exv10w2



 





EXHIBIT 10.2




MOLLY M. WHITE, Cal. Bar No. 171448

DIANA K. TANI, Cal. Bar No. 136656

FINOLA HALLORAN, Cal. Bar No. 180681




Attorneys for Plaintiff

Securities and Exchange Commission

Randall R. Lee, Regional Director

Michele Wein Layne, Associate Regional Director

5670 Wilshire Boulevard, 11th Floor

Los Angeles, California 90036

Telephone: (323) 965-3998

Facsimile: (323) 965-3908




UNITED STATES DISTRICT COURT

FOR THE CENTRAL DISTRICT OF CALIFORNIA




	 	 	 
	SECURITIES AND EXCHANGE 

COMMISSION,

	 	Case No.
	 
	                    Plaintiff, 


          vs.

	 	CONSENT OF DEFENDANT
ENDOCARE, INC. TO ENTRY
OF FINAL JUDGMENT OF
PERMANENT INJUNCTION AND OTHER RELIEF
	 
	ENDOCARE, INC., KEVIN M. QUILTY, and JERRY W. ANDERSON,
	 	 
	
                    Defendants.
	 	 






     1. Defendant Endocare, Inc. (“Endocare”) waives service of a Summons
and the Complaint in this action, enters a general appearance, and admits the
Court’s jurisdiction over it and over the subject matter of this action.



     2. Without admitting or denying the allegations of the Complaint (except
as to personal and subject matter jurisdiction, which Endocare admits), Endocare
hereby consents to the entry of the Final Judgment Of Permanent Injunction And
Other Relief (“Final Judgment”) in the form attached hereto and incorporated by
reference herein, which, among other things:




	 	a.	 	permanently restrains and enjoins Endocare from
violations of: 1) Section 17(a) of the Securities Act of 1933 (“Securities




 









 






	 	 	 	Act”), 15 U.S.C. §77q(a); and 2) Sections 10(b), 13(a), 13(b)(2)(A), and 13(b)(2)(B)
of the Securities Exchange Act of 1934 (“Exchange Act”), 15 U.S.C. §§78j(b), 78m(a),
78m(b)(2)(A), and 78m(b)(2)(B), and Rules 10b-5, 12b-20, 13a-1,
13a-11, and 13a-13
thereunder, 17 C.F.R. §§240.10b-5, 240.12b-20, 240.13a-1,
240.13a-11, and
240.13a-13; and
	 
	 	b.	 	orders Endocare to pay a civil penalty in the amount of
$750,000 under Section 20(d)(l) of the Securities Act, 15 U.S.C. §77t(d)(l), and
Section 21(d)(3) of the Exchange Act, 15 U.S.C. §78u(d)(3).





     3. Endocare agrees that it shall not seek or accept, directly or indirectly,
reimbursement or indemnification from any source, including but not limited to
payment made pursuant to any insurance policy, with regard to any civil penalty
amounts that Endocare pays pursuant to the Final Judgment, regardless of whether
such penalty amounts or any part thereof are added to a distribution fund or
otherwise used for the benefit of investors. Endocare further agrees that it shall not
claim, assert, or apply for a tax deduction or tax credit with regard to any federal,
state, or local tax for any penalty amounts that Endocare pays pursuant to the Final
Judgment, regardless of whether such penalty amounts or any part thereof are
added to a distribution fund or otherwise used for the benefit of investors.



     4. Endocare waives the entry of findings of fact and conclusions of law
pursuant to Rule 52 of the Federal Rules of Civil Procedure.



     5. Endocare waives the right, if any, to: (a) a jury trial; (b) seek relief
from the Final Judgment under Rule 60(b) of the Federal Rules of Civil Procedure;
and (c) appeal from the entry of the Final Judgment.



     6. Endocare enters into this Consent voluntarily and represents that no
threats, offers, promises, or inducements of any kind have been made by the



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Commission or any member, officer, employee, agent, or representative of the Commission to
induce Endocare to enter into this Consent.




     7. Endocare agrees that this Consent shall be incorporated into the Final
Judgment with the same force and effect as if fully set forth therein.



     8. Endocare will not oppose the enforcement of the Final Judgment on
the ground, if any exists, that it fails to comply with Rule 65(d) of the Federal
Rules of Civil Procedure, and hereby waives any objection based thereon.



     9. Endocare waives service of the Final Judgment and agrees that entry
of the Final Judgment by the Court and filing with the Clerk of the Court will
constitute notice to Endocare of its terms and conditions. Endocare further agrees
to provide counsel for the Commission, within 30 days after the Final Judgment is
filed with the Clerk of the Court, with an affidavit or declaration stating that
Endocare has received and read a copy of the Final Judgment.



     10. Consistent with 17 C.F.R. 202.5(f), this Consent resolves only the
claims asserted against Endocare in this civil proceeding. Endocare acknowledges
that no promise or representation has been made by the Commission or any
member, officer, employee, agent, or representative of the Commission with regard
to any criminal liability that may have arisen or may arise from the facts
underlying this action or immunity from any such criminal liability. Endocare
waives any claim of Double Jeopardy based upon the settlement of this proceeding,
including the imposition of any remedy or civil penalty herein. Endocare further
acknowledges that the Court’s entry of a permanent injunction may have collateral
consequences under federal or state law.



     11. Endocare understands and agrees to comply with the Commission’s
policy “not to permit a defendant or respondent to consent to a judgment or order
that imposes a sanction while denying the allegations in the complaint or order for
proceedings.” 17 C.F.R. § 202.5. In compliance with this policy, Endocare agrees
not to take any action or to make or permit to be made any public statement



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denying, directly or indirectly, any allegation in the Complaint or creating the impression that
the Complaint is without factual basis. If Endocare breaches this agreement, the Commission may
petition the Court to vacate the Final Judgment and restore this action to its active docket.
Nothing in this paragraph affects Endocare’s: (i) testimonial obligations; or (ii) right to take
legal or factual positions in litigation or other legal proceedings in which the Commission is not
a party.




     12. Endocare hereby waives any rights under the Equal Access to Justice
Act, the Small Business Regulatory Enforcement Fairness Act of 1996, or any
other provision of law to seek from the United States, or any agency, or any
official of the United States acting in his or her official capacity, directly or
indirectly, reimbursement of attorney’s fees or other fees, expenses, or costs
expended by Endocare to defend against this action. For these purposes, Endocare
agrees that it is not the prevailing party in this action since the parties have reached
a good faith settlement.



     13. Endocare agrees that it will cooperate fully with the staff of the
Commission in any and all investigations, litigation or other formal or informal
proceedings of the Commission relating to or arising from the matters described in
the Commission’s Complaint filed in district court against Endocare by
undertaking to do the following:




a. Produce, without service of a notice or subpoena, any and all
nonprivileged documents and other information reasonably requested
by the Commission’s staff;




b. To be interviewed, and to make its officers, directors,
employees, agents and other representatives available (and to use its
reasonable best efforts to make its former officers, directors,
employees, agents and other representatives available) to be
interviewed, by the Commission’s staff at such times as the
Commission’s staff reasonably may direct;



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c. To make its officers, directors, employees, agents and other
representatives available (and to use its reasonable best efforts to
make its former officers, directors, employees, agents and other
representatives available) to appear and testify in such investigations,
depositions, hearings, or trials as the Commission’s staff reasonably
may direct; and




d. That in connection with any testimony of Endocare’s officers,
directors, employees, agents and other representatives or requests for
documents or other information, that any notice or subpoena for such
may be addressed to its counsel, and be served by mail or facsimile;
with respect to such notices and subpoenas, Endocare waives the
territorial limits on service contained within Rule 45 of the Federal
Rules of Civil Procedure and any applicable local rules, provided that
the party requesting the testimony reimburses Endocare’s travel,
lodging and subsistence expenses at the then-prevailing United States
Government per diem rates; and Endocare consents to personal
jurisdiction over it in any United States District Court for purposes of
enforcing any such notice or subpoena.



     14. Endocare agrees that the Commission may present the Final Judgment to the Court for
signature and entry without further notice.



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     15. Endocare
agrees that this Court shall retain jurisdiction over this matter for the purpose of
enforcing the terms of the Final Judgment.



	 	 	 	 	 
	DATED: July 14, 2006 	Endocare, Inc.

 	 
	 	By:  	/s/ Craig T. Davenport	 
	 	 	Craig T. Davenport
 Chairman of
the Board and Chief Executive	 
	 	 	Officer of Endocare, Inc. 
201 Technology
Drive

 Irvine, CA 92618 	 
	 




     On
July 14, 2006, Craig T. Davenport, a person known to me,
personally appeared before me and acknowledged executing the
foregoing Consent with full authority to do so on behalf of Endocare, Inc. as its Chairman of the Board and Chief Executive Officer.



	 	 	 
	 	 	/s/ Rosanne E. St. Onge
	 	 	 
	 

	 	Notary Public 
Commission expires: November 1, 2007






Approved as to form:




/s/ Dan Marmalefsky                                        

Dan Marmalefsky

Morrison & Foerster LLP

555 West Fifth Street, Suite 3500

Los Angeles CA 90013

(213) 892-5809




Attorney for Defendant




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