Document:

Exhibit 10.59

 

 

SEPARATION AGREEMENT AND RELEASE

 

THIS
IS A SEPARATION AGREEMENT AND RELEASE between Christopher J. Aitken (“Employee”)
and LECG Corporation and its wholly-owned subsidiary LECG, LLC (collectively, “Company”)
(hereinafter referred to as “Agreement”).

 

Background. 
Employee was
previously employed by Company as the Executive Vice President and Head of
Corporate Development.  The parties have
agreed upon an exchange of consideration by which all matters pertaining to
Employee’s employment and termination of employment have been fully and finally
resolved, the terms of which are set forth below.

 

THEREFORE, in consideration of the mutual
promises set forth below, and intending to be legally bound, the Company and
the Employee agree that:

 

1.                                      Employment Termination.  Employee’s last day of work as a regular employee will be February 13,
2009, on which date Employee’s employment as a regular employee with the
Company will be terminated.  The Company
will pay Employee all earned compensation through that date, including any
accrued and unused vacation and personal days, and will reimburse Employee for
all approved but previously unreimbursed business expenses immediately upon the
termination of Employee’s employment. 
Employee will return all keys, passes, credit cards, and other Company
property, including all documents, disks and other records which pertain to the
business and affairs of the Company on or before Employee’s last day of work.

 

2.                                      Separation Consideration.  As consideration of the agreements of Employee hereunder, the Company
and Employee have agreed that Company will pay Employee a severance payment in
the amount of Three Hundred Thousand Dollars ($312,500), less all

 

 

applicable withholdings,
payable within five (5) days after the Effective Date.  The Effective Date of this Agreement shall be
the date it is signed by Employee.

 

3.                                      Benefit Coverage.  Employee’s health coverage under the Company’s group health plan will
cease as of February 28, 2009. 
Thereafter, the Company will pay Employee’s and Employee’s qualified
dependents’ health coverage under the Consolidated Omnibus Reconciliation Act (“COBRA”)
between March 1, 2009 and February 28, 2010 so long as the Employee
elects to continue coverage under COBRA and this Agreement has not been
revoked.  Employee will be financially
responsible for continuing Consolidated Omnibus Reconciliation (“COBRA”)
coverage for Employee and Employee’s qualifying dependents, if so elected,
beginning March 1, 2010.

 

4.                                      Affiliate Status. 
Provided Employee enters into an exclusive Affiliate Agreement with
Company on or before March 1, 2009, and remains an exclusive Affiliate for
at least six (6) consecutive months, in the event of a Change of Control,
if and only if such Change of Control closes on or before August 31, 2009,
Employee shall receive an additional payment of Three Hundred Thousand Dollars
($300,000).  For purposes of this
Agreement, “Change of Control” shall be defined as the occurrence of any one or
more of the following events:

 

i.                                          sale of all or substantially all of the
assets of LECG Corporation (“LECG”) to one or more individuals, entities, or
groups (other than an “Excluded Owner” as defined below);

 

ii.                                       a person, entity, or group (other than an
Excluded Owner) acquires or attains ownership of at least 51% of the undiluted
total voting power of LECG’s then-outstanding securities eligible to vote to
elect members of the Board (“Company Voting Securities”); or

 

2

 

iii.                                    completion of a merger or consolidation of
LECG with or into any other entity (other than an Excluded Owner) unless the
holders of the Company Voting Securities outstanding immediately before such
completion, together with any trustee or other fiduciary holding securities under
a Company benefit plan, hold securities that represent immediately after such
merger or consolidation at least 51% of the combined voting power of the then
outstanding voting securities of either LECG or the other surviving entity or
its ultimate parent.

 

(An “Excluded Owner” consists of LECG, the
Company, any entity owned, directly or indirectly, at least 50% by LECG or the
Company, any entity that, directly or indirectly, owns at least 50% of LECG or
the Company, any Company benefit plan, and any underwriter temporarily holding
securities for an offering of such securities.)

 

5.                                      Employee Representations.  Employee makes the following representations, each of which is a
condition of the Company entering into this Agreement:

 

a)                                      That the payments the Company has agreed to
provide herein include payments to which Employee would not be entitled were it
not for this Agreement.

 

b)                                     That Employee has been given a reasonable
period of time (not to exceed 10 days) to consider whether or not to sign this
Agreement, and/or acknowledges that Employee has been advised of Employee’s
right to that 10-day period and has voluntarily waived it, and that Employee
has not been pressured to sign this Agreement in a shorter period of time.

 

3

 

c)                                      That no promises or representations except
those contained in this Agreement have been made to the Employee in connection
with the termination of Employee’s employment.

 

d)                                     That Employee understands that this Agreement
and release does not cancel or otherwise diminish any post-employment
obligations under any employment agreement with the Company (or any predecessor
or affiliate of the Company) to which the Employee is a party, including, but
not limited to, obligations relating to confidentiality or the use of
confidential information of the Company, disclosure and ownership of
intellectual property, non-competition and non-solicitation of customers or
employees.

 

e)                                      That Employee has read and understands each
and every provision in this Agreement and has been advised to consult with an
attorney in connection with Employee’s consideration of this Agreement, and
that Employee is entering into this Agreement voluntarily and of Employee’s own
free will.

 

f)                                        That Employee has not filed any complaints
against the Company in any court, nor any charges with any governmental agency
before signing this Agreement.

 

6.                                      No Admission of Liability.  Employee understands that the Company is not offering this Agreement
because it believes that the Employee has any valid legal claim against the
Company.  Employee agrees and understands
that nothing in the Agreement, or the offering of this Agreement, shall
constitute or be construed as an admission of liability, wrongdoing or
violation of any law on the part of the Company.

 

4

 

7.                                      General Release by the
Employee.  Employee hereby fully and forever releases
and discharges the Company, its benefit plans, officers, directors, employees,
agents, members, affiliates, parent entities, subsidiary entities, successors
and assigns (“Released Party” or “Released Parties”) from any and all liability
for claims, causes of action and obligations of every nature whatsoever,
including, without limitation, claims of negligence, breach of contract,
wrongful discharge, intentional torts, defamation, and violation of federal,
state or local laws, among which are laws which prohibit discrimination on the
basis of race, color, national origin, religion, sex, age, disability and other
protected traits, such as the Title VII of the Civil Rights Act of 1964, the
Americans with Disabilities Act, and/or the California Fair Employment and
Housing Act.  This Release covers claims, known or unknown,
which are based upon any act, event or failure to act which occurred before the
date on which this Agreement is signed and becomes effective, except claims for
vested pension benefits or other claims which cannot, as a matter of law, be
released.

 

Employee expressly waives and relinquishes
all rights and benefits afforded by Section 1542 of the Civil Code of the
State of California, or any analogous state or federal law, and does so
understanding and acknowledging the significance of such specific waiver of Section 1542.
Section 1542 of the Civil Code of the State of California states as
follows:

 

“A
general release does not extend to claims which the creditor does not know or
suspect to exist in his or her favor at the time of executing the release,
which if known by him or her must have materially affected his or her
settlement with the debtor.”

 

Notwithstanding the provisions of Section 1542,
and for the purpose of implementing a full and complete release, the parties
expressly acknowledge that this Agreement is intended to include in its effect,
without limitation, all claims which the Employee does not know or suspect

 

5

 

to exist at the time this agreement is signed,
and that this Agreement contemplates the extinguishment of any such claim or
claims.

 

8.                                      Non-Disparagement. 
Employee agrees that
Employee will not make any disparaging statements to any current, former or
potential customers, contractors, vendors or employees of the Company, to any
media or to any other person about the Company or other Released Party. A
disparaging statement is any confidential information or false or misleading
communication that, if publicized, would cause, or tend to cause, the recipient
of the communication to question the business condition, integrity, competence,
good character or product quality of the person or entity to whom the
communication relates.

 

9.                                      Remedies for Breach. 
If Employee breaches
Employee’s obligations not to disparage the Company, or if Employee breaches
the provisions of any existing agreements with the Company pertaining to
noncompetition, nonsolicitation of employees or customers or nondisclosure of
confidential business information, then the Company will have the right to any
available legal or equitable remedies. In the case of any legal proceedings
between Employee and the Company, the prevailing party shall be entitled to
recover his, her or its expenses of suit, including attorneys’ fees.  If, contrary to this Agreement, a lawsuit is
filed by Employee against a Released Party for any purpose other than to
determine the validity of this Agreement as applied to claims under the ADEA,
or Employee breaches Employee’s obligations to maintain the confidentiality of
the terms of this Agreement, then in addition to (and not instead of) any other
remedies available for such breach, Employee will be obligated to reimburse the
Company or other Released Party for litigation expenses and attorneys fees
incurred in defending such suit if the Company or other Released Party
substantially prevails.

 

6

 

10.                               Covenant Not To Sue.  Employee
represents and warrants that Employee will not file any legal proceedings
against any Released Party on the basis of any claims within the scope of the
releases contained in this Agreement. Employee also agrees not to permit any
other entity to instigate or cause any legal proceedings to be filed against a
Released Party regarding any claims within the scope of such releases.  This covenant not to sue does not bar
Employee from filing a charge with the EEOC or the California Department of
Fair Employment and Housing.  However, in
the event such charge is filed, Employee agrees that the agreements made by the
Company pursuant to this Agreement are in full satisfaction of any damages
asserted by, or on behalf of, Employee in such charge and that Employee will
not be entitled to any monetary relief.

 

11.                               General.

 

a)                                      No provision of this Agreement may be
modified, amended or revoked, except in writing, signed by Employee and an authorized
officer of the Company.

 

b)                                     No waiver or failure to enforce any
condition or provision of this Agreement will be deemed to be a continuing
waiver of the same or any other provision of this Agreement.

 

c)                                      This Agreement constitutes the entire
Agreement respecting Employee’s employment and termination of employment;
provided, however, that Company and Employee agree that Employee’s
Indemnification Agreement, which was effective August 1, 2007 (“Indemnification
Agreement”), shall remain in full force and effect.  The separation payment provided for herein is
in lieu of payments or benefits under any other plan, program,

 

7

 

practice, agreement or arrangement.  This Agreement supersedes any and all other
agreements, express or implied, between Employee and the Company.

 

d)                                     This Agreement shall be construed and
enforced in accordance with the laws of California, without regard to its
choice of law principles.

 

	
  BY THE EMPLOYEE:

  	
   

  	
  LECG, LLC:

  
	
   

  	
   

  	
   

  
	
  /s/ Christopher J. Aitken

  	
   

  	
  /s/ Tina Bussone

  
	
  Christopher J. Aitken

  	
   

  	
  Tina Bussone

  
	
   

  	
   

  	
  Executive Vice President,
  Head of Human

  Resources & Operations

  
	
   

  	
   

  	
   

  
	
  February 10,
  2009

  	
   

  	
  February 10,
  2009

  
	
  Date

  	
   

  	
  Date

  

 

8Exhibit 10.60

 

EXECUTION VERSION

 

FOURTH AMENDMENT TO CREDIT
AGREEMENT

 

THIS
FOURTH AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is made as of March 30,
2009 by and among LECG, LLC  (the “Company”),
the financial institutions party hereto (the “Lenders”), and BANK OF
AMERICA, N.A., successor by merger to LaSalle Bank National Association, as
administrative agent for the Lenders (the “Administrative Agent”).

 

RECITALS

 

A.            The Company, the financial
institutions party thereto and the Administrative Agent entered into a Credit
Agreement dated as of December 15, 2006 and amended as of July 16,
2007, December 20, 2007, and February 9, 2009 (as so amended, the “Credit
Agreement”).  As security for the
obligations under the Credit Agreement, LECG Corporation (the “Parent”),
the Company and LECG Canada Holding, Inc. (together with the Parent and
the Company, the “Grantors”) executed with and in favor of the
Administrative Agent that Security Agreement dated as of February 9, 2009
(the “Security Agreement”).

 

B.            The Company, the Lenders and the
Administrative Agent wish to further amend the Credit Agreement as set forth
herein.

 

NOW
THEREFORE, in consideration of the matters set forth in the recitals and the
covenants and provisions herein set forth, and other valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:

 

1.             Definitions.  Capitalized terms used but not
defined herein are used as defined in the Credit Agreement.

 

2.             Amendments to Credit
Agreement.  The Credit Agreement is hereby
amended as follows:

 

(a)           Section 1.1 of the Credit
Agreement shall be amended by adding the following additional defined terms, in
appropriate alphabetical order:

 

Adjusted EBITDA means, for any period, Consolidated Net
Income for such period plus, to the extent deducted in determining such
Consolidated Net Income, and without duplication, (i) Interest Expense, (ii) income
tax expense, (iii) depreciation and amortization for such period,
including, but not limited to, amortization of Signing and Performance Bonus
expense, (iv) non-cash equity compensation expense, (v) other
non-cash charges (excluding any such non-cash charge to the extent that it
represents an accrual or reserve for potential cash items in the future), (vi) extraordinary
non-cash losses (as determined in accordance with GAAP) incurred other than in
the ordinary course of business, (vii) goodwill impairment expense per
GAAP, (viii) for periods including such quarters, cash restructuring
charges incurred in the fiscal quarters ended December 31, 2008 (in an
amount not to exceed $6,500,000) and ending March 31, 2009 and June 30,
2009 (in an amount not to exceed $2,500,000 for both quarters combined), and

 

 

(ix) expensed
acquisition costs of up to $500,000 minus, to the extent included in
Consolidated Net Income, extraordinary gains (as determined in accordance with
GAAP) realized other than in the ordinary course of business, for such period.
In addition, “Adjusted EBITDA” shall also (x) include Adjusted EBITDA
for each Subsidiary, business or division acquired in an Acquisition occurring
during such period for which financial statements have been received as
required pursuant hereto as if such Acquisition had occurred as of the first
day of such period, and (y) exclude Adjusted EBITDA attributable to each
Asset Disposition of a Subsidiary, business or division occurring in the
relevant period as if such Asset Disposition had occurred as of the first day
of such period.

 

Borrowing Base Certificate means a certificate substantially in the
form of Exhibit F.

 

Borrowing Base Deficiency means, at any time, the failure of (a) the
sum of 80% of the value of the Eligible Receivables (based upon the Borrowing
Base Certificate then most recently delivered by the Company to the
Administrative Agent hereunder) to equal or exceed (b) the Revolving
Outstandings at such time.

 

Defaulting Lender means any Lender that (a) has refused
(which refusal may be given verbally or in writing and has not been retracted)
or failed to fund any portion of the Loans or participations in Letters of
Credit required to be funded by it hereunder which refusal or failure is not
cured within one Business Day after the date of such refusal or failure, (b) has
otherwise failed to pay over to the Administrative Agent or any other Lender
any other amount required to be paid by it hereunder within one Business Day of
the date when due, unless the subject of a good faith dispute or unless such
failure has been cured, or (c) is deemed insolvent or such Lender becomes
subject to a Lender-Related Distress Event.

 

Eligible
Receivables means Receivables of the Company subject to the
Lien of the Collateral Documents, the value of which shall be determined by
taking into consideration, among other factors, their book value determined in
accordance with GAAP; provided, however, that none of the
following classes of Receivables shall be deemed to be Eligible Receivables:

 

(a)           Receivables that do not arise out of
sales of goods or rendering of services in the ordinary course of the Company’s
business;

 

(b)           Receivables payable other than in
Dollars or that are otherwise on terms other than those normal or customary in
the Company’s business;

 

(c)           Receivables owing from any Person
that is an Affiliate of the Parent;

 

(d)           Receivables more than 120 days past
original invoice date;

 

2

 

(e)           Receivables owing from any Person
from which an aggregate amount of more than 33% of the Receivables owing
therefrom is more than 120 days past the date due;

 

(f)            Receivables owing from any Person
that (i) has disputed liability for any Receivable owing from such Person
or (ii) has otherwise asserted any claim, demand or liability against the
Parent or any of its Subsidiaries, whether by action, suit, counterclaim or
otherwise; provided that for purposes of subclause (f)(i), such
Receivables shall be excluded only to the extent of the amounts being disputed
by such Person at any date of determination;

 

(g)           Receivables owing from any Person
that shall take or be the subject of any action or proceeding of a type
described in Section 13.1.4;

 

(h)           Receivables (i) owing from any
Person that is also a supplier to or creditor of the Parent or any of its
Subsidiaries unless such Person has waived any right of setoff in a manner
acceptable to the Administrative Agent or (ii) representing any
manufacturer’s or supplier’s credits, discounts, incentive plans or similar
arrangements entitling the Parent or any of its Subsidiaries to discounts on
future purchase therefrom;

 

(i)            Receivables arising out of sales to
account debtors outside the United States unless such Receivables are fully
backed by an irrevocable letter of credit on terms, and issued by a financial
institution, acceptable to the Administrative Agent and such irrevocable letter
of credit is in the possession of the Administrative Agent; and

 

(j)            Receivables in respect of which
there does not exist a valid and perfected first priority lien or security
interest in favor of the Administrative Agent, securing the Obligations.

 

Lender-Related
Distress Event means, with respect to any Lender or any
Person that directly or indirectly controls such Lender (each, a “Distressed
Person”), as the case may be, a 
voluntary or involuntary case with respect to such Distressed Person
under the U.S. Bankruptcy Code or any similar bankruptcy or insolvency laws of
its jurisdiction of formation, or a custodian, conservator, receiver or similar
official is appointed for such Distressed Person or any substantial part of
such Distressed Person’s assets, or such Distressed Person or any Person that
directly or indirectly controls such Distressed Person is subject to a forced
liquidation, merger, sale or other change of control supported in whole or in
part by guaranties or other support of (including without limitation the
nationalization or assumption of ownership or operating control by) the U.S.
government or other governmental authority, or such Distressed Person makes a
general assignment for the benefit of creditors or is otherwise adjudicated as,
or determined by any governmental authority having regulatory authority over
such Distressed Person or its assets to be, insolvent, bankrupt, or deficient
in meeting any capital adequacy or liquidity standard of any such governmental
authority.

 

3

 

Receivables
means accounts (as defined in the Uniform Commercial Code) of the Company
arising in the ordinary course of business.

 

Restricted
Period means the period from March 30, 2009 through the
Termination Date, provided, if the Company delivers to the
Administrative Agent a Compliance Certificate in accordance with Section 10.1.3
in respect of any fiscal quarter ending on or after June 30, 2009,
demonstrating that (i) EBITDA for the Computation Period ending on such
date is in excess of $25,000,000, and (ii) the Fixed Charge Coverage
Ratios for any two or more consecutive Computation Periods, each ending after March 31,
2009, were greater than 2:00:1:00; then the Restricted Period shall end
on the Business Day following the date of such delivery.

 

Swing
Line Availability means, at any time,  the lesser of (a) the Swing Line
Commitment Amount and (b) Revolving Commitment (less Revolving Outstandings at
such time), provided that during the Restricted Period, no Borrowing
Base Deficiency shall exist at such time.

 

Total Debt to Adjusted EBITDA Ratio
means, as of the last day of any Fiscal Quarter, the ratio of (a) Total
Debt as of such day to (b) Adjusted EBITDA for the Computation Period
ending on such day.

 

(b)           Section 1.1 of the Credit
Agreement shall be further amended by amending and restating the definition of “EBIT”,
to read as follows:

 

EBIT means, for any period,
Consolidated Net Income for such period plus, to the extent deducted in
determining such Consolidated Net Income, without duplication, (i) Interest
Expense, (ii) income tax expense, (iii) amortization of Signing and
Performance Bonus expense, (iv) non-cash equity compensation expense, (v) other
non-cash charges (excluding any such non-cash charge to the extent that it
represents an accrual or reserve for potential cash items in the future), (vi) extraordinary
non-cash losses (as determined in accordance with GAAP) incurred other than in
the ordinary course of business, (vii) goodwill impairment expense per
GAAP, (viii) for periods including
such quarters, cash restructuring charges incurred in the fiscal quarters ended
December 31, 2008 (in an amount not to exceed $6,500,000) and ending March 31,
2009 and June 30, 2009 (in an amount not to exceed $2,500,000 for both
quarters combined), and (ix) expensed acquisition costs of up to
$500,000.

 

(c)           Section 1.1 of the Credit
Agreement shall be further amended by amending and restating “Applicable
Margin” to read as follows:

 

Applicable Margin means, for any
day, the rate per annum set forth below opposite the level (the “Level”)
then in effect, it being understood that the Applicable Margin for (i) Eurocurrency
Rate Loans and the L/C Fee Rate shall be the percentage set forth under the
column “Eurocurrency Rate Margin and L/C Fee Rate”, (ii) Base Rate Loans
shall be the percentage set forth under the column

 

4

 

“Base Rate Margin”, and (iii) the
Non-Use Fee Rate shall be the percentage set forth under the column “Non-Use
Fee Rate”:

 

	
  Level

  	
   

  	
  Total Debt

  to EBITDA Ratio

  	
   

  	
  Eurocurrency

  Rate Margin

  and 

  L/C Fee Rate

  	
   

  	
  Base Rate

  Margin

  	
   

  	
  Non-Use

  Fee Rate

  	
   

  
	
  I

  	
   

  	
  Less
  than or equal to 1.0:1.0

  	
   

  	
  3.50

  	
  %

  	
  2.50

  	
  %

  	
  0.50

  	
  %

  
	
  II

  	
   

  	
  Greater
  than 1.0:1.0 but less than or equal to 2.0:1.0

  	
   

  	
  4.00

  	
  %

  	
  3.00

  	
  %

  	
  0.55

  	
  %

  
	
  III

  	
   

  	
  Greater
  than 2.0:1.0

  	
   

  	
  4.50

  	
  %

  	
  3.50

  	
  %

  	
  0.60

  	
  %

  

 

The Eurocurrency Rate Margin, the Base Rate Margin,
the Non-Use Fee Rate and the L/C Fee Rate shall be adjusted, to the extent
applicable, on the fifth (5th) Business Day after the Company provides the
annual and quarterly financial statements and other information pursuant to Sections
10.1.1 or 10.1.2, as applicable (such day, the “Adjustment Date”),
and the related Compliance Certificate, pursuant to Section 10.1.3;
provided that Level II shall apply at all times from March 30, 2009
through the Adjustment Date in respect of the fiscal quarter ending September 30,
2009 unless and to the extent Level III shall at any time otherwise be
indicated under this definition. 
Notwithstanding anything contained in this paragraph to the contrary, (a) if
the Company fails to deliver the financial statements and Compliance
Certificate in accordance with the provisions of Sections 10.1.1, 10.1.2
and 10.1.3, the Eurocurrency Rate Margin, the Base Rate Margin, the
Non-Use Fee Rate and the L/C Fee Rate shall be based upon Level III above
beginning on the date such financial statements and Compliance Certificate were
required to be delivered until the fifth (5th) Business Day after such
financial statements and Compliance Certificate are actually delivered,
whereupon the Applicable Margin shall be determined by the then current Level,
and (b) no reduction to any Applicable Margin shall become effective at
any time when an Event of Default or Unmatured Event of Default has occurred
and is continuing.

 

(d)           Section 1.1 of the Credit
Agreement shall be further amended by amending and restating “Minimum Asset
Coverage Ratio” to read as follows:

 

Minimum
Asset Coverage Ratio means, in respect of the Parent and its
Subsidiaries on a consolidated basis, as of any date of determination, (i) the
sum of cash and net accounts receivable, divided by (ii) the sum of Total
Debt plus contingent obligations in respect of undrawn letters of credit, as of
such date.

 

(e)           Section 2.1.1 of the
Credit Agreement shall be amended and restated to read as follows:

 

2.1.1        Revolving
Loan Commitment.  Each Lender with a
Revolving Loan Commitment agrees to make loans on a revolving basis (“Revolving
Loans”) in the applicable Designated Currency requested by Company from
time

 

5

 

to time until the
Termination Date in such Lender’s Pro Rata Share of such aggregate amounts as
the Company may request from all Lenders; provided that (i) the
Revolving Outstandings will not at any time exceed the Revolving Commitment
(less the amount of any Swing Line Loans outstanding at such time; provided,
that the aggregate Dollar Equivalent of all outstanding Loans denominated in a Foreign
Currency shall not exceed $10,000,000), and (ii) during the Restricted
Period, no Borrowing Base Deficiency shall exist or result therefrom.

 

(f)            Section 2.1.2(a) of
the Credit Agreement shall be amended by deleting the first sentence thereof
and inserting in its place the following:

 

Subject to Section 2.3.1, the Issuing
Lender agrees to issue letters of credit denominated in Agreed Currencies, in
each case containing such terms and conditions as are permitted by this
Agreement and are reasonably satisfactory to the Issuing Lender (including the
letters of credit listed on Schedule 2.1, each, a “Letter of Credit”),
at the request of and for the account of the Company from time to time before
the scheduled Termination Date; provided that (i) the Dollar
Equivalent of the aggregate Stated Amount of all Letters of Credit shall not at
any time exceed $25,000,000, (ii) the Revolving Outstandings shall not at
any time exceed the Revolving Commitment (less the amount of any Swing Line
Loans outstanding at such time), and (iii) during the Restricted Period,
no Borrowing Base Deficiency shall exist or result therefrom; and, as more
fully set forth in Section 2.3.2, each Lender agrees to purchase a
participation in each such Letter of Credit.

 

(g)           Section 2.2.4(a) of
the Credit Agreement shall be amended by adding the following at the end
thereof:

 

Notwithstanding the
foregoing, in the event that the Swing Line Lender determines that any other
Lender is a Defaulting Lender, the Swing Line Lender shall not be required to
extend any Swing Line Loan unless arrangements satisfactory to such Swing Line
Lender shall have been entered into to eliminate such Swing Line Lender’s risk
with respect to the participation in Swing Line Loans of such Defaulting
Lender, which may include requiring the Company to cash collateralize in a
matter satisfactory to such Swing Line Lender such Defaulting Lender’s Pro Rata
Share of Swing Line Loans.

 

(h)           Section 2.3.1
of the Credit Agreement shall be amended by adding the following at the end
thereof:

 

Notwithstanding the foregoing, in the event that any
Issuing Lender determines that any Lender is a Defaulting Lender, the
respective Issuing Lender shall not be required to issue any Letter of Credit
unless arrangements satisfactory to such Issuing Lender shall have been entered
into in order to eliminate such Issuing Lender’s risk with respect to the
participation in Letters of Credit of such Defaulting Lender, which may include
requiring the Company to cash collateralize such Defaulting Lender’s Pro Rata
Share of the Stated Amount of all Letters of Credit. 

 

6

 

(i)            Section 6.2.2 of the
Credit Agreement shall be amended by adding at the end thereof:

 

(c)           If
there exists at any time a Borrowing Base Deficiency, the Company shall within
three Business Days prepay Revolving Loans or Cash Collateralize the
outstanding Letters of Credit, or do a combination of the foregoing, in an
amount sufficient to eliminate such deficiency.

 

(j)            Section 10.1.9 of the
Credit Agreement shall be amended and restated to read as follows:

 

10.1.9          Accounts Receivable Agings;
Borrowing Base Certificate.  Promptly
when available and in any event within 30 days after the end of each calendar
month, (i) an accounts receivable aging report, in form and detail
reasonably satisfactory to the Administrative Agent, in respect of the Parent
and its Subsidiaries, and (ii) during the Restricted Period, a Borrowing
Base Certificate.

 

(k)           Section 10 of the Credit
Agreement shall be further amended by adding the following Section 10.10
at the end thereof:

 

10.10           Deposit and Investment Accounts.  Notwithstanding any other term or provision
of this Agreement or any other Loan Document to the contrary, maintain at all
times from and after May 31, 2009 effective control agreements in form
reasonably satisfactory to the Administrative Agent in respect of all deposit
accounts and investment accounts held or maintained from time to time with U.S.
branches or offices of depository institutions, financial intermediaries or
financial institutions by the Parent, the Company, or any of their respective
Subsidiaries.

 

(l)            Section 11.12.1 of the
Credit Agreement shall be amended and restated to read in full as follows:

 

11.12.1        Total Debt to Adjusted EBITDA Ratio.  Not permit the Total Debt to Adjusted EDITDA
Ratio as of the last day of any Computation Period to exceed 2.50 to 1.00.

 

(m)          Section 11.12.2 of the
Credit Agreement shall be amended and restated to read in full as follows:

 

11.12.2        Fixed Charge Coverage Ratio.  Not permit the Fixed Charge Coverage Ratio as
of the last day of any Computation Period to be less than the amount indicated
below:

 

7

 

	
  Fiscal
  Quarter

  Ending Nearest

  	
   

  	
  Minimum Ratio

  
	
  December 31, 2008

  	
   

  	
  2.00:1.00

  
	
  March 31, 2009

  	
   

  	
  1.50:1.00

  
	
  June 30, 2009,
  September 30, 2009

  	
   

  	
  1.25:1:00

  
	
  December 31, 2009
  and thereafter

  	
   

  	
  2.00:1.00

  

 

(n)           Section 12.2.1 of the
Credit Agreement shall be amended and restated to read as follows:

 

12.2.1          Compliance with Warranties, No
Default, etc.  Both before and after
giving effect to any borrowing and the issuance of any Letter of Credit, the
following statements shall be true and correct:

 

(a)           the
representations and warranties of each Loan Party set forth in this Agreement
and the other Loan Documents shall be true and correct in all respects with the
same effect as if then made (except to the extent stated to relate to a
specific earlier date, in which case such representations and warranties shall
be true and correct as of such earlier date);

 

(b)           no
Event of Default or Unmatured Event of Default shall have then occurred and be
continuing; and

 

(c)           during
the Restricted Period, no Borrowing Base Deficiency shall exist.

 

(o)           Section 13.1.5(a) of
the Credit Agreement shall be amended by deleting the phrase “Section 10.1.5,
10.3(b) or 10.5 or Section 11” and inserting in its
place:  “Section 10.1.5, 10.1.9,
10.3(b), 10.5 or 10.10 or Section 11”.

 

(p)           The Credit Agreement shall be further
amended by deleting Exhibit B thereof and replacing it with the Exhibit B
attached hereto as Annex I.

 

(q)           The Credit Agreement shall be further
amended by (i) adding “EXHIBIT F Borrowing Base Certificate” to the Table
of Contents under “EXHIBITS”, and (ii) adding as Exhibit F
thereof the Exhibit F attached hereto as Annex II.

 

3.             Acknowledgement and Waiver.

 

(a)           The Administrative Agent and Lenders
hereby acknowledge receipt of all assignments of life insurance policies
required under Section 11 of that Third Amendment to Credit Agreement
dated as of February 9, 2009 among the parties hereto, and hereby waive
any Event of Default or Unmatured Event of Default arising from any failure of
the Company to deliver such assignments prior to the date specified in such Section 11
(“Existing Default”).

 

8

 

(b)           Nothing contained herein shall be
deemed a waiver of (or otherwise affect the Lenders’ ability to enforce) any
other default or event of default under the Credit Agreement, including (i) any
default or event of default as may now or hereafter exist and arise from or
otherwise be related to (but not otherwise constituting) the Existing Default
(including without limitation any cross-default arising under the Credit
Agreement by virtue of any matters resulting from the Existing Default), and (ii) any
default or event of default arising at any time after the Effective Date and
which is the same as or similar to the Existing Default.

 

4.             Effectiveness.  This
Amendment (including the waiver at Section 3) shall become
effective upon the satisfaction of each of the following conditions precedent
(such date, the “Effective Date”):

 

(i)            The
Administrative Agent shall have received duly-executed counterpart originals
(or, if agreed by Administrative Agent, fax or PDF copies) of (A) this
Amendment from the Company and the Required Lenders, and (B) an Amendment
to Security Agreement substantially in the form attached hereto as Annex III
from the Parent, the Company, and LECG Canada Holding, Inc.

 

(ii)           The Administrative Agent shall have
received from the Company a certificate signed by the secretary, assistant
secretary or chief financial officer of the Loan Parties, dated the Effective
Date, in form and substance satisfactory to the Administrative Agent, and certifying
evidence of the authorization of the execution, delivery and performance by the
Loan Parties of this Amendment and the other documents and agreements delivered
in connection herewith (together, the “Amendment Documents”).

 

(iii)          The Administrative Agent shall have
received such evidence of the valid existence and good standing of the Loan
Parties executing any of the Amendment Documents as the Administrative Agent shall request.

 

(iv)          The Company shall have paid all fees
required under that letter dated March 19, 2009, among Banc of America
Securities LLC, the Administrative Agent and the Company.

 

(v)           The Company shall have paid or
reimbursed to the Administrative Agent all reasonable and documented costs and
attorneys’ fees incurred by the Administrative Agent in connection with this
Amendment and the other Amendment Documents.

 

(vi)          The Administrative Agent shall have
received a Borrowing Base Certificate, dated as of February 28, 2009, duly
certified by the chief executive officer, chief financial officer, treasurer or
controller of the Company.

 

9

 

(vii)         The Administrative Agent shall have
received, in form and substance reasonably satisfactory to it, such additional
opinions, approvals, consents, documents and other information as the
Administrative Agent or any Lender shall reasonably request.

 

5.             Representations and Warranties.  To
induce the Administrative Agent and the undersigned Lenders to execute this
Amendment, the Company represents and warrants as follows:

 

(a)           The Company is duly authorized to
execute and deliver this Amendment and the other Amendment Documents, and to
perform its obligations hereunder and thereunder.

 

(b)           The representations and warranties in
the Loan Documents (including but not limited to Section 9 of the
Credit Agreement), as amended hereby, are true and correct in all material
respects with the same effect as though made on and as of the date of this
Amendment (except to the extent stated to relate to a specific earlier date, in
which case such representations and warranties were true and correct as of such
earlier date).

 

6.             Affirmation.  Except as expressly amended
hereby or by the other Amendment Documents, the Credit Agreement and the other
Loan Documents are and shall continue in full force and effect and the Company
hereby fully ratifies and affirms each Loan Document to which it is a
party.  Any reference to the Credit
Agreement found in the Credit Agreement or any other Loan Document shall be a
reference to the Credit Agreement as amended hereby.  This Amendment shall constitute a Loan
Document for purposes of the Credit Agreement and the other Loan Documents.

 

7.             Counterparts.  This
Amendment may be executed in two or more counterparts, each of which shall constitute
an original, but all of which when taken together shall constitute one
instrument.  Delivery of an executed
counterpart of this Amendment by facsimile or electronic mail shall be
effective as delivery of an original counterpart.

 

8.             Headings.  The headings and captions of
this Amendment are for the purposes of reference only and shall not affect the
construction of, or be taken into consideration in interpreting, this
Amendment.

 

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

 

10.           Costs and Expenses.  The Company hereby affirms its obligation under Section 15.5 of the Credit
Agreement to reimburse the Administrative Agent for all reasonable
out-of-pocket costs and expenses paid or incurred thereby in connection with
the preparation, execution and delivery of this Amendment and the other
Amendment Documents, including but not limited to the Attorney Costs with
respect thereto.

 

[signature pages follow]

 

10

 

The
parties hereto have caused this Amendment to be executed by their duly
authorized officers, all as of the day and year first above written.

 

 

	
   

  	
  LECG, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Steven R. Fife

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  CFO

  
				

 

[Signature Page 1 to Fourth
Amendment]

 

 

	
   

  	
  BANK OF AMERICA, N.A.,

  
	
   

  	
  as Administrative Agent

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ken Puro

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Ken Puro

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BANK OF AMERICA, N.A.,

  
	
   

  	
  as Issuing Lender, and a
  Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ [ILLEGIBLE]

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  Senior Vice President

  
				

 

[Signature Page 2 to Fourth
Amendment]

 

 

	
   

  	
  U. S. BANK NATIONAL

  
	
   

  	
  ASSOCIATION, as a Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
					

 

[Signature Page 3 to Fourth
Amendment]

 

 

	
   

  	
  KEY BANK N.A., as a Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ [ILLEGIBLE]

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  Associate

  
				

 

[Signature Page 4 to Fourth
Amendment]

 

 

	
   

  	
  WELLS FARGO BANK, N.A., as a

  
	
   

  	
  Lender

  
	
   

  	
   

  
	
   

  	
   

  	
  /s/ Michael R.
  Jones

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Michael R. Jones

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  Vice President

  
				

 

[Signature Page 5 to Fourth
Amendment]

 

 

	
   

  	
  THE NORTHERN TRUST
  COMPANY, 

  
	
   

  	
  as a Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ [ILLEGIBLE]

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  Senior Vice President

  
				

 

[Signature Page 6 to Fourth
Amendment]

 

 

ANNEX I

 

EXHIBIT B

 

FORM OF COMPLIANCE
CERTIFICATE

 

To:                              Bank of
America, N.A.

 

Please
refer to the Second Amended and Restated Credit Agreement dated as of December 15,
2006 (as amended, restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”) among LECG, LLC (the “Company”),
various financial institutions and LaSalle Bank National Association
(predecessor by merger to Bank of America, N.A.), as Administrative Agent.  Terms used but not otherwise defined herein
are used herein as defined in the Credit Agreement.

 

I.                                         Reports.  Enclosed herewith is a copy of the [annual audited/quarterly/monthly] report of the Parent as
at                          ,
           (the “Computation
Date”), which report fairly presents in all material respects the financial
condition and results of operations [(subject to the absence
of footnotes and to normal year-end adjustments)] of the Parent as
of the Computation Date and has been prepared in accordance with GAAP
consistently applied.

 

II.                                     Financial Tests.  The Company hereby certifies and warrants to
you that the following is a true and correct computation as at the Computation
Date of the following ratios and/or financial restrictions contained in the
Credit Agreement:

 

A.                                    Section 11.12.2 – Minimum Fixed
Charge Coverage Ratio

 

	
  1.

  	
  Consolidated Net Income

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
  Plus:

  	
  (i) Interest
  Expense

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
  (ii) income
  tax expense

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
  (iii) amortization
  of Signing and Performance Bonus expense

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
  (iv) non-cash equity compensation

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
  (v) other non-cash charges Specify:

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
  (vi) extraordinary non-cash losses

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
  (vii) goodwill impairment

  	
  $

  	
   

  	
   

  

 

1

 

	
   

  	
   

  	
  (viii) cash restructuring charges incurred in
  fiscal quarters ended December 31, 2008 (< $6,500,000)
  and ending March 31, 2009 and June 30, 2009 (< $2,500,000
  for both quarters combined) (if applicable)

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
  (ix) expensed acquisition costs (< $500,000)

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
  Total (EBIT)

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
  Rentals

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
  Sum of (3) and (4)

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
  Cash Interest Expense

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
  Sum of (4) and (6)

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
  Ratio of (5) to (7)

  	
   

  	
  to 1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
  Minimum Required:

  	
   

  	
   

  	
   

  

 

	
  Fiscal Quarter

  Ending Nearest

  	
   

  	
  Minimum Ratio

  	
   

  
	
  December 31,
  2008

  	
   

  	
  2.00:1.00

  	
   

  
	
  March 31,
  2009

  	
   

  	
  1.50:1.00

  	
   

  
	
  June 30,
  2009, September 30, 2009

  	
   

  	
  1.25:1:00

  	
   

  
	
  December 31,
  2009 and thereafter

  	
   

  	
  2.00:1.00

  	
   

  

 

B.                                    Section 11.12.1 – Maximum Total Debt
to Adjusted EBITDA Ratio

 

	
  1.

  	
  Total Debt

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
  Consolidated Net Income

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
  Plus:

  	
  (i) Interest
  Expense

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
  (ii) income
  tax expense

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
  (iii) depreciation

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
  (iv) amortization 

  	
  $

  	
   

  	
   

  

 

2

 

	
   

  	
   

  	
  (v) non-cash equity compensation

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
  (vi) other non-cash charges Specify:

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
  (vii) extraordinary non-cash losses

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
  (viii) goodwill impairment

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
  (ix) cash restructuring charges incurred in
  fiscal quarters ended December 31, 2008 (< $6,500,000)
  and ending March 31, 2009 and June 30, 2009 (< $2,500,000
  for both quarters combined) (if applicable)

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
  (x) expensed acquisition costs (up to
  $500,000)

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
  Total (Adjusted EBITDA)

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
  Ratio of (1) to (4)

  	
   

  	
          to 1

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
  Maximum allowed

  	
   

  	
  2.50:1.00

  	
   

  

 

C.                                    Section 11.12.3 – Minimum Asset
Coverage Ratio

 

	
  1.

  	
  Cash

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
  Net accounts receivable

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
  Total Debt plus undrawn letters of credit

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
  Ratio of ((1) + (2)) to (3)

  	
   

  	
         to 1

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
  Minimum allowed

  	
   

  	
  1.50:1.00

  	
   

  

 

D.                                    Section 11.13 – Signing and
Performance Bonuses

 

	
  1.

  	
  Signing
  and Performance Bonuses paid in 12 month period ending on Computation Date

  	
  $

  	
   

  	
   

  

 

3

 

	
  2.

  	
  Maximum
  allowed:

  	
   

  	
   

  	
   

  

 

	
  12 Month Period

  Ending

  	
   

  	
  Maximum

  	
   

  
	
  October 1,
  2007 – September 30, 2008

  	
   

  	
  75% of EBITDA

  	
   

  
	
  October 1,
  2008 – June 30, 2009

  	
   

  	
  100% of EBITDA

  	
   

  
	
  July 1,
  2009 – December 31, 2009

  	
   

  	
  75% of EBITDA

  	
   

  
	
  After
  December 31, 2009

  	
   

  	
  50% of EBITDA

  	
   

  

 

E.                                      Restricted Period Termination

 

	
  1.

  	
  EBITDA
  (B.4 less B.3(ix))

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Minimum

  	
  $

  	
  25,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
  Fixed
  Charge Coverage Ratios for any two or more consecutive Computation Periods,
  each ending after March 31, 2009, greater than 2.00:1:00 (Y/N)?

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Restricted Period 

  	
   

  	
   

  	
   

  
	
   

  	
  Terminated (Y/N)?

  	
   

  	
   

  	
   

  

 

The Company further certifies to you that no Event of Default or
Unmatured Event of Default has occurred and is continuing.

 

The Company has caused this Certificate to be executed and delivered by
its duly authorized officer on                           ,
      .

 

	
   

  	
  LECG, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
				

 

4

 

ANNEX II

 

EXHIBIT F

 

FORM OF BORROWING BASE
CERTIFICATE

Date:

 

To:                              Bank of
America, N.A.,

as Administrative Agent

 

Ladies
and Gentlemen:

 

Reference is made to that certain Credit Agreement
dated as of December 15, 2006 and amended as of July 16, 2007, December 20,
2007, February 9, 2009 and March 30,  2009 (as amended, modified, renewed or
extended from time to time, the “Credit Agreement”), among LECG, LLC
(the “Company”), the several financial institutions from time to time
party thereto (the “Lenders”) and Bank of America, N.A., successor by
merger to LaSalle Bank National Association, as administrative agent for the
Lenders (in such capacity, the “Administrative Agent”).  Unless otherwise defined herein, capitalized
terms used herein have the respective meanings assigned to them in the Credit
Agreement.  This Borrowing Base
Certificate is made and delivered pursuant to Section 10.1.9 of the
Credit Agreement.

 

The undersigned Responsible Officer of the Company
hereby certifies as of the date hereof that he/she is the [                         ]
of the Company, and that, as such, he/she is authorized to execute and deliver
this Certificate to the Lenders and the Administrative Agent on the behalf of
the Company, and that  the information
set forth on Schedule 1 hereto is true, accurate and complete as of                           .

 

IN WITNESS WHEREOF, the undersigned has executed this
Certificate as the                        
of the Company as of                             .

 

	
   

  	
  LECG, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					

 

1

 

SCHEDULE 1

to the Borrowing Base Certificate

 

	
  Date of Calculation:

  	
   

  
	
   

  	
   

  
	
  A.

  	
  Eligible
  Receivables

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  1.                    Aggregate amount of the Company’s
  Receivables, subject to the Lien of the Collateral Documents, the value of
  which shall be determined by taking into consideration, among other factors,
  their book value determined in accordance with GAAP

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  2.                    Less ineligible Receivables:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (a)                      Receivables that do not arise out of sales of goods
  or rendering of services in the ordinary course of the Company’s business

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (b)                     Receivables payable other than in Dollars or that
  are otherwise on terms other than those normal or customary in the Company’s
  business

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (c)                      Receivables owing from any Person that is an
  Affiliate of the Parent

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (d)                     Receivables more than 120 days past original invoice
  date

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (e)                      Receivables owing from any Person from which an
  aggregate amount of more than 33% of the Receivables owing therefrom is more
  than 120 days past the date due

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (f)                        Receivables owing from any Person that (i) has
  disputed liability for any Receivable owing from such Person or (ii) has
  otherwise asserted any claim, demand or liability against the Parent or any
  of its Subsidiaries, whether by action, suit, counterclaim or otherwise; provided
  that for purposes of subclause (f)(i), such Receivables shall be
  excluded only to the extent of the amounts being disputed by such Person at
  any date of determination

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (g)                     Receivables owing from any Person that shall take or
  be the subject of any action or proceeding of a type described in Section 13.1.4
  of the Credit Agreement

  	
   

  

 

2

 

	
   

  	
  (h)                     Receivables (i) owing from any
  Person that is also a supplier to or creditor of the Parent or any of its
  Subsidiaries unless such Person has waived any right of setoff in a manner
  acceptable to the Administrative Agent or (ii) representing any
  manufacturer’s or supplier’s credits, discounts, incentive plans or similar
  arrangements entitling the Parent or any of its Subsidiaries to discounts on
  future purchase therefrom

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (i)                         Receivables arising out of sales to
  account debtors outside the United States unless such Receivables are fully
  backed by an irrevocable letter of credit on terms, and issued by a financial
  institution, acceptable to the Administrative Agent and such irrevocable
  letter of credit is in the possession of the Administrative Agent

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (j)                         Receivables in respect of which there
  does not exist a valid and perfected first priority lien or security interest
  in favor of the Administrative Agent, securing the Obligations

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  3.                    Total ineligible Receivables (sum of (a) through
  (j) of 2)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  4.                    Total Eligible Receivables (1 minus 3)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  5.                    Eligible Receivables Borrowing Base
  (80% of 4)

  	
   

  
	
   

  	
   

  	
   

  
	
  B.

  	
  Borrowing Base and
  Availability

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  1.                    Total Borrowing Base (A.5)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  2.                    Outstanding aggregate principal amount
  of Revolving Loans

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  3.                    Stated Amount of all Letters of Credit

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  4.                    Total Revolving Outstandings (sum of
  B.2 and B.3)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  5.                    Amount of Borrowing Base Deficiency
  (greater of (i) zero and (ii) B.4 minus B.1)

  	
   

  

 

3

 

ANNEX III

 

FORM OF FIRST
AMENDMENT

TO SECURITY
AGREEMENT

 

THIS
FIRST AMENDMENT TO SECURITY AGREEMENT (this “Amendment”), dated as of March 30,
2009, is made by and among LECG, LLC, a California limited liability company
(the “Company”), LECG CORPORATION, a Delaware corporation (the “Parent”),
certain other affiliates of the Company listed in Annex I to the
Security Agreement (as defined herein) or acceding thereto as provided in Section 18
of the Security Agreement (“Additional Grantors” and, together with the
Company and the Parent, the “Grantors”), and BANK OF AMERICA, N.A.,
successor by merger to LaSalle Bank National Association, as administrative
agent and collateral agent for itself, the Lenders, and certain Affiliates of
the Lenders to which Bank Product Obligations or Hedging Obligations may from
time to time be owed (in such capacity, the “Administrative Agent”).

 

RECITALS

 

A.            The Company, the financial
institutions party thereto and the Administrative Agent entered into a Credit
Agreement dated as of December 15, 2006 and amended as of July 16,
2007, December 20, 2007, February 9, 2009 and March 30, 2009 (as amended, modified, renewed or extended
from time to time, the “Credit Agreement”).  As security for the obligations under the
Credit Agreement, the Grantors executed with and in favor of the Administrative
Agent that Security Agreement dated as of February 9, 2009 (the “Security
Agreement”).

 

B.            The Grantors and the Administrative
Agent wish to amend the Security Agreement as set forth herein.

 

NOW
THEREFORE, in consideration of the matters set forth in the recitals and the
covenants and provisions herein set forth, and other valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:

 

1.             Definitions.  Capitalized terms used but not defined herein
are used as defined in the Security Agreement.

 

2.             Amendments to Security
Agreement.  The Security Agreement is
hereby amended as follows:

 

(a)           Section 2(a) of the
Security Agreement shall be amended by deleting the last sentence thereof and
replacing it with the following:

 

“Notwithstanding the foregoing, except for fixtures
(to the extent covered by Article 9 of the UCC), such grant of a security
interest shall not extend to, and the term “Collateral” shall not include, any
asset which would be real property under the law of the jurisdiction in which
it is located.”

 

(b)           Section 2(l) of the
Security Agreement shall be amended by deleting the final sentence thereof and
by amending and restating the first sentence as follows:

 

1

 

“(l)          Without limiting the foregoing
provisions of this Section 2, each Grantor will cooperate with the
Administrative Agent in obtaining control (as defined in the UCC) of
Collateral consisting of any (i) Deposit Accounts or Investment Property
with any U.S. branch or office of any depository institution, financial
intermediary or financial institution, (ii) Electronic Chattel Paper or (iii) Letter-of-Credit
Rights.”

 

(c)           Section 2(o) of the
Security Agreement shall be amended by deleting the phrase “subsections (f),
(g), (h), (i), (j), (k) and (l)” and replacing it with the following:  “subsections (f), (g), (i), (j), and (k)”.

 

(d)           Section 3(g) of the
Security Agreement shall be amended by adding the following after the “;” at
the end of clause (vi) thereof:

 

“and

 

(vii)         with respect to the Rights to Payment
constituting Eligible Receivables, except as disclosed in writing to the
Administrative Agent, the Company has no knowledge that any of the criteria for
eligibility are not satisfied.”

 

(e)           Section 4(l) of the
Security Agreement shall be amended and restated to read as follows:

 

“(l)          Upon the establishment of any new
Deposit Account, or any new securities account with respect to any Investment
Property with any U.S. branch or office of any depository institution,
financial intermediary or financial institution, each Grantor shall immediately
deliver to Administrative Agent a control agreement in form and substance satisfactory
to Administrative Agent in respect of such new Deposit Account or new
securities account, duly executed by each party thereto (other than the
Administrative Agent).”

 

3.             Effectiveness.  This Amendment shall become effective upon
the “Effective Date”, as defined in that Fourth Amendment to Credit Agreement,
dated as of the date hereof, by and among the Company, the Lenders and the
Administrative Agent (the “Fourth Amendment”).

 

4.             Representations and Warranties.  To
induce the Administrative Agent to execute this Amendment, each Grantor
represents and warrants as follows:

 

(a)           Such Grantor is duly
authorized to execute and deliver this Amendment and to perform its obligations
hereunder.

 

(b)           The representations and warranties in
the Security Agreement, as amended hereby, are true and correct in all material
respects with the same effect as though made on and as of the date of this
Amendment (except to the extent stated to relate to a specific earlier date, in
which case such representations and warranties were true and correct as of such
earlier date).

 

2

 

5.             Affirmation.  Except as expressly amended
hereby or by the other Amendment Documents, the Credit Agreement and the other
Loan Documents are and shall continue in full force and effect and each Grantor
hereby fully ratifies and affirms each Loan Document to which it is a
party.  Any reference to the Security
Agreement found in the Security Agreement or any other Loan Document shall be a
reference to the Security Agreement as amended hereby.  This Amendment shall constitute a Loan
Document for purposes of the Credit Agreement and the other Loan Documents.

 

6.             Entire Agreement;
Amendment.  This Amendment, together
with the other Loan Documents, embodies the entire agreement and understanding
among the Grantors, the Lenders and the Administrative Agent, and supersedes
all prior or contemporaneous agreements and understandings of such Persons,
verbal or written, relating to the subject matter hereof and thereof and shall
not be amended except by the written agreement of the parties as provided in
the Credit Agreement

 

7.             Severability.  If any provision of this Amendment is held to
be illegal, invalid or unenforceable, (a) the legality, validity and
enforceability of the remaining provisions of this Amendment shall not be
affected or impaired thereby and (b) the parties shall endeavor in good
faith negotiations to replace the illegal, invalid or unenforceable provisions
with valid provisions the economic effect of which comes as close as possible
to that of the illegal, invalid or unenforceable provisions.  The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction

 

8.             Counterparts.  This
Amendment may be executed in two or more counterparts, each of which shall
constitute an original, but all of which when taken together shall constitute
one instrument.  Delivery of an executed
counterpart of this Amendment by facsimile or electronic mail shall be
effective as delivery of an original counterpart.

 

9.             Incorporation of
Provisions of the Credit Agreement. 
To the extent the Credit Agreement contains provisions of general
applicability to the Loan Documents, including any such provisions contained in
Section 15 thereof, such provisions are incorporated herein by this
reference.

 

10.           No Inconsistent
Requirements.  Each Grantor
acknowledges that this Amendment and the other Loan Documents may contain
covenants and other terms and provisions variously stated regarding the same or
similar matters, and agrees that all such covenants, terms and provisions are
cumulative and all shall be performed and satisfied in accordance with their
respective terms.

 

11.           Headings.  The headings and captions of
this Amendment are for the purposes of reference only and shall not affect the
construction of, or be taken into consideration in interpreting, this
Amendment.

 

12.           APPLICABLE LAW.  THIS AMENDMENT SHALL BE A CONTRACT MADE UNDER
AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF ILLINOIS APPLICABLE TO
CONTRACTS MADE AND TO BE PERFORMED 

 

3

 

ENTIRELY WITHIN SUCH STATE,
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.

 

13.           Costs and Expenses.  The Company hereby affirms its obligation under Section 15.5 of the Credit
Agreement to reimburse the Administrative Agent for all reasonable
out-of-pocket costs and expenses paid or incurred thereby in connection with
the preparation, execution and delivery of this Amendment including but not
limited to the Attorney Costs with respect hereto.

 

14.           Grantor
Consent.  Each of Parent and Additional Grantor, in its
capacity as a Grantor, acknowledges that its consent to the Fourth Amendment is
not required, but nevertheless does hereby consent to the Fourth Amendment and
to the documents and agreements referred to therein.  Nothing herein or in the Fourth Amendment
shall in any way limit any of the terms or provisions of the Collateral Documents
executed by each of Parent and Additional Grantor in the Administrative Agent’s
or the Lenders’ favor, or any other Loan Document executed by each of Parent
and Additional Grantor (as the same may be amended from time to time), all of
which are hereby ratified and affirmed in all respects.

 

[signature page follows]

 

4

 

The
parties hereto have caused this Amendment to be executed by their duly
authorized officers, all as of the day and year first above written.

 

	
   

  	
  LECG, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Steven R. Fife

  
	
   

  	
  Name:

  	
  Steven R. Fife

  
	
   

  	
  Title:

  	
  CFO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LECG CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Steven R. Fife

  
	
   

  	
  Name:

  	
  Steven R. Fife

  
	
   

  	
  Title:

  	
  CFO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LECG CANADA HOLDING, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Steven R. Fife

  
	
   

  	
  Name:

  	
  Steven R. Fife

  
	
   

  	
  Title:

  	
  CFO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BANK OF AMERICA, N.A.,

  
	
   

  	
  as Administrative Agent

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ken Puro

  
	
   

  	
  Name:

  	
  Ken Puro

  
	
   

  	
  Title:

  	
  Vice President

  

 

5

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