or similar rule (e.g., the work product rules). 

        11.    Accrued Compensation and Vacation.    Andersen will pay to each Transferred Employee (including Partners, if
applicable) in their final paycheck an amount equal to their respective base salary, contractually guaranteed bonuses, and vacation accrued for the period through and including the
Employment Effective Date (the "Accrued Compensation"), irrespective of whether such amounts exceed the Accrued Vacation Amount. LECG is not responsible for, and is not assuming any liability with
respect to, the Accrued Compensation payable to any Transferred Employee. 

        12.    Reserved.    

        13.    Representations by Andersen.    Andersen is a duly organized, validly existing Illinois limited liability
partnership with full partnership power and authority to execute, deliver and perform this Letter Agreement, the Separation Agreements, and the Termination of Non-Compete Agreements. The
execution, delivery and performance of this Letter Agreement, the Separation Agreements and the Termination of Non-Compete Agreements have been duly authorized and approved by Andersen,
and do not require any further authorization or consent from Andersen. 

        14.    Representations by LECG.    LECG is a duly organized, validly existing California limited liability company
with full limited liability company power and authority to execute, deliver and perform this Letter Agreement. The execution, delivery and performance of this Letter Agreement have been duly
authorized and approved by LECG's sole manager, and do not require any further authorization or consent from LECG that has not been, or will not have been, obtained prior to the Closing Date. 

        15.    Conditions to Closing.    The obligation of either LECG or Andersen, as applicable, to consummate the
transactions contemplated by this Letter Agreement is subject to the fulfillment, on or prior to the Closing Date, of the following conditions, any of which may be waived by LECG or Andersen, as the
case may be: 

        (a)   There
shall have been no material breach by either party in the performance of any of its covenants and agreements herein; and each of the representations and warranties
of LECG or Andersen, as applicable, contained herein shall be true and correct in all material respects on the Closing Date as though made on the Closing Date; 

        (b)   A
sublease or a lease, in form and substance satisfactory to each of LECG and Andersen, for the Subleased Space identified in Section 4 hereof shall have been
executed by LECG and Andersen (or, in the case of a lease, the landlord) and consented to by the landlord of such Subleased Space; 

4

 

        (c)   An
Assignment and Assumption Agreement, in the form of Exhibit F, shall have been executed by LECG and Andersen with respect to the APH Rights; and 

        (d)   Those
Partners who currently have outstanding loans related to their prior capital contribution to Andersen shall have repaid or refinance such loans such that Andersen
has no further liability with respect to such loans. 

Each
of LECG and Andersen will deliver to the other party on the Closing Date a certificate of a duly authorized representative of such party confirming the satisfaction or waiver of each of the
conditions to closing identified in this Section 15 that are applicable to such party. 

        16.    Transaction Expenses.    Each of Andersen, LECG and the Partners shall pay their respective fees and expenses
incurred by them in connection with this Agreement and the transactions contemplated hereby. 

        17.    Disclaimers.    

        (a)   Except
as expressly set forth herein, Andersen is making no representation, warranty or covenant as to itself, the
Transferred Employees or any other matter. LECG and the Partners acknowledge that none of Andersen, its affiliates or any of their representatives has made any representation or warranty, express or
implied, as to the accuracy or completeness of (i) any memoranda, charts, summaries, projections or schedules heretofore made available by Andersen, its affiliates or their representatives to
LECG, the Partners or any of their representatives or (ii) any information that is not included in this Agreement, and none of Andersen, its affiliates or any of their representatives will have
or be subject to any liability to LECG or the Partners or their representatives resulting from the distribution of any such information to, or the use of any such information by, LECG or the Partners
or any of their representatives. LECG and the Partners acknowledge that the current circumstances of Andersen make the reliability of any projections particularly questionable. 

        (b)   Except
as expressly set forth herein, LECG is making no representation, warranty or covenant as to itself or any other matter. LECG states that it is not assuming,
directly or indirectly, any actual or contingent liability or obligation of Andersen or any of the Partners of any nature whatsoever, whether known or unknown, whether due or to become due, and
whether related to the Practice Group, the Partners, the Transferred Employees or otherwise, and regardless of when asserted. 

        18.    Limitation on Recourse.    Notwithstanding anything to the contrary contained herein, it is expressly
acknowledged and agreed that (a) in no event shall the Administrator of Andersen, any member of the Administrative Board of Andersen, any directors, officers, managers, partners, participating
principals, national directors or similar persons of Andersen or any of their respective representatives or agents (collectively, the "Andersen Covered Persons") have any personal liability with
respect to Andersen's obligations pursuant to this Letter Agreement and (b) no Andersen Covered Person shall be obligated to make, and no Andersen Covered Person in fact will make, any capital
contribution or other payment of any kind to Andersen in order for Andersen to satisfy Andersen's obligations pursuant to this Letter Agreement. Notwithstanding anything to the contrary contained
herein, it is expressly acknowledged and agreed that (a) in no event shall any director, officer, manager, member, employees, independent contractors or similar person of LECG or any of their
respective representatives or agents (collectively, the "LECG Covered Persons") have any personal liability with respect to LECG's obligations pursuant to this Letter Agreement and (b) no LECG
Covered Person shall be obligated to make, and no LECG Covered Person in fact will make, any capital contribution or other payment of any kind to LECG in order for LECG to satisfy LECG's obligations
pursuant to this Letter Agreement. 

5

 

        19.    Confidentiality; Disclosure.    Neither party will make, or cause to be made, and LECG will not permit the
Partners to make, any press release, or other public announcement in respect of the matters set forth in this letter, or otherwise communicate with the new media without the prior consent of Andersen,
except as may be required by law, regulation, any listing or trading agreement concerning publicly-traded securities, or by any administrative or governmental agency in connection with the listing of
securities for public trading (in which case the disclosing party will use its best efforts to advise the other party prior to making that required disclosure). 

        20.    Entire Agreement.    This Letter Agreement, the Separation Agreements, the Termination of Noncompete Agreements
and the Mutual Nondisclosure Agreement dated April 5, 2002 contain the entire understanding of the parties hereto with regard to the subject matter contained herein and therein and supersede
all prior agreements, understandings or letters of intent between or among the parties hereto. 

        21.    Further Assurances.    Each party upon the request of the other agrees to perform such further acts and execute
and deliver such further documents as may be reasonably necessary to effectually carry out the terms and intent of this Letter Agreement, the Separation Agreements and the Termination of
Non-Compete Agreements. 

        22.    Governing Law.    This letter will be governed by and construed in accordance with the laws of the State of
Illinois. 

        Please
acknowledge your agreement to the terms set forth in this Letter Agreement by signing a copy of this letter in the space provided below. 

	 	Very truly yours,
	

 	

LECG, LLC
	 	 	 	 
	

 	

By:	
 	

/s/  MARVIN A. TENENBAUM      

	 	Name:	 	Marvin A. Tenenbaum

	 	Title:	 	General Counsel

	

Agreed and Accepted as of

the date first written above.	

 	
 	

 
	

ARTHUR ANDERSEN LLP	

 	
 	

 

	

By:	
 	

/s/  D. BRYAN RUEZ      
	

 
	Name:	 	D. Bryan Ruez
	 
	Title:	 	Partner
	 

***Confidential
treatment requested. 

6

SCHEDULE A-1

 

PARTNERS

 

Mark C. Hargis

 

Anthony A. Tabb

 

Ronald E. Van Epps

 

George G. Hansen

 

Douglas H. Deems

 

John R. Cadarette, Jr.

 

 

 

SCHEDULE A-2

 

EMPLOYEE GROUP MEMBERS

 

Amy Allen

 

Michael Bachrodt

 

Kevin Blake

 

Daniel Bourgeois

 

Brian Carl

 

Joshua Damon

 

Gene L. Deetz* (Director)

 

Michael Gardner* (Principle)

 

Brian Gieger

 

Ralph Grimse

 

Christopher Harvey

 

Matthew Infantino

 

Marjorie Kessler/Chambers

 

Karl Killian* (Director)

 

Richard Lies

 

Milton Liu

 

Lisa McDougall*

 

Chris McClure*

 

Paul McIntyre

 

Stephanie Morris

 

Lauren Murphy

 

Gary Napadov

 

Jacob Parsons

 

 

Erica Rogers

 

Rachel Sabin

 

Matthew Schwab

 

Tracy Spinks

 

Nicholl Terzich

 

Michelle Uddin (Principle)

 

 

SCHEDULE B

 

WIRE INSTRUCTIONS

 

	
  Beneficiary
  names:

  	
   

  	
  [***]

  
	
   

  	
   

  	
   

  
	
  Beneficiary
  account number:

  	
   

  	
  [***]

  
	
   

  	
   

  	
   

  
	
  Bank name
  & address:

  	
   

  	
  [***]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Bank ABA
  number:

  	
   

  	
  [***]

  

 

 

SCHEDULE C-1

 

FURNITURE, FIXTURES
AND EQUIPMENT

 

	
  Qty.

  	
   

  	
  Description

  
	
   

  	
   

  	
   

  
	
  81

  	
   

  	
  Herman
  Miller Aeron Chairs

  
	
   

  	
   

  	
   

  
	
  14

  	
   

  	
  Kent Leather
  Chairs

  
	
   

  	
   

  	
   

  
	
  66

  	
   

  	
  Essex Guest
  Chairs

  
	
   

  	
   

  	
   

  
	
  33

  	
   

  	
  Metro Office
  Furniture Set-Ups (Each

  Office includes P-top worksurface &

  return, overhead storage, 2 peds, 2

  storage cubbies, 2 or 4-high lateral file)

  
	
   

  	
   

  	
   

  
	
  3

  	
   

  	
  Metro
  Credenzas

  
	
   

  	
   

  	
   

  
	
  3

  	
   

  	
  Metro Tables

  
	
   

  	
   

  	
   

  
	
  1

  	
   

  	
  Metro Table

  
	
   

  	
   

  	
   

  
	
  3

  	
   

  	
  HBF
  Occasional Tables

  
	
   

  	
   

  	
   

  
	
  4

  	
   

  	
  Davis Guest
  Chairs

  
	
   

  	
   

  	
   

  
	
  24

  	
   

  	
  Vitra Chairs

  
	
   

  	
   

  	
   

  
	
  2

  	
   

  	
  Bernhardt
  Occasional Table

  
	
   

  	
   

  	
   

  
	
  7

  	
   

  	
  Bernhardt
  Adagio Lounge Chair

  
	
   

  	
   

  	
   

  
	
  3

  	
   

  	
  Steelcase
  Storage Cabinets

  
	
   

  	
   

  	
   

  
	
  48

  	
   

  	
  Steelcase
  Staff Cubes (Each cube

  includes 2 worksurfaces, 2 peds,

  overhead bins, task light, 4 tackable

  panels)

  
	
   

  	
   

  	
   

  
	
  78

  	
   

  	
  Steelcase
  File Cabinets

  
	
   

  	
   

  	
   

  
	
  10

  	
   

  	
  Window
  Blinds

  
	
   

  	
   

  	
   

  
	
  2

  	
   

  	
  24” x 30”
  Hon tables in staff area by 18-

  213 and 18-220

  
	
   

  	
   

  	
   

  
	
  1

  	
   

  	
  Bookcase in
  18-231

  

 

 

	
  2

  	
   

  	
  Metal
  Storage shelves in 18-227

  
	
   

  	
   

  	
   

  
	
  3

  	
   

  	
  5-drawer
  file cabinets in 18-219

  
	
   

  	
   

  	
   

  
	
  1

  	
   

  	
  Built-in
  Refrigerator in 18-148

  
	
   

  	
   

  	
   

  
	
  1

  	
   

  	
  Built-in
  Icemaker in 18-148

  
	
   

  	
   

  	
   

  
	
  3

  	
   

  	
  Floor Plants
  w/containers

  
	
   

  	
   

  	
   

  
	
  15

  	
   

  	
  Desk Plants
  w/containers

  
	
   

  	
   

  	
   

  
	
  4

  	
   

  	
  Ceiling
  projection screens (Conference

  rooms 18200, 18156, 18159, 18147)

  
	
   

  	
   

  	
   

  
	
  33

  	
   

  	
  Attached
  whiteboards (offices)

  
	
   

  	
   

  	
   

  
	
  5

  	
   

  	
  Attached
  whiteboards (conference

  room; board room)

  

 

 

SCHEDULE C-2

 

SPECIFIC PURCHASED
EQUIPMENT

 

Catalyst 4000 Chassis (6-slot),
Suprvsr II, (2) AC PS, Fans (Part No. WS-C4006-S2)

 

Catalyst 4000 AC PS Redundant
(Part No. WS-X4008/3)

 

Catalyst 4000 10/100 Auto
Module 48 Ports (Part No. WS-X4148-RJ)

 

1000 Base-SX Short Wavelength
GBIC (Multimode) (Part No. WS-G5484)

 

HP Printer, Model 8000DN
(Location 18227)

 

HP Printer, Model 8000 DN
(Location 18107)

 

HP Printer, Model 8500 DN
(Location 18197)

 

Xerox 535 Fax (Room 18150)

 

30” Screen Television

 

Sony VCR

 

13” Sony Portable TC/VCR Combo

 

RCA Satellite Receiver

 

 

SCHEDULE D

 

LICENSED MATERIAL

 

	
  Intellectual
  Property

  	
   

  	
  Description

  	
   

  	
  Media/Format

  	
   

  	
  Location

  	
   

  	
  Server/Directory

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  Computer files
  (largely ACCESS/SQL and Excel) supported by miscellaneous hard copy
  documentation

  	
   

  	
  Chicago

  

  

  

  Houston

  	
   

  	
  [***]

   

   

   

  [***]

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  ACCESS,
  Powerpoint, Excel, Word and Hardcopy binders

  	
   

  	
  Chicago

  

  

  Houston

  	
   

  	
  [***]

   

   

  [***]

  

 

 

SCHEDULE E

 

APH CONTRACTS

 

 

The agreements evidenced by the
following:

 

•                  [***]

 

•                  [***]

 

•                  [***]

 

•                  [***]

 

•                  [***]

 

•                  [***]

 

•                  [***]

 

 

•                  [***]

 

•                  [***]

 

•                  [***]

 

•                  [***]

 

•                  [***]

 

•                  [***]

 

•                  [***]

 

•                  [***]

 

 

SCHEDULE F

 

IN-PROCESS
ENGAGEMENTS

 

Andersen Insurance Claims Group Client List

 

	
   

  	
   

  	
  APH?

  	
   

  	
  Job

  Number(s)

  	
   

  	
  Partner(s)

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
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EXHIBIT A-1

 

FORM OF SEPARATION
AGREEMENTS

 

 

SEPARATION AGREEMENT
– PARTNERS

 

This
Separation Agreement (this “Agreement”) is made as of this [   ]
day of  [          ],
2002, by and between Arthur Andersen LLP, a registered limited liability
partnership under the laws of the State of Illinois (“AA”), and [NAME OF
PARTNER] (“Partner”).

 

WHEREAS, AA
and LECG, LLC (“LECG”) have agreed by letter agreement (the “Letter Agreement”)
to the terms of a separation of certain partners, participating principals and
national directors, including Partner, from the existing Insurance Claims
Practice and certain other portions of AA’s Value Solutions Unit;

 

WHEREAS, each
of AA and Partner will derive substantial benefits from the transactions
contemplated by the Letter Agreement;

 

WHEREAS,
completing the transactions contemplated by the Letter Agreement at this time
maximizes value for the benefit of AA, which benefit may not be realized
without Partner separating from AA on the terms set forth in this Agreement and
affiliating with LECG;

 

WHEREAS, the
foregoing cannot be accomplished unless AA releases Partner as contemplated by
Section 2 hereof, which Section includes, among other things, the release of
Partner by AA from certain restrictive covenants set forth in the September 1,
2000 partnership agreement of AA, as amended (the “Partnership Agreement”); and

 

WHEREAS, AA
has determined that as of the date of Partner’s separation from AA, his/her
amounts owing to AA and certain other matters are as set forth on the
determination statement attached hereto as Exhibit A (the “Determination
Statement”).

 

NOW,
THEREFORE, in consideration of the foregoing and the mutual agreements contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, AA and Partner hereby agree as
follows:

 

1.             Partner hereby agrees as follows:

 

(a)           From and after the
date of this Agreement Partner will no longer be a partner of and will have no
further interest in AA, AA Holdings C.V., Andersen Worldwide Societe
Cooperative (“AW”) or any affiliated firms or any of their respective assets or
rights (including, without limitation, any inventions, writings or other
intellectual property created by Partner or under Partner’s supervision as part
of and during Partner’s association with any of the foregoing firms); provided,
however, that, subject to AA’s determination under Section 1(b), Partner
may receive certain retirement payments and payments and allocations with
respect to Partner’s paid-in-capital as contemplated under Section 1(b).
Partner hereby acknowledges receipt of sufficient consideration in connection
with this Agreement, including without limitation the consideration received
under Section 2 hereof.

 

(b)           The Determination
Statement describes accurately the amount owed by the Partner to AA (or by AA
to the Partner, as applicable) as of the date hereof.  Partner will not be

 

 

entitled to receive any
separation or other payments (including, without limitation, early retirement
benefits and payments under the “Weinbach” schedule or “Measelle” policy) and
Partner’s entitlement to repayment of Partner’s paid-in-capital may be delayed
indefinitely, repaid in installments, and/or subordinated to the capital and/or
loan accounts of remaining and terminated partners, participating principals
and national directors, in each case without interest, all as determined by AA,
which determination shall be in AA’s sole and absolute discretion and shall be
final and conclusive. Partner accepts and agrees that the aggregate amount of
basic retirement benefits available to all of AA’s retiees may be limited
(either to a set percentage of AA’s net income or otherwise) or may be entirely
eliminated and that, in addition, such benefits with respect to Partner may be
restructured, cancelled, reduced or delayed indefinitely, in each case all as
determined by AA, which determination shall be in AA’s sole and absolute discretion
and shall be final and conclusive; provided, however, that this
sentence shall not apply to assets in or benefits which are provided under any
retirement plan which is intended to be qualified under Section 401(a) of the
Internal Revenue Code of 1986, as amended (which retirement plans include,
without limitation, (i) Arthur Andersen LLP Partners’ Profit Sharing and 401(k)
Plan, (ii) Arthur Andersen LLP Retirement Benefit Plan and (iii) Arthur
Andersen LLP Retirement Plan). Partner will not be entitled to any further
distributions or payments of income or other cash or property from AA pursuant
to the Partnership Agreement or otherwise. 
Partner hereby agrees not to object to any amendment of the Partnership
Agreement that effectuates any decisions of AA as described in this Agreement.
Nothing in this Agreement shall require Partner to make any payment or
contribution to AA in excess of that which otherwise would be required by
Partner under the Partnership Agreement. 
AA agrees that in the event that, within six months of the date hereof,
any partner, participating principal or national director enters into a
provision with AA corresponding to this Section 1(b) in connection with the
sale of assets by AA that contains terms that are more favorable to such
partner, participating principal or national director than the comparable terms
of this Section 1(b), then, at the option of Partner, any such provision shall
apply to Partner in lieu of this Section 1(b).

 

(c)           Partner acknowledges
and agrees that, except as provided herein, all terms of the Partnership
Agreement that are applicable to Partner shall remain in full force and effect
with respect to Partner after the date of this Agreement.

 

(d)           Except as may be
required by the lawful order of a court or agency of competent jurisdiction or
as provided in the Letter Agreement. 
Partner shall keep secret and confidential indefinitely all non-public
information (including, without limitation, information regarding litigation
and any communication with counsel to AA or any special committee of AA or any
work product of any such counsel) concerning AA, any of its affiliates or
affiliated firms and/or any of their respective clients (unless the client
consents otherwise) which was acquired by or disclosed to Partner during
Partner’s employment by, association with or ownership of AA or any of its
affiliates or affiliated firms and shall not disclose the same, either directly
or indirectly, to any other person, firm, or business entity or use it in any
way. Partner represents that, except as contemplated by the Letter Agreement,
Partner has returned to AA or its affiliates, affiliated firms or clients, as
applicable, any and all records, documents, property, information, computer
disks or other materials relating to the business of AA, any of its affiliates
or affiliated firms and/or any of their respective clients obtained by Partner
during the course of his/her employment by, association with or ownership of AA
or any of its affiliates or affiliated firms, including without limitation all
items of the type described on Exhibit B.  Nothing in this

 

2

 

Agreement, the Partnership
Agreement or any other agreement or document by which Partner is bound to AA or
its affiliates shall be construed so as to prevent Partner from using, in
connection with membership in or association with LECG or any of its
affiliates, knowledge which was acquired by Partner during Partner’s employment
by, association with or ownership of AA or any of its affiliates or affiliated
firms, and which is generally known to persons of Partner’s experience.

 

(e)           Partner shall not disparage AA or any
of its affiliated firms or any of their respective present or former partners,
managers or employees (“AA Party”); provided, however, that this
Section 1(e) shall not prevent Partner from (i) responding to comments made by
any AA Party about Partner if Partner reasonably believes such comments were
disparaging to Partner or (ii) making statements about an AA Party in
connection with the defense of a claim made against Partner by a third party.

 

(f)            Notwithstanding
anything to the contrary herein. Partner, on behalf of Partner, Partner’s
heirs, administrators, estates, executors, personal representatives, successors
and assigns, does hereby release and forever discharge AA, AW and their
respective affiliated firms, and each of their respective assigns, past or
present partners, officers, principals, directors, employees, agents,
successors (whether at law, equity or otherwise), and affiliates (collectively,
the “Released Parties”) from any and all actions, causes of action, claims,
demands, debts, damages, costs, losses, penalties, attorneys’ fees,
obligations, judgments, expenses, compensation or liabilities of any nature
whatsoever, in law or equity, whether known or unknown, contingent or
otherwise, that Partner now has, may have ever had in the past or may have in
the future against any of the Released Parties by reason of any act, omission,
transaction, occurrence, conduct, circumstance, condition, harm, matter, cause
or thing that has occurred from the beginning of time up to and including the
date hereof, including, without limitation, claims that in any way arise from
or out of, are based upon or relate to Partner’s employment by, association
with or ownership of AA or any of its affiliated firms, except (i) for claims
arising out of AA’s obligations set forth in this Agreement and (ii) as
provided in the second sentence of Section 1(g) hereof. It is understood and
agreed that nothing herein shall be deemed to be a release of any person or
entity other than the Released Parties. In addition, the release set forth in
this Section 1(f) shall not be effective as to any other partner, participating
principal, national director or other employee of AA who has not executed a
release in favor of Partner that is substantially identical to the release set
forth in this Section 1(f). Nothing herein shall be deemed a release by LECG of
any Released Persons or other person or entity.  AA agrees that in the event that, within six months of the date
hereof, any partner, participating principal or national director enters into a
provision with AA corresponding to this Section 1(f) that contains terms that
are more favorable to such partner, participating principal or national
director than the comparable terms of this Section 1(f), then, at the option of
Partner, any such provision shall apply to Partner in lieu of this
Section 1(f).

 

(g)           Notwithstanding
anything in this Section 1 to the contrary, Partner shall comply with
continuing obligations under the Partnership Agreement and other organizational
document(s) of AA as presently in effect and binding on former partners,
including, without limitation, restrictions on future activities (except as
specifically released herein).  It is
understood and agreed that this Agreement does not waive, modify, release or
otherwise affect

 

3

 

any rights, obligations, claims
or defenses under any loan which Partner may have originally entered into with
Andersen Financial Corporation or other affiliate of AA.

 

(h)           Partner shall use
his/her best efforts on behalf of AA to effect collections for work-in-progress
and accounts receivable owed to AA by AA clients for which Partner had billing
or collections authority (“Partner Clients”); provided, that,
“best efforts” shall not require Partner to expend Partner’s funds to effect
such collections. Partner represents and warrants to AA that attached hereto as
Exhibit C is an accurate and complete list of all in-process engagements
with respect to Partner Clients for which fees take into account any factors in
addition to professional time expended on the engagement.

 

(i)            Partner shall
cooperate reasonably with AA in connection with any claim or actual or
threatened investigation, litigation or proceeding relating to AA or any of its
affiliated firms (“Litigation”) and, if requested by AA, to act as a witness in
connection with any such Litigation, all without any compensation but with
reimbursement for reasonable, documented, out of-pocket expenses incurred as a
result of specific requests for cooperation by AA. AA will defend at its
expense any Litigation (i) against Partner involving Partner’s activities while
a partner of AA that were undertaken by Partner on AA’s behalf in accordance
with Partner’s responsibilities to AA or (ii) against AA that also includes
Partner as a defendant and that does not involve any claim with respect to
which Partner did not act in accordance with Partner’s responsibilities to AA.

 

(j)            Partner agrees to
cooperate reasonably with AA in connection with the appropriate handling of
files and property of AA with which Partner was involved, all in accordance
with the procedures set forth on Exhibit D.

 

(k)           Partner represents
and warrants to AA that to Partner’s knowledge:

 

(i)            Since January 10, 2002, Partner has
(x) not caused the destruction of any documents in contravention of the
document retention policy of AA attached hereto as Exhibit E and (y) in
all cases where Partner has informed AA’s legal department of a pending
litigation, investigation, or inquiry or facts making litigation,
investigation, or inquiry reasonably foreseeable. Partner has also informed all
AA employees who worked on the relevant matter of AA’s document retention
policies and the need to preserve documents related to pending or reasonably
foreseeable litigation, investigation, or inquiry.

 

(ii)           Since April 30, 2001, Partner has
complied in all respects with all requests made to Partner by both inside and
outside counsel to AA to retain documents and, when requested by such counsel,
has delivered such documents to such counsel.

 

(l)            Partner agrees that
all notices to Partner with respect to this Agreement shall be sent to Partner
to the home address, or via the email address, indicated under Partner’s name
on the signature page hereto. Partner further agrees that in the event that
Partner’s home address, email address and/or home phone number change subsequent
to the date of this Agreement. Partner shall, as soon as reasonably practicable
thereafter, provide AA with written notice of such change.

 

4

 

2.             AA hereby agrees to Partner’s
affiliation with LECG and hereby releases Partner from (i) those restrictive
covenants set forth in (x) Article 26(A)(2), Article 26(A)(3) and Article
26(A)(4) of the Partnership Agreement (the text of such Articles is attached
hereto as Exhibit F) and (y) the corresponding restrictive covenants set
forth in Sections 35.3.1, 35.4.1 and 35.5.1 of Andersen Worldwide Policies 12
(the text of such Sections is attached hereto as Exhibit G) and (ii) all
other non-compete, non-solicitation and other restrictive covenants applicable
to Partner in the Partnership Agreement or any other organizational document of
AA, AW or any of their respective affiliated firms. Concurrently with the
execution hereof, AA waives the ninety (90) day notice requirement set forth in
Article 10(A) of the Partnership Agreement.

 

3.             Notwithstanding anything to the
contrary contained herein, Partner expressly acknowledges and agrees that (a)
in no event shall the Administrator of AA, any member of the Administrative
Board of AA, any directors, officers, managers, partners, participating
principals, national directors or similar persons of AA or any of their
respective agents or representatives (collectively, the “Covered Persons”) have
any personal liability with respect to AA’s obligations hereunder and (b) no
Covered Person shall be obligated to make, and no Covered Person in fact will
make, any capital contribution or other payment of any kind to AA in order for
AA to satisfy its obligations hereunder.

 

4.             This Agreement shall be governed by
Illinois law without giving effect to principles of conflicts of law. Any and
all disputes arising under this Agreement and the transactions contemplated
herein shall be governed by Article 39 (“Arbitration”) of the Partnership
Agreement, and such provision (as modified as necessary to conform to the
language and terms hereof) is hereby incorporated by reference herein for such
purpose.

 

5.             This Agreement may be executed in
any number of counterparts, each of which shall be deemed an original, but all
of which together shall constitute a single instrument.

 

6.             From time to time after the date
hereof, at the request of either party hereto, the parties hereto shall execute
and deliver to such requesting party such documents and take such other action
as such requesting party may reasonably request in order to consummate more
effectively the transactions contemplated hereby.

 

7.             The parties hereto agree that I,
ECG shall be a third party beneficiary of Section 1(d), the penultimate
sentence of Section 1(f), Section 2 and this Section 7, but for no other
purpose.

 

5

 

IN WITNESS
WHEREOF, the parties hereto have caused this Agreement to be executed and
delivered as of the date first above written.

 

	
   

  	
   

  	
   

  	
  ARTHUR
  ANDERSEN LLP

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
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  Name:

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
  Its:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  [Name]

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Home
  Address:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Email
  Address:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Home Phone
  Number:

  
									

 

6

 

Exhibit A –
Determination Statement

 

 

Determination Statement for
Partner is attached hereto.

 

A-1

 

Exhibit
B – Description of Property

 

B-1

 

Exhibit C –
Alternative Fee Arrangements

 

[Provide list of contingency payments associated with
Partner]

 

C-1

 

Exhibit D – Partner
Check -Out Procedures

 

 

D-1

 

Exhibit E – Document
Retention Policy

 

Interim Document Management Policy

 

Following is the Interim
Document Management Policy, as established on January 10, 2002, and including
revisions through April 30, 2002.  Any
questions about the policy should be directed to the Legal Group at 1-312-507-9209.

 

Revisions for retention and deletion of
documents — April 2002

 

The revisions to the Interim
Document Management Policy are as follows:

 

You may now delete documents of all kinds
that you have created on the network, including documents in your Lotus Notes
e-mail database, provided that you are not required to preserve such documents
under the Interim Document Management Policy because of their relevance to
pending or reasonably foreseeable litigation, investigation, inquiry,
proceeding or other dispute.

 

As noted in previous communications,
documents that must be retained include those related to Enron,
Worldcom, Global Crossing, tax shelter transactions or any other matter for
which specific instructions to preserve documents have been issued or may be
issued in the future.

 

When you save and back up your
documents, the firm’s systems will automatically retain a copy of any deleted
documents so you are not at risk in the event of documents becoming relevant in
the future.

 

You still must retain every
document that is created in the future if it may be relevant to any pending or
reasonably foreseeable litigation, investigation, inquiry, proceeding or other
dispute.

 

Note:  If you have a local replica of your e-mail
database:

•                  You must make
sure to regularly replicate between your local e-mail database and your e-mail
database on the network.

•                  Do NOT
refresh the design of your local e-mail database. If you have problems with
your local e-mail database, please contact your local Notes administrator or
local technology support desk.

•                  If you have
selected the Remove documents not modified in the last: XX days in the
Replication Settings dialog box on your e-mail database, it must not be
set to less than 14 days.  The graphic
below illustrates a mail file set to remove documents not modified in the last
14 days.  If you have any questions
about this setting, please contact your local Notes administrator or local
technology support desk.

 

You may now also dispose of various hard
copies of materials that you previously were required to keep.  You may dispose only of items that are not
relevant to any pending or reasonably foreseeable litigation, investigation,
inquiry proceeding or other dispute.  In
addition, if any such materials contain notations, those materials must be preserved.

 

E-1

 

Hard copies that must be retained
include those related to Enron, Worldcom, Global Crossing, tax shelter
transactions or any other matter for which specific instructions to preserve
documents have been issued or may be issued in the future.

 

The
following is a list of categories of materials that may be disposed of in
accordance with these restrictions:

1.     Andersen employee materials
such as benefits packages, reference binders for personnel issues, training
materials, phone directories, Andersen publications, business cards, industry
magazines, promotional materials, reference materials, textbooks;

2.     Employee time reports (if
they are hard copies of information preserved on the computer systems);

3.     Lotus Notes, memos, Excel
sheets and PowerPoint presentations (if they are hard copies of information
preserved on the computer systems);

4.     10-Ks, 5-1s, 5-8s and
financial statements (if they are extra copies of materials that are preserved
both in hard copy and on the computer systems);

5.     Billing information such as
computer printouts of time billed to a client and billing status of a given
project (if they are hard copies of information preserved on the computer
systems);

6.               General client information such as
client proposals and background information about clients;

7.     Copies of materials that
are contained in client engagement files (except that if they contain
notations, such materials must be preserved);

8.     CDs, computer discs and
other general electronic files as long as the contents have been saved and
backed up on the computer systems;

9.     Tax return preparation
software (non-client specific);

10.   Extra copies of prior year
tax returns (if other copies are maintained in the engagement files);

11.   Drafts of financial
statements and tax returns (if the final version of these items are maintained
in the engagement files).

 

Note:
Do not dispose of any phone message slips or documents with any handwritten
notations. These items will be collected and retained.

 

Any questions about disposal of
hard copy materials should be directed to your local office Director of
Administration / Support Services or to Ed DiYanni at 1-212-708-6230.

 

As a final point, please note
that all US ABA partners, principals, managers and seniors received US ABA Bulletin 02-10, dated April 15,
2002, which announced significant revisions to the firm’s audit working paper
archiving policy. That memo remains in effect with the following clarification:
For work-related materials that are not specific to an engagement, apply the
guidelines described above. Any questions about the audit working paper
archiving policy should be directed to your ABA practice director or the
Professional Standards Group.

 

Revisions for retention and deletion of
documents – March 2002

 

The revisions are as follows:

 

E-2

 

•                  No document can
be printed without first being saved. 
This is to ensure that a copy of all relevant data is retained
properly.  This applies to documents in
all operating systems and software programs.

•                  Document(s)
saved to your hard drive can be deleted only after all of the following steps
have been completed:

1.     You have saved the
document(s) on your hard drive under either the Data directory (for Windows 95
users) or the My Documents
directory (for Windows 2000 users).

2.     You
have connected your computer to the Andersen network.

3.     You
have successfully backed up the document(s) by copying it to the network, or by
using the automatic backup program Connected TLM. For any questions related to
backing up document(s) on your hard drive, please contact your local help desk.

4.     You
have wanted 48 hours from the completion of that successful backup.  This is to ensure that the technologies that
back up all Andersen data on the network have completed necessary operations.

•                  No documents can
be saved to what is called the “system” volume (SYS) of our network file
servers.  This should not affect the way
you work, but you need to be aware of this restriction.

Software
programs allow you to save documents to the location of your choice, including
network file servers such as the “J” drive. The network file servers are
structured into data volumes, such as VOL1, VOL2, etc., where software programs
and documents are stored. The SYS volume contains the files and data that run
the server.  The SYS volume must be kept
free of user documents so that we can perform routine maintenance and keep the
file servers and network operating properly.

 

Please remember that the
Interim Document Management Policy requires that you retain any
document, including e-mail, that could be relevant in actual or potential legal
or regulatory proceedings.  It also
requires that you retain every work-related document that existed as of
January 10, 2002, when the interim policy was established.

 

January
2002

(Superseding
AABU Policy Statement 760)

 

I.      Documents
Currently in Existence: Retain Everything

A.  You must retain every
work-related document that is currently in existence. (See definition of
“documents,” Section III, infra)

1.  This means that for the time
being you must not destroy or discard any work-related documents in the
possession of Andersen or any Andersen employees.

 

2.  As further explained below,
this directive includes electronic documents. 
Thus, you may not delete anything that currently exists on your
computer, including any e-mails.

 

II.             Requirement for
Retention of Documents Created in the Future

A.  In addition to work papers,
correspondence, client-prepared schedules and other documents that you normally
retain as part of central engagement files, you must retain every
document that is created in the future if you believe that document
might possibly be

 

E-3

 

relevant to
any actual or potential litigation, investigation, inquiry, proceeding, or
other dispute

1.  Be over-inclusive: If a
question crosses your mind about whether to retain a document, retain it.

 

2.  If you have questions about
this aspect of the policy, call the Legal Group in Chicago at 312-507-9209.

 

III.   Definition
of  “Document”

A.    For purposes of this policy,
the word “document” has an intentionally broad definition. More specifically,
“document” means:

1.  any record or other tangible
form of expression, whether an original or a copy, and however created,
produced or stored (manually, mechanically, electronically or otherwise),
including but not limited to; books, papers, files, notes, correspondence,
messages, memoranda, reports, work papers, electronic mail messages, telephone
logs, records of conversations or meetings, account statements, confirmations,
contracts, agreements, reports, studies, summaries, charts, computer printouts,
diaries, calendars, bank statements, invoices, bills, records of billings,
checks, wire transfers, drafts for money, records of payment, magnetic tape,
tape recordings, disks, diskettes, disk packs, and other electronic media,
microfilm, microfiche, and storage devices, (this does not include Octels and
voice mail messages)

2.     and all drafts,
alterations, and modifications, changes or amendments of the foregoing.

a.     Again, be over-inclusive.  If you are not sure whether something is a
“document,” treat it as if it is a document.

 

b.     Also, this means that
“drafts” are “documents.”

 

 

Andersen Worldwide SC

 

 

May 3, 2002

Further clarification - Interim Document Management Policy

 

•      Additional guidance on disposal of hard
copy materials with notations

 

Andrew Pincus

General Counsel

 

Dan Nottke

Managing Partner, Global Technology Organization

 

E-4

 

We want to inform you of further guidance pertaining to our Interim
Document Management Policy.  These
clarifications should help you better manage your disposal of various hard copy
materials and reduce costs for the firm. 
Former US Senator John Danforth’s firm, Bryan Cave, has approved the
changes announced below.

 

Consistent with the notice issued last week, the clarifications noted
below should continue to ease the burden of the Interim Document Management
Policy on you and the firm without compromising the integrity of important
principles of document preservation. 
They allow you to delete / dispose of some materials and documents as
described below.

 

These changes apply to all Andersen personnel worldwide and are
effective immediately.  We realize that
many of you are in deals or working on deals to move to a new firm. We remind
you that as long as you are part of the Andersen network of firms or have
possession of Andersen documents, you need to abide by the Andersen policies
for document retention.  The Interim
Document Management Policy has been revised on our intranet to incorporate
these revisions and other guidance to date. 
We encourage you to read the policy in full on the intranet.

 

The additional clarifications to the Interim Document Management Policy
are as follows:

 

•      Phone messages and documents with
notations

 

You may dispose of phone messages and copies of materials (e.g.
contracts, reports, financial statements) with notations that you previously
were required to keep as long as:

 

1.               they are not relevant to any pending on
reasonably foreseeable litigation, investigation, inquiry, proceeding or other
dispute (by “any” we mean matters that involve Andersen, an Andersen client, or
any other matter where Andersen possess relevant documents);

2.               they are not related in any way to
Enron;

 

E-5

 

3.               they are not related in any way to
either the Professional Standards Group (PSG) or to the Firm’s General Counsel
(or any attorneys that are part of that functional area) for the period from
8/1/01 through 11/15/01.

 

Hard copies that must be retained include those related to Enron,
Worldcom, Global Crossing, tax shelter transactions or any other matter for
which specific instructions to preserve documents have been issued or may be
issued in the future.

 

Materials that have been cleared for disposal and which are
confidential or proprietary should be accumulated for shredding rather than
discarded in the regular office trash collection and disposal process.

 

Any questions about disposal of hard copy materials should be directed
to your local office Director of Administration / Support Services or to Ed
DiYanni at 1-212-708-6230.

 

If you have any questions about the Interim Document Management Policy,
please contact the Legal Group at 1-312-507-9209.

 

E-6

 

To: All US partners and
personnel

 

 

Because
this document has been retained centrally, you may delete it from your e-mail
under the Interim Document Management Policy.

 

 

May
23, 2002

 

Revised
Document Management Policy: Effective May 23, 2002

 

Arthur
Andersen LLP  Legal Group

 

In January, we initiated a
formal review of our document management and retention policies, Former US
Senator John Danforth’s firm, Bryan Cave, has participated in this process,
advising on and approving the interim policy changes that have been provided to
you over the past several months.

 

This revised Document
Management policy supersedes the Interim Document Management Policy with
respect to client engagement information in hardcopy form.  It also outlines the policy for management
of client information, in both hardcopy and electronic form, in the event of
pending or reasonably foreseeable litigation. These requirements apply, with
immediate effect, to all partners and employees in the United States.

 

Given that many of you are or
soon will be transitioning to new organizations and work environments, it is
vital that you adhere to these policies in making arrangements for the
retention or disposal of documents in your possession.

 

Policy
for hardcopy client engagement information

 

Policy Statement 760 (Practice
Administration: Client Engagement Information — Organization, Retention and
Destruction) and other policies developed in accordance with PS 760, include
provisions for the retention and disposal of both hardcopy and electronic
client engagement information.  The provisions in PS 760 and related policies with
respect to hardcopy client information now apply to all documents created both
before and after January 10, 2002. 
For your reference, a copy of PS 760
is available on the intranet.

 

One of the related policies
that provides summary guidelines for retention of internal accounting records
is the Accounting Record Retention Schedule,
included in Appendices E-1 and E-2 of the Accounting
Procedures Manual.  This
includes document retention guidance for current and obsolete office records,
including client receivables, unbilled services, fee statistics and other
information.

 

You should maintain and dispose
of applicable hardcopy documents in accordance with those provisions, unless
the documents are related to pending or reasonably foreseeable litigation,
legal proceedings, inquiries, investigations, or disputes, involving Arthur
Andersen, Arthur Andersen clients or third parties where Arthur Andersen has
possession, custody or control of documents related to those matters.  If you
have possession of any such documents, you must preserve them until further
notice.  This is described in
more detail later in this note.

 

PS 760 protects the
confidentiality and provides for the proper management of client engagement
information.  It applies to the
following types of client documents.

 

E-7

 

	
  Service
  Line

  	
   

  	
  Type of Material

  	
   

  	
  Retention Period

  
	
  ABA -
  Financial Statement Assurance

  	
   

  	
  Client File
  (a)/Engagement Knowledge Base/CAF (purged annually of superseded or non-relevant
  documents)

  Audit Workpapers/Central File

  	
   

  	
  Permanently
  (e)

  
	
   

  	
   

  	
  Office
  copies of reports and financial statements (d)Filings with Government
  agencies which include (physically or by reference) our reports, such as
  10K’s and Registration Statements filed with the SEC

  	
   

  	
  Six Years

  Permanently (e)

  

  

  Permanently (e)

  
	
  ABA-Business
  Risk Consulting and Advisory

  	
   

  	
  Central
  File, including Working Papers

  	
   

  	
  When no
  longer useful or needed to

  support an opinion, Maximum

  of Six years (f)

  
	
   

  	
   

  	
  Office
  Copies of Reports (d)

  	
   

  	
  Permanently
  (e)

  
	
  AHA-AA
  Process Solutions

  	
   

  	
  Central
  File, including working papers (Enterprise Center Clients)

  Office Copies of Reports and Financial Statements Filings with Government
  Agencies which include (physically or by reference) our reports, such as 10Ks
  and Registration statements filed with SEC

  CAFs

  	
   

  	
  Six years
  (f)

  

  Permanently (e)

  
	
   

  	
   

  	
  Project File
  Documentation, including:

  	
   

  	
   

  
	
   

  	
   

  	
  • SMART documentation and risk
  management action plans

  	
   

  	
  Permanently
  (e)

  
	
   

  	
   

  	
  • Job Arrangement Letter or Contract
  with appropriate terms

  	
   

  	
   

  
	
   

  	
   

  	
  • Contract change orders

  	
   

  	
   

  
	
   

  	
   

  	
  • Project work plans

  	
   

  	
   

  
	
   

  	
   

  	
  • Engagement QA partner review
  documentation

  	
   

  	
   

  
	
   

  	
   

  	
  • Project memoranda related to client
  discussions of issues/problems and resolution

  	
   

  	
   

  
	
   

  	
   

  	
  • Supporting schedules, simulations,
  models, or other documentation that underlie final recommendations made or
  end products delivered

  	
   

  	
   

  
	
   

  	
   

  	
  • Client satisfaction documentation
  and survey forms

  	
   

  	
  Six years
  (b)

  

 

E-8

 

	
  Service
  Line

  	
   

  	
  Type of
  Material

  	
   

  	
  Retention
  Period

  
	
  TLBA - Tax
  and Business Advisory

  	
   

  	
  Central
  File, including all Working Papers

  Income Tax Returns

  Tax Basis Studies

  	
   

  	
  Six Years
  (f)

  Six years (f)

  Permanently (e)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Earnings and
  Profits Studies

  	
   

  	
  Permanently
  (e)

  
	
   

  	
   

  	
  Estate
  Planning Studies

  	
   

  	
  Permanently
  (e)

  
	
   

  	
   

  	
  Estate and
  Gift Tax Returns

  	
   

  	
  Permanently
  (e)

  
	
   

  	
   

  	
  Office
  Copies of Attest Reports, including Third-Party Tax Opinions and Reports on
  Prospective Financial Information Continuing Tax Files (including all
  documents that have continuing importance)

  	
   

  	
  Permanently
  (e)

  
	
  TLBA - Legal

  	
   

  	
  Central
  File, including Working Papers

  	
   

  	
  Customs and
  practices of legal profession in each country.  The policy should be determined by the Head of Legal Services
  and approved by the Area Practice Director of Legal Services.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Office Copy
  of Report or Other Deliverable (d)

  	
   

  	
  Permanently
  (e)

  
	
  BC

  	
   

  	
  Project File
  Documentation

  	
   

  	
  Six Years(b)

  
	
   

  	
   

  	
  • Risk SMART documentation and risk
  management action plans

  	
   

  	
   

  
	
   

  	
   

  	
  • Job Arrangement Letter with
  appropriate terms and conditions, signed by the client and AA

  • Contract change
  orders

  • Project work
  plans

  • Engagement QA
  partner review documentation

  • Project status
  meetings

  • Project memoranda
  related to client discussions of issues/problems and resolution

  	
   

  	
   

  
	
   

  	
   

  	
  • Supporting schedules, electronic
  simulations or models, and other documentation that underlie final
  recommendations made or end products delivered

  • Client
  satisfaction documentation and survey forms

  	
   

  	
   

  
	
   

  	
   

  	
  Office Copy
  of Final Report or Other Deliverable (d)

  	
   

  	
  Permanently
  (e)

  

 

E-9

 

	
  Service
  Line

  	
   

  	
  Type of Material

  	
   

  	
  Retention Period

  	
   

  
	
  Complex
  Claims & Events

  (Litigation Support)

  	
   

  	
  Project File
  Documentation, including:
•
  Documentation to support that an adequate conflict search was performed

    Risk
  SMART documentation

  • Job Arrangement
  Letter with appropriate terms and conditions, signed by the Client and AA

  • Contract change
  orders

  • AP-150, including
  sign-off by engagement QA partner

  • Client
  satisfaction documentation and survey forms

   Retention of specific supporting schedules are required by (i) Class
  Action Settlement Assistance, (ii) Insurance Insolvency Consulting and (iii)
  FEHB Settlement Negotiations. Contact the respective service line leader for
  more information

  	
   

  	
  Six Years
  (b)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Office Copy
  of Final Report or Other Deliverable (d)

  	
   

  	
  Permanently
  (e)

  	
   

  
	
  Federal
  Government Contacts Consulting

  	
   

  	
  In addition
  to the guidelines provided for BC, contracts with the U.S. Government require
  the retention of certain documentation pursuant to Federal guidelines.  Contact the Office of Government Services
  (OGS) for more information

  	
   

  	
  As directed
  by OGS

  	
   

  
	
  Other
  Service Lines

  	
   

  	
  Central
  File, including Working Papers Office Copies of Reports (d)

  	
   

  	
  Six Years
  (b)

  Permanently (e)

  	
   

  

 

THESE
NOTES ARE IMPORTANT - PLEASE READ

 

(a)  The client file is a continuously updated
file and includes the reports to support the accept/retain decision. EXCEED.
Understanding the Business, Assess Client Risk Controls and Determining and
Managing Residual Risk Processes.  Per
Section 2 of AOP, the engagement team must retain certain reports from the
client file in the current year workpapers; retention of other reports is
optional.

(b)  Six years from the date of the financial statements covered by an
audit report or supplemental reports, or the date of issue of special reports
on prospective financial information, or other deliverables.

(c)  The Office/Country Managing Partner in consultation with the
Global Risk Management Group, may choose to extend the period, if
appropriate.  In no circumstances,
however, should the retention period be lessened.

(d)  If our arrangement letter with the client includes legal
liability limitation language, such letter should be included with the office
copy of our report

(e)  As described in Section 4 of AABU Policy Statement No. 760, these
items do not need to be retained permanently for lost clients.  These items should be retained for six years
after loss of client rather than permanently.

(f)  Six years from the year-end of the relevant return unless a
longer period is required by local law. 
However, if a return is under examination of in dispute, the relevant
information should not be destroyed until final resolution or settlement.

 

Departing partners, managers
and staff should follow the guidance provided by their solution segment leaders
and practice directors regarding the collection and storage of engagement
specific documents. Materials that have been cleared for disposal should be
accumulated for cremation, shredding, mulching or pulping, whichever is most
cost

 

E-10

 

effective. Where available, commercial
facilities that are bonded and provide proof of destruction should be used for
disposal of hardcopy client engagement information.  PS 760, Section 4.5.2, provides guidelines and processes for the
disposal of hardcopy working paper files.

 

The Interim Document Retention
Policy — updated on April 29, 2002, to allow for deletion of
electronic documents under appropriate circumstances — remains in effect with
respect to retaining and disposing of electronic client documents. An updated
copy of the Interim Document Retention Policy is available on the intranet. In
brief, if you save and properly back up any electronic document, you may delete
it from your PC or laptop, unless it falls within the Litigation restrictions
set out below.

 

Document
management in the event of pending or foreseeable litigation

 

If you possess any client documents —
hardcopy or electronic — related to pending or reasonably foreseeable
litigation, legal proceedings, inquiries, investigations or disputes involving
Arthur Andersen, Arthur Andersen clients or third parties where Arthur Andersen
has possession, custody or control of documents related to those matters
(referred to as “Litigation”), you must preserve them until further notice.

 

In particular, you cannot dispose of any
documents related to Enron, Global Crossing, Worldcom, Asia Pulp & Paper,
Peregrine Systems or tax shelters. In deciding whether to dispose of any
document, err on the side of caution. 
If there is any doubt as to whether it is appropriate to dispose of a
document, either retain the document or contact the Arthur Andersen LLP Legal
Group at 312-507-9209 to determine whether the document or category of
documents is related to pending or reasonably foreseeable Litigation.

 

If any of the following situations occurs or
has occurred, do not dispose of any documents related to that matter:

 

•      You have been contacted by someone at Arthur
Andersen or outside counsel for Arthur Andersen to provide documents related to
pending Litigation.

•      You have been notified by the engagement
partner or another Arthur Andersen employee that it is reasonably foreseeable
that a matter for which you possess documents is or will be the subject of
Litigation, or

•      You become aware of information that leads
you to believe that it is reasonably foreseeable that a matter for which you
possess documents is or will be the subject of Litigation.

 

Policy Statement 780 (Practice
Administration: Notification of Threatened or Actual Litigation, Governmental
or Professional Investigations, Receipt of a Subpoena, or Other Requests for
Documents or Testimony, Formal or Informal) and other directives from Arthur
Andersen address the procedures to be followed when an Arthur Andersen partner
or employee becomes aware of information that suggests it is reasonably
foreseeable that Arthur Andersen, one of Arthur Andersen’s clients or a third
party will be the subject of Litigation about which Arthur Andersen has
information.  In these situations, you
are required to:

 

•      Report that information to the Arthur
Andersen LLP Legal Group, and

•      Retain and preserve every document that is
relevant to the matter that is the subject of the pending or reasonably
foreseeable Litigation

 

Given the significant numbers of partners and
employees leaving and the fact that they no longer will be a resource for
information about pending or reasonably foreseeable Litigation, please keep in
mind your obligations with respect to notifying others about pending or
reasonably foreseeable Litigation.  If
you make a report, or have made a report, to the Arthur Andersen LLP Legal
Group about information described above, you also must tell all members of the
relevant engagement team and any other relevant Arthur Andersen personnel to
preserve and maintain documents related to that matter.

 

Any questions about disposal of hard copy
materials should be directed to your local office Director of Administration / Support
Services or to Kent Piper at 1-312-931-0503.

 

E-11

 

If you have any questions about the policy
please contact the Arthur Andersen LLP Legal Group at 1-312-507-9209.

 

E-12

 

Exhibit F – Released Restrictive
Covenants from Partnership Agreement

 

[Article 26(A)] ...In recognition of the partners’ special relationship with the Firm and
the fiduciary duties arising therefrom, and in acknowledgment that each partner
will have obtained knowledge of Firm information during his membership in the
Firm, each partner undertakes the following obligations which he confirms have
been reasonably designed to protect the Firm’s legitimate business interests
without unnecessarily or unreasonably restricting his professional
opportunities in the event that he resigns, retires, or is removed as a member
of the Firm:

 

* * *

 

(2)           Each partner shall not, for a period of eighteen (18) months following
his resignation, retirement or removal from the Firm, for himself or as agent,
partner or employee of any person, corporation or firm other than an Affiliated
Firm, engage in the practice of professional services of the type provided by
the Firm for:

 

(a)           any client of the Firm or of an Affiliated Firm for whom the partner
performed services, as determined by the Administrator, or

 

(b)           any prospective client of the Firm or of an Affiliated Firm to whom the
partner submitted, or assisted in the submission of, a proposal, during the
eighteen (18) month period preceding his resignation, retirement, or removal.

 

(3)           Each partner shall not, at any time during which he is a partner of the
Firm and for twelve (12) months after his resignation, retirement or removal
from the Firm, whether for his own account or for the account of any person
other than an Affiliated Firm, directly or indirectly, endeavor to solicit away
from the Firm or an Affiliated Firm, or facilitate the solicitation away from
the Firm or an Affiliated Firm of, any client of the Firm or an Affiliated
Firm.

 

(4)           Each partner shall not, at any time during which he is a partner of the
Firm and for eighteen (18) months after his resignation, retirement or removal
from the Firm, whether for his own account or for the account of any person
other than an Affiliated Firm, directly or indirectly, induce away from the
Firm or an Affiliated Firm, or facilitate the inducement away from the Firm or
an Affiliated Firm of, any personnel of the Firm or an Affiliated Firm or
interfere with the faithful discharge by such personnel of their contractual
and fiduciary obligations to serve the Firm’s or the Affiliated Firm’s
interests and those of its clients of undivided loyalty.

 

F-1

 

Exhibit G – Released Restrictive
Covenants from Andersen Worldwide Policies 12

 

35.3.1.     A retired partner may not, for 18 months
following retirement, provide the same type of services provided by any Member
Firm for:

 

•      Any client of any Member Firm for whom the
retired partner performed services, as determined by the Managing Partner of
the Member Firm from which he or she retired.

 

•      Any prospective client to whom the partner
submitted or assisted in the submission of a proposal during the 18-month
period preceding his or her retirement.

 

* * *

 

35.4.1.     Retired partners may not, for 12 months after
retirement, whether for their own account or for the account of any other
person, directly or indirectly solicit away any client of any Member Firm.  A client is any person or entity for whom
the Firm or an affiliated firm performed professional services, or provided
products within the 12 months immediately preceding retirement.  (Article 26 (A)2 and (D) of the Standard
Partnership Agreement)

 

* * *

 

35.5.1.     Retired partners may not, for 18 months after
retirement, whether for their own account or for the account of any other
person, directly or indirectly:

 

•      Solicit away any personnel of any Member
Firm.

 

•      Interfere with the faithful discharge by such
personnel of their contractual and fiduciary obligations to serve the Firm’s
interests and those of its clients with undivided loyalty.  (Article 26(A)4 of the Standard Partnership
Agreement)

 

G-1

 

SEPARATION AGREEMENT – PARTICIPATING
PRINCIPALS

 

This
Separation Agreement (this “Agreement”) is made as of this
[    ] day of
[               ]
, 2002, by and between Arthur Andersen LLP, a registered limited liability
partnership under the laws of the State of Illinois (“AA”), and [NAME OF PARTICIPATING PRINCIPAL]
(“Participating Principal”).

 

WHEREAS, AA
and LECG, LLC (“LECG”) have agreed by letter agreement (the “Letter Agreement”)
to the terms of a separation of certain partners, participating principals and
national directors, including Participating Principal, from the existing
Insurance Claims Practice and certain other portions of AA’s Value Solutions
Unit;

 

WHEREAS, each
of AA and Participating Principal will derive substantial benefits from the
transactions contemplated by the Letter Agreement;

 

WHEREAS,
completing the transactions contemplated by the Letter Agreement at this time
maximizes value for the benefit of AA, which benefit may not be realized
without Participating Principal separating from AA on the terms set forth in
this Agreement and affiliating with LECG;

 

WHEREAS,  the foregoing cannot be accomplished unless
AA releases Participating Principal as contemplated by Section 2 hereof, which
Section includes, among other things, the release of Participating Principal by
AA from certain restrictive covenants set forth in the September 1, 2000
partnership agreement of AA, as amended (the “Partnership Agreement”); and

 

WHEREAS, AA
has determined that as of the date of Participating Principal’s separation from
AA, his/her amounts owing to AA and certain other matters are as set forth on
the determination statement attached hereto as Exhibit A (the
“Determination Statement”).

 

NOW,
THEREFORE, in consideration of the foregoing and the mutual agreements
contained herein, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged. AA and Participating
Principal hereby agree as follows;

 

1.             Participating
Principal hereby agrees as follows:

 

(a)           From
and after the date of this Agreement Participating Principal will no longer be
a participating principal of and will have no further interest in AA, AA
Holdings C.V., Andersen Worldwide Societe Cooperative (“AW”) or any affiliated
firms or any of their respective assets or rights (including, without
limitation, any inventions, writings or other intellectual property created by
Participating Principal or under Participating Principal’s supervision as part
of and during Participating Principal’s association with any of the foregoing
firms); provided, however, that, subject to AA’s determination
under Section 1(b).  Participating
Principal may receive certain retirement payments as contemplated under Section
1(b).  Participating Principal hereby
acknowledges receipt of sufficient consideration in connection

 

 

with this Agreement, including
without limitation the consideration received under Section 2 hereof.

 

(b)           The
Determination Statement describes accurately the amount owed by the
Participating Principal to AA (or by AA to the Participating Principal, as
applicable) as of the date hereof. 
Except as otherwise referenced herein, Participating Principal will not
be entitled to receive any separation or other payments (including, without
limitation, early retirement benefits and payments under the “Weinbach”
schedule or “Measelle” policy); provided, however, that this
sentence shall not apply to any assets in or benefits which are provided under
any retirement plan which  is intended
to be qualified under Section 401(a) of the Internal Revenue Code of 1986, as
amended.  Participating Principal
accepts and agrees that the aggregate amount of basic retirement benefits
available to all of AA’s retirees may be limited (either to a set percentage of
AA’s net income or otherwise) or may be entirely eliminated and that, in
addition, such benefits with respect to Participating Principal may be
restructured, cancelled, reduced or delayed indefinitely, in each case all as
determined by AA, which determination shall be in AA’s sole and absolute
discretion and shall be final and conclusive . 
Participating Principal and AA agree that Participating Principal will
not be entitled to any further distributions or payments of income or other
cash or property from AA pursuant to the Partnership Agreement (which is
applicable to Participating Principal to the extent provided in that certain
Agreement with Participating Principals and National Directors (the form of
which is attached hereto as Exhibit B) by and among AA and Participating
Principal) or otherwise.   In
consideration for (i) the distributions and/or payments to date and the
payments referenced hereunder.  (ii) any
business assets of AA, such as business treatises or journals, allowed to be
retained by Participating Principal as part of the approved check out process
and (iii) the other rights and obligations contained herein.  Participating  Principal agrees to waive repayment of Participating Principal’s
subordinated loan as provided for in the Agreement with Participating
Principals and National Directors. 
Nothing in this Section 1(b) shall alter the legal status of
Participating Principal pursuant to the Agreement with Participating Principals
and National Directors and other applicable organizational documents of AA, AW
or its affiliates.  Additionally,
nothing in this Agreement shall constitute an admission by Participating
Principal that Participating Principal is or ever has been a partner of
AA.  AA agrees that in the event that,
within six months of the date hereof, any partner, participating principal or
national director enters into a provision with AA corresponding to this Section
1(b), in connection with the sale of assets by AA that contains terms that are
more favorable to such partner, participating principal or national director
than the comparable terms of this Section 1(b), then, at the option of
Participating Principal, any such provision shall apply to Participating
Principal in lieu of this Section 1(b).

 

(c)           Participating
Principal acknowledges and agrees that, except as provided herein, all terms of
the Partnership Agreement that are applicable to Participating Principal shall
remain in full force and effect with respect to Participating Principal after
the date of this Agreement.

 

(d)           Except
as may be required by the lawful order of a court or agency of competent
jurisdiction or as provided in the Letter Agreement.  Participating Principal shall keep secret and confidential
indefinitely all non-public information (including, without limitation,
information regarding litigation and any communication with counsel to AA or
any special committee of AA or any work product of any such counsel) concerning
AA, any of its affiliates or affiliated firms and/or any of their respective
clients (unless the client consents otherwise) which was acquired

 

2

 

by or disclosed to
Participating Principal during Participating Principal’s employment by,
association with or ownership of AA or any of its affiliates or affiliated
firms and shall not disclose the same, either directly or indirectly, to any
other person, firm, or business entity or use it in any way.  Participating Principal represents that,
except as contemplated by the Letter Agreement, Participating Principal has
returned to AA or its affiliates, affiliated firms or clients, as applicable,
any and all records, documents, property, information, computer disks or other
materials relating to the business of AA, any of its affiliates or affiliated
firms and/or any of their respective clients obtained by Participating
Principal during the course of his/her employment by, association with or
ownership of AA or any of its affiliates or affiliated firms, including without
limitation all items of the type described on Exhibit C.  Nothing in this Agreement, the Partnership
Agreement or any other agreement or document by which Participating Principal
is bound to AA or its affiliates shall be construed so as to prevent
Participating Principal from using, in connection with membership in or
association with LECG or any of its affiliates, knowledge which was acquired by
Participating Principal during Participating Principal’s employment by,
association with or ownership of AA or any of its affiliates or affiliated
firms, and which is generally known to persons of Participating Principal’s
experience.

 

(e)           Participating
Principal shall not disparage AA or any of its affiliated firms or any of their
respective present or former partners, managers or employees (“AA Party”); provided,
however, that this Section 1(c) shall not prevent Participating
Principal from (i) responding to comments made by any AA Party about
Participating Principal if Participating Principal reasonably believes such
comments were disparaging to Participating Principal or (ii) making statements
about an  AA Party in connection with
the defense of a claim made against Participating Principal by a third party.

 

(f)            Notwithstanding
anything to the contrary herein, Participating Principal, on behalf of
Participating Principal, Participating Principal’s heirs, administrators,
estates, executors, personal representatives, successors and assigns, does
hereby release and forever discharge AA, AW and their respective affiliated
firms, and each of their respective assigns, past or present partners, officers,
principals, directors, employees, agents, successors (whether at law, equity or
otherwise), and affiliates (collectively, the “Released Parties”) from any and
all actions, causes of action, claims, demands, debts, damages, costs, losses,
penalties, attorneys’ fees, obligations, judgments, expenses, compensation or
liabilities of any nature whatsoever, in law or equity, whether known or
unknown, contingent or otherwise, that Participating Principal now has, may
have ever had in the past or may have in the future against any of the Released
Parties by reason of any act, omission, transaction, occurrence, conduct,
circumstance, condition, harm, matter, cause or thing that has occurred from
the beginning of time up to and including the date hereof, including, without
limitation, claims that in any way arise from or out of, are based upon or
relate to Participating Principal’s employment by, association with or
ownership of AA or any of its affiliated firms, except (i) for claims arising
out of AA’s obligations set forth in this Agreement and (ii) as provided in the
second sentence of Section 1(g) hereof. 
It is understood and agreed that nothing herein shall be deemed to be a
release of any person or entity other than the Released Parties.  In addition, the release set forth in this
Section 1(f) shall not be effective as to any other partner, participating
principal national director or other employee of AA who has not executed a
release in favor of Participating Principal that is substantially identical to
the release set forth in this Section 1(f). 
Nothing herein shall be deemed a release by LECG of any Released Persons
or other person or entity.  AA agrees
that in the event that, within six months

 

3

 

of the date hereof, any
partner, participating principal or national director enters into a provision
with AA corresponding to this Section 1(f) that contains terms that are more
favorable to such partner, participating principal or national director than
the comparable terms of this Section 1(f), then, at the option of Participating
Principal, any such provision shall apply to Participating Principal in lieu of
this Section 1(f).

 

(g)           Notwithstanding
anything in this Section 1 to the contrary, Participating Principal shall
comply with continuing obligations under the Partnership Agreement and other
organizational document(s) of AA as presently in effect and binding on former
participating principals, including, without limitation, restrictions on future
activities (expect as specifically released herein).  It is understood and agreed that this Agreement does not waive,
modify, release or otherwise affect any rights, obligations, claims or defenses
under any loan which Participating Principal may have originally entered into
with Andersen Financial Corporation or other affiliate of AA.

 

(h)           Participating
Principal shall use his/her best efforts on behalf of AA to effect collections
for work-in-progress and accounts receivable owed to AA by AA clients for which
Participating Principal had billing or collections authority (“Participating
Principal Clients”); provided, that, “best efforts” shall not
require Participating Principal to expend Participating Principal’s funds to
effect such collections.  Participating
Principal represents and warrants to AA that attached hereto as Exhibit D
is an accurate and complete list of all in-process engagements with respect to
Participating Principal Clients for which fees take into account any factors in
addition to professional time expended on the engagement.

 

(i)            Participating
Principal shall cooperate reasonably with AA in connection with any claim or
actual or threatened investigation, litigation or proceeding relating to AA or
any of its affiliated firms (“Litigation”) and, if requested by AA, to act as a
witness in connection with any such Litigation, all without any compensation
but with reimbursement for reasonable, documented, out-of-pocket expenses
incurred as a result of specific requests for cooperation by AA.  AA will defend at its expense any Litigation
(i) against Participating Principal involving Participating Principal’s
activities while a participating principal of AA that were undertaken by
Participating Principal on AA’s behalf in accordance with Participating Principal’s
responsibilities to AA or (ii) against AA that also includes Participating
Principal as a defendant and that does not involve any claim with respect to
which Participating Principal did not act in accordance with Participating
Principal’s responsibilities to AA.

 

(j)            Participating
Principal agrees to cooperate reasonably with AA in connection with the
appropriate handling of files and property of AA with which Participating
Principal was involved, all in accordance with the procedures set forth on Exhibit
E.

 

(k)           Participating
Principal represents and warrants to AA that to Participating Principal’s
knowledge:

 

(i)            Since
January 10, 2002.  Participating
Principal has (x) not caused the destruction of any documents in contravention
of the document retention policy of AA attached hereto as Exhibit F and
(y) in all cases where Participating Principal has informed AA’s legal
department of a pending litigation, investigation, or inquiry or facts making
litigation,

 

4

 

investigation, or inquiry
reasonably foreseeable, Participating Principal has also informed all AA
employees who worked on the relevant matter of AA’s document retention policies
and the need to preserve documents related to pending or reasonably foreseeable
litigation, investigation, or inquiry.

 

(ii)           Since
April 30, 2001, Participating Principal has complied in all respects with all
requests made to Participating Principal by both inside and outside counsel to
AA to retain documents and, when requested by such counsel, has delivered such
documents to such counsel.

 

(1)           Participating
Principal agrees that all notices to Participating Principal with respect to
this Agreement shall be sent to Participating Principal to the home address, or
via the email address, indicated under Participating Principal’s name on the
signature page hereto, Participating Principal further agrees that in the event
that Participating Principal’s home address, email address and/or home phone
number change subsequent to the date of this Agreement, Participating Principal
shall, as soon as reasonably practicable thereafter, provide AA with written
notice of such change.

 

2.             AA hereby agrees to
Participating Principal’s affiliation with LECG and hereby releases
Participating Principal from (i) those restrictive covenants set forth in (x)
Article 26(A)(2), Article 26(A)(3) and Article 26(A)(4) of the Partnership
Agreement (the text of such Articles is attached hereto as Exhibit G)
and (y) the corresponding restrictive covenants set forth in Sections 35.3.1,
35.4.1 and 35.5.1 of Andersen Worldwide Policies 12 (the text of such Sections
is attached hereto as Exhibit H) and (ii) all other non-compete,
non-solicitation and other restrictive covenants applicable to Participating
Principal in the Partnership Agreement or any other organizational document of
AA, AW or any of their respective affiliated firms.  Concurrently with the execution hereof, AA waives the ninety (90)
day notice requirement set forth in Article 10(A) of the Partnership Agreement.

 

3.             Notwithstanding
anything to the contrary contained herein. 
Participating Principal expressly acknowledges and agrees that (a) in no
event shall the Administrator of AA, any member of the Administrative Board of
AA, any directors, officers, managers, partners, participating principals,
national directors or similar persons of 
AA or any of their respective agents or representatives (collectively,
the “Covered Persons”) have any personal liability with respect to AA’s
obligations hereunder and (b) no Covered Person shall be obligated to make, and
no Covered Person in fact will make, any capital contribution or other payment
of any kind to AA in order for AA to satisfy its obligations hereunder.

 

4.             This Agreement shall
be governed by Illinois law without giving effect to principles of conflicts of
law.  Any and all disputes arising under
this Agreement and the transactions contemplated herein shall be governed by
Article 39 (“Arbitration”) of the Partnership Agreement, and such provision (as
modified as necessary to conform to the language and terms hereof) is hereby
incorporated by reference herein for such purpose.

 

5.             This Agreement may be
executed in any number of counterparts, each of which shall be deemed an
original, but all of which together shall constitute a single instrument.

 

5

 

6.             From time to time
after the date hereof, at the request of either party hereto, the parties
hereto shall execute and deliver to such requesting party such documents and
take such other action as such requesting party may reasonably request in order
to consummate more effectively the transactions contemplated hereby.

 

7.             The parties hereto
agree that LECG shall be a third party beneficiary of Section 1(d), the
penultimate sentence of Section 1(f), Section 2 and this Section 7, but
for no other purpose.

 

6

 

IN WITNESS
WHEREOF, the parties hereto have caused this Agreement to be executed and
delivered as of the date first above written.

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  ARTHUR
  ANDERSEN LLP

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
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  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Its:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  [Name]

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Home
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  Home Phone
  Number:

  	
   

  
														

 

7

 

Exhibit A –
Determination Statement

 

 

Determination Statement for
Participating Principal is attached hereto.

 

A-1

 

Exhibit B – Form of
Agreement with Participating

Principals
and National Directors

 

ARTHUR ANDERSEN LLP

 

AGREEMENT WITH PARTICIPATING PRINCIPALS

AND NATIONAL DIRECTORS

 

THIS
AGREEMENT, made between Arthur Andersen LLP, a limited liability partnership
organized and existing under the laws of the State of Illinois (hereinafter
referred to as the “Firm”), and the individuals listed on Attachment I hereto
(hereinafter referred to as “participating principals” and “national
directors”) jointly and severally.

 

WITNESSETH

 

1.             The individuals
listed on Attachment 1 hereby agree to provide basic loans to the Firm, in
accordance with instructions given by the Firm, of the amounts set forth
opposite their names on the attached Appendix “B”.  The loans  to the Firm
shall not be reduced by reason of losses of the Firm but are subordinate to all
claims of both secured and unsecured creditors of the Firm.

 

Effective as of the Effective
Date (as defined below), and continuing until there shall have been an increase
or decrease in the number of units of participation reserved pursuant to
Paragraph 5 or until this Agreement is terminated or modified, each
participating principal shall be entitled to receive as compensation a
proportionate share of the net income of the Firm equal to that proportion of
number of units of participation reserved for him or her bears to the total
units of participation of partners, participating principals, and overseas
representatives of the Firm, outstanding or reserved, during fiscal years of
the Firm commencing on or after the Effective Date, or such lesser proportion
as shall be appropriate for a period of less than twelve months.

 

The participating principals
shall have the right to draw against their compensation for any fiscal year in
monthly installments in accordance with the plan and procedure applicable to
the partners, except that such drawings shall be based upon the respective
number of units reserved for the participating principals.  Each national director shall receive their
compensation in semi-monthly installments as determined by the Firm.

 

None of the participating
principals or national directors shall be required to contribute to or share in
any net losses of the Firm unless and until admitted into the Firm as a partner
or national partner and then only from the effective date of such admission.

 

The participating principals
and national directors shall perform such duties as shall be assigned to them
by the Firm.  They shall not be, nor be
held out or represented to be, partners or national partners, but in their
relations with the partners and national partners, they shall have the same
status, rights and obligations as though they were in fact partners or national
partners, except that where any action is provided for in the Partnership
Agreement of the Firm by some or all of the partners and national partners, it
is understood and agreed that while such action may be taken in similar manner
with respect to the participating principals and national directors, for the
purpose of taking any such action, the participating principals and national
directors shall not be considered as partners or national partners respectively
who must or may join in taking such

 

B-1

 

action.  Nevertheless, the participating principals
and national directors will be bound by the action taken by the partners and
national partners to the extent such action is not contrary to the provisions
of this Agreement.  Further, election by
the Administrative Board and ratification by the partners and national partners
of a participating principal or national director to membership on the
Administrative Board, or election or appointment to any committee of the Firm,
shall not thereby make such participating principal or national director, a
partner or national partner.

 

During the term of this
Agreement, except as otherwise provided, the participating principals and
national directors hereby expressly assume and agree to discharge all of the
covenants and obligations of the Firm in a like manner as though they were
partners or national partners, respectively.

 

2.             The Firm has reserved
and agrees to hold available for the participating principals during the term
of this Agreement, units of participation in accordance with the applicable
Firm policies.  Such units shall be
awarded to a participating principal if he or she is admitted to the Firm as a
partner, subject only to his or her having paid either in cash or notes
acceptable to the Firm all contributions to capital which may be required of
him or her.

 

3.             The Firm, as to any
one or all of the participating principals and national directors, and any one
of the participating principals and national directors as to himself or
herself, may terminate this Agreement in the same manner and with the same
effect as provided in the Partnership Agreement of the Firm pertaining to
partners or national partners.

 

4.             The terms of the
Partnership Agreement of the Firm as in effect on the Effective Date, together
with any amendments to it which may thereafter be adopted by the partners, are
incorporated herein by reference and are specifically made applicable to
participating principals (as if they were partners) and to national directors
(as if they were national partners), except to the extent that any provision
therein may be inconsistent with the status of a participating principal  or national director or with this Agreement.

 

5.             It is understood that
the units of participation in the Firm, outstanding and/or reserved in respect
of participating principals, may be increased or decreased from time to time
and that the making of this Agreement shall not restrict such acts or any
changes in or amendments of any character to the Partnership Agreement of the
Firm.

 

6.             The participating principals
and national directors agree that with respect to all computations required to
be made hereunder, they and their heirs, executors, administrators,
beneficiaries and assigns shall be bound by and accept any determination made
by the Administrator of the Firm.

 

7.             This Agreement
supersedes all prior agreements between the Firm and any of the participating
principals and national directors with respect to the same subject matter of
this Agreement and such prior agreements shall be deemed terminated.

 

B-2

 

IN WITNESS WHEREOF, the parties
hereto have executed this Agreement on the dates indicated below, with effect,
in respect of each individual listed on Attachment I hereto, as of the
effective date such individual has been admitted to the Firm as a Participating
Principal or National Director (the “Effective Date”).

 

B-3

 

Exhibit C – Description of Property

 

C-1

 

Exhibit D – Alternative Fee Arrangements

 

[Provide list of contingency payments associated with
Participating Principal]

 

D-1

 

Exhibit E – Partner Check-Out Procedures

 

E-1

 

Exhibit F – Document Retention Policy

 

Interim Document Management Policy

 

Following is the Interim
Document Management Policy, as established on January 10, 2002, and including
revisions through April 30, 2002. Any questions about the policy should
be directed to the Legal Group
at 1-312-507-9209.

 

Revisions for  retention
and deletion of documents — April 2002

 

The revisions to the Interim
Document Management Policy are as follows:

 

You may now delete documents of all kinds that you have
created on the network, including documents in your
Lotus Notes e-mail database, provided that you are not required to
preserve such documents under the Interim Document Management Policy because of
their relevance to pending or reasonably foreseeable litigation, investigation,
inquiry, proceeding or other dispute.

 

As noted in previous communications, documents that must
be retained include those related to Enron, Worldcom, Global Crossing, tax
shelter transactions or any other matter for which specific instructions to
preserve documents have been  issued
or may be issued in the future.

 

When you save and back up
your documents, the firm’s systems will automatically retain a copy of any
deleted documents so  you are not
at risk in the event of documents becoming relevant in the future.

 

You still must retain every
document that is created in the future if it may be relevant to any pending or
reasonably foreseeable litigation, investigation, inquiry, proceeding or other
dispute.

 

Note: If you have a local
replica of your e-mail database:

•      You must make sure to regularly replicate
between your local e-mail database and your e-mail database on the network.

•      Do NOT refresh the design of your
local e-mail database. If you have problems with your local e-mail database,
please contact your local Notes administrator or local technology support desk.

•      If you have selected the Remove documents not modified in the last: XX days
in the Replication Settings dialog box on your e-mail database, it must not
be set to less than 14 days. The graphic below illustrates a mail file set to
remove documents not modified in the last 14 days. If you have any questions
about this setting, please contact your local Notes administrator or local
technology support desk.

 

You may now also dispose of various hard copies of materials
that you previously were required to keep. You may dispose only of items that
are not relevant to any pending or reasonably foreseeable litigation,
investigation, inquiry proceeding or other dispute. In addition, if any such
materials contain notations, those materials must be preserved.

 

F-1

 

Hard copies that must be retained include those
related to Enron, Worldcom, Global Crossing, tax shelter transactions or any
other matter for which specific instructions to preserve documents have been
issued or may be issued in the future.

 

The following is a list of categories of materials that may
be disposed of in accordance with these restrictions:

1.
Andersen employee materials such as benefits packages, reference binders for
personnel issues, training materials, phone directories, Andersen publications,
business cards, industry magazines, promotional materials, reference materials,
textbooks;

2.
Employee time reports (if they are hard copies of information preserved on the
computer systems);

3.
Lotus Notes, memos, Excel sheets and PowerPoint presentations (if they are hard
copies of information preserved on the computer systems);

4.
10-Ks, S-1s, S-8s and financial statements (if they are extra copies of
materials that are preserved both in hard copy and on the computer systems);

5.
Billing information such as computer printouts of time billed to a client and
billing status of a given project (if they are hard copies of information
preserved on the computer systems);

6.
General client information such as client proposals and background information
about clients;

7.
Copies of materials that are contained in client engagement files (except that
if they contain notations, such materials must be preserved);

8.
CDs, computer discs and other general electronic files as long as the contents
have been saved and backed up on the computer systems;

9.
Tax return preparation software (non-client specific);

10.
Extra copies of prior year tax returns (if other copies are maintained in the
engagement files);

11.
Drafts of financial statements and tax returns (if the final version of these
items are maintained in the engagement files).

 

Note:
Do not dispose of any phone message slips or documents with any handwritten
notations. These items will be collected and retained.

 

Any questions about disposal
of hard copy materials should be directed to your local office Director of
Administration / Support Services or to Ed DiYanni at 1-212-708-6230.

 

As a final point, please
note that all US ABA partners, principals, managers and seniors received US ABA Bulletin 02-10, dated April 15,
2002, which announced significant revisions to the firm’s audit working paper
archiving policy. That memo remains in effect with the following clarification:
For work-related materials that are not specific to an engagement, apply the
guidelines described above. Any questions about the audit working paper
archiving policy should be directed to your ABA practice director or the
Professional Standards Group.

 

Revisions for retention and deletion of  documents — March 2002

 

The revisions are as
follows:

 

F-2

 

•      No document can be printed without first
being saved. This is to ensure that a copy of all relevant
data is retained properly. This applies to documents in all operating systems
and software programs.

•      Document(s) saved to your hard drive can be deleted only after all of the following steps have been completed:

1.
You have saved the document(s) on your hard drive under either the Data
directory (for Windows 95 users) or the My
Documents directory (for Windows 2000 users).

2.
You have connected your computer to the Andersen network.

3.
You have successfully backed up the document(s) by copying it to the network,
or by using the automatic backup program Connected TLM. For any questions
related to backing up document(s) on your hard drive, please contact your local
help desk.

4.
You have waited 48 hours from the completion of that successful backup. This is
to ensure that the technologies that back up all Andersen data on the network
have completed necessary operations.

•      No documents can be saved to what is called
the “system” volume (SYS) of our network file servers. This should not affect
the way you work, but you need to be aware of this restriction.

 

Software
programs allow you to save documents to the location of your choice, including
network file servers such as the “J” drive. The network file servers are structured
into data volumes, such as VOL1, VOL2, etc., where software programs and
documents are stored.  The SYS volume
contains the files and data that run the server. The SYS volume must be kept
free of user documents so that we can perform routine maintenance and keep the
file servers and network operating properly.

 

Please remember that the
Interim Document Management Policy requires that you retain any
document, including e-mail, that could be relevant in actual or potential legal
or regulatory proceedings.  It also
requires that you retain every work-related document that existed as of
January 10, 2002, when the interim policy was established.

 

January 2002

(Superseding AABU Policy Statement 760)

 

I. Documents
Currently in Existence: Retain Everything

A.
You must retain every work-related document that is currently in existence.
(See definition of “documents.” Section III, infra)

1.
This means that for the time being you must not destroy or discard any
work-related documents in the possession of Andersen or any Andersen employees.

 

2.
As further explained below, this directive includes electronic documents. Thus,
you may not delete anything that currently exists on your computer,
including any e-mails.

 

II. Requirement for Retention of Documents Created in the
Future

A.
In addition to work papers, correspondence, client-prepared schedules and other
documents that you normally retain as part of central engagement files, you
must retain every document that is created in the future if you
believe that document might possibly be

 

F-3

 

relevant
to any actual or potential litigation, investigation, inquiry, proceeding, or
other dispute.

1.
Be over-inclusive: If a question crosses your mind about whether to retain a
document, retain it.

 

2.
If you have questions about this aspect of the policy, call the Legal Group in
Chicago at 312-507-9209.

 

III. Definition of “Document”

A.
For purposes of this policy, the word “document” has an intentionally broad
definition.

More
specifically, “document” means:

1.
any record or other tangible form of expression, whether an original or a copy,
and however created, produced or stored (manually, mechanically, electronically
or otherwise), including but not limited to: books, papers, files, notes,
correspondence, messages, memoranda, reports, work papers, electronic mail
messages, telephone logs, records of conversations or meetings, account
statements, confirmations, contracts, agreements, reports, studies, summaries,
charts, computer printouts, diaries, calendars, bank statements, invoices,
bills, records of billings, checks, wire transfers, drafts for money, records
of payment, magnetic tape, tape recordings, disks, diskettes, disk packs, and
other electronic media, microfilm, microfiche, and storage devices, (this does
not include Octels and voice mail messages)

2.
and all drafts, alterations, and modifications, changes or amendments of the
foregoing.

a.
Again, be over-inclusive. If you are not sure whether something is a
“document,” treat it as if it is a document.

 

b.
Also, this means that “drafts” are “documents.”

 

F-4

 

Andersen Worldwide SC

 

 

May 3, 2002

Further
clarification - Interim Document Management Policy

 

•      Additional guidance on disposal of hard copy
materials with notations

 

Andrew
Pincus

General
Counsel

 

Dan
Nottke

Managing
Partner, Global Technology Organization

 

We
want to inform you of further guidance pertaining to our Interim Document
Management Policy. These clarifications should help you better manage your
disposal of various hard copy materials and reduce costs for the firm.  Former US Senator John Danforth’s firm,
Bryan Cave, has approved the changes announced below.

 

Consistent
with the  notice issued last week,
the clarifications noted below should continue to ease the burden of the
Interim Document Management Policy on you and the firm without compromising the
integrity of important principles of document preservation. They allow you to
delete / dispose of some materials and documents as described below.

 

These
changes apply to all Andersen personnel worldwide and are effective
immediately. We realize that many of you are in deals or working on deals to
move to a new firm. We remind you that as long as you are part of the Andersen
network of firms or have possession of Andersen documents, you need to abide by
the Andersen policies for document retention. The Interim Document Management
Policy has been revised on our intranet to incorporate these revisions and other
guidance to date. We encourage you to read the policy in full on the intranet.

 

F-5

 

The
additional clarifications to the Interim Document Management Policy are as
follows:

 

•      Phone messages and documents with notations

 

You
may dispose of phone messages and  copies
of  materials (e.g. contracts,
reports, financial statements) with notations that you previously were required
to keep as long as:

 

1.     they are not relevant to any pending or
reasonably foreseeable litigation, investigation, inquiry, proceeding or other
dispute ( by “any” we mean matters that involve Andersen, an Andersen client,
or any other matter where Andersen possess relevant documents);

2.     they are not related in any way to Enron;

3.     they are not related in any way to either the
Professional Standards Group ( PSG ) or  to
the Firm’s General Counsel ( or any attorneys that are part of  that functional area ) for the period
from 8/1/01 through 11/15/01.

 

Hard
copies that must be retained include those related to Enron, Worldcom, Global
Crossing, tax shelter transactions or any other matter for which specific
instructions to preserve documents have been issued or may be issued in the
future.

 

Materials
that have been cleared for disposal and which are confidential or proprietary
should be accumulated for shredding rather than discarded in the regular office
trash collection and disposal process.

 

Any
questions about disposal of hard copy materials should be directed to your
local office Director of Administration / Support Services or to Ed DiYanni at
1-212-708-6230.

 

If
you have any questions about the Interim Document Management Policy, please
contact the Legal Group at 1-312-507-9209.

 

F-6

 

To: All US partners and
personnel

 

 

Because this document has been retained centrally, you may
delete it from your e-mail under the Interim Document Management Policy.

 

 

May 23, 2002

 

Revised Document Management Policy: Effective May 23, 2002

 

Arthur Andersen LLP Legal Group

 

In January, we initiated a
formal review of our document management and retention policies. Former US
Senator John Danforth’s firm,  Bryan
Cave, has participated in this process, advising on and approving the interim
policy changes that have been provided to you over the past several months.

 

This revised Document
Management policy supersedes the Interim Document Management Policy with
respect to client engagement information in hardcopy form. It also outlines the
policy for management of client information, in both hardcopy and electronic
form, in the event of pending or reasonably foreseeable litigation. These
requirements apply, with immediate effect, to all partners and employees in the
United States.

 

Given that many of you are or
soon will be transitioning to new organizations and work environments, it is
vital that you adhere to these policies in making arrangements for the
retention or disposal of documents in your possession.

 

Policy for hardcopy client engagement information

 

Policy Statement 760
(Practice Administration: Client Engagement Information — Organization,
Retention and Destruction) and other policies developed in accordance with PS
760, include provisions for the retention and disposal of both hardcopy and
electronic client engagement information. The
provisions in PS 760 and related policies with respect to hardcopy client
information now apply to all documents created both before and after January
10, 2002. For your reference, a copy of PS 760 is available on the
intranet.

 

One of the related policies
that provides summary guidelines for retention of internal accounting records
is the Accounting Record Retention Schedule,
included in Appendices E-1 and E-2 of the Accounting
Procedures Manual. This includes document retention guidance for
current and obsolete office records, including client receivables, unbilled
services, fee statistics and other information

 

You should maintain and
dispose of applicable hardcopy documents in accordance with those provisions,
unless the documents are related to pending or reasonably foreseeable
litigation, legal proceedings, inquiries, investigations, or disputes involving
Arthur Andersen. Arthur Andersen clients or third parties where Arthur Andersen
has possession, custody or control of documents related to those matters.  If you
have possession of any such documents, you must preserve them until further
notice. This is described in more detail later in this note.

 

PS 760 protects the
confidentiality and provides for the proper management of client engagement
information. It applies to the following types of client documents:

 

F-7

 

	
  Service Line

  	
   

  	
  Type of
  Material

  	
   

  	
  Retention
  Period

  
	
  ABA -
  Financial Statement Assurance

  	
   

  	
  Client File
  (a)/Engagement Knowledge Base/CAF (purged annually of superseded or
  non-relevant documents)

  Audit Workpapers/Central File

  Office copies of reports and financial statements (d)Filings with Government
  agencies which include (physically or by reference) our reports, such as 10K’s
  and Registration Statements filed with the SEC

  	
   

  	
  Permanently
  (e)

  

  

  

  Six years

  Permanently (e)

  

  Permanently (e)

  
	
  ABA -
  Business Risk Consulting and Advisory

  	
   

  	
  Central
  File, including Working Papers

  	
   

  	
  When no
  longer useful or needed

  to support an opinion. Maximum

  of Six years (f)

  
	
   

  	
   

  	
  Office
  Copies of Reports (d)

  	
   

  	
  Permanently
  (e)

  
	
  ABA - AA
  Process Solutions

  	
   

  	
  Central
  File, including working papers (Enterprise Center Clients)

  	
   

  	
  Six years
  (f)

  
	
   

  	
   

  	
  Office
  Copies of Reports and Financial Statements Filings with Government Agencies
  which include (physically or by reference) our reports, such as 10Ks and
  Registration statements filed with SEC CAFs

  Project File Documentation, including:

  	
   

  	
  Permanently
  (e)

  
	
   

  	
   

  	
  SMART documentation and risk management action plans

  • 
  Job Arrangement Letter or Contract with appropriate terms

  • 
  Contract change orders

  • 
  Project work plans

  • 
  Engagement QA partner review documentation

  • 
  Project memoranda related to client discussions of issues/problems and
  resolution

  • 
  Supporting schedules, simulations, models, or other documentation that
  underlie final recommendations made or end products delivered

  	
   

  	
  Permanently
  (e)

  
	
   

  	
   

  	
  • 
  Client satisfaction documentation and survey forms

  	
   

  	
  Six years
  (b)

  

 

F-8

 

	
  Service Line

  	
   

  	
  Type of
  Material

  	
   

  	
  Retention
  Period

  
	
  TI BA - Tax
  and Business Advisory

  	
   

  	
  Central
  File, including all Working Papers 

  	
   

  	
  Six Years
  (f)

  
	
   

  	
   

  	
  Income Tax
  Returns

  	
   

  	
  Six years
  (f)

  
	
   

  	
   

  	
  Tax Basis
  Studies

  	
   

  	
  Permanently
  (e)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Earnings and
  Profits Studies

  	
   

  	
  Permanently
  (e)

  
	
   

  	
   

  	
  Estate
  Planning Studies 

  	
   

  	
  Permanently
  (e)

  
	
   

  	
   

  	
  Estate and
  Gift Tax Returns

  	
   

  	
  Permanently
  (e)

  
	
   

  	
   

  	
  Office
  Copies of Attest Reports, including Third-Party Tax Opinions and Reports on
  Prospective Financial Information 

  	
   

  	
  Permanently
  (e)

  
	
   

  	
   

  	
  Continuing
  Tax Files (including all documents that have continuing importance)

  	
   

  	
  Permanently
  (e)

  
	
  TLBA - Legal

  	
   

  	
  Central
  File, including Working Papers

  	
   

  	
  Customs and
  practices of legal profession in each country.  The policy should be determined by the Head of Legal Services
  and approved by the Area Practice Director of Legal Services.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Office Copy
  of Report or Other Deliverable (d) 

  	
   

  	
  Permanently
  (e)

  
	
  BC

  	
   

  	
  Project File
  Documentation

  • 
  Risk SMART documentation and risk management action plans

  • 
  Job Arrangement Letter with appropriate terms and conditions, signed
  by the client and AA

  • 
  Contract change orders

  • 
  Project work plans

  • 
  Engagement QA partner review documentation

  • 
  Project status meetings

  • 
  Project memoranda related to client discussions of issues/problems and
  resolution

  • 
  Supporting schedules, electronic simulations or models, and other
  documentation that underlie final recommendations made or end products
  delivered

  • 
  Client satisfaction documentation and survey forms

  	
   

  	
  Six Years
  (b)

  
	
   

  	
   

  	
  Office Copy
  of Final Report or Other Deliverable (d)

  	
   

  	
  Permanently
  (e)

  

 

F-9

 

	
  Service Line

  	
   

  	
  Type of
  Material

  	
   

  	
  Retention
  Period

  
	
  Complex
  Claims & Events

  (Litigation Support)

  	
   

  	
  Project File
  Documentation, including:
•  Documentation to support that an adequate
  conflict search was performed

  • 
  Risk SMART documentation

  • 
  Job Arrangement Letter with appropriate terms and conditions, signed
  by the client and AA

  • 
  Contract change orders

  • 
  AP-150, including sign-off by engagement QA partner

  • 
  Client satisfaction documentation and survey forms

  • 
  Retention of specific supporting schedules are required by (i) Class
  Action Settlement Assistance, (ii) Insurance Insolvency Consulting and (iii)
  FEHB Settlement Negotiations. Contact the respective service line leader for
  more information

  	
   

  	
  Six Years
  (b)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Office Copy
  of Final Report or Other Deliverable (d)

  	
   

  	
  Permanently
  (e)

  
	
  Federal
  Government Contacts Consulting

  	
   

  	
  In addition
  to the guidelines provided for BC, contracts with the U.S. Government require
  the retention of certain documentation pursuant to Federal guidelines.  Contact the Office of Government Services
  (OGS) for more information

  	
   

  	
  As directed
  by OGS

  
	
  Other
  Service Lines

  	
   

  	
  Central
  File, including Working Papers

  	
   

  	
  Six Years
  (b)

  
	
   

  	
   

  	
  Office
  Copies of Reports (d)

  	
   

  	
  Permanently
  (e)

  

 

THESE NOTES ARE IMPORTANT - PLEASE READ

 

(a) The client file is a
continuously updated file and includes the reports to support the accept/retain
decision, EXCEED Understanding the Business, Assess Client Risk Controls and
Determining and Managing Residual Risk Processes. Per Section 2 of AOP, the
engagement team must retain certain reports from the client file in the current
year workpapers: retention of other reports is optional.

(b) Six years from the date
of the financial statements covered by an audit report or supplemental reports,
or the date of issue of
special reports on prospective financial information, or other deliverables.

(c) The Office/Country
Managing Partner, in consultation with the Global Risk Management Group, may
choose to extend the period, if appropriate. In no circumstances, however,
should the retention period be lessened.

(d) If our arrangement letter
with the client includes legal liability limitation language, such letter should
be included with the office copy of our report.

(e) As described in Section 4
of AABU Policy Statement No 760, these items do not need to be retained
permanently for lost clients.  These
items should be retained for six years after loss of client rather than
permanently

(f) Six years from the
year-end of the relevant return unless a longer period is required by local
law.  However, if a return is under
examination or in dispute, the relevant information should not be destroyed
until final resolution or settlement.

 

Departing partners, managers
and staff should follow the guidance provided by their solution segment leaders
and practice directors regarding the collection and storage of engagement
specific documents.  Materials that have
been cleared for disposal should be accumulated for cremation, shredding,
mulching or pulping, whichever is most cost

 

F-10

 

effective.  Where available, commercial facilities that
are bonded and provide proof of destruction should be used for disposal of
hardcopy client engagement information, PS 760, Section 4.5.2, provides
guidelines and processes for the disposal of hardcopy working paper files.

 

The Interim Document
Retention Policy — updated on April 29, 2002, to allow for deletion of
electronic documents under appropriate circumstances — remains in effect with
respect to retaining and disposing of electronic client documents. An updated
copy of the Interim Document Retention Policy is available on the intranet.  In brief, if you save and properly back up
any electronic document, you may delete it from your PC or laptop, unless it
falls within the Litigation restrictions set out below.

 

Document management in the event of pending or foreseeable
litigation

 

If you possess any client
documents — hardcopy or electronic — related to pending or reasonably
foreseeable litigation, legal proceedings, inquiries, investigations or
disputes involving Arthur Andersen, Arthur Andersen clients or third parties
where Arthur Andersen has possession, custody or control of documents related
to those matters (referred to as “Litigation”), you must preserve them until
further notice.

 

In particular, you cannot
dispose of any documents related to Enron, Global Crossing, Worldcom, Asia Pulp
& Paper, Peregrine Systems or tax shelters. In deciding whether to dispose
of any document, err on the side of caution. If there is any doubt as to
whether it is appropriate to dispose of a document, either retain the document
or contact the Arthur Andersen LLP Legal Group at 312-507-9209 to determine
whether the document or category of documents is related to pending or
reasonably foreseeable Litigation.

 

If any of the following
situations occurs or has occurred, do not dispose of any documents related to
that matter:

 

•      You have been contacted by someone at Arthur
Andersen or outside counsel for Arthur Andersen to provide documents related to
pending Litigation.

•      You have been notified by the engagement
partner or another Arthur Andersen employees that it is reasonably foreseeable
that a matter for which you possess documents is or will be the subject of
Litigation, or

•      You become aware of information that leads you
to believe that it is reasonably foreseeable that a matter for which you
possess documents is or will be the subject of Litigation.

 

Policy Statement 780
(Practice Administration; Notification of Threatened or Actual Litigation,
Governmental or Professional investigations, Receipt of a Subpoena, or Other
Requests for Documents or Testimony, Formal or Informal) and other directives
from Arthur Andersen address the procedures to be followed when an Arthur
Andersen partner or employee becomes aware of information that suggests it is
reasonably foreseeable that Arthur Andersen, one of Arthur Andersen’s clients
or a third party will be the subject of Litigation about which Arthur Andersen
has information. In these situations, you are required to.

 

•      Report that information to the Arthur Andersen
LLP Legal Group, and

•      Retain and preserve every document that is
relevant to the matter that is the subject of the pending or reasonably
foreseeable Litigation.

 

Given the significant numbers
of partners and employees leaving and the fact that they no longer will be a
resource for information about pending or reasonably foreseeable Litigation,
please keep in mind your obligations with respect to notifying others about
pending or reasonably foreseeable Litigation. If you make a report, or have
made a report, to the Arthur Andersen LLP Legal Group about information
described above, you also must tell all members of the relevant engagement team
and any other relevant Arthur Andersen personnel to preserve and maintain
documents related to that matter.

 

Any questions about disposal
of hard copy materials should be directed to your local office Director of
Administration / Support Services or to Kent Piper at 1-312-931 0503.

 

F-11

 

If you have any questions about
the policy, please contact the Arthur Andersen LLP Legal Group at
1-312-507-9209.

 

F-12

 

Exhibit G – Released Restrictive Covenants from
Partnership Agreement

 

[Article 26(A) ]...In
recognition of the partners’ special relationship with the Firm and the
fiduciary duties arising therefrom, and in acknowledgment that each partner
will have obtained knowledge of  Firm
information during his membership in the Firm, each partner undertakes the
following obligations which he confirms have been reasonably designed to protect
the Firm’s legitimate business interests without unnecessarily or unreasonably
restricting his professional opportunities in the event that he resigns,
retires, or is removed as a member of the Firm:

 

* * *

 

(2)           Each partner shall not, for a period of eighteen
(18) months following his resignation, retirement or removal from the Firm, for
himself or as agent, partner or employee of any person, corporation or firm
other than an Affiliated Firm, engage in the practice of professional services
of the type provided by the Firm for:

 

(a)           any client of the Firm or of an Affiliated Firm for whom the partner
performed services, as determined by the Administrator, or

 

(b)           any prospective client of the Firm or of an Affiliated Firm to whom the
partner submitted, or assisted in the submission of, a proposal, during the
eighteen (18) month period preceding his resignation, retirement, or removal.

 

(3)           Each partner shall not, at any time during
which he is a partner of the Firm and for twelve (12) months after his resignation,
retirement or removal from the Firm, whether for his own account or for the
account of any person other than an Affiliated Firm, directly or indirectly,
endeavor to solicit away from the Firm or an Affiliated Firm, or facilitate the
solicitation away from the firm or an Affiliated Firm of, any client of the
Firm or an Affiliated Firm.

 

(4)           Each partner shall not, at any time during
which he is a partner of the Firm and for eighteen (18) months after his
resignation, retirement or removal from the Firm, whether for his own account
or for the account of any person other than an Affiliated Firm, directly or
indirectly, induce away from the Firm or an Affiliated Firm, or facilitate the
inducement away from the Firm or an Affiliated Firm of, any personnel of the
Firm or an Affiliated Firm or interfere with the faithful discharge by such
personnel of their contractual and fiduciary obligations to serve the Firm’s or
the Affiliated Firm’s interests and those of its clients of undivided loyalty.

 

G-1

 

Exhibit H - Released Restrictive Covenants from
Andersen Worldwide Policies 12

 

35.3.1.     A retired partner may not, for 18 months following retirement, provide
the same type of services provided by any Member Firm for:

 

•      Any client of any Member Firm for whom the
retired partner performed services, as determined by the Managing Partner of
the Member Firm from which he or she retired.

 

•      Any prospective client to whom the partner
submitted or assisted in the submission of a proposal during the 18-month
period preceding his or her retirement.

 

* * *

 

35.4.1.     Retired
partners may not, for 12 months after retirement, whether for their own account
or for the account of any other person, directly or indirectly solicit away any
client of any Member Firm.  A client is
any person or entity for whom the Firm or an affiliated firm performed
professional services, or provided products within the 12 months immediately
preceding retirement.  (Article 26 (A)2
and (D) of the Standard Partnership Agreement)

 

* * *

 

35.5.1.     Retired
partners may not, for 18 months after retirement, whether for their own account
or for the account of any other person, directly or indirectly:

 

•      Solicit away any personnel of any Member
Firm.

 

•      Interfere with the faithful discharge by such
personnel of their contractual and fiduciary obligations to serve the Firm’s
interests and those of its clients with undivided loyalty.  (Article 26(A)4 of the Standard Partnership
Agreement)

 

H-1

 

SEPARATION AGREEMENT – NATIONAL DIRECTORS

 

This
Separation Agreement (this “Agreement”) is made as of this
[       ] day of
[                        ],
2002, by and between Arthur Andersen LLP, a registered limited liability
partnership under the laws of the State of Illinois (“AA”), and [NAME OF NATIONAL DIRECTOR] (“National
Director”).

 

WHEREAS,
AA and LECG, LLC (“LECG”) have agreed by letter agreement (the “Letter
Agreement”) to the terms of a separation of certain partners, participating
principals and national directors, including National Director, from the
existing Insurance Claims Practice and certain other portions of AA’s Value
Solutions Unit;

 

WHEREAS,
each of AA and National Director will derive substantial benefits from the
transactions contemplated by the Letter Agreement;

 

WHEREAS,
completing the transactions contemplated by the Letter Agreement at this time
maximizes value for the benefit of AA, which benefit may not be realized
without National Director separating from AA on the terms set forth in this
Agreement and affiliating with LECG;

 

WHEREAS,
the foregoing cannot be accomplished unless AA releases National Director as
contemplated by Section 2 hereof, which Section includes, among other things,
the release of National Director by AA from certain restrictive covenants set
forth in the September 1, 2000 partnership agreement of AA, as amended (the
“Partnership Agreement”); and

 

WHEREAS,
AA has determined that as of the date of National Director’s separation from
AA, his/her amounts owing to AA and certain other matters are as set forth on
the determination statement attached hereto as Exhibit A (the
“Determination Statement”).

 

NOW,
THEREFORE, in consideration of the foregoing and the mutual agreements contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, AA and National Director hereby
agree as follows:

 

1.             National Director hereby agrees as follows:

 

(a)           From and after the date of this Agreement National Director will no
longer be a national director of and will have no further interest in AA. AA
Holdings C.V., Andersen Worldwide Societe Cooperative (“AW”) or any affiliated
firms or any of their respective assets or rights (including, without
limitation, any inventions, writings or other intellectual property created by
National Director or under National Director’s supervision as part of and
during National Director’s association with any of the foregoing firms); provided,
however, that, subject to AA’s determination under Section 1(b),
National Director may receive certain retirement payments as contemplated under
Section l(b).  National Director hereby
acknowledges receipt of sufficient consideration in connection with this
Agreement, including without limitation the consideration received under
Section 2 hereof.

 

 

(b)           The Determination Statement describes accurately the amount owed by the
National Director to AA (or by AA to the National Director, as applicable) as
of the date hereof.  Except as otherwise
referenced herein, National Director will not be entitled to receive any
separation or other payments (including, without limitation, early retirement
benefits and payments under the “Weinbach” schedule or “Measelle” policy; provided,
however, that this sentence shall not apply to any assets in or benefits
which are provided under any retirement plan which is intended to be qualified
under Section 401(a) of the Internal Revenue Code of 1986, as amended).
National Director accepts and agrees that the aggregate amount of basic
retirement benefits available to all of AA’s retirees may be limited (either to
a set percentage of AA’s net income or otherwise) or may be entirely eliminated
and that, in addition, such benefits with respect to National Director may be
restructured, cancelled, reduced or delayed indefinitely, in each case all as
determined by AA, which determination shall be in AA’s sole and absolute
discretion and shall be final and conclusive. National Director and AA agree that
National Director will not be entitled to any further payments of cash or
property from AA pursuant to the Partnership Agreement (which is applicable to
National Director to the extent provided in that certain Agreement with
Participating Principals and National Directors (the form of which is attached
hereto as Exhibit B) by and among AA and National Director) or
otherwise. In consideration for (i) the distributions and/or payments to date
and the payments referenced hereunder, (ii) any business assets of AA, such as
business treatises or journals, allowed to be retained by National Director as
part of the approved check out process and (iii) the other rights and
obligations contained herein. National Director agrees to waive repayment of
National Director’s subordinated loan as provided for in the Agreement with
Participating Principals and National Directors.  Nothing in this Section 1(b) shall alter the legal status of
National Director pursuant to the Agreement with Participating Principals and
National Directors and other applicable organizational documents of AA, AW or
its affiliates. Additionally, nothing in this Agreement shall constitute an
admission by National Director that National Director is or ever has been a
partner of AA.  AA agrees that in the
event that, within six months of the date hereof, any partner, participating
principal or national director enters into a provision with AA corresponding to
this Section l(b) in connection with the sale of assets by AA that contains
terms that are more favorable to such partner, participating principal or
national director than the comparable terms of this Section l(b), then, at the
option of National Director, any such provision shall apply to National
Director in lieu of this Section l(b).

 

(c)           National Director acknowledges and agrees that, except as provided
herein, all terms of the Partnership Agreement that are applicable to National
Director shall remain in full force and effect with respect to National
Director after the date of this Agreement.

 

(d)           Except as may be required by the lawful order of a court or agency of
competent jurisdiction or as provided in the Letter Agreement, National
Director shall keep secret and confidential indefinitely all non-public
information (including, without limitation, information regarding litigation
and any communication with counsel to AA or any special committee of AA or any
work product of any such counsel) concerning AA, any of its affiliates or
affiliated firms and/or any of their respective clients (unless the client
consents otherwise) which was acquired by or disclosed to National Director
during National Director’s employment by, association with or ownership of AA
or any of its affiliates or affiliated firms and shall not disclose the same,
either directly or indirectly, to any other person, firm, or business entity or
use it in any way. National Director represents that, except as contemplated by
the Letter Agreement.  National

 

2

 

Director has returned to AA
or its affiliates, affiliated firms or clients, as applicable, any and all
records, documents, property, information, computer disks or other materials
relating to the business of AA, any of its affiliates or affiliated firms
and/or any of their respective clients obtained by National Director during the
course of his/her employment by, association with or ownership of AA or any of
its affiliates or affiliated firms, including without limitation all items of
the type described on Exhibit C. Nothing in this Agreement, the
Partnership Agreement or any other agreement or document by which National
Director is bound to AA or its affiliates shall be construed so as to prevent
National Director from using, in connection with membership in or association with
LECG or any of its affiliates, knowledge which was acquired by National
Director during National Director’s employment by, association with or
ownership of AA or any of its affiliates or affiliated firms, and which is
generally known to persons National Director’s experience.

 

(e)           National Director shall not disparage AA or any of its affiliated firms
or any of their respective present or former partners, managers or employees
(“AA Party”): provided, however, that this Section 1(e) shall not
prevent National Director from (i) responding to comments made by any AA Party
about National Director if National Director reasonably believes such comments
were disparaging to National Director or (ii) making statements about an AA
Party in connection with the defense of a claim made against National Director
by a third party.

 

(f)            Notwithstanding anything to the contrary
herein, National Director, on behalf of National Director, National Director’s
heirs, administrators, estates, executors, personal representatives, successors
and assigns, does hereby release and forever discharge AA, AW and their
respective affiliated firms, and each of their respective assigns, past or
present partners, officers, principals, directors, employees, agents,
successors (whether at law, equity or otherwise), and affiliates (collectively,
the “Released Parties”) from any and all actions, causes of action, claims,
demands, debts, damages, costs, losses, penalties, attorneys’ fees,
obligations, judgments, expenses, compensation or liabilities of any nature
whatsoever, in law or equity, whether known or unknown, contingent or
otherwise, that National Director now has, may have ever had in the past or may
have in the future against any of the Released Parties by reason of any act,
omission, transaction, occurrence, conduct, circumstance, condition, harm,
matter, cause or thing that has occurred from the beginning of time up to and
including the date hereof, including, without limitation, claims that in any
way arise from or out of, are based upon or relate to National Director’s
employment by, association with or ownership of AA or any of its affiliated
firms, except (i) for claims arising out of AA’s obligations set forth in this
Agreement and (ii) as provided in the second sentence of Section 1(g) hereof.
It is understood and agreed that nothing herein shall be deemed to be a release
of any person or entity other than the Released Parties. In addition, the
release set forth in this Section 1(f) shall not be effective as to any other
partner, participating principal, national director or other employee of AA who
has not executed a release in favor of National Director that is substantially
identical to the release set forth in this Section 1(f).  Nothing herein shall be deemed a release by
LECG of any Released Persons or other person or entity.  AA agrees that in the event that, within six
months of the date hereof, any partner, participating principal or national
director enters into a provision with AA corresponding to this Section 1(f)
that contains terms that are more favorable to such partner, participating
principal or national director than the comparable terms of this Section 1(f),
then, at

 

3

 

the option of National
Director, any such provision shall apply to National Director in lieu of this
Section 1(f).

 

(g)           Notwithstanding anything in this Section 1 to the contrary, National
Director shall comply with continuing obligations under the Partnership
Agreement and other organizational document(s) of AA as presently in effect and
binding on former national directors, including, without limitation,
restrictions on future activities (except as specifically released
herein).  It is understood and agreed
that this Agreement does not waive, modify, release or otherwise affect any
rights, obligations, claims or defenses under any loan which National Director
may have originally entered into with Andersen Financial Corporation or other
affiliate of AA.

 

(h)           National Director shall use his/her best efforts on behalf of AA to
effect collections for work-in-progress and accounts receivable owed to AA by
AA clients for which National Director had billing or collections authority
(“National Director Clients”); provided, that, “best efforts”
shall not require National Director to expend National Director’s funds to
effect such collections. National Director represents and warrants to AA that
attached hereto as Exhibit D is an accurate and complete list of all
in-process engagements with respect to National Director Clients for which fees
take into account any factors in addition to professional time expended on the
engagement.

 

(i)            National Director shall cooperate reasonably
with AA in connection with any claim or actual or threatened investigation,
litigation or proceeding relating to AA or any of its affiliated firms
(“Litigation”) and, if requested by AA, to act as a witness in connection with
any such Litigation, all without any compensation but with reimbursement for
reasonable, documented, out-of-pocket expenses incurred as a result of specific
requests for cooperation by AA.  AA will
defend at its expense any Litigation (i) against National Director involving
National Director’s activities while a national director of AA that were
undertaken by National Director on AA’s behalf in accordance with National
Director’s responsibilities to AA or (ii) against AA that also includes
National Director as a defendant and that does not involve any claim with
respect to which National Director did not act in accordance with National
Director’s responsibilities to AA.

 

(j)            National Director agrees to cooperate
reasonably with AA in connection with the appropriate handling of files and
property of AA with which National Director was involved, all in accordance
with the procedures set forth on Exhibit E.

 

(k)           National Director represents and warrants to AA that to National
Director’s knowledge:

 

(i)            Since January 10, 2002, National Director has
(x) not caused the destruction of any documents in contravention of the
document retention policy of AA attached hereto as Exhibit F and (y) in
all cases where National Director has informed AA’s legal department of a
pending litigation, investigation, or inquiry or facts making litigation,
investigation, or inquiry reasonably foreseeable. National Director has also
informed all AA employees who worked on the relevant matter of AA’s document
retention policies and the need to preserve documents related to pending or
reasonably foreseeable litigation, investigation, or inquiry.

 

4

 

(ii)           Since April 30, 2001, National Director has complied in all respects
with all requests made to National Director by both inside and outside counsel
to AA to retain documents and, when requested by such counsel, has delivered
such documents to such counsel.

 

(l)            National Director agrees that all notices to
National Director with respect to this Agreement shall be sent to National
Director to the home address, or via the email address, indicated under
National Director’s name on the signature page hereto. National Director
further agrees that in the event that National Director’s home address, email
address and/or home phone number change subsequent to the date of this
Agreement. National Director shall, as soon as reasonably practicable
thereafter, provide AA with written notice of such change.

 

2.             AA hereby agrees to National Director’s
affiliation with LECG and hereby releases National Director from (i) those
restrictive covenants set forth in (x) Article 26(A)(2), Article 26(A)(3) and
Article 26(A)(4) of the Partnership Agreement (the text of such Articles is
attached hereto as Exhibit G) and (y) the corresponding restrictive
covenants set forth in Sections 35.3.1, 35.4.1 and 35.5.1 of Andersen Worldwide
Policies 12 (the text of such Sections is attached hereto as Exhibit H)
and (ii) all other non-compete,. non-solicitation and other restrictive
covenants applicable to National Director in the Partnership Agreement or any
other organizational document of AA, AW or any of their respective affiliated
firms. Concurrently with the execution hereof, AA waives the ninety (90) day
notice requirement set forth in Article 10(A) of the Partnership Agreement.

 

3.             Notwithstanding anything to the contrary
contained herein, National Director expressly acknowledges and agrees that (a)
in no event shall the Administrator of AA, any member of the Administrative
Board of AA, any directors, officers, managers, partners, participating
principals, national directors or similar persons of AA or any of their
respective agents or representatives (collectively, the “Covered Persons”) have
any personal liability with respect to AA’s obligations hereunder and (b) no
Covered Person shall be obligated to make, and no Covered Person in fact will
make, any capital contribution or other payment of any kind to AA in order for
AA to satisfy its obligations hereunder.

 

4              This Agreement shall
be governed by Illinois law without giving effect to principles of conflicts of
law.  Any and all disputes arising under
this Agreement and the transactions contemplated herein shall be governed by
Article 39 (“Arbitration”) of the Partnership Agreement, and such provision (as
modified as necessary to conform to the language and terms hereof) is hereby
incorporated by reference herein for such purpose.

 

5.             This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original, but all of which
together shall constitute a single instrument.

 

6.             From time to time
after the date hereof, at the request of either party hereto, the parties
hereto shall execute and deliver to such requesting party such documents and
take such other action as such requesting party may reasonably request in order
to consummate more effectively the transactions contemplated hereby.

 

7.             The parties hereto agree that LECG shall be a
third party beneficiary of Section l(d), the penultimate sentence
of Section 1(f), Section 2 and this Section 7, but for no other
purpose.

 

5

 

IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
and delivered as of the date first above written.

 

	
   

  	
  ARTHUR
  ANDERSEN LLP

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Its:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  [Name]

  
	
   

  	
   

  
	
   

  	
  Home Address:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Email Address:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Home Phone Number:

  
					

 

6

 

Exhibit A – Determination Statement

 

Determination
Statement for National Director is attached hereto.

 

A-1

 

Exhibit B – Form of Agreement with Participating

Principals and National Directors

 

ARTHUR ANDERSEN LLP

 

AGREEMENT WITH PARTICIPATING PRINCIPALS

AND NATIONAL DIRECTORS

 

THIS
AGREEMENT, made between Arthur Andersen LLP, a limited liability partnership
organized and existing under the laws of the State of Illinois (hereinafter
referred to as  the “Firm”), and
the individuals listed on Attachment I hereto (hereinafter referred to as “participating principals” and “national directors”) jointly and
severally.

 

WITNESSETH

 

1.                                       The
individuals listed on Attachment I hereby agree to provide basic loans to the
Firm, in accordance with instructions given by the Firm, of the amounts set
forth opposite their names on the attached Appendix “B.”  The loans to the Firm shall not be reduced
by reason of losses of the Firm but are subordinate to all claims of both
secured and unsecured creditors of the Firm.

 

Effective
as of the Effective Date (as defined below), and continuing until there shall
have been an increase or decrease in the number of units of participation
reserved pursuant to Paragraph 5 or until this Agreement is terminated or
modified, each participating principal shall be entitled to receive as
compensation a proportionate share of the net income of the Firm equal to that
proportion of number of units of participation reserved for him or her bears to
the total units of participation of partners, participating principals, and
overseas representatives of the Firm outstanding or reserved, during fiscal
years of the Firm commencing on or after the Effective Date, or such lesser
proportion as shall be appropriate for a period of less than twelve months.

 

The
participating principals shall have the right to draw against their
compensation for any fiscal year in monthly installments in accordance with the
plan and procedure applicable to the partners, except that such drawings shall
be based upon the respective number of units reserved for the participating
principals.  Each national director
shall receive their compensation in semi-monthly installments as determined by
the Firm.

 

None of the participating principals or national directors shall be
required to contribute to or share in any net losses of the Firm unless and
until admitted into the Firm as a partner or national partner and then only
from the effective date of such admission.

 

The participating principals and national directors shall perform such
duties as shall be assigned to them by the Firm. They shall not be, nor he held
out or represented to be, partners or national partners, but in their relations
with the partners and national partners, they shall have the same status,
rights and obligations as though they were in fact partners or national
partners, except that where any action is provided for in the Partnership Agreement
of the Firm by some or all of the partners and national partners, it is
understood and agreed that while such action may be taken in similar manner
with respect to the participating principals and national directors, for the
purpose of taking any such action, the participating principals and national
directors shall not

 

B-1

 

be considered as partners or
national partners respectively who must or may join in taking such action.  Nevertheless, the participating principals
and national directors will be bound by the action taken by the partners and
national partners to the extent such action is not contrary to the provisions
of this Agreement. Further, election by the Administrative Board and ratification
by the partners and national partners of a participating principal or national
director to membership on the Administrative Board, or election or appointment
to any committee of the Firm, shall not thereby make such participating
principal or national director, a partner or national partner.

 

During
the term of this Agreement, except as otherwise provided, the participating
principals and national directors hereby expressly assume and agree to
discharge all of the covenants and obligations of the Firm in a like manner as
though they were partners or national partners, respectively.

 

2                                          The Firm has reserved and agrees to hold
available for the participating principals during the term of this Agreement,
units of participation in accordance with the applicable Firm policies. Such
units shall be awarded to a participating principal if he or she is admitted to
the Firm as a partner, subject only to his or her having paid either in cash or
notes acceptable to the Firm all contributions to capital which may be required
of him or her.

 

3.                                       The Firm, as to any one or all of the
participating principals and national directors, and any one of the
participating principals and national directors as to himself or herself, may
terminate this Agreement in the same manner and with the same effect as
provided in the Partnership Agreement of the Firm pertaining to partners or
national partners.

 

4.                                       The terms of the Partnership Agreement of the
Firm as in effect on the Effective Date, together with any amendments to it
which may thereafter be adopted by the partners, are incorporated herein by
reference and are specifically made applicable to participating principals (as
if they were partners) and to national directors (as if they were national
partners), except to the extent that any provision therein may be inconsistent
with the status of a participating principal or national director or with this
Agreement.

 

5.                                       It is understood that the units of
participation in the Firm, outstanding and/or reserved in respect of
participating principals, may be increased or decreased from time to time and
that the making of this Agreement shall not restrict such acts or any changes
in or amendments of any character to the Partnership Agreement of the Firm.

 

6.                                       The participating principals and national
directors agree that with respect to all  computations
required to be made hereunder, they and their heirs, executors, administrators,
beneficiaries and assigns shall be bound by and accept any determination made
by the Administrator of the Firm.

 

7.                                       This Agreement supersedes all prior
agreements between the Firm and any of the participating principals and
national directors with respect to the same subject matter of this Agreement
and such prior agreements shall be deemed terminated.

 

B-2

 

IN WITNESS WHEREOF, the
parties hereto have executed this Agreement on the dates indicated below, with
effect in respect of each individual listed on Attachment I hereto as of the
effective date such individual has been admitted to the Firm as a Participating
Principal or National Director (the “Effective Date”).

 

B-3

 

Exhibit C – Description of Property

 

C-1

 

Exhibit D – Alternative Fee Arrangements

 

[Provide list of contingency payments
associated with National Director]

 

D-1

 

Exhibit E – Partner Check-Out Procedures

 

D-1

 

Exhibit F – Document Retention Policy

 

Interim Document Management Policy

 

Following
is the Interim Document Management Policy, as established on January 10, 2002,
and including revisions through April 30, 2002. Any questions about the policy
should be directed to the Legal Group at 1-312-507-9209.

 

Revisions for retention and deletion of documents — April
2002

 

The
revisions to the Interim Document Management Policy are as follows:

 

You
may now delete documents of all kinds that you have created on the network,
including documents in your Lotus Notes e-mail database, provided that you are
not required to preserve such documents under the Interim Document Management
Policy because of their relevance to pending or reasonably foreseeable
litigation, investigation, inquiry, proceeding or other dispute.

 

As
noted in previous communications, documents that must be retained
include those related to Enron, Worldcom, Global Crossing, tax shelter
transactions or any other matter for which specific instructions to preserve
documents have been issued or may be issued in the future.

 

When you save and back up your documents, the firm’s systems will
automatically retain a copy of any deleted documents so you are not at risk in
the event of documents becoming relevant in the future.

 

You
still must retain every document that is created in the future if it may be
relevant to any pending or reasonably foreseeable litigation, investigation,
inquiry, proceeding or other dispute.

 

Note: If you have a local replica of your e-mail database:

 

•                  You must make
sure to regularly replicate between your local e-mail database and your e-mail
database on the network.

•                  Do NOT
refresh the design of your local e-mail database. If you have problems with
your local e-mail database, please contact your local Notes administrator or
local technology support desk.

•                  If you have
selected the Remove documents not modified in
the last: XX days in the Replication Settings dialog box on your
e-mail database, it must not be set to less than 14 days.  The graphic below illustrates a mail file
set to remove documents not modified in the last 14 days. If you have any
questions about this setting, please contact your local Notes administrator or
local technology support desk.

 

You may now also dispose of various hard
copies of materials that you previously were required to keep. You may dispose
only of items that are not relevant to any pending or reasonably foreseeable
litigation, investigation, inquiry proceeding or other dispute. In

 

F-1

 

addition, if any such materials contain notations, those
materials must be preserved.

 

Hard copies that must be retained include those
related to Enron, Worldcom, Global Crossing, tax shelter transactions or any other
matter for which specific instructions to preserve documents have been issued
or may be issued in the future.

 

The following is a list of categories of materials that may
be disposed of in accordance with these restrictions:

 

1.                                       Andersen employee materials such as benefits
packages, reference binders for personnel issues, training materials, phone
directories, Andersen publications, business cards, industry magazines,
promotional materials, reference materials, textbooks;

 

2.                                       Employee time reports (if they are hard
copies of information preserved on the computer systems);

 

3.                                       Lotus Notes, memos, Excel sheets and
PowerPoint presentations (if they are hard copies of information preserved on
the computer systems);

 

4.                                       10-Ks, S-ls, S-8s and financial statements
(if they are extra copies of materials that are preserved both in hard copy and on the computer systems);

 

5.                                       Billing information such as computer
printouts of time billed to a client and billing status of a given project (if
they are hard copies of information preserved on the computer systems);

 

6.                                       General client information such as client
proposals and background information about clients;

 

7.                                       Copies of materials that are contained in
client engagement files (except that if they contain notations, such materials
must be preserved);

 

8.                                       CDs, computer discs and other general
electronic files as long as the contents have been saved and backed up on the
computer systems;

 

9.                                       Tax return preparation software (non-client
specific);

 

10.                                 Extra copies of prior year tax returns (if
other copies are maintained in the engagement files);

 

11.                                 Drafts of financial statements and tax
returns (if the final version of these items are maintained in the engagement
files).

 

Note:
Do not dispose of any phone message slips or documents with any handwritten
notations.  These items will be
collected and retained.

 

Any
questions about disposal of hard copy materials should be directed to your
local office Director of Administration / Support Services or to Ed DiYanni at
1-2l2-708-6230.

 

F-2

 

As
a final point, please note that all US ABA partners, principals, managers and
seniors received US ABA Bulletin 02-10,  dated April 15, 2002, which announced
significant revisions to the firm’s audit working paper archiving policy.  That memo remains in effect with the
following clarification: For work-related materials that are not specific to an
engagement, apply the guidelines described above. Any questions about the audit
working paper archiving policy should be  directed
to your ABA practice director or the Professional Standards Group.

 

Revisions for retention and deletion of
documents — March 2002

 

The
revisions are as follows:

 

•                  No
document can be printed without
first being saved. This is to ensure that a copy of all relevant data is
retained properly. This applies to documents in all operating systems and
software programs.

•                  Document(s)
saved to your hard drive can be
deleted only after all of the following steps have been completed:

 

1.                                       You have saved the document(s) on your hard
drive under either the Data directory (for Windows 95 users) or the My Documents directory (for Windows 2000
users)

 

2.                                       You have connected your computer to the
Andersen network.

 

3.                                       You have successfully backed up the
document(s) by copying it to the network, or by using the automatic backup
program Connected TLM. For any questions related to backing up document(s) on
your hard drive, please contact your local help desk.

 

4.                                       You have waited 48 hours from the completion
of that successful backup. This is to ensure that the technologies that back up
all Andersen data on the network have completed necessary operations.

 

•                  No
documents can be saved to what is called the “system” volume (SYS) of our
network file servers. This should not affect the way you work, but you need to
be aware of this restriction.

 

Software
programs allow you to save documents to the location of your choice, including
network file servers such as the “J” drive. The network file servers are structured
into data volumes, such as VOL1, VOL2, etc., where software programs and
documents are stored. The SYS volume contains the files and data that run the
server. The SYS volume must be kept free of user documents so that we can
perform routine maintenance and keep the file servers and network operating
properly.

 

Please
remember that the Interim Document Management Policy requires that you retain
any document, including e-mail, that could be relevant in actual or potential
legal or regulatory proceedings. It also requires that you retain every
work-related document that existed as of January 10, 2002, when the interim
policy was established.

 

F-3

 

January 2002

(Superseding AABU Policy Statement 760)

 

I.  Documents
Currently in Existence: Retain Everything

 

A.
You must retain every work-related document that is currently in existence.
(See definition of “documents,” Section III, infra)

1.
This means that for the time being you must not destroy or discard any
work-related documents in the possession of Andersen or any Andersen employees.

 

2.  As further explained below, this
directive includes electronic documents. Thus, you may not delete anything
that currently exists on your computer, including any e-mails.

 

II.  Requirement for
Retention of Documents Created in the Future

A.
In addition to work papers, correspondence, client-prepared schedules and other
documents that you normally retain as part of central engagement files, you
must retain every document that is created in the future if you
believe that document might possibly be relevant to any actual or potential
litigation, investigation, inquiry, proceeding, or other dispute.

1.
Be over-inclusive: If a  question
crosses your mind about whether to retain a  document, retain it.

 

2.
If you have questions about this aspect of the policy, call the Legal Group in
Chicago at 312-507-9209.

 

III.  Definition of
“Document”

A.
For purposes of this policy, the word “document” has an intentionally broad
definition.  More
specifically, “document” means;

1.
any record or other tangible form of expression, whether an original or a copy,
and however created, produced or stored (manually, mechanically, electronically
or otherwise), including but not limited to: books, papers, files, notes,
correspondence, messages, memoranda, reports, work papers, electronic mail
messages, telephone logs, records of conversations or meetings, account
statements, confirmations, contracts, agreements, reports, studies, summaries,
charts, computer printouts, diaries, calendars, bank statements, invoices,
bills, records of billings, checks, wire transfers, drafts for money, records
of payment, magnetic tape, tape recordings, disks, diskettes, disk packs, and
other electronic media, microfilm, microfiche, and storage devices. (this does
not include Octels and voice mail messages)

2.
and all drafts, alterations, and modifications,
changes or amendments of the foregoing.

 

a. Again, be over-inclusive. If you are not sure whether something is a
“document,” treat it as if it is a document.

 

b. Also, this means that “drafts” are “documents.”

 

F-4

 

Andersen Worldwide SC

 

 

May 3, 2002

Further
clarification - Interim Document Management Policy

 

•                   Additional guidance on disposal of hard copy
materials with notations

 

Andrew
Pincus

General
Counsel

 

Dan
Nottke

Managing
Partner, Global Technology Organization

 

We
want to inform you of further guidance pertaining to our Interim Document
Management Policy. These clarifications should help you better manage your
disposal of various hard copy materials and reduce costs for the firm. Former
US Senator John Danforth’s firm, Bryan Cave, has approved the changes announced
below.

 

Consistent
with the notice issued last week, the clarifications noted below should
continue to ease the burden of the Interim Document Management Policy on you
and the firm without compromising the integrity of important principles of
document preservation. They allow you to delete / dispose of some materials and
documents as described below.

 

These
changes apply to all Andersen personnel worldwide and are effective
immediately. We realize that many of you are in deals or working on deals to
move to a new firm. We remind you that as long as you are part of the Andersen
network of firms or have possession of Andersen documents, you need to abide by
the Andersen policies for document retention. The Interim Document Management
Policy has been revised on our intranet to incorporate these revisions and other
guidance to date. We encourage you to read the policy in full on the intranet.

 

F-5

 

The
additional clarifications to the Interim Document Management Policy are as
follows:

 

•                  Phone messages and documents with notations

 

You
may dispose of phone messages and copies of materials (e.g. contracts, reports,
financial statements) with notations that you previously were required to keep
as long as:

 

1.               they are not relevant to any pending or
reasonably foreseeable litigation, investigation, inquiry, proceeding or other
dispute (by “any” we mean matters that involve Andersen, an Andersen client, or
any other matter where Andersen possess relevant documents);

2.               they are not related in any way to Enron:

3.               they are not related in any way to either the
Professional Standards Group (PSG) or to the Firm’s General Counsel (or any
attorneys that are part of that functional area) for the period from 8/1/01
through 11/15/01.

 

Hard
copies that must be retained include those related to Enron. Worldcom, Global
Crossing, tax shelter transactions or any other matter for which specific
instructions to preserve documents have been issued or may be issued in the
future.

 

Materials
that have been cleared for disposal and which are confidential or proprietary
should be accumulated for shredding rather than discarded in the regular office
trash collection and disposal process.

 

Any
questions about disposal of hard copy materials should he directed to your
local office Director of Administration / Support Services or to Ed DiYanni at
1-212-708-6230.

 

If
you have any questions about the Interim Document Management Policy, please
contact the Legal Group at 1-312-507-9209.

 

F-6

 

To: All US partners and
personnel

 

 

Because this document has been retained centrally, you may
delete it from your e-mail under the Interim Document Management Policy.

 

 

May 23, 2002

 

Revised Document Management Policy: Effective May 23, 2002

 

Arthur Andersen LLP Legal Group

 

In January, we initiated a
formal review of our document management and retention policies Former US
Senator John Danforth’s firm. Bryan Cave, has participated in this process,
advising on and approving the interim policy changes that have been provided to
you over the past several months

 

This revised Document
Management policy supersedes the Interim Document Management Policy with
respect to client engagement information in hardcopy form. It also outlines the
policy for management of client information, in both hardcopy and electronic
form, in the event of pending or reasonably foreseeable litigation.  These requirements apply, with immediate
effect, to all partners and employees in the United States.

 

Given that many of you are or
soon will be transitioning to new organizations and work environments, it is
vital that you adhere to these policies in making arrangements for the
retention or disposal of documents in your possession.

 

Policy for hardcopy client engagement information

 

Policy Statement 760
(Practice Administration: Client Engagement Information — Organization,
Retention and Destruction) and other policies developed in accordance with PS
760. include provisions for the retention and disposal of both hardcopy and
electronic client engagement information. The provisions in PS 760 and related
policies with respect to hardcopy client information now apply to all documents
created both before and after January 10, 2002. For your reference, a copy of
PS 760 is available on the intranet.

 

One of the related policies
that provides summary guidelines for retention of internal accounting records
is the Accounting Record Retention Schedule, included in Appendices E-1 and E-2
of the Accounting Procedures Manual. This
includes document retention guidance for current and obsolete office records,
including client receivables, unbilled services, lee statistics, and other
information.

 

You should maintain and
dispose of applicable hardcopy documents in accordance with those provisions,
unless the documents are related to pending or reasonably foreseeable
litigation, legal proceedings, inquiries, investigations, or disputes involving
Arthur Andersen. Arthur Andersen clients or third parties where Arthur Andersen
has possession, custody or control of documents related to those matters. If
you have possession of any such documents, you must preserve them until further
notice. This is described in more detail later in this note

 

PS 760 protects the
confidentiality and provides for the proper management of client engagement
information.  It applies to the
following types of client documents

 

F-7

 

	
  Service Line

  	
   

  	
  Type of
  Material

  	
   

  	
  Retention
  Period

  
	
  ABA -
  Financial Statement Assurance

  	
   

  	
  Client File
  (a)/Engagement Knowledge Base/CAF (purged annually of superseded or
  non-relevant documents)

  Audit
  Workpapers/Central File Office copies of reports and financial statements
  (d)Filings with Government agencies which include (physically or by
  reference) our reports, such as 10K’s and Registration Statements filed with
  SEC 

  	
   

  	
  Permanently
  (e)

  

  

  Six Years

  Permanently (e)

   

   

  Permanently
  (e)

  
	
  ABA -
  Business Risk Consulting and Advisory

  	
   

  	
  Central
  File, including Working Papers

  	
   

  	
  When no
  longer useful or needed to support an opinion. Maximum of Six years (f)

  
	
   

  	
   

  	
  Office
  Copies of Reports (d)

  	
   

  	
  Permanently
  (e)

  
	
  ABA - AA
  Process Solutions

  	
   

  	
  Central
  File, including working papers (Enterprise Center Clients)

  	
   

  	
  Six years
  (f)

  
	
   

  	
   

  	
  Office
  Copies of Reports and Financial Statements Filings with Government Agencies
  which include (physically or by reference) our reports, such as 10Ks and
  Registration statements filed with SEC CAFs

  Project File Documentation, including:

  	
   

  	
  Permanently
  (e)

  
	
   

  	
   

  	
  • 
  SMART documentation and risk management action plans

  •  Job Arrangement Letter or Contract with
  appropriate terms

  • 
  Contract change orders

  • 
  Project work plans

  • 
  Engagement QA partner review documentation

  • 
  Project memoranda related to client discussions of issues/problems and
  resolution

  • 
  Supporting schedules, simulations, models, or other documentation that
  underlie final recommendations made or end products delivered

  	
   

  	
  Permanently
  (e)

  
	
   

  	
   

  	
  • 
  Client satisfaction documentation and survey forms

  	
   

  	
  Six years
  (b)

  

 

F-8

 

	
  Service Line

  	
   

  	
  Type of
  Material

  	
   

  	
  Retention
  Period

  
	
  TLBA-Tax and
  Business Advisory

  	
   

  	
  Central
  File, including all Working Papers 

  	
   

  	
  Six years
  (f)

  
	
   

  	
   

  	
  Income Tax
  Returns

  	
   

  	
  Six years
  (f)

  
	
   

  	
   

  	
  Tax Basis
  Studies

  	
   

  	
  Permanently
  (e)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Earnings and
  Profits Studies

  	
   

  	
  Permanently
  (e)

  
	
   

  	
   

  	
  Estate
  Planning Studies 

  	
   

  	
  Permanently
  (e)

  
	
   

  	
   

  	
  Estate and
  Gift Tax Returns

  	
   

  	
  Permanently
  (e)

  
	
   

  	
   

  	
  Office
  Copies of Attest Reports, including Third-Party Tax Opinions and Reports on
  Prospective Financial Information 

  	
   

  	
  Permanently
  (e)

  
	
   

  	
   

  	
  Continuing
  Tax Files (including all documents that have continuing importance)

  	
   

  	
  Permanently
  (e)

  
	
  TLBA - Legal

  	
   

  	
  Central
  File, including Working Papers

  	
   

  	
  Customs and
  practices of legal profession in each country.  The policy should be determined by the Head of Legal Services
  and approved by the Area Practice Director of Legal Services.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Office Copy
  of Report or Other Deliverable (d) 

  	
   

  	
  Permanently
  (e)

  
	
  BC

  	
   

  	
  Project File
  Documentation

  • 
  Risk SMART documentation and risk management action plans

  • 
  Job Arrangement Letter with appropriate terms and conditions, signed
  by the client and AA

  • 
  Contract change orders

  • 
  Project work plans

  • 
  Engagement QA partner review documentation

  • 
  Project status meetings

  • 
  Project memoranda related to client discussions of issues/problems and
  resolution

  • 
  Supporting schedules, electronic simulations or models, and other
  documentation that underlie final recommendations made or end products
  delivered

  • 
  Client satisfaction documentation and survey forms

  	
   

  	
  Six Years
  (b)

  
	
   

  	
   

  	
  • 
  Office Copy of Final Report or Other Deliverable (d)

  	
   

  	
  Permanently
  (e)

  

 

F-9

 

	
  Service Line

  	
   

  	
  Type of
  Material

  	
   

  	
  Retention
  Period

  
	
  Complex
  Claims & Events

  (Litigation Support)

  	
   

  	
  Project File
  Documentation, including:
•  Documentation to support that an adequate
  conflict search was performed

  • 
  Risk SMART documentation

  • 
  Job Arrangement Letter with appropriate terms and conditions, signed
  by the client and AA

  • 
  Contract change orders

  • 
  AP-150, including sign-off by engagement QA partner

  • 
  Client satisfaction documentation and survey forms

  • 
  Retention of specific supporting schedules are required by (i) Class
  Action Settlement Assistance, (ii) Insurance Insolvency Consulting and (iii)
  FEHB Settlement Negotiations. Contact the respective service line leader for
  more information

  	
   

  	
  Six Years
  (b)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Office Copy
  of Final Report or Other Deliverable (d)

  	
   

  	
  Permanently
  (e)

  
	
  Federal
  Government Contacts Consulting

  	
   

  	
  In addition
  to the guidelines, provided for BC, contracts with the U.S. Government
  require the retention of certain documentation pursuant to Federal
  guidelines.  Contact the Office of
  Government Services (OGS) for more information

  	
   

  	
  As directed
  by OGS

  
	
  Other
  Service Lines

  	
   

  	
  Central
  File, including Working Papers

  	
   

  	
  Six Years (b)

  
	
   

  	
   

  	
  Office
  Copies of Reports (d)

  	
   

  	
  Permanently
  (e)

  

 

THESE NOTES ARE IMPORTANT -
PLEASE READ

 

(a)  The client file is a continuously updated file and includes the
reports to  support the
accept/retain decision.  EXCEED,
Understanding the Business, Assess Client Risk Controls and Determining and
Managing Residual Risk Processes.
Per Section 2 of AOP, the engagement team must retain certain reports from the
client file in the current year workpapers; retention of other reports is
optional.

(b)  Six years from the date of the financial statements covered by an
audit report or supplemental reports, or the date of issue of special reports
on prospective financial information, or other deliverables 

(c)  The Office/Country Managing Partner, in consultation with the
Global Risk Management Group, may choose to  extend the period, it appropriate. In no
circumstances, however, should the retention period be lessened.

(d)  If our arrangement letter with the client includes legal
liability limitation language, such letter should be included  with the office copy of our report.

(e)  As described in Section 4 of AABU Policy statement No. 760, these
items do not need to be retained permanently for lost clients. These items
should be retained for six years after loss of client rather than permanently.

(f)  Six years from the year-end of the relevant return unless a
longer period is required by local law. However, if a return is under
examination or in dispute, the relevant information should not be destroyed
until final resolution or settlement.

 

Departing partners, managers
and staff should follow the guidance provided by their solution segment leaders
and practice directors regarding the collection and storage of engagement
specific documents.  Materials that have
been cleared for disposal should be accumulated for cremation, shredding,
mulching or pulping, whichever is most cost

 

F-10

 

effective.  Where available, commercial facilities that
are bonded and provide proof of destruction should be used for disposal of
hardcopy client engagement information. PS 760. Section 4.5.2  provides guidelines and processes for the
disposal of hardcopy working paper files.

 

The Interim Document
Retention Policy — updated on April 29, 2002, to allow for deletion of
electronic documents under appropriate circumstances — remains in effect with
respect to retaining and disposing of electronic client documents. An updated
copy of the Interim Document Retention Policy is available on the intranet. In brief,
if you save and properly back up any electronic document, you may delete it
from your PC or laptop, unless it falls within the Litigation restrictions set
out below.

 

Document management in the event of pending or foreseeable
litigation

 

If you possess any client
documents — hardcopy or electronic — related to pending or reasonably
foreseeable litigation, legal proceedings, inquiries, investigations or
disputes involving Arthur Andersen, Arthur Andersen clients or third parties
where Arthur Andersen has possession, custody or  control of documents related to those matters (referred to
as “Litigation”), you must preserve them until further notice.

 

In particular, you cannot
dispose of any documents related to Enron, Global Crossing, Worldcom, Asia Pulp
& Paper, Peregrine Systems or tax shelters. In deciding whether to dispose
of any document, err on the side of caution. 
If there is any doubt as  to
whether it is appropriate to dispose of a document, either retain the document
or contact the Arthur Andersen LLP Legal Group at  312-507-9209 to determine whether the document or category of
documents is related to pending or reasonably foreseeable Litigation

 

If any of the following
situations occurs or  has
occurred, do not dispose of any documents related to that matter:

 

•                     You have been
contacted by someone at  Arthur
Andersen or outside counsel for Arthur Andersen to provide documents related to
pending Litigation,

•                     You have been
notified by the engagement partner or another Arthur Andersen employee that it is
reasonably foreseeable that a matter for which you possess documents is or will
be the subject of Litigation, or

•                     You become
aware of information that leads you to believe that it is reasonably
foreseeable that a matter for which you possess documents is or will be the
subject of Litigation

 

Policy Statement 780 (Practice
Administration Notification of Threaleneo or Actual Litigation, Governmental or
Professional Investigations, Receipt of a Subpoena, or Other Requests for
Documents or Testimony, Formal or Informal) and other directives from Arthur
Andersen address the procedures to be followed when an Arthur Andersen partner
or employee becomes aware of information that suggests it is reasonably
foreseeable that Arthur Andersen, one of Arthur Andersen’s clients or a third
party will be the subject of Litigation about which Arthur Andersen has
information.  In these situations, you
are required to.

 

•                     Report that information to the Arthur Andersen
LLP Legal Group, and

•                     Retain and preserve every document that is
relevant to the matter that is the subject of the pending or reasonably
foreseeable Litigation.

 

Given the significant numbers
of partners and employees leaving and the fact that they no longer will be a
resource for information about pending or reasonably foreseeable Litigation,
please keep in mind your obligations with respect to notifying others about
pending or reasonably foreseeable Litigation. If you make a report, or have
made a report, to the Arthur Andersen LLP Legal Group about information
described above, you also must tell all members of the relevant engagement team
and any other relevant Arthur Andersen personnel to preserve and maintain
documents related to that matter.

 

Any questions about disposal
of hard copy materials should be directed to your local office Director of
Administration / Support Services or to Kent Piper at 1-312-931-0503.

 

F-11

 

If you have any questions
about the policy, please contact the Arthur Andersen LLP Legal Group at
1-312-507-9209.

 

F-12

 

Exhibit G – Released Restrictive Covenants from  Partnership Agreement

 

[Article 26(A)]...In recognition of the partners’ special relationship with the Firm
and the fiduciary duties arising therefrom, and in acknowledgment that each
partner will have obtained knowledge of Firm information during his membership
in the Firm, each partner undertakes the following obligations which he
confirms have been reasonably designed to protect the Firm’s legitimate
business interests without unnecessarily or unreasonably restricting his
professional opportunities in the event that he resigns, retires, or is removed
as a member of the Firm:

 

* * *

 

(2)                                  Each partner shall not, for a period of eighteen
(18) months following his resignation, retirement or removal from the Firm, for
himself or as agent, partner or employee of any person, corporation or firm
other than an Affiliated Firm, engage in the practice of professional services
of the type provided by the Firm for:

 

(a)                                  any
client of the Firm or of an Affiliated Firm for whom the partner performed
services, as determined by the Administrator, or

 

(b)                                 any prospective client of the Firm or of an
Affiliated Firm to whom the partner submitted, or assisted in the submission
of, a proposal, during the eighteen (18) month period preceding his
resignation, retirement, or removal.

 

(3)                                  Each partner shall not, at any time during
which he is a partner of the Firm and for twelve (12) months after his resignation,
retirement or removal from the Firm, whether for his own account or for the
account of any person other than an Affiliated Firm, directly or indirectly,
endeavor to solicit away from the Firm or an Affiliated Firm, or facilitate the
solicitation away from the Firm or an Affiliated Firm of, any client of the
Firm or an Affiliated Firm.

 

(4)                                  Each partner shall not, at any time during
which he is a  partner of the Firm
and for eighteen (18) months after his resignation, retirement or removal from
the Firm, whether for his own account or for the account of any person other
than an Affiliated Firm, directly or indirectly, induce away from the Firm or
an Affiliated Firm, or facilitate the inducement away from the Firm or an
Affiliated Firm of, any personnel of the Firm or an Affiliated Firm or
interfere with the faithful discharge by such personnel of their contractual
and fiduciary obligations to serve the Firm’s or the Affiliated Firm’s
interests and those of its clients of undivided loyalty.

 

G-1

 

Exhibit H – Released Restrictive Covenants
from Andersen Worldwide Policies 12

 

35.3.1.  A retired partner may
not, for 18 months following retirement, provide the same type of services
provided by any Member Firm for:

 

•           Any client  of any Member Firm for whom the retired
partner performed services, as determined by the Managing Partner of the Member
Firm from which he or she retired.

 

•           Any prospective client to whom the partner
submitted or assisted in the submission of a proposal during the 18-month
period preceding his or her retirement.

 

* * *

 

35.4.1  Retired partners may not, for 12 months
after retirement, whether for their own account or for the account of any other
person, directly or indirectly solicit away any client of any Member Firm.  A client is any person or entity for whom the Firm or an affiliated firm performed
professional services, or provided products within the 12 months immediately
preceding retirement. (Article 26 (A)2 and (D) of the Standard Partnership
Agreement)

 

* * *

 

35.5.1. Retired partners may not for 18 months after retirement,
whether for their own account or for the account of any other person, directly
or indirectly:

 

•           Solicit away any personnel of any Member
Firm.

 

•           Interfere with the faithful discharge by such
personnel of their contractual and fiduciary obligations to serve the Firm’s
interests and those of its clients with undivided loyalty. (Article 26(A)4 of
the Standard Partnership Agreement)

 

H-1

 

EXHIBIT A-2

 

FORM OF TERMINATION OF NON-COMPETE AGREEMENT

 

 

TERMINATION OF NON-COMPETE AGREEMENT

 

This
Termination of Non-Compete Agreement (this “Agreement”) is made as of this
[         ] day of
[                             ],
2002, by and between Arthur Andersen LLP, a registered limited liability
partnership under the laws of the State of Illinois (“AA”), and [NAME OF MANAGER/PRINCIPAL] (“Employee”).

 

WHEREAS,
AA and LECG, LLC (“LECG”) have agreed by letter agreement (the “Letter
Agreement”) to the terms of a separation of certain principals and managers,
including Employee, from the existing Insurance Claims Practice and certain
other portions of AA’s Value Solutions Unit;

 

WHEREAS,
each of AA and Employee will derive substantial benefits from the transactions
contemplated by the Letter Agreement;

 

WHEREAS,
completing the transactions contemplated by the Letter Agreement at this time
maximizes value for the benefit of AA, which benefit may not be realized
without Employee separating from AA on the terms set forth in this Agreement
and affiliating with LECG; and

 

WHEREAS,
the foregoing cannot be accomplished unless AA releases Employee from the
bonding covenants in the document entitled “Noncompete Provisions” that has
been executed by Employee, the form of which is attached hereto as Exhibit A
(the “Noncompete Document”).

 

NOW,
THEREFORE, in consideration of the foregoing and the mutual agreements
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, AA and Employee hereby agree as
follows:

 

1.                                       Employee hereby agrees as follows:

 

(a)                                  Effective as of the date hereof, Employee
hereby resigns his or her employment by AA and/or any of its affiliates or
affiliated firms.

 

(b)                                 Except as may be required by the lawful order
of a court or agency of competent jurisdiction or as provided in the Letter
Agreement, Employee agrees that Employee will preserve as confidential all
trade secrets and confidential knowledge, data or other proprietary information
relating to products, processes, know-how, design, mask works, formulas, test
data, computer programs and databases and other original works of authorship,
consumer lists, business plans, marketing plans and strategies and pricing
strategies or other subject matters pertaining to any business of AA, any of
its affiliates or affiliated firms, or any of their respective clients,
customers, consultants, licensees or affiliates. Employee represents that,
except as contemplated by the Letter Agreement, Employee has returned to AA or
its affiliates, affiliated firms or clients, as applicable, (i) computer
software in any form or medium belonging to AA or its affiliates, affiliated
firms or clients: (ii) any information or materials intended to be of a
confidential nature and in any way pertaining to any of the computer software
products of

 

 

AA or its affiliates,
affiliated firms or clients; (iii) any information or materials intended to be
of a confidential nature obtained during the course of Employee’s employment by
or association with AA or any of its affiliates or affiliated firms: and (iv)
any records, document, data, laboratory sketches, notes, reports, proposals, or
copies of them, or other documents or materials, equipment or other property
belonging to AA or its affiliates, affiliated firms or clients. Employee
further represents that (i) Employee has complied with and will continue to
comply with all the terms of AA’s Personnel
Reference Database relating to Employee’s obligations to protect the
confidential nature of the materials and information described in this Section
l(b), (ii) Employee has read and understood Employee’s obligations stated in
AA’s Personnel Reference Database shortly after the commencement of Employee’s
employment by or association with AA or any of its affiliates or affiliated
firms, and Employee hereby reaffirms having read and understood such
obligations and (iii) Employee has  fully
and completely reported to AA any inventions and original works of authorship,
conceived or made by Employee (solely or jointly with others), during the
course of Employee’s employment by or association with AA or any of its
affiliates or affiliated firms, to which AA retains all rights of ownership.
Nothing in this Agreement or any other agreement or document by which Employee
is bound to AA or its affiliates shall be construed so as to prevent Employee
from using, in connection with employment by or association with LECG or any of
its affiliates, knowledge which was acquired by Employee during Employee’s
employment by or association with AA or any of its affiliates or affiliated
firms, and which is generally known to persons of Employee’s experience.

 

(c)                                       Employee shall not disparage AA or any of its
affiliated firms or any of their respective present or former partners,
managers or employees (“AA Party”); provided, however, that this
Section l(c) shall not prevent Employee from (i) responding to comments made by
any AA Party about Employee if Employee reasonably believes such comments were
disparaging to Employee or (ii) making statements about an AA Party in
connection with the defense of a claim made against Employee by a third party.

 

(d)                                      Notwithstanding anything to the contrary
herein, Employee, on behalf of Employee, Employee’s heirs, administrators,
estates, executors, personal representatives, successors and assigns, does
hereby release and forever discharge AA. Andersen Worldwide Societe Cooperative
(“AW”) and their respective affiliated firms, and each of their respective
assigns, past or present partners, officers, principals, directors, employees,
agents, successors (whether at law, equity or otherwise), and affiliates
(collectively, the “Released Parties”) from any and all actions, causes of
action, claims, demands, debts, damages, costs, losses, penalties, attorneys’
fees, obligations, judgments, expenses, compensation or liabilities of any
nature whatsoever, in law or equity, whether known or unknown, contingent or
otherwise, that Employee now has, may have ever had in the past or may have in
the future against any of the Released Parties by reason of any act, omission,
transaction, occurrence, conduct, circumstance, condition, harm, matter, cause
or thing that has occurred from the beginning of time up to and including the
date hereof, including, without limitation, claims that in any way arise from
or out of, are based upon or relate to Employee’s employment by, association
with or compensation from AA or any of its affiliated firms, except for claims
(i) arising out of AA’s obligations set forth in this Agreement or (ii) for any
accrued and unpaid salary or other employee benefit or compensation owing to
Employee as of the date hereof.  It is
understood and agreed that nothing herein shall be deemed to be a release of
any person or entity other than the Released Parties. Nothing herein shall be
deemed a release by LECG of any Released Persons or other person or

 

2

 

entity. AA agrees that in
the event that, within six months of the date hereof, any principal or manager
enters into a provision with AA corresponding to this Section l(d) that
contains terms that are more favorable to such principal or manager than the
comparable terms of this Section l(d), then, at the option of Employee, any
such provision shall apply to Employee in lieu of this Section l(d).

 

(e)                                       Notwithstanding anything in this Section 1 to
the contrary, Employee shall comply with any obligations under the Noncompete
Document that continue after giving effect to Section 2 hereof.

 

(f)                                         Employee shall cooperate reasonably with AA
in connection with any claim or actual or threatened investigation, litigation
or proceeding relating to AA or any of its affiliated firms (“Litigation”) and,
if requested by AA, to act as a witness in connection with any such Litigation,
all without any compensation but with reimbursement for reasonable, documented,
out-of-pocket expenses incurred as a result of specific requests for
cooperation by AA.

 

(g)                                      Employee agrees to cooperate reasonably with
AA in connection with the appropriate handling of files and property of AA with
which Employee was involved.

 

(h)                                      Employee represents and warrants to AA that
to Employee’s knowledge:

 

(i)                                     Since January 10, 2002, Employee has (x) not
caused the destruction of any documents in contravention of the document
retention policy of AA attached hereto as Exhibit B and (y) in all cases
where Employee has informed AA’s legal department of a pending litigation,
investigation, or inquiry or facts making litigation, investigation, or inquiry
reasonably foreseeable. Employee has also informed all AA employees who worked
on the relevant matter of AA’s document retention policies and the need to
preserve documents related to pending or reasonably foreseeable litigation,
investigation, or inquiry.

 

(ii)                                  Since April 30, 2001, Employee has complied
in all respects with all requests made to Employee by both inside and outside
counsel to AA to retain documents and, when requested by such counsel, has
delivered such documents to such counsel.

 

(i)                                     Employee agrees that all notices to Employee
with respect to this Agreement shall be sent to Employee to the home address,
or via the email address, indicated under Employee’s name on the signature page
hereto. Employee further agrees that in the event that Employee’s home address,
email address and/or home phone number change subsequent to the date of this
Agreement, Employee shall, as soon as reasonably practicable thereafter,
provide AA with written notice of such change.

 

2.                                       AA
hereby accepts Employee’s resignation from AA and/or its affiliates or
affiliated firms effective as of the
date hereof.  AA hereby agrees to
Employee’s employment by or affiliation with LECG or one of its affiliates and
hereby releases Employee from (i) those restrictive covenants set forth in the
first three bullet points of the Noncompete Document and (ii) all other
non-compete, non-solicitation and other restrictive covenants applicable to
Employee in any organizational document of AA, AW or any of their respective
affiliated firms.

 

3

 

3.                                       Notwithstanding anything to the contrary
contained herein, Employee expressly acknowledges and agrees that (a) in no
event shall the Administrator of AA, any member of the Administrative Board of
AA, any directors, officers, managers, partners, participating principals,
national directors or similar persons of AA or any of their respective agents
or representatives (collectively, the “Covered Persons”) have any personal
liability with respect to AA’s obligations hereunder and (b) no Covered Person
shall be obligated to make, and no Covered Person in fact will make, any
capital contribution or other payment of any kind to AA in order for AA to satisfy
its obligations hereunder.

 

4.                                       This Agreement shall be governed by Illinois
law without giving effect to principles of conflicts of law.

 

5.                                       This Agreement may be executed in any  number of counterparts, each of which
shall be deemed an original, but all of which together shall constitute a
single instrument.

 

6.                                       From time to time after the date hereof, at
the request of either party hereto, the parties hereto shall execute and
deliver to such requesting party such documents and take such other action as
such requesting party may reasonably request in order to consummate more
effectively the transactions contemplated hereby.

 

7.                                       The parties hereto agree that LECG shall be a
third party beneficiary of Section 1(b), the penultimate sentence of Section
1(d), Section 2 and this Section 7, but for no other purpose.

 

4

 

IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
and delivered as of the date first above written.

 

	
   

  	
  ARTHUR ANDERSEN LLP

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Its:

  	
  Authorized Signatory

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [Name]

  
	
   

  	
   

  
	
   

  	
  Home Address:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Email Address:

  
	
   

  	
   

  
	
   

  	
  Home Phone Number:

  
					

 

5

 

Exhibit A – Noncompete Document

 

NONCOMPETE PROVISIONS

 

The Firm’s two
greatest assets are its people and its clients. We are committed to hiring the
best and our investment in developing our personnel is second to none. Given
our commitment, we must protect this investment so that we can provide our
people the opportunity for growth and success. Today, there is an increased
risk of losing clients or our investment in our people whenever one of our
executive level employees leaves the Firm. Recognizing these business
realities, we have adopted the following policies applicable to all executives.

 

•                  If you leave the
Firm, for eighteen months after release or resignation, you agree not to
perform professional services (of the type you provided) for any client of the
Firm on which you worked during the eighteen months prior to release or
resignation. This does not prohibit you from accepting employment with a
client.

 

•                  For twelve
months after you leave the Firm, you agree not to solicit (to perform
professional services of the type you provided) any client of the Firm’s
office(s) to which you were assigned during the eighteen months preceding
release or resignation.

 

•                  You agree not to
solicit away from the Firm any of its professional personnel for eighteen
months after release or resignation.

 

•                  Upon your
release or resignation, you agree not to remove, retain, copy or utilize any
confidential, privileged or proprietary information or property of the Firm or
its clients. All discoveries, inventions or techniques developed in the course
of your employment belong to the Firm and will be disclosed and assigned to it
by you.

 

It is not our intent to limit your ability to pursue your professional
career if you leave the Firm. The provisions above relate to preserving our
people and our clients.

 

A-1

 

Exhibit B – Document Retention Policy

 

Interim Document Management Policy

 

Following is the Interim Document Management Policy, as established on
January 10, 2002, and including revisions through April 30, 2002. Any questions
about the policy should be directed to the Legal Group at 1-312-507-9209.

 

Revisions for retention and deletion of
documents – April 2002

 

The revisions to the Interim Document Management Policy are as follows:

 

You may now delete documents of all kinds that
you have created on the network, including documents in your Lotus Notes
e-mail database, provided that you are not required to preserve such
documents under the Interim Document Management Policy because of their
relevance to pending or reasonably foreseeable litigation, investigation,
inquiry, proceeding or other dispute.

 

As noted in previous communications,
documents that must be retained include those related to Enron,
Worldcom, Global Crossing, tax shelter transactions or any other matter for
which specific instructions to preserve documents have been issued or may be
issued in the future.

 

When you save and back up your documents, the firm’s systems will
automatically retain a copy of any deleted documents so you are not at risk in
the event of documents becoming relevant in the future.

 

You still must retain every document that is created in the future if
it may be relevant to any pending or reasonably foreseeable litigation,
investigation, inquiry, proceeding or other dispute.

 

Note: If you have a
local replica of your e-mail database:

•                  You must make
sure to regularly replicate between your local e-mail database and your e-mail
database on the network.

•                  Do NOT
refresh the design of your local e-mail database. If you have problems with
your local e-mail database, please contact your local Notes administrator or
local technology support desk.

•                  If you have
selected the Remove documents not modified in
the last: XX days in the Replication Settings dialog box on your
e-mail database, it must not be set to less than 14 days. The graphic
below illustrates a mail file set to remove documents not modified in the last
14 days. If you have any questions about this setting, please contact your
local Notes administrator or local technology support desk.

 

You may now also dispose of various hard
copies of materials that you previously were required to keep. You may dispose
only of items that are not relevant to any pending or reasonably foreseeable
litigation, investigation, inquiry proceeding or other dispute. In addition, if
any such materials contain notations, those materials must be preserved.

 

B-1

 

Hard copies that must be retained
include those related to Enron, Worldcom, Global Crossing, tax shelter transactions
or any other matter for which specific instructions to preserve documents have
been issued or may be issued in the future.

 

The following is a list of categories of
materials that may be disposed of in accordance with these restrictions:

1. Andersen employee materials such as benefits packages, reference
binders for personnel issues, training materials, phone directories, Andersen
publications, business cards, industry magazines, promotional materials,
reference materials, textbooks;

2. Employee time reports (if they are hard copies of information
preserved on the computer systems);

3. Lotus Notes, memos, Excel sheets and PowerPoint presentations (if
they are hard copies of information preserved on the computer systems);

4. 10-Ks, S-1s, S-8s and financial statements (if they are extra copies
of materials that are preserved both in hard copy and on the computer systems);

5. Billing information such as computer printouts of time billed to a
client and billing status of a given project (if they are hard copies of
information preserved on the computer systems);

6. General client information such as client proposals and background
information about clients;

7. Copies of materials that are contained in client engagement files
(except that if they contain notations, such materials must be preserved);

8. CDs, computer discs and other general electronic files as long as
the contents have been saved and backed up on the computer systems;

9. Tax return preparation software (non-client specific);

10. Extra copies of prior year tax returns (if other copies are
maintained in the engagement files);

11. Drafts of financial statements and tax returns (if the final
version of these items are maintained in the engagement files).

 

Note: Do not dispose
of any phone message slips or documents with any handwritten notations. These
items will be collected and retained.

 

Any questions about disposal of hard copy materials should be directed
to your local office Director of Administration / Support Services or to Ed
DiYanni at 1-212-708-6230.

 

As a final point, please note that all US ABA partners, principals,
managers and seniors received US ABA Bulletin
02-10, dated April 15, 2002, which announced
significant revisions to the firm’s audit working paper archiving policy. That
memo remains in effect with the following clarification: For work-related
materials that are not specific to an engagement, apply the guidelines
described above. Any questions about the audit working paper archiving policy
should be directed to your ABA practice director or the Professional Standards
Group.

 

B-2

 

Revisions for retention and deletion of
documents – March 2002

 

The revisions are as follows:

•                  No document can
be printed without first being saved. This is to ensure that a copy of all
relevant data is retained properly. This applies to documents in all operating
systems and software programs.

•                  Document(s)
saved to your hard drive can be deleted only after all of the following steps
have been completed:

1. You have saved the document(s) on your hard drive under either the
Data directory (for Windows 95 users) or the My
Documents directory (for Windows 2000 users).

2. You have connected your computer to the Andersen network.

3. You have successfully backed up the document(s) by copying it to the
network, or by using the automatic backup program Connected TLM. For any
questions related to backing up document(s) on your hard drive, please contact
your local help desk.

4. You have waited 48 hours from the completion of that successful
backup. This is to ensure that the technologies that back up all Andersen data
on the network have completed necessary operations.

•                  No documents can
be saved to what is called the “system” volume (SYS) of our network file servers.
This should not affect the way you work, but you need to be aware of this
restriction.

Software programs allow you to save documents to the location of your
choice, including network file servers such as the “J” drive. The network file
servers are structured into data volumes, such as VOL1, VOL2, etc., where
software programs and documents are stored. The SYS volume contains the files
and data that run the server. The SYS volume must be kept free of user
documents so that we can perform routine maintenance and keep the file servers
and network operating properly.

 

Please remember that the Interim Document Management Policy requires
that you retain any document, including e-mail, that could be relevant
in actual or potential legal or regulatory proceedings. It also requires that
you retain every work-related document that existed as of January 10,
2002, when the interim policy was established.

 

January 2002

(Superseding AABU Policy Statement 760)

 

1. Documents Currently in Existence: Retain
Everything

A. You must retain every work-related document that is currently in
existence.  (See definition of
“documents,” Section III, infra)

1. This means that for the time being you must not destroy or discard
any work-related documents in the possession of Andersen or any Andersen
employees.

 

2. As further explained below, this directive includes electronic
documents. Thus, you may not delete anything that currently exists on your
computer, including any e-mails.

 

B-3

 

II. Requirement for Retention of Documents
Created in the Future

A. In addition to work papers, correspondence, client-prepared
schedules and other documents that you normally retain as part of central
engagement files, you must retain every document that is created in the
future if you believe that document might possibly be relevant to any
actual or potential litigation, investigation, inquiry, proceeding, or other
dispute.

1. Be over-inclusive: If a question crosses your mind about whether to
retain a document, retain it.

 

2. If you have questions about this aspect of the policy, call the
Legal Group in Chicago at 312-507-9209.

 

III. Definition of “Document”

A. For purposes of this policy, the word “document” has an
intentionally broad definition.  More specifically,
“document” means:

1. any record or other tangible form of expression, whether an original
or a copy, and however created, produced or stored (manually, mechanically,
electronically or otherwise), including but not limited to: books, papers, files,
notes, correspondence, messages, memoranda, reports, work papers, electronic
mail messages, telephone logs, records of conversations or meetings, account
statements, confirmations, contracts, agreements, reports, studies, summaries,
charts, computer printouts, diaries, calendars, bank statements, invoices,
bills, records of billings, checks, wire transfers, drafts for money, records
of payment, magnetic tape, tape recordings, disks, diskettes, disk packs, and
other electronic media, microfilm, microfiche, and storage devices. (this does
not include Octels and voice mail messages)

2. and all drafts, alterations, and modifications, changes or
amendments of the foregoing.

 

a. Again, be over-inclusive. If you are not sure whether something is a
“document,” treat it as if it is a document.

 

b. Also, this means that “drafts” are “documents.”

 

B-4

 

Andersen Worldwide SC

 

 

May 3, 2002

Further clarification - Interim Document Management Policy

 

•      Additional guidance on disposal of hard
copy materials with notations

 

Andrew Pincus

General Counsel

 

Dan Nottke

Managing Partner, Global Technology Organization

 

We want to inform you of further guidance pertaining to our Interim
Document Management Policy. These clarifications should help you better manage
your disposal of various hard copy materials and reduce costs for the firm.
Former US Senator John Danforth’s firm, Bryan Cave, has approved the changes
announced below.

 

Consistent with the notice issued last week, the clarifications noted
below should continue to ease the burden of the Interim Document Management
Policy on you and the firm without compromising the integrity of important
principles of document preservation. They allow you to delete / dispose of some
materials and documents as described below.

 

These changes apply to all Andersen personnel worldwide and are
effective immediately. We realize that many of you are in deals or working on
deals to move to a new firm. We remind you that as long as you are part of the
Andersen network of firms or have possession of Andersen documents, you need to
abide by the Andersen policies for document retention. The Interim Document
Management Policy has been revised on our intranet to incorporate these
revisions and other guidance to date. We encourage you to read the policy in
full on the intranet.

 

B-5

 

The additional clarifications to the Interim Document Management Policy
are as follows:

 

•                  Phone messages
and documents with notations

 

You may dispose of phone messages and copies of materials (e.g.
contracts, reports, financial statements) with notations that you previously
were required to keep as long as:

 

1.         they are not relevant to any pending or
reasonably foreseeable litigation, investigation, inquiry, proceeding or other
dispute (by “any” we mean matters that involve Andersen, an Andersen client, or
any other matter where Andersen possess relevant documents);

2.         they are not related in any way to Enron;

3.         they are not related in any way to either the
Professional Standards Group (PSG) or to the Firm’s General Counsel (or any
attorneys that are part of that functional area) for the period from 8/1/01
through 11/15/01.

 

Hard copies that must be retained include those related to Enron,
Worldcom, Global Crossing, tax shelter transactions or any other matter for
which specific instructions to preserve documents have been issued or may be
issued in the future.

 

Materials that have been cleared for disposal and which are confidential
or proprietary should be accumulated for shredding rather than discarded in the
regular office trash collection and disposal process.

 

Any questions about disposal of hard copy materials should be directed
to your local office Director of Administration / Support Services or to Ed
DiYanni at 1-212-708-6230.

 

If you have any questions about the Interim Document Management Policy,
please contact the Legal Group at 1-312-507-9209.

 

B-6

 

To: All US partners and personnel

 

 

Because this document
has been retained centrally, you may delete it from your e-mail under the
Interim Document Management Policy.

 

 

May 23, 2002

 

Revised Document Management Policy: Effective
May 23, 2002

 

Arthur Andersen LLP Legal Group

 

In January, we initiated a formal review of our document management and
retention policies. Former US Senator John Danforth’s firm, Bryan Cave, has
participated in this process, advising on and approving the interim policy
changes that have been provided to your over the past several months.

 

This revised Document Management policy supersedes the Interim Document
Management Policy with respect to client engagement information in hardcopy
form. It also outlines the policy for management of client information, in both
hardcopy and electronic form, in the event of pending or reasonably foreseeable
litigation. These requirements apply, with immediate effect, to all partners
and employees in the United States.

 

Given that many of you are or soon will be transitioning to new
organizations and work environments, it is vital that you adhere to these
policies in making arrangements for the retention or disposal of documents in
your possession.

 

Policy for hardcopy client engagement
information

 

Policy Statement 760 (Practice Administration: Client Engagement
Information — Organization, Retention and Destruction) and other policies
developed in accordance with PS 760, include provisions for the retention and
disposal of both hardcopy and electronic client engagement information. The provisions in PS 760 and related policies with
respect to hardcopy client information now apply to all documents created both
before and after January 10, 2002. For your reference, a copy of PS 760 is available on the intranet.

 

One of the related policies that provides summary guidelines for
retention of internal accounting records is the Accounting Record Retention Schedule, included in Appendices
E-1 and E-2 of the Accounting Procedures Manual. This
includes document retention guidance for current and obsolete office records,
including client receivables, unbilled services, fee statistics and other
information.

 

You should maintain and dispose of applicable hardcopy documents in
accordance with those provisions, unless the documents are related to pending
or reasonably foreseeable litigation, legal proceedings, inquiries,
investigations, or disputes involving Arthur Andersen, Arthur Andersen clients
or third parties where Arthur Andersen has possession, custody or control of
documents related to those matters. If you
have possession of any such documents, you must preserve them until further
notice. This is described in more detail later in this note.

 

PS 760 protects the confidentiality and provides for the proper
management of client engagement information. It applies to the following types
of client documents:

 

B-7

 

	
  Service
  Line

  	
   

  	
  Type of Material

  	
   

  	
  Retention Period

  
	
  ABA -
  Financial

  	
   

  	
  Client File
  (a)/Engagement Knowledge

  	
   

  	
  Permanently
  (e)

  
	
  Statement
  Assurance

  	
   

  	
  Base/CAF
  (purged annually of superseded or non-relevant documents)

  	
   

  	
   

  
	
   

  	
   

  	
  Audit
  Workpapers/Central File

  	
   

  	
   

  
	
   

  	
   

  	
  Office
  copies of reports and financial statements (d) Filings with Government
  agencies which include (physically or by reference) our reports, such as
  10K’s and Registration Statements filed with the SEC

  	
   

  	
  Six years

  Permanently (e)

  
Permanently (e)

  
	
  ABA -
  Business Risk Consulting and Advisory

  	
   

  	
  Central
  File, including Working Papers

  	
   

  	
  When no
  longer useful or needed to support an opinion. Maximum of Six years (f)

  
	
   

  	
   

  	
  Office
  Copies of Reports (d)

  	
   

  	
  Permanently
  (e)

  
	
  ABA - AA
  Process Solutions

  	
   

  	
  Central
  File, including working papers (Enterprise Center Clients)

  	
   

  	
  Six years
  (f)

  
	
   

  	
   

  	
  Office
  Copies of Reports and Financial Statements Filings with Government Agencies
  which include (physically or by reference) our reports, such as 10Ks and
  Registration statements filed with SEC

  	
   

  	
  Permanently
  (e)

  
	
   

  	
   

  	
  CAFs

  	
   

  	
   

  
	
   

  	
   

  	
  Project File
  Documentation, including:

  	
   

  	
   

  
	
   

  	
   

  	
  • SMART documentation and risk
  management action plans

  	
   

  	
  Permanently
  (e)

  
	
   

  	
   

  	
  • Job Arrangement Letter or Contract
  with appropriate terms

  	
   

  	
   

  
	
   

  	
   

  	
  • Contract change orders

  	
   

  	
   

  
	
   

  	
   

  	
  • Project work plans

  	
   

  	
   

  
	
   

  	
   

  	
  • Engagement QA partner review
  documentation

  	
   

  	
   

  
	
   

  	
   

  	
  • Project memoranda related to client
  discussions of issues/problems and resolution

  	
   

  	
   

  
	
   

  	
   

  	
  • Supporting schedules, simulations,
  models, or other documentation that underlie final recommendations made or
  end products delivered

  	
   

  	
   

  
	
   

  	
   

  	
  • Client satisfaction documentation
  and survey forms

  	
   

  	
  Six years
  (b)

  

 

B-8

 

	
  Service
  Line

  	
   

  	
  Type of Material

  	
   

  	
  Retention Period

  
	
  TLBA - Tax
  and

  	
   

  	
  Central
  File, including all Working Papers

  	
   

  	
  Six Years
  (f)

  
	
  Business
  Advisory

  	
   

  	
  Income Tax
  Returns

  	
   

  	
  Six Years
  (f)

  
	
   

  	
   

  	
  Tax Basis
  Studies

  	
   

  	
  Permanently
  (e)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Earnings and
  Profits Studies

  	
   

  	
  Permanently
  (e)

  
	
   

  	
   

  	
  Estate
  Planning Studies

  	
   

  	
  Permanently
  (e)

  
	
   

  	
   

  	
  Estate and
  Gift Tax Returns

  	
   

  	
  Permanently
  (e)

  
	
   

  	
   

  	
  Office
  Copies of Attest Reports, including Third Party Tax Opinions and Reports on
  Prospective Financial Information 

  	
   

  	
  Permanently
  (e)

  
	
   

  	
   

  	
  Continuing
  Tax Files (including all documents that have continuing importance)

  	
   

  	
  Permanently
  (e)

  
	
  TLBA - Legal

  	
   

  	
  Central
  File, including Working Papers

  	
   

  	
  Customs and
  practices of legal profession in each country. The policy should be
  determined by the Head of Legal Services and approved by the Area Practice
  Director of Legal Services.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Office Copy
  of Report or Other Deliverable (d)

  	
   

  	
  Permanently
  (e)

  
	
  BC

  	
   

  	
  Project File
  Documentation

  	
   

  	
  Six Years
  (b)

  
	
   

  	
   

  	
  Risk SMART documentation and risk management action plans

  	
   

  	
   

  
	
   

  	
   

  	
  • Job Arrangement Letter with
  appropriate terms and conditions, signed by the client and AA

  	
   

  	
   

  
	
   

  	
   

  	
  • Contract change orders

  	
   

  	
   

  
	
   

  	
   

  	
  • Project work plans

  	
   

  	
   

  
	
   

  	
   

  	
  • Engagement QA partner review
  documentation

  	
   

  	
   

  
	
   

  	
   

  	
  • Projects status meetings

  	
   

  	
   

  
	
   

  	
   

  	
  • Project memoranda related to client
  discussions of issues/problems and resolution

  	
   

  	
   

  
	
   

  	
   

  	
  Supporting schedules, electronic simulations or models, and other
  documentation that underlie final recommendations made or end products
  delivered

  	
   

  	
   

  
	
   

  	
   

  	
  • Client satisfaction documentation
  and survey forms

  	
   

  	
   

  
	
   

  	
   

  	
  Office Copy
  of Final Report or Other Deliverable (d)

  	
   

  	
  Permanently
  (e)

  

 

B-9

 

	
  Service
  Line

  	
   

  	
  Type of Material

  	
   

  	
  Retention Period

  
	
  Complex
  Claims & Events 

  	
   

  	
  Project File
  Documentation, including:

  	
   

  	
  Six Years
  (b)

  
	
  (Litigation
  Support)

  	
   

  	
  • Documentation to support that an
  adequate conflict search was performed

  	
   

  	
   

  
	
   

  	
   

  	
  • Risk SMART documentation

  	
   

  	
   

  
	
   

  	
   

  	
  • Job Arrangement Letter with
  appropriate terms and conditions, signed by the client and AA

  	
   

  	
   

  
	
   

  	
   

  	
  • Contract change orders

  	
   

  	
   

  
	
   

  	
   

  	
  • AP-150, including sign-off by
  engagement QA partner

  	
   

  	
   

  
	
   

  	
   

  	
  • Client satisfaction documentation
  and survey forms

  	
   

  	
   

  
	
   

  	
   

  	
  • Retention of specific supporting
  schedules are required by (i) Class Action Settlement Assistance, (ii)
  Insurance Insolvency Consulting and (iii) FEHB Settlement Negotiations,
  Contact the respective service line leader for more information

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Office Copy
  of Final Report or Other Deliverable (d)

  	
   

  	
  Permanently
  (e)

  
	
  Federal
  Government Contacts Consulting

  	
   

  	
  In addition
  to the guidelines provided for BC, contracts with the U.S. Government require
  the retention of certain documentation pursuant to Federal guidelines.
  Contact the Office of Government Services (OGS) for more information

  	
   

  	
  As directed
  by OGS

  
	
  Other
  Service Lines

  	
   

  	
  Central
  File, including Working Papers Office Copies of Reports (d)

  	
   

  	
  Six Years
  (b)

  Permanently
  (e)

  

 

THESE NOTES ARE IMPORTANT - PLEASE READ

 

(a)  The client file is a continuously updated
file and includes the reports to support the accept/retain decision, ExCEED,
Understanding the Business, Assess Client Risk Controls and Determining and
Managing Residual Risk Processes. Per Section 2 of AOP, the engagement team
must retain certain reports from the client file in the current year
workpapers; retention of other reports is optional.

(b)  Six years from the date of the financial statements covered by an
audit report or supplemental reports, or the date of issue of special reports
on prospective financial information, or other deliverables.

(c)  The Office/Country Managing Partner, in consultation with the
Global Risk Management Group, may choose to extend the period, if appropriate.
In no circumstances, however, should the retention period be lessened.

(d)  If our arrangement letter with the client includes legal
liability limitation language, such letter should be included with the office
copy of our report

(e)  As described in Section 4 of AABU Policy Statement No. 760, these
items do not need to be retained permanently for lost clients. These items
should be retained for six years after loss of client rather than permanently.

(f)  Six years from the year-end of the relevant return unless a
longer period is required by local law However, if a return is under examination
or in dispute, the relevant information should not be destroyed until final
resolution or settlement.

 

Departing partners, managers
and staff should follow the guidance provided by their solution segment leaders
and practice directors regarding the collection and storage of engagement
specific documents. Materials that have been cleared for disposal should be
accumulated for cremation, shredding, mulching or pulping, whichever is most
cost

 

B-10

 

effective. Where available,
commercial facilities that are bonded and provide proof of destruction should
be used for disposal of hardcopy client engagement information.  PS 760, Section 4.5.2, provides guidelines
and processes for the disposal of hardcopy working paper files.

 

The Interim Document Retention
Policy — updated on April 29, 2002, to allow for deletion of electronic
documents under appropriate circumstances — remains in effect with respect to
retaining and disposing of electronic client documents. An updated copy of the
Interim Document Retention Policy is available on the intranet. In brief, if
you save and properly back up any electronic document, you may delete it from
your PC or laptop, unless it falls within the Litigation restrictions set out
below.

 

Document management in the event of pending
or foreseeable litigation

 

If you possess any client
documents – hardcopy or electronic – related to pending or reasonably
foreseeable litigation, legal proceedings, inquiries, investigations or disputes
involving Arthur Andersen, Arthur Andersen clients or third parties where
Arthur Andersen has possession, custody or control of documents related to
those matters (referred to as “Litigation”), you must preserve them until
further notice.

 

In particular, you cannot
dispose of any documents related to Enron, Global Crossing, Worldcom, Asia Pulp
& Paper, Peregrine Systems or tax shelters. In deciding whether to dispose
of any document, err on the side of caution. If there is any doubt as to
whether it is appropriate to dispose of a document, either retain the document
or contact the Arthur Andersen LLP Legal Group at 312-507-9209 to determine
whether the document or category of documents is related to pending or
reasonably foreseeable Litigation.

 

If any of the following
situations occurs or has occurred, do not dispose of any documents related to
that matter:

 

•      You have been contacted by someone at
Arthur Andersen or outside counsel for Arthur Andersen to provide documents
related to pending Litigation,

•      You have been notified by the engagement
partner or another Arthur Andersen employee that it is reasonably foreseeable
that a matter for which you possess documents is or will be the subject of
Litigation, or

•      You become aware of information that leads
you to believe that it is reasonably foreseeable that a matter for which you
possess documents is or will be the subject of Litigation.

 

Policy Statement 780 (Practice
Administration: Notification of Threatened or Actual Litigation, Governmental
or Professional Investigations, Receipt of a Subpoena, or Other Requests for
Documents or Testimony, Formal or Informal) and other directives from Arthur
Andersen address the procedures to be followed when an Arthur Andersen partner
or employee becomes aware of information that suggests it is reasonably
foreseeable that Arthur Andersen, one of Arthur Andersen’s clients or a third
party will be the subject of Litigation about which Arthur Andersen has
information.  In these situations, you
are required to:

 

•      Report that information to the Arthur
Andersen LLP Legal Group, and

•      Retain and preserve every document that is
relevant to the matter that is the subject of the pending or reasonably
foreseeable Litigation.

 

Given the significant numbers
of partners and employees leaving and the fact that they no longer will be a
resource for information about pending or reasonably foreseeable Litigation,
please keep in mind your obligations with respect to notifying others about
pending or reasonably foreseeable Litigation. If you make a report, or have
made a report, to the Arthur Andersen LLP Legal Group about information
described above, you also must tell all members of the relevant engagement team
and any other relevant Arthur Andersen personnel to preserve and maintain documents
related to that matter.

 

Any questions about disposal of
hard copy materials should be directed to your local office Director of
Administration / Support Services or to Kent Piper at 1-312-931-0503.

 

B-11

 

If you have any questions about
the policy, please contact the Arthur Andersen LLP Legal Group at
1-312-507-9209.

 

B-12

 

EXHIBIT B

 

FORM OF FIXTURES AND EQUIPMENT LEASE

 

 

Execution Copy

 

FIXTURES AND EQUIPMENT LEASE

 

This FIXTURES
AND EQUIPMENT LEASE (this “Lease”) is made and entered into as of June
12, 2002 by and between Arthur Andersen LLP, a registered limited liability
partnership under the laws of the State of Illinois (“Lessor”), and
LECG, LLC, a California limited liability company (“Lessee”).

 

WHEREAS,
Lessor and Lessee have entered into a Letter Agreement dated even herewith (the
“Letter Agreement”; capitalized terms used herein but not otherwise defined
herein shall have the meanings given to such terms in the Letter Agreement);

 

WHEREAS,
Lessee and Lessor have entered or will enter into a Sublease pursuant to the
Letter Agreement for certain office space located on the 18th Floor
of 33 West Monroe Street, Chicago, Illinois (the “Sublease Space”); and

 

WHEREAS, the
Letter Agreement contemplates that Lessor and Lessee will enter into this Lease
at the Closing to lease the Fixtures and Equipment (as defined below) from
Lessor to Lessee for the Lease Term (as defined below).

 

NOW,
THEREFORE, in consideration of the foregoing and the mutual covenants and
agreements contained herein, the parties hereto hereby agree as follows:

 

1.             Lease. Subject
to the terms and conditions set forth herein, Lessor hereby agrees to lease to
Lessee, and Lessee hereby agrees to lease from Lessor, the furniture, fixtures
and equipment (other than personal computers, printers, scanners, routers,
peripherals, modems, servers, cabling, other computer hardware and other
related equipment) owned by Lessor and described on Schedule C-1 to the Letter
Agreement (the “Fixtures and Equipment”) for the Lease Term. Each item
comprising part of the Fixtures and Equipment shall be called a “Unit”.

 

2.             Lease Term.

 

(a)           The term of this Lease
(the “Lease Term”) shall commence on the date hereof and shall terminate
upon the third (3rd) anniversary of the date hereof. Any obligations
that are outstanding hereunder immediately prior to the end of the Lease Term
shall survive the end of the Lease Term.

 

(b)           Provided that (i)
Lessee is not in default of this Lease; and (ii) the Sublease is terminated
pursuant to the terms thereof, except as the result of a default thereunder by
Lessee; and (iii) Lessee no longer occupies any portion of the Sublease Space,
then the Lease Term shall be deemed to terminate effective as of the last date
of the calendar month that Lessee occupies the Sublease Space (it being
understood that if the Sublease is terminated by the mutual agreement of the
parties thereto, then Lessee shall remain obligated for all payments of Rent
(as defined below) remaining due under the terms and conditions provided herein
unless the parties hereto agree otherwise).

 

 

(c)           In the event that
Lessee remains in the Sublease Space beyond the Lease Term, either pursuant to
the Sublease (including any extensions or modifications thereof) or pursuant to
a lease with the landlord of the Sublease Space, the Lease Term shall be
extended for an additional period of two (2) years (the “Extension Period”),
to begin upon the expiration of the Lease Term, on the same terms and
conditions set forth herein. Lessee shall continue to pay Rent (as defined
below) and all other amounts under the terms and conditions set forth herein
during the Extension Period.

 

(d)           If Lessee remains in
occupancy of the Sublease Space after the expiration of the Lease Term other
than as described in Paragraph 2(c) above, Lessee shall become a month to month
lessee of the Fixtures and Equipment upon all terms of this Lease as might be
applicable to such month to month lease, except that Lessee shall pay rent to
Lessor at a rate equal to 200% of Rent.

 

3.             Rent, Net Lease.

 

(a)           Lessee shall pay to
Lessor rent in respect of the lease of the Fixtures and Equipment the amount of
One Hundred Fifty Thousand Dollars ($150,000) per annum during the Lease Term
(“Rent”). Such amounts shall be paid by Lessee to Lessor in equal
monthly installments of Twelve Thousand Five Hundred Dollars ($12,500) each,
the first of which shall be due on the date hereof pursuant to Section 5 of the
Letter Agreement. Each subsequent monthly installment of rent thereafter shall
be due and payable on the first day of each calendar month during the Lease
Term and shall be paid by check payable in U.S. Dollars to Lessor at its office
specified pursuant to Section 11(b) below, or at such other location as Lessor
shall specify. Rent for partial calendar months shall be prorated. In the event
any rent or other amounts due hereunder shall not be paid within 5 days of the
date when due, after notice from Lessor of such non-payment, Lessee shall pay
Lessor, for the period during which such amount is past due following the
expiration of such 5-day period, interest on such overdue amount from the
expiration of such 5-day period to the date of payment at a rate of 6% per annum.

 

(b)           This Lease constitutes
a net lease. Lessee shall promptly pay all costs, expenses and obligations of
every kind and nature incurred in connection with the use or operation of the
Fixtures and Equipment which may arise or be payable during the Lease Term
hereunder, whether or not such cost, expense or obligation is specifically
referred to herein.

 

4.             Disclaimer of
Warranties.

 

(a)           Lessee agrees and
acknowledges that:

 

(i)         Lessee
is satisfied that each Unit is suitable for its purposes; and

 

(ii)        Lessor
is not a manufacturer of, a dealer in, or in the business of selling or
leasing, furniture, fixtures or equipment of the type or kind leased by Lessee
hereunder.

 

(b)           EXCEPT AS OTHERWISE
EXPRESSLY PROVIDED IN THE LETTER AGREEMENT AND THIS LEASE, (A) LESSOR IS MAKING
NO REPRESENTATION OR WARRANTY AS TO THE FIXTURES AND EQUIPMENT AND LESSEE IS
LEASING THE

 

2

 

FIXTURES AND EQUIPMENT IN
RELIANCE ON ITS OWN INVESTIGATION AND ON AN “AS IS, WHERE IS” BASIS AND WITHOUT
RECOURSE AND WITHOUT ANY REPRESENTATION OR WARRANTY OF MERCHANTABILITY, FITNESS
FOR ANY PARTICULAR PURPOSE, OR ANY OTHER IMPLIED OR EXPRESS WARRANTIES
WHATSOEVER.

 

5.             Use of Fixtures
and Equipment. This Lease does not convey to Lessee any right, title or
interest in or to the Fixtures and Equipment or any Unit thereof except as a
lessee. Each Unit shall be the exclusive property of Lessor, and Lessee shall
have no rights therein except the right to use it so long as Lessee is not in
default hereunder. Lessee agrees that the Fixtures and Equipment will be used
in the conduct of its business and with due care to prevent injury thereto
(normal wear and tear excepted) or to any person or property, and in conformity
with all applicable Laws (as defined below). Lessee shall not permit the
Fixtures and Equipment to become or remain a fixture to any real estate or an
accession to any personalty not leased hereunder. Lessor or any duly authorized
representative of Lessor may upon reasonable notice from time to time inspect
the Fixtures and Equipment and Lessee’s records with respect thereto wherever
the same may be located. Lessee shall not remove any Unit from its location as
of the date hereof or permit any Lien to arise or remain on any Unit. As used
herein, “Laws” shall mean any federal, state, local or foreign law,
statute ordinance, rule, regulation, order or decree.

 

6.             Maintenance of
Fixtures and Equipment. Lessee shall at all times keep the Fixtures and
Equipment in such repair, condition and working order, ordinary wear and tear
excepted, as delivered to it by Lessor and shall supply all parts, service, and
other items as so required. Lessee shall not, without the written consent of
Lessor, make any improvements or additions to the Fixtures and Equipment or
install thereon any accessory or device that cannot be removed without damage
or injury to any Unit. All parts, replacements and substitutions to or for any
Unit, and all accessories or devices installed thereon shall immediately become
Fixtures and Equipment and the property of Lessor. Lessee assumes all risk of,
and Lessee’s obligations under this Lease shall continue unmodified despite,
any loss, theft, destruction, damage, or other interruption or termination of
use of any Unit regardless of the cause thereof, except in the event that (a)
Lessee is not in default hereof, and (b) such loss, theft, destruction,
damage, or other interruption or termination of use is caused solely by Lessor.
Lessee shall maintain commercially reasonable levels of physical damage and
liability insurance with respect to the Fixtures and Equipment with companies
reasonably acceptable to Lessor.

 

7.             Return of Fixtures
and Equipment. Upon the final termination of the Lease Term, Lessee shall,
return the Fixtures and Equipment to Lessor in the same condition as when
received, ordinary wear and tear excepted, at such location as the Fixtures and
Equipment are situated at the time of execution of this Lease.

 

8.             Events of Default;
Remedy. The occurrence of any of the following shall constitute an event of
default hereunder: (a) default, and continuance thereof for ten (10) days, in
the payment of any rent or other amount hereunder, after notice from Lessor
thereof; (b) default under the Sublease; or (c) default in the performance of
any of the agreements herein set forth (and not constituting an event of
default under clause (i) of this paragraph) and continuance of such default for
thirty (30) days after notice thereof from Lessor or Lessee, as applicable.

 

3

 

Upon the
occurrence of an event of default, Lessor shall (except to the extent otherwise
required by law) be entitled to: (a) proceed by appropriate court action or
actions to enforce performance by Lessee of the applicable covenants and terms
of this Lease or to recover damages for the breach thereof; (b) repossess any
or all of the Fixtures and Equipment without prejudice to any remedy or claim
hereinafter referred to; (c) by notice to Lessee declare this Lease terminated without
prejudice to Lessor’s rights in respect of obligations then accrued and
remaining unsatisfied; or (d) avail itself of any other remedy or remedies
provided for by any statute or otherwise available at law, in equity or in
bankruptcy or insolvency proceedings. The remedies herein set forth or referred
to shall be cumulative.

 

9.             No Sublease.
Lessee shall not, without Lessor’s express written consent (which may be
granted or withheld in the sole discretion of Lessee), assign any right or
interest in or to any Unit or sublet or otherwise relinquish possession of any
Unit.

 

10.           Further Assurances.
Lessee agrees, at Lessor’s expense, promptly upon Lessor’s request, to execute,
acknowledge and deliver such instruments, and to take such other action, as may
reasonably be necessary to protect Lessor’s interests, including (without
limitation) the execution of Uniform Commercial Code financing statements. Any
carbon, photographic or other reproduction of this Lease or any such Uniform
Commercial Code financing statement shall be sufficient for filing as such a
financing statement.

 

11.           Miscellaneous.

 

(a)           Entire Agreement.
This Lease and the Letter Agreement contain the entire understanding of the
parties with respect to the Fixtures and Equipment.

 

(b)           Notices. Any
notices, requests, claims, demands or other communications to be given
hereunder by a party hereto shall be in writing and shall be deemed to have
been duly given when delivered in person or upon confirmation of receipt when
transmitted by facsimile transmission or upon receipt after dispatch by
registered or certified mail, postage prepaid, addressed as follows:

 

(i)            If to Lessor:

 

Arthur
Andersen LLP

33 West Monroe

Chicago,
Illinois 60603

Attn:
Administrator

Fax:
312-462-3711

 

With a copy
to:

 

Mayer, Brown,
Rowe & Maw

190 S. LaSalle
Street

Chicago,
Illinois 60603

Attn:       John W. Noell, Jr.

David A.
Carpenter

 

4

 

Fax:
312-701-7711

 

(ii)           If to Lessee:

 

LECG, LLC

2000 Powell
Street, Suite 600

Emeryville,
California 94608

Attn:       Director of
Administration

Fax::       510-653-9695

 

With a copy
to:

 

Marvin A.
Tenenbaum

General
Counsel

LECG, LLC

1603 Orrington
Avenue, Suite 1500

Evanston,
Illinois 60201

 

(c)           Amendment. This
Lease may not be amended or modified except by an instrument in writing signed
by Lessor and Lessee.

 

(d)           Assignment. This
Lease may not be assigned without the express written consent of Lessor and
Lessee (which consent may be granted or withheld in the sole discretion of
Lessor or Lessee); provided, however, that Lessee may, upon
notice to Lessor, assign this Lease or any of its rights and obligations
hereunder to one or more of its Affiliates without the consent of Lessor; provided
that no assignment or delegation by Lessee (or any of its assignees or
delegates) of any rights or obligations hereunder shall (a) increase or
otherwise affect the obligations of Lessor hereunder, (b) reduce or otherwise
affect the rights of Lessor hereunder, or (c) relieve LECG, LLC of or otherwise
affect the obligations of LECG, LLC hereunder.

 

(e)           Severability. If
any provision of this Lease shall be held invalid, illegal or unenforceable,
the validity, legality or enforceability of the other provisions hereof shall
not be affected, and there shall be deemed substituted for the provision at
issue a valid, legal and enforceable provision as similar as possible to the
provision at issue.

 

(f)            Waivers. A
party to this Lease may (i) extend the time for the performance of any of the
obligations or other acts of the other party to this Lease, or (ii) waive
compliance with any of the agreements, or satisfaction of any of the
conditions, contained in this Lease by the other party. Any agreement on the
part of a party to this Lease to any such extension or waiver shall be valid only
if set forth in an instrument in writing signed by such party.

 

(g)           Applicable Law.
This Agreement shall be governed by and construed in accordance with the
domestic Laws of the State of Illinois without giving effect to any choice or
conflict of law provision or rule (whether of the State of Illinois or any
other jurisdiction) that would cause the application of the Laws of any
jurisdiction other than the State of Illinois.

 

5

 

(h)           Counterparts. This Lease may
be executed in counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.

 

 

[Remainder of page intentionally left blank.]

 

6

 

IN WITNESS
WHEREOF, the parties have caused this Lease to be executed and delivered as of
the date first above written.

 

 

	
   

  	
   

  	
  ARTHUR
  ANDERSEN LLP

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  LECG, LLC

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
								

 

7

 

EXHIBIT C

 

FORM OF BILL OF SALE

 

 

Execution Copy

 

BILL OF SALE

 

This Bill of Sale (this “Bill of Sale”) is made as of this 12th
day of June, 2002, by and between Arthur Andersen LLP, a registered limited liability
partnership under the laws of the State of Illinois (“Seller”), and  LECG, LLC, a California limited liability
company (“Purchaser”).

 

WHEREAS, Seller and Purchaser have entered into a Letter Agreement
dated even herewith (the “Letter Agreement”; capitalized terms used but
not otherwise defined herein shall have the meanings given to such terms in the
Letter Agreement) providing for, subject to the terms and conditions set forth
therein, the sale, transfer, conveyance, assignment and delivery by Seller to
Purchaser of the equipment identified on Schedule C-2 of the Letter
Agreement (collectively, the “Transferred Assets”).

 

NOW, THEREFORE, in consideration of the foregoing, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Seller hereby sells, transfers, conveys, assigns and delivers to
Purchaser all of Seller’s right, title and interest in, to and under the
Transferred Assets.  Notwithstanding the
foregoing, this Bill of Sale shall not constitute a sale, transfer, conveyance,
assignment or delivery of any property or right included in the Transferred
Assets that is not assignable or transferable under applicable Law (as defined
below) without the consent of some party unless and until such consent has been
obtained.  As used herein, “Law”
shall mean any federal, state, local, or foreign law, statute, ordinance, rule,
regulation order or decree.

 

This Bill of Sale is being executed and delivered pursuant and subject
to the Letter Agreement.  Nothing in
this Bill of Sale shall, or shall be deemed to, defeat, limit, alter, impair,
enhance or enlarge any right, obligation, claim or remedy created by the Letter
Agreement. In the event of any conflict between this Bill of Sale and the
Letter Agreement, the Letter Agreement shall control.

 

Notwithstanding anything to the contrary contained herein, it is
expressly acknowledged and agreed that (a) in no event shall the Administrator
of Seller, any member of the Administrative Board of Seller or any directors,
officers, managers, partners, participating principals, national directors or
similar persons or any representatives or agents of Seller (collectively, the “Covered
Persons”) have any personal liability with respect to Seller’s obligations
hereunder and (b) no Covered Person shall be obligated to make, and no Covered
Person in fact will make, any capital contribution or other payment of any kind
to Seller in order for Seller to satisfy its obligations hereunder.

 

This Bill of Sale shall be governed by and construed and enforced in
accordance with the laws of the State of Illinois without reference to its
conflicts of law principles.

 

 

This Bill of
Sale may be executed in counterparts, each of which shall be deemed an
original, but all of which together shall constitute a single instrument.

 

2

 

IN WITNESS
WHEREOF, the undersigned have caused this Bill of Sale to be executed and
delivered as of the date first above written.

 

	
   

  	
  ARTHUR ANDERSEN LLP

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Acknowledged and accepted this

  	
   

  
	
  12th day of June, 2002.

  	
   

  
	
   

  	
   

  
	
  LECG, LLC

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  
	
  Title:

  	
   

  
					

 

3

 

EXHIBIT D

FORM OF LICENSE AGREEMENT

 

 

Execution Copy

 

LICENSE AGREEMENT

 

This License
Agreement (together with all Schedules attached hereto, this “Agreement”), dated as of the 12th day
of June, 2002  (the “Effective Date”), is made by and
between Arthur Andersen LLP (“AA”),
and LECG, LLC (“Licensee”).

 

WHEREAS, Licensee desires AA to provide, and AA is willing to provide,
a limited license to use the Licensed Materials (as defined below), up on the
terms and subject to the conditions set forth in this Agreement.

 

NOW, THEREFORE, the parties hereto hereby agree as follows:

 

1.                                      DEFINITIONS.

 

1.1                               “Closing
Date” means the Closing Date as set forth in the Letter Agreement.

 

1.2                               “Legacy
Clients” means former clients of the Practice Group that were served by
the Transferred Employees in the United States.

 

1.3                               “Letter
Agreement” means that certain letter agreement dated as of
June 12, 2002 herewith between AA and Licensee.

 

1.4                               “Licensed
Materials” means such certain documents, templates, knowledge bases,
computer applications (object code only) and other similar material specifically
identified on Schedule A
but only to the extent such documents, templates, knowledge bases, computer
applications (object code only) and other similar material (i) are owned
exclusively by AA, (ii) were used internally by the Partners in production to
provide professional services for AA immediately prior to the Closing Date,
(iii) are not commercially licensed (or planned for commercial licensing) by
AA; (iv) do not contain client information, client-specific or confidential
information of a third party; (v) are reasonably separable from materials that
are not Licensed Materials; and (vi) are necessary for the Partners to continue
to provide services to Legacy Clients.

 

Capitalized terms used, but not
defined, in this Agreement shall have the meanings given to such terms in the
Letter Agreement.

 

2.                                      LICENSE
GRANT.

 

2.1                               License.  Subject to the terms and conditions of this
Agreement, applicable laws and the rights of third parties, AA hereby grants to
Licensee a non-exclusive, non-transferable license to use the Licensed
Materials in the United States under such valid U.S. copyrights, patents and
trade secret rights as AA may have in the Licensed Materials on the Closing
Date.  Licensee may use the Licensed
Materials solely for its internal use in the United States (a) solely to
provide professional services to complete Current Engagements for Legacy
Clients, consistent with AA’s use prior to the Closing Date, and (b) solely for
the purpose of facilitating the transition of Legacy Clients from the Licensed
Materials to the materials used by Licensee to perform such professional
services.  No rights are granted to any
trademark, service mark, trade dress or other

 

 

indicator of source
origin.  All copies of the Licensed
Materials are and shall remain subject to the terms of this Agreement.

 

2.2                               No
Sublicense.  Licensee shall not,
and shall not permit any third party to, (i) sublicense, transfer, sell, rent
or lease, time-share or lend the Licensed Materials, or otherwise assign
Licensee’s license to the Licensed Materials, to any third party, (ii) modify
or reverse engineer or otherwise disassemble or decompile any computer
applications included in the Licensed Materials, (iii) use the Licensed
Materials on behalf of any person or entity that is not a Legacy Client
(including, without limitation, use to obtain information for or otherwise for
the benefit of any third party), (iv) install or use any computer applications
included in the Licensed Materials on any computer that is not owned or leased
by Licensee.  Licensee shall maintain
all copyright, patent, trademark and service mark notices that appear on the
Licensed Materials on any copies of the Licensed Materials made or permitted
under this Agreement.  Licensee shall
not have the right to possess, use, modify, or derive any of the source code
for any of the software included in any Licensed Materials.

 

2.3                               Costs,
Fees, Expenses.  Licensee shall
be solely responsible for obtaining, and for paying all costs, fees and
expenses associated with, all equipment, materials, data, and third party
consents and licenses necessary to use the Licensed Materials (including,
without Limitation, consents and licenses necessary from any affiliate of
AA).  AA shall use its good faith
efforts (without any obligation to incur any costs or expenses) to assist
Licensee to obtain such consents.

 

2.4                               No
Updates or Support.  AA shall
not be responsible for, and shall not be obligated to provide, any updates,
maintenance, training, assistance or support of any kind or nature related to
the Licensed Materials.  AA shall not be
obligated to provide hosting services for the Licensed Materials.

 

3.                                      BANKRUPTCY.

 

The license
granted pursuant to this Agreement by AA to Licensee is, and shall otherwise be
deemed to be, for purposes of Section 365(n) of the Bankruptcy Code (11
U.S.C. Section 101 et seq., the “Code”),
a license of rights to “intellectual property” as defined therein.  The parties hereto agree that Licensee, as
the grantee of such license hereunder, shall retain and may fully exercise all
of its rights and elections under the Code. 
The parties hereto further agree that, in the event of the commencement
of bankruptcy proceedings by or against AA under the Code, Licensee shall be
entitled to retain the license granted to Licensee pursuant to this Agreement.

 

4.                                      OWNERSHIP
AND ACCESS.

 

4.1                               Title;
No Implied Licenses.  This
Agreement does not, and shall not be construed to, grant, transfer or assign to
Licensee any rights, title or interest in or to the Licensed Materials, other
than the license expressly granted herein. 
As between AA and Licensee, AA shall own and continue to own all rights,
title and interest in the Licensed Materials. 
AA reserves all rights in the Licensed Materials not expressly granted
to Licensee herein.

 

4.2                               Protection
of Title. The Licensed Materials are protected by copyright law, are of
a proprietary nature, and contain trade secret information.  Licensee shall (a) secure and protect the
Licensed Materials in a manner at all times consistent with maintaining AA’s or
its licensor’s rights therein and shall take all actions AA may reasonably
request to protect AA’s rights in the

 

2

 

Licensed Materials, (b) use all
reasonable efforts to preserve the confidentiality and proprietary character of
the Licensed Materials and shall treat all information contained therein as
confidential, and not remove or obscure AA’s or any other party’s copyright or
proprietary rights notices, and (c) not permit any third party to access or use
the Licensed Materials without AA’s prior written consent, except that such
consent shall not be required for contractors engaged by Licensee that (i) have
a good faith need to access and/or use the Licensed Materials to perform their
obligations to Licensee, (ii) are not direct or indirect competitors of AA or
any affiliate of AA, and (iii) agree in writing to be bound by a written
non-disclosure agreement that requires such contractors to strictly maintain
the confidentiality of the Licensed Materials and to use the Licensed Materials
only for the benefit of Licensee and that contains terms that are at least as
protective of AA’s rights in the Licensed Materials as are the terms and
conditions of this Article.  Licensee
shall notify AA of any actual or threatened breach of these confidentiality
provisions, and shall cooperate with AA in enforcing such provisions.  Access to the Licensed Materials is
restricted to those of Licensee’s personnel who have a need to know information
regarding the Licensed Materials for the use permitted hereunder.

 

4.3                                Additional
Copies.  Licensee may make a
reasonable number of  copies of the
Licensed Materials to permit its use of the Licensed Materials as and to the
extent expressly authorized herein. 
Licensee shall reproduce and include all AA and any other party’s
copyright and proprietary rights notices on any copies made.  All copies shall be the property of AA.

 

5.                                      DURATION.

 

This Agreement shall be deemed effective for the period beginning on
the Effective Date and continuing for twelve (12) months thereafter (the “Term”), unless terminated sooner as
provided herein.

 

6.                                      TERMINATION.

 

6.1                               Termination
by AA.  AA may terminate this
Agreement at any time upon breach of any of Licensee’s obligations under this Agreement
by providing Licensee with written notice of termination specifying, in
reasonable detail, the breach, provided that Licensee shall then have 10 days
from its receipt of such notice to cure such breach.

 

6.2                               Termination
by Licensee.  Licensee may terminate
this Agreement at any time upon breach of any of AA’s obligations under this
Agreement by providing AA with written notice of termination specifying, in
reasonable detail, the breach, provided that AA shall then have 10 days from
its receipt of such notice to cure such breach.

 

6.3                               Effect
of Termination.  Termination of
this Agreement by Licensee or AA does not relieve Licensee of its obligations
hereunder.  Under termination of this
Agreement, Licensee shall return immediately to AA or, if requested by AA,
destroy, the original and all copies of the Licensed Materials (including all
related documentation) and erase or otherwise delete all electronically stored
copies of the Licensed Materials and provide AA with written certification of
completion of such action.  The
provisions of Articles 1, 7, 8, 9 and 10 and
Sections 2.2, 2.3 (excluding the final sentence of Section 2.3), 2.4, 4.1,
4.3 and 6.3 shall
survive any termination of this Agreement.

 

3

 

7.                                      WARRANTY
DISCLAIMER.

 

7.1                               Disclaimer.  LICENSEE ACKNOWLEDGES THAT AA IS NOT IN THE
BUSINESS OF PROVIDING THE LICENSED MATERIALS AND THAT AA IS PROVIDING THE
LICENSED MATERIALS SOLELY AS AN ACCOMMODATION TO LICENSEE.  THE LICENSED MATERIALS ARE FURNISHED “AS
IS,” WITH ALL FAULTS AND WITHOUT WARRANTY OF ANY KIND, EXPRESS, IMPLIED,
STATUTORY OR OTHERWISE, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF
MERCHANTABILITY, FITNESS FOR ANY PARTICULAR PURPOSE, TITLE, NON-INFRINGEMENT,
ADEQUACY, OR COMPLIANCE WITH ANY LAW, DOMESTIC OR FOREIGN.

 

7.2                               Reasonableness.  LICENSEE AGREES THAT THE FOREGOING
DISCLAIMERS ARE REASONABLE, AND THAT THE LIMITED REMEDY PROVISIONS SET FORTH
ABOVE ARE REASONABLE AND SHALL NOT BE CONTRAVENED BY ANY ASSERTION THAT THEY
FAIL OF THEIR ESSENTIAL PURPOSE.

 

8.                                       LIMITATION
OF LIABILITY.

 

8.1                               Limitation
of Liability.    TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, NEITHER AA, ITS AFFILIATES NOR ANY OF THEIR RESPECTIVE
PARTNERS, OFFICERS, EMPLOYEES OR AGENTS, NOR ANY OTHER THIRD PARTY INVOLVED IN
THE CREATION, PRODUCTION OR DELIVERY OF THE LICENSED MATERIALS, SHALL HAVE ANY
LIABILITY ARISING OUT OF, IN CONNECTION WITH, OR RELATED TO THIS AGREEMENT
(REGARDLESS OF WHETHER SUCH LIABILITY IS BASED ON BREACH OF CONTRACT, TORT
(INCLUDING NEGLIGENCE), STRICT LIABILITY, BREACH OF WARRANTIES, FAILURE OF
ESSENTIAL PURPOSE OR OTHERWISE) (I) FOR ANY ATTORNEYS FEES OR ANY INDIRECT,
SPECIAL, CONSEQUENTIAL, EXEMPLARY, RELIANCE, PUNITIVE OR INCIDENTAL DAMAGES,
EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, OR (II) IN ANY EVENT, IN
EXCESS OF $1,000.

 

8.2.                            Limitation
on Recourse.  Notwithstanding
anything to the contrary contained herein, it is expressly acknowledged and
agreed that (a) in no event shall the Administrator of AA, any member of the
Administrative Board of AA, any directors, officers, managers, partners,
participating principals, national directors or similar persons of AA or any of
their respective representatives or agents (collectively, the “AA Covered Persons”) have any
personal liability with respect to AA’s obligations pursuant to this Agreement
and (b) no AA Covered Person shall be obligated to make, and no AA Covered
Person in fact will make, any capital contribution or other payment of any kind
to AA in order for AA to satisfy AA’s obligations pursuant to this
Agreement.  Notwithstanding anything to
the contrary contained herein, it is expressly acknowledged and agreed that (a)
in no event shall any director, officer, manager, member, employees,
independent contractors or similar person of Licensee or any of their
respective representatives or agents (collectively, the “Licensee Covered Persons”) have any
personal liability with respect to Licensee’s obligations pursuant to this
Agreement and (b) no Licensee Covered Person shall be obligated to make, and no
Licensee Covered Person in fact will make, any capital contribution or other
payment of any kind to Licensee in order for Licensee to satisfy Licensee’s
obligations pursuant to this Agreement.

 

4

 

8.3                               Reasonableness. 
THE PARTIES AGREE THAT THIS ARTICLE 8  (“LIMITATION OF
LIABILITY”) REPRESENTS A REASONABLE ALLOCATION OF RISK.

 

9.                                      LICENSEE
RESPONSIBILITIES.

 

9.1                               Use
of Licensed Materials.  Licensee
is responsible for determining its desired results from use of the Licensed
Materials, evaluating the capabilities of the Licensed Materials and
successfully using and operating the Licensed Materials. Licensee understands
that the certain Licensed Materials may be based or rely, in part, upon interpretations
of federal, state and foreign laws and other regulations or statutes. Licenses
understands that:   (a) Licensee will
review the effect of the interpretations contained in the Licensed Materials,
and other data generated by the Licensed Materials, with appropriate
professional advisors; (b) Licensee is solely responsible for ensuring that any
output generated by the Licensed Materials are prepared and filed in accordance
with applicable laws and regulations; and (c) Licensee is solely responsible
for the consequences of using any data generated by the Licensed Materials.

 

9.2                               Indemnity.  Licensee shall indemnify, defend and hold
AA, its Administrator, each member of its Administrative Board or other
governing body, and each of its directors, officers, managers, partners,
participating principles, national directors and similar persons harmless from
and against any and all claims, causes of action, demands, damages, losses,
costs and expenses (including attorneys’ fees) arising out of  or related to any claim, demand, loss or
action resulting from operation of use of the Licensed Materials and/or related
output by Licensee, or by any Legacy Client from and after the Effective Date.

 

10.                               GENERAL.

 

10.1                        Waiver.  The waiver or failure by either party to
claim a breach of any provision herein shall not be a waiver of a breach of any
other provision or subsequent breach of the same provision.

 

10.2                        Choice of
Law.  THIS AGREEMENT
SHALL BE CONTROLLED BY THE LAWS OF THE UNITED STATES OF AMERICA AND SHALL BE
INTERPRETED, CONSTRUED AND ENFORCED ACCORDING TO THE INTERNAL LAWS OF THE STATE
OF ILLINOIS (WITHOUT REGARD TO CHOICE OF LAW PROVISIONS).

 

10.3                        Severability. 
If any term herein is declared to be void or unenforceable by a tribunal
of competent jurisdiction, such declaration shall have no effect on the other
terms of the Agreement, which will remain in effect and fully enforceable.

 

10.4                        Force
Majeure.  Neither party
shall be liable for any delay or failure of performance (excluding payments of
any amounts due hereunder) which is due to causes beyond its control.

 

10.5                        Taxes.  In addition to and separate from any amounts
to be paid under this Agreement, Licensee shall pay amounts equal to any taxes
based on this Agreement, any Licensee’s use of the Licensed Materials or
provision of any of the services described above, exclusive of taxes based on
AA’s net income.

 

5

 

10.6                        Payment
of Fees.  Any amounts to be paid
under this Agreement shall be due within 30 days of Licensee’s receipt for an
invoice.  Any payment not much when due
shall bear interest at the rate of 1.5% per month, or the highest rate allowed
by law, whichever is less.

 

10.7                        Telecopied
Documents.  Telecopied documents
may be treated as originals.

 

10.8                        Assignment
by AA.    AA may assign this Agreement and its
rights and obligations hereunder to any third party, without the consent of
Licensee.  In addition, AA may freely
delegate all or a portion of its responsibilities under this Agreement to subcontractors.  Licensee shall not assign this Agreement or
its rights or obligations hereunder, without the prior written consent of AA,
which consent shall not be unreasonably withheld with respect to any assignment
by Licensee to any entity that is an affiliate of Licensee as of the Effective
Date.  Any assignment in derogation of
this Section 10.8
shall be void ab  initio. 
Subject to the foregoing, this Agreement and all rights and obligations
of each party hereunder shall be binding upon and inure to the benefit of the
parties hereto and any and all of their successors and permitted assigns.

 

10.9                        Entire
Agreement.  This Agreement and
the Schedule attached hereto (which is hereby incorporated by reference
herein) are the complete and exclusive statement of the Agreement between the
parties and supersede all prior proposals, communications or agreements,
whether written or oral, relating to the subject matter herein, including those
made by sales representatives, support personnel, authorized dealers, consultants
or otherwise.  Licensee acknowledges
that no modification or amendment of this Agreement shall be effective or
enforceable unless it is in writing and has been executed by an authorized AA
representative.  Furthermore, the terms
and conditions of this Agreement shall control in the event that there are
different or additional terms or conditions set forth in any other purchase
order form or other document submitted by Licensee.

 

* * * * * * * * * * *

 

6

 

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

 

	
  LECG, LLC

  	
  ARTHUR ANDERSEN LLP

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Title:

  	
   

  	
   

  
										

 

 

Schedule A

 

Licensed Materials

 

Note:  The presence of any item on the list below does not include any
associated third party tools, software (including, without limitation, database
engines, operating systems), data or other third party items.  As provided elsewhere herein, Licensee, at
its sole expense, is solely responsible for obtaining all necessary consents,
licenses and rights necessary to access, operate and otherwise use the items
listed below.

 

	
  Intellectual

  Property

  	
   

  	
  Description

  	
   

  	
  Media/Format

  	
   

  	
  Location

  	
   

  	
  Server/Directory

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  Computer
  files (largely 

  	
   

  	
  Chicago

  	
   

  	
  [***]

  
	
   

  	
   

  	
   

  	
   

  	
  ACCESS/SQL
  and  

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Excel)
  supported by

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  miscellaneous
  hard 

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  copy
  documentation

  	
   

  	
  Houston

  	
   

  	
  [***]

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  ACCESS,
  Powerpoint, 

  	
   

  	
  Chicago

  	
   

  	
  [***]

  
	
   

  	
   

  	
   

  	
   

  	
  Excel, Word
  and 

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Hardcopy 

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  binders

  	
   

  	
  Houston

  	
   

  	
  [***]

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

8

 

EXHIBIT E-1

 

FORMS OF CLIENT CONSENT

 

 

INSURANCE CLAIMS GROUP

CLIENT AUTHORIZATION LETTER – AA LETTERHEAD

[AA LETTERHEAD – use only if sent prior to joining successor firm]

 

 

Client Code
                            (1)

 

This letter shall be deemed dated and effective

upon the date [PARTNER] joins LECG, LLC

(replace this sentence with actual date if
sent

after joining successor firm)

 

 

[NAME/ADDRESS
OF CLIENT]

 

 

Re:                               Arthur
Andersen’s Consulting Working Papers and Files – Client Authorization and
Understandings

 

Dear
                                                         :

 

Relating to Arthur Andersen’s
work on the Environmental Insurance Cost Recovery Engagement (the
“Engagement”), [NAME OF FORMER CLIENT]
(the “Client” or “you”) has requested that Arthur Andersen (“AA”), make its
related working papers available for review by LECG, LLC (“LECG”), and that we
answer questions related to these working papers.  We understand that the purpose of this access to and review of
our working papers and files is to facilitate LECG completion of the
Engagement.  You acknowledge that upon
receipt of the items specified in the last paragraph of this letter.  AA will be authorized to provide copies of
these working papers and all other written materials pertaining to the
Engagement (collectively, the “Work Files”) to LECG.

 

Regarding our cooperation and
other participation in this matter neither AA, our affiliated firms nor any of
AA’s nor such affiliated firms’ respective directors, officers, managers,
partners, participating principals, national directors, employees,
representatives or similar persons will have any liability of any kind, and
shall have no liability for any consequential, special, incidental or exemplary
damages; the foregoing shall apply regardless of the theory of relief asserted
(including negligence of AA or others) and even if AA is advised of the
possibility of such damage or loss.

 

You also acknowledge that you
(and not AA) are solely responsible for determining the applicability of any
tax advisor privilege, attorney-client 
privilege or other privilege or similar rule (e.g., the work product
rules) to the above-mentioned working papers and for otherwise managing the
establishment and maintenance of any such privilege or protection and for
considering possible waiver thereof (and for involving legal counsel as
necessary).  And you further acknowledge
that AA reserves the right to withhold from disclosure any of its Work Files
that AA is its discretion determines contain information proprietary or
confidential to AA and to limit access to review only and not permit
copying.  AA will be entitled to retain
in full the originals of its Work Files.

 

With regard to those services
for which Client was obligated to pay AA on an hourly basis and if Client was
obligated to reimburse AA for expenses. 
Client also agrees to pay AA upon invoicing (or

 

(1)  This should be completed upon receiving the executed letter from
the client

 

 

immediately if already
invoiced) all such fees and expenses incurred to date in connection with AA’s
services provided to Client as of the date of this letter, in accordance with
such invoices(s).

 

Client shall upon the receipt
of written notice from AA indemnify and hold harmless AA, its affiliates and
their respective partners, principals and personnel against all costs, fees,
expense, damages and liabilities (including defense costs) associated with any
claim arising from or relating to any access to or use of our Work Files or
related consultations hereunder.  This
indemnity is intended to apply to the extent not contrary to applicable law,
regardless of the grounds or nature of any claim asserted (including contract,
statute, any form of negligence whether of client, AA or others, tort, strict
liability or otherwise) and whether or not AA was advised or aware of the
possibility of the damage or loss asserted. 
Such indemnity obligation shall also continue to apply after any
termination of this agreement or the activities hereunder and during any
dispute that might arise between the parties.

 

Please acknowledge your
concurrence with the foregoing by signing and dating a copy of this letter and
returning it to [PARTNER CONTACT INFORMATION
– fax and address].  Upon
receipt of this letter, an executed access letter in the form approved by AA
from LECG and any outstanding fees owed to us in connection with the
Engagement, we will be prepared to provide our assistance in this matter at the
earliest mutually convenient time.  (Delete the following sentence if
sent after joining successor firm) THIS LETTER SHALL BE EFFECTIVE AS
TO BOTH PARTIES ONLY UPON [PARTNER] JOINING LECG.

 

	
  Very truly
  yours,

  	
   

  
	
   

  	
   

  
	
  Arthur
  Andersen LLP

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  AGREED:

  	
   

  
	
   

  	
   

  
	
  (use appropriate signature block)

  	
   

  
	
   

  	
   

  
	
  [NAME OF CLIENT] “Client”

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  (Authorized Officer)

  	
   

  
	
   

  	
   

  	
   

  
	
  Title

  	
  Date

  	
   

  
	
   

  	
   

  
	
  OR

  	
   

  
	
   

  	
   

  
	
  Signature

  	
   

  	
   

  	
  Date

  	
   

  	
   

  
	
  Name

  	
   

  	
  (please
  print)

  	
   

  
												

 

 

If married and filing jointly,

 

	
  Spouse
  Signature

  	
   

  	
   

  	
  Date

  	
   

  	
   

  
	
  Name

  	
   

  	
  (please
  print)

  	
   

  	
   

  
								

 

cc:       [partner FAX
AND ADDRESS]

 

 

EXHIBIT E-2

 

FORM OF CLIENT ACCESS MASTER AGREEMENT

 

 

 

Execution Copy

 

ACCESS MASTER
AGREEMENT - CONSULTING

 

This Access Master Agreement -
Consulting, dated June 12, 2002, sets forth the agreement by and between LECG,
LLC (“Recipient Firm”) and Arthur Andersen LLP (“AA”) with
respect to Recipient Firm’s access to certain of Arthur Andersen’s consulting
working papers.

 

In each case in which (i) a
client of AA wishes Recipient Firm to have access to AA’s working papers
relating to AA consulting work in order to assist Recipient Firm in providing
consulting services to Client (the “Approved Purpose”), and (ii)
Recipient Firm accepts such client as a client of Recipient Firm (“Client”),
Recipient Firm agrees to the following provisions with respect to AA’s working
papers:

 

AA’s cooperation in providing
Recipient Firm with access to AA’s working papers relating to consulting work
assumes that Client has authorized AA to allow Recipient Firm to review those
working papers and is conditioned on the understandings in this letter.
Assuming AA’s prior receipt of such satisfactory authorization.  AA will provide Recipient Firm access to
certain of AA’s working papers solely for the Approved Purpose.  Recipient Firm understands that certain of
AA’s working papers may constitute privileged communications and that access to
same may require specific authorization by Client. Recipient Firm acknowledges
that AA reserves the right to withhold from disclosure any of its consulting
working papers that AA in its discretion determines contain information
proprietary or confidential to AA, and to limit access to review only and not
permit copying.  AA will be entitled to
retain in full the originals of its work papers.  To the extent copies are permitted and provided.  AA’s charge for copies will be AA’s cost and
will be billed to Recipient Firm, due on receipt of invoice.

 

Recipient Firm understands that
in performing the consulting services referred to above, AA relied on the
accuracy, completeness and validity of information and representations provided
by Client, its representatives and others. 
It is further understood that this means, among other things, that
undetected irregularities or errors may have occurred or may be present, and
issues or items of possible relevance or interest to Recipient Firm may not
have been addressed.  In addition,
Recipient Firm also understands that because AA’s work for Client at times
involved judgment and the assessment of materiality, matters may have arisen
that would have been assessed differently by another service provider.  Recipient Firm understands that AA’s working
papers may not satisfy Recipient Firm’s own particular purposes or needs and
did not contemplate the services Recipient Firm will perform for Client, and
that the working papers were not prepared nor AA consulting services performed
for the reliance or other benefit of Recipient Firm or any other third
party.  Access to or use of AA’s
consulting working papers hereunder are for the convenience of the user and at
its own risk and are not intended to replace any inquiries, procedures or other
tasks by Recipient Firm (or others) necessary for good and adequate performance
of the services Recipient Firm will perform for Client or any other work.

 

AA makes no representations or
commitments to Recipient Firm as to the sufficiency, accuracy, completeness or
appropriateness of AA’s working papers, any included, derived or related
information of AA’s consulting services.

 

 

Recipient Firm agrees that it
does not acquire (and in fact waives) any claim against any Andersen Person, or
any other rights, as a result of any access to or use of AA’s work papers or
related consultations, and acknowledges and agrees that no Andersen Person
acquires or assumes any duties or obligations as a result of giving or
cooperating in any such access or use or consultations. “Andersen Person,”
as used in this letter, means AA, its affiliated firms and any of AA’s or such
affiliated firms’ respective partners, principals, directors, members,
officers, employees or representatives.

 

Further, Recipient Firm agrees
that AA’s working papers and any information acquired as a result of any access
to or use of AA’s working papers or any consultations hereunder may be used by
Recipient Firm, and by any others duly acting on Client’s behalf or request and
notified to AA, but only for the Approved Purpose, and that Recipient Firm will
show this letter to all such other persons to whom it directly or indirectly allows
such use and secure their written agreement to each of the provisions of this
letter to which Recipient Firm is bound. 
Recipient Firm shall not provide expert testimony regarding, litigation
support services regarding, or otherwise agree with another to consult or opine
on, issues relating to the quality or other aspects of AA’s working papers or
consulting services described above (except as necessary to perform the
services contemplated by this letter). 
Except as provided for in this letter. 
Recipient Firm agrees not to disclose to others, in whole or in part,
any of AA’s working papers, nor any information acquired as a result of any
access to or use of AA’s working papers or consultations hereunder, without
AA’s prior written consent: however, such consent will be deemed given
regarding disclosure to others acting on Client’s behalf (as provided for
above) if Recipient Firm complies with this paragraph regarding same, and such
consent shall not be required in respect of disclosures made pursuant to
judicial subpoenas or other validly issued administrative or judicial process
insofar as Recipient Firm complies with the terms of the paragraph immediately
below.

 

In the event any demand or
request is received whose scope includes all or a part of AA’s working papers
or any copy thereof (“Requested AA Material”), Recipient Firm agrees to
promptly notify and provide AA a copy of such demand or request and to allow AA
to participate in responding to such demand or request and, at its option and
expense, to oppose such demand or request to the extent it pertains to any
Requested AA Material.  Except to the
extent the demand or request shall have been timely limited, quashed or
extended with respect to any Requested AA Material, the recipient (i.e., Recipient
Firm) shall thereafter be entitled to comply with such demand or request
regarding any Requested AA Material, to the extent permitted by law.  If requested by AA, such recipient shall
cooperate (at the expense of AA) in the defense of a demand or request.

 

[remainder of page intentionally left blank]

 

 

IN WITNESS WHEREOF, the parties
hereto have caused this Agreement to be executed and delivered as of the date
first above written.

 

 

	
   

  	
  ARTHUR ANDERSEN LLP

  
	
   

  	
  “AA”

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LECG, LLC

  
	
   

  	
  “Recipient Firm”

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

 

 

EXHIBIT F

 

 

FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT

 

 

Execution Copy

 

 

Assignment and Assumption Agreement

 

This
Assignment and Assumption Agreement is made as of the 12th day of June, 2002
between ARTHUR ANDERSEN LLP, an Illinois limited liability partnership (“Andersen”)
and LECG, LLC, a California limited liability company (“LECG”).

 

In
consideration of the Letter Agreement, dated June 12, 2002, by and between
Andersen and LECG (the “Letter Agreement”) and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Andersen hereby assigns to LECG all of its rights, title and interests in and
to the APH Rights (as such term is defined in the Letter Agreement) and LECG
hereby accepts the transfer of all APH Rights and agrees to assume the
obligations and liabilities of Andersen arising thereunder after the date
hereof, but excluding any liabilities for any breach of such agreements
occurring prior to the date hereof.

 

It is
acknowledged and agreed that this Assignment and Assumption Agreement is
intended only to document the assignment and assumption of the APH Rights, and
that the Letter Agreement is the exclusive source of the agreement and
understanding between Andersen and LECG respecting the APH Rights. Except as
expressly provided herein or in the Letter Agreement, LECG does not assume,
undertake or accept, and will not assume, undertake or accept or be deemed to
have assumed undertaken or accepted, any duties, responsibilities, obligations
or liabilities of Andersen, other than the those expressly set forth in the
Letter Agreement.

 

This
Assignment and Assumption Agreement shall be governed by and construed in
accordance with the laws of the State of Illinois.

 

 

IN WITNESS WHEREOF,
Andersen and LECG have caused this Assignment and Assumption Agreement to be
executed and delivered on the date and year first written above.

 

	
   

  	
  ARTHUR
  ANDERSEN LLP

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LECG, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

 

QuickLinks

LETTER AGREEMENT

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