Document:

exv10w2

 

Exhibit 10.2

REGISTRATION RIGHTS AGREEMENT

     This Registration Rights Agreement (this “Agreement”) is made and entered into as of May 25,
2007, among Endocare, Inc., a Delaware corporation (the “Company”), and Frazier Healthcare V, L.P.,
a Delaware limited partnership (the “Purchaser” and together with any other person that may become
a party to this Agreement as a “Purchaser,” collectively, the “Purchasers”).

     WHEREAS, the parties have agreed to enter into this Agreement in connection with, and as a
condition to the Closing under, the Common Stock Subscription Agreement dated as of May 24, 2007
among the Company and the Purchaser (the “Subscription Agreement”).

     NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for
other good and valuable consideration the receipt and adequacy of which are hereby acknowledged,
the Company and the Purchasers agree as follows:

          1. Definitions. In addition to the terms defined elsewhere in this Agreement, (a)
capitalized terms that are not otherwise defined herein have the meanings given to such terms in
the Subscription Agreement, and (b) the following terms have the meanings indicated:

     “Commission” means the Securities and Exchange Commission.

     “Filing Date” means, with respect to the initial Registration Statement required to be
filed pursuant to Section 2, February 25, 2008, and, with respect to any additional
Registration Statements that may be required pursuant to Section 3(c), the 30th day
following the date on which the Company first knows, or reasonably should have known, that
such additional Registration Statement is required under such Section.

     “Holder” means any holder, from time to time, of Registrable Securities.

     “Losses” means any and all damages, fines, penalties, deficiencies, liabilities,
claims, losses (including loss of value), judgments, awards, settlements, taxes, actions,
obligations and reasonable costs and expenses in connection therewith (including, without
limitation, interest, court costs and reasonable fees and expenses of attorneys, accountants
and other experts, or any other reasonable expenses of litigation or other Proceedings or of
any default or assessment).

     “Proceeding” means any action, claim, suit, investigation or proceeding (including,
without limitation, an investigation or partial proceeding, such as a deposition).

     “Prospectus” means the prospectus included in the Registration Statement (including,
without limitation, a prospectus that includes any information previously omitted from a
prospectus filed as part of an effective registration statement in reliance upon Rule 430A
promulgated under the Securities Act), as amended or supplemented by any prospectus
supplement, with respect to the terms of the offering of any portion of the Registrable
Securities covered by the Registration Statement, and all other amendments

 

 

and supplements to the Prospectus, including post-effective amendments, and all
material incorporated by reference or deemed to be incorporated by reference in such
Prospectus.

     “Purchaser Counsel” means the counsel designated by agreement of the Holders of a
majority of Registrable Securities then outstanding and set forth in a written notice to the
Company.

     “Registrable Securities” means any Common Stock issued or issuable pursuant to the
Subscription Agreement, together with any securities issued or issuable upon any stock
split, dividend or other distribution, recapitalization or similar event with respect to the
foregoing.

     “Registration Statement” means the initial registration statement required to be filed
hereunder and any additional registration statements contemplated by Section 3(c),
including (in each case) the Prospectus, amendments and supplements to such registration
statement or Prospectus, including pre- and post-effective amendments, all exhibits thereto,
and all material incorporated by reference or deemed to be incorporated by reference in such
registration statement.

     “Required Effectiveness Date” means, with respect to the initial Registration Statement
required to be filed hereunder, May 25, 2008, and, with respect to any additional
Registration Statements that may be required pursuant to Section 3(c), the 60th day
following the date on which the Company first knows, or reasonably should have known, that
such additional Registration Statement is required under such Section.

     “Rule 415,” “Rule 424” and “Rule 461” means Rule 415, Rule 424 and Rule 461,
respectively, promulgated by the Commission pursuant to the Securities Act, as such Rules
may be amended from time to time, or any similar rule or regulation hereafter adopted by the
Commission having substantially the same effect as such Rule.

          2. Shelf Registration

          (a) Prior to each Filing Date, the Company shall prepare and file with the Commission a
“Shelf” Registration Statement covering the resale of all Registrable Securities for an offering to
be made on a continuous basis pursuant to Rule 415. The Registration Statement shall be on Form
S-3 (except if the Company is not then eligible to register for resale the Registrable Securities
on Form S-3, in which case such registration shall be on Form S-1 or such another appropriate form
in accordance herewith as the Holders may consent) and shall contain (except if otherwise directed
by the Holders or otherwise required by the Commission) the “Plan of Distribution” attached hereto
as Annex A. The Purchasers acknowledge and agree that as of the date of this Agreement,
the Company is not eligible to use Form S-3. The Company shall use commercially reasonable efforts
to cause the Registration Statement to be declared effective under the Securities Act as promptly
as possible after the filing thereof, but in any event prior to the Required Effectiveness Date,
and shall use commercially reasonable efforts to keep such Registration Statement continuously
effective under the Securities Act until the earlier of (i) May 25, 2010 and (ii) when all
Registrable Securities covered by the Registration Statement have been sold (the “Effectiveness
Period”), subject to any applicable exceptions to continuous

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effectiveness specifically set forth below in this Section 2. The Company shall notify each
Holder in writing promptly (and in any event within two business days) after receiving notification
from the Commission that a Registration Statement has been declared effective.

          (b) Notwithstanding anything in this Agreement to the contrary, after 60 consecutive business
days of continuous effectiveness of the initial Registration Statement filed and declared effective
pursuant to this Agreement, the Company may, by written notice to the Holders, suspend sales under
a Registration Statement after the effective date thereof and/or require that the Holders
immediately cease the sale of shares of Common Stock pursuant thereto and/or defer the filing of
any subsequent Registration Statement if the Company is engaged in a material merger, acquisition,
sale or financing or is in possession of other material nonpublic information and the Board of
Directors determines in good faith, by appropriate resolutions, that, as a result of such activity
or information, (A) (x) it would be materially detrimental to the Company (other than as relating
solely to the price of the Common Stock) to file a Registration Statement at such time and (y) it
is in the best interests of the Company to defer proceeding with such registration at such time, or
(B) it would be materially detrimental to the Company (other than as relating solely to the price
of the Common Stock) to amend or supplement an effective Registration Statement or the related
prospectus to disclose such activity or information, as applicable. Upon receipt of such notice,
each Holder shall immediately discontinue any sales of Registrable Securities pursuant to such
registration until such Holder has received copies of a supplemented or amended Prospectus or until
such Holder is advised in writing by the Company that the then-current Prospectus may be used and
has received copies of any additional or supplemental filings that are incorporated or deemed
incorporated by reference in such Prospectus. In no event, however, shall this right be exercised
to suspend sales beyond the period during which (in the good faith determination of the Company’s
Board of Directors) the failure to require such suspension would be materially detrimental to the
Company. The Company’s rights under this Section 2(b) may be exercised no more than two
times and for a period of no more than 30 days in any twelve-month period. Immediately after the
end of any suspension period under this Section 2(b), the Company shall take all necessary
actions (including filing any required supplemental prospectus) to restore the effectiveness of the
applicable Registration Statement and the ability of the Holders to publicly resell their
Registrable Securities pursuant to such effective Registration Statement.

          (c) Notwithstanding anything in this Agreement to the contrary, so long as a Registration
Statement is on Form S-1 or on any other form that does not allow for forward incorporation by
reference of reports and other materials filed by the Company pursuant to Section 13(a) or 15(d) of
the Exchange Act, the Company may suspend sales under such Registration Statement (an “Updating
Delay”) (i) for the period commencing at the time that the Company disseminates a press release
announcing its preliminary financial results for any fiscal period and ending on the third business
day after the earlier of (A) the date that the related report on Form 10-K or 10-Q, as applicable,
under the Exchange Act is filed with the Commission and (B) the date on which such report is
required to be filed under the Exchange Act (without regard to Rule 12b-25 promulgated thereunder)
and (ii) for the period commencing at the time that the Company disseminates a press release
announcing a material development and ending on the third business day after the earlier of (A) the
date that the related report on Form 8-K is filed with the Commission and (B) the date on which
such report is required to be filed under the Exchange Act (without regard to Rule 12b-25
promulgated thereunder), but in any such case

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only to the extent necessary to allow any post-effective amendment to the Registration
Statement or supplement to the Prospectus to be prepared and, if necessary, filed with the
Commission and, in the case of a post-effective amendment, declared effective. The Company will
use commercially reasonable efforts to minimize periods during which the Registration Statement is
not effective.

          3. Registration Procedures. In connection with the Company’s registration obligations
hereunder, the Company shall:

          (a) Not less than three business days prior to the filing of each Registration Statement or
any related Prospectus or any amendment or supplement thereto (including any document that would be
incorporated or deemed to be incorporated therein by reference), the Company shall (i) furnish to
the Holders and Purchaser Counsel copies of all such documents proposed to be filed, which
documents (other than those incorporated or deemed to be incorporated by reference) will be subject
to the review of such Holders and Purchaser Counsel, and (ii) cause its officers and directors,
counsel and independent certified public accountants to respond to such inquiries as shall be
necessary, in the reasonable opinion of respective counsel, to conduct a reasonable investigation
within the meaning of the Securities Act. The Company shall not file the Registration Statement or
any such Prospectus or any amendments or supplements thereto to which the Holders of a majority of
the Registrable Securities and Purchaser Counsel shall reasonably object; provided that such
Holders shall provide any such objections within three business days following receipt of any such
documents.

          (b) (i) Prepare and file with the Commission such amendments, including post-effective
amendments, to the Registration Statement and the Prospectus used in connection therewith as may be
necessary to keep the Registration Statement continuously effective as to the applicable
Registrable Securities for the Effectiveness Period (subject to the exceptions to continuous
effectiveness provided above in Section 2(c)) and prepare and file with the Commission such
additional Registration Statements in order to register for resale under the Securities Act all of
the Registrable Securities; (ii) cause the related Prospectus to be amended or supplemented by any
required Prospectus supplement, and as so supplemented or amended to be filed pursuant to Rule 424;
(iii) respond as promptly as reasonably possible, and in any event within ten business days, to any
comments received from the Commission with respect to the Registration Statement or any amendment
thereto and as promptly as reasonably possible provide the Holders true and complete copies of all
correspondence from and to the Commission relating to the Registration Statement, unless such
correspondence contains material non-public information as determined by the Company and its
counsel; and (iv) comply in all material respects with the provisions of the Securities Act and the
Exchange Act with respect to the disposition of all Registrable Securities covered by the
Registration Statement during the applicable period in accordance with the intended methods of
disposition by the Holders thereof set forth in the Registration Statement as so amended or in such
Prospectus as so supplemented. The foregoing shall apply, without limitation, to any required
revision or modification to the listed selling stockholders and related information in the
applicable Registration Statement and Prospectus in the event of a transfer of Registrable
Securities by a Holder in a transaction in which the transferee continues to hold restricted
securities (including, without limitation, a distribution of Registrable Securities by a Holder to
its partners, members or stockholders).

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          (c) Notify the Holders of Registrable Securities to be sold and Purchaser Counsel as promptly
as reasonably possible, and (if requested by any such person) confirm such notice in writing no
later than one business day thereafter, of any of the following events: (i) the Commission notifies
the Company whether there will be a “review” of any Registration Statement; (ii) the Commission
comments in writing on any Registration Statement (in which case the Company shall deliver to each
Holder a copy of such comments and of all written responses thereto, except to the extent that such
correspondence contains material non-public information as determined by the Company and its
counsel); (iii) any Registration Statement or any post-effective amendment is declared effective;
(iv) the Commission or any other Federal or state governmental authority requests any amendment or
supplement to a Registration Statement or Prospectus or requests additional information related
thereto; (v) the Commission issues any stop order suspending the effectiveness of any Registration
Statement or notifies the Company that it has initiated any Proceedings for that purpose; (vi) the
Company receives notice of any suspension of the qualification or exemption from qualification of
any Registrable Securities for sale in any jurisdiction, or the initiation or threat of any
Proceeding for such purpose; or (vii) the financial statements included in any Registration
Statement become ineligible for inclusion therein or any statement made in any Registration
Statement or Prospectus or any document incorporated or deemed to be incorporated therein by
reference is untrue in any material respect or any revision to a Registration Statement, Prospectus
or other document is required so that it will not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made, not misleading.

          (d) Use commercially reasonable efforts to avoid the issuance of or, if issued, obtain the
withdrawal of (i) any order suspending the effectiveness of any Registration Statement or (ii) any
suspension of the qualification (or exemption from qualification) of any of the Registrable
Securities for sale in any jurisdiction, at the earliest practicable moment.

          (e) Furnish to each Holder and Purchaser Counsel, without charge, at least one conformed copy
of each Registration Statement and each amendment thereto, including financial statements and
schedules, all documents incorporated or deemed to be incorporated therein by reference, and all
exhibits to the extent requested by such person (including those previously furnished or
incorporated by reference) promptly after the filing of such documents with the Commission.

          (f) Promptly deliver to each Holder and Purchaser Counsel, without charge, as many copies of
the Prospectus or Prospectuses (including each form of prospectus) and each amendment or supplement
thereto as such persons may reasonably request. The Company hereby consents to the use of such
Prospectus and each amendment or supplement thereto by each of the selling Holders in connection
with the offering and sale of the Registrable Securities covered by such Prospectus and any
amendment or supplement thereto.

          (g) (i) In the time and manner required by each applicable trading market or quotation system
on which the Company’s Common Stock is approved for listing or quotation, if at all, prepare and
file with such trading market or quotation system an additional shares listing application covering
all of the Registrable Securities; (ii) use commercially reasonable efforts to approve for listing
and to list the Registrable Securities covered by such Registration Statement

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with each such trading market or quotation system as soon as reasonably practicable; (iii) to
the extent available to the Company, provide to the Holders evidence of such listing; and (iv)
maintain the listing of such Registrable Securities on each such trading market or quotation
system.

          (h) Prior to any public offering of Registrable Securities, use its commercially reasonable
efforts to register or qualify or cooperate with the selling Holders and Purchaser Counsel in
connection with the registration or qualification (or exemption from such registration or
qualification) of such Registrable Securities for offer and sale under the securities or blue sky
laws of such jurisdictions within the United States as any Holder requests in writing, to keep each
such registration or qualification (or exemption therefrom) effective during the Effectiveness
Period and to do any and all other acts or things necessary or advisable to enable the disposition
in such jurisdictions of the Registrable Securities covered by a Registration Statement, except
that the Company shall not for any such purpose be required (A) to qualify generally to do business
as a foreign corporation in any jurisdiction wherein it would not but for the requirements of this
paragraph (h) be obligated to be so qualified, (B) to subject itself to taxation in any such
jurisdiction, or (C) to consent to general service of process in any jurisdiction.

          (i) Cooperate with the Holders to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be delivered to a transferee pursuant to a
Registration Statement, which certificates shall be free, to the extent permitted by the
Subscription Agreement, of all restrictive legends, and to enable such Registrable Securities to be
in such denominations and registered in such names as any such Holders may request.

          (j) Upon the occurrence of any event described in Section 3(c)(vii), as promptly as
reasonably possible, prepare a supplement or amendment, including a post-effective amendment, to
the Registration Statement or a supplement to the related Prospectus or any document incorporated
or deemed to be incorporated therein by reference, and file any other required document so that, as
thereafter delivered, neither the Registration Statement nor such Prospectus will contain an untrue
statement of a material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under which they were made,
not misleading.

          (k) Cooperate with any reasonable due diligence investigation undertaken by the Holders in
connection with the sale of Registrable Securities, including without limitation by making
available any documents and information reasonably requested; provided that the Company will not
deliver or make available to any Holder material, nonpublic information unless such Holder
specifically requests in advance to receive material, nonpublic information.

          (l) Comply with all applicable rules and regulations of the Commission.

          4. Registration Expenses. All fees and expenses incident to the performance of or
compliance with this Agreement by the Company shall be borne by the Company whether or not any
Registrable Securities are sold pursuant to the Registration Statement. The fees and expenses
referred to in the foregoing sentence shall include, without limitation, (a) all registration and
filing fees (including, without limitation, fees and expenses (i) with respect to

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filings required to be made with any trading market or quotation system, and (ii) in
compliance with applicable state securities or blue sky laws (including, without limitation, fees
and disbursements of counsel for the Company in connection with blue sky qualifications or
exemptions of the Registrable Securities and determination of the eligibility of the Registrable
Securities for investment under the laws of such jurisdictions as requested by the Holders )), (b)
printing expenses (including, without limitation, expenses of printing certificates for Registrable
Securities and of printing prospectuses requested by the Holders), (c) messenger, telephone and
delivery expenses, (d) fees and disbursements of counsel for the Company, and (e) fees and expenses
of all other persons retained by the Company in connection with the consummation of the
transactions contemplated by this Agreement. The Holders shall be responsible for all fees and
expenses of Purchaser Counsel.

          5. Indemnification

          (a) Indemnification by the Company. The Company shall, notwithstanding any
termination of this Agreement, indemnify and hold harmless each Holder, the officers, directors,
partners, members, agents, brokers (including brokers who offer and sell Registrable Securities as
principal as a result of a pledge or any failure to perform under a margin call of Common Stock),
investment advisors and employees of each of them, each person who controls any such Holder (within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) and the
officers, directors, partners, members, agents and employees of each such controlling person, to
the fullest extent permitted by applicable law, from and against any and all Losses, as incurred,
arising out of or relating to any untrue or alleged untrue statement of a material fact contained
in the Registration Statement, any Prospectus or any form of prospectus or in any amendment or
supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission
or alleged omission of a material fact required to be stated therein or necessary to make the
statements therein (in the case of any Prospectus or form of prospectus or supplement thereto, in
light of the circumstances under which they were made) not misleading, except to the extent, but
only to the extent, that (i) such untrue statements or omissions are based solely upon information
regarding such Holder furnished in writing to the Company by such Holder expressly for use therein,
or to the extent that such information relates to such Holder or such Holder’s proposed method of
distribution of Registrable Securities and was reviewed and expressly approved in writing by such
Holder expressly for use in the Registration Statement, such Prospectus or such form of Prospectus
or in any amendment or supplement thereto or (ii) in the case of an occurrence of an event of the
type specified in Section 3(c)(iv)-(vii), the use by such Holder of an outdated or
defective Prospectus after the Company has notified such Holder in writing that the Prospectus is
outdated or defective. The Company shall notify the Holders promptly of the institution, threat or
assertion of any Proceeding of which the Company is aware in connection with the transactions
contemplated by this Agreement.

          (b) Indemnification by Holders. Each Holder shall, severally and not jointly,
indemnify and hold harmless the Company, its directors, officers, agents and employees, each person
who controls the Company (within the meaning of Section 15 of the Securities Act and Section 20 of
the Exchange Act), and the directors, officers, agents or employees of such controlling persons, to
the fullest extent permitted by applicable law, from and against all Losses (as determined by a
court of competent jurisdiction in a final judgment not subject to appeal or review) arising solely
out of any untrue statement of a material fact contained in any Registration

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Statement, any Prospectus, or any form of prospectus, or in any amendment or supplement
thereto, or arising solely out of any omission of a material fact required to be stated therein or
necessary to make the statements therein not misleading to the extent, but only to the extent, that
such untrue statement or omission is contained in any information so furnished in writing by such
Holder to the Company specifically for inclusion in such Registration Statement or such Prospectus.
In no event shall the liability of any selling Holder hereunder be greater in amount than the
dollar amount of the net proceeds received by such Holder upon the sale of the Registrable
Securities giving rise to such indemnification obligation.

          (c) Conduct of Indemnification Proceedings. If any Proceeding shall be brought or
asserted against any person entitled to indemnity hereunder (an “Indemnified Party”), such
Indemnified Party shall promptly notify the person from whom indemnity is sought (the “Indemnifying
Party”) in writing, and the Indemnifying Party shall assume the defense thereof, including the
employment of counsel reasonably satisfactory to the Indemnified Party and the payment of all fees
and expenses incurred in connection with defense thereof; provided, that the failure of any
Indemnified Party to give such notice shall not relieve the Indemnifying Party of its obligations
or liabilities pursuant to this Agreement, except (and only) to the extent that it shall be finally
determined by a court of competent jurisdiction (which determination is not subject to appeal or
further review) that such failure shall have proximately and materially adversely prejudiced the
Indemnifying Party.

          An Indemnified Party shall have the right to employ separate counsel in any such Proceeding
and to participate in the defense thereof, but the fees and expenses of such counsel shall be at
the expense of such Indemnified Party or Parties unless: (i) the Indemnifying Party has agreed in
writing to pay such fees and expenses; or (ii) the Indemnifying Party shall have failed promptly to
assume the defense of such Proceeding and to employ counsel reasonably satisfactory to such
Indemnified Party in any such Proceeding; or (iii) the named parties to any such Proceeding
(including any impleaded parties) include both such Indemnified Party and the Indemnifying Party,
and such Indemnified Party shall have been advised by counsel that a conflict of interest is likely
to exist if the same counsel were to represent such Indemnified Party and the Indemnifying Party
(in which case, if such Indemnified Party notifies the Indemnifying Party in writing that it elects
to employ separate counsel at the expense of the Indemnifying Party, the Indemnifying Party shall
not have the right to assume the defense thereof and such counsel shall be at the expense of the
Indemnifying Party). The Indemnifying Party shall not be liable for any settlement of any such
Proceeding effected without its written consent, which consent shall not be unreasonably withheld.
No Indemnifying Party shall, without the prior written consent of the Indemnified Party, effect any
settlement of any pending Proceeding in respect of which any Indemnified Party is a party, unless
such settlement includes an unconditional release of such Indemnified Party from all liability on
claims that are the subject matter of such Proceeding.

          All reasonable fees and expenses of the Indemnified Party (including reasonable fees and
expenses to the extent incurred in connection with investigating or preparing to defend such
Proceeding in a manner not inconsistent with this Section, provided that it shall not include the
costs of more than one law firm) shall be paid to the Indemnified Party, as incurred, within 30
days of written notice thereof to the Indemnifying Party accompanied by copies of the related
invoices (regardless of whether it is ultimately determined that an Indemnified Party is not

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entitled to indemnification hereunder; provided, that the Indemnifying Party may require such
Indemnified Party to undertake to reimburse all such fees and expenses to the extent it is finally
judicially determined that such Indemnified Party is not entitled to indemnification hereunder).

          (d) Contribution. If a claim for indemnification under Section 5(a) or
5(b) is unavailable to an Indemnified Party (by reason of public policy or otherwise), then
each Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the
amount paid or payable by such Indemnified Party as a result of such Losses (not including the cost
of more than one law firm for the Holders of the Company), in such proportion as is appropriate to
reflect the relative fault of the Indemnifying Party and Indemnified Party in connection with the
actions, statements or omissions that resulted in such Losses as well as any other relevant
equitable considerations. The relative fault of such Indemnifying Party and Indemnified Party
shall be determined by reference to, among other things, whether any action in question, including
any untrue or alleged untrue statement of a material fact or omission or alleged omission of a
material fact, has been taken or made by, or relates to information supplied by, such Indemnifying
Party or Indemnified Party, and the parties’ relative intent, knowledge, access to information and
opportunity to correct or prevent such action, statement or omission. The amount paid or payable
by a party as a result of any Losses shall be deemed to include, subject to the limitations set
forth in Section 5(c), any reasonable attorneys’ or other reasonable fees or expenses
incurred by such party in connection with any Proceeding to the extent such party would have been
indemnified for such fees or expenses if the indemnification provided for in this Section was
available to such party in accordance with its terms.

          The parties hereto agree that it would not be just and equitable if contribution pursuant to
this Section 5(d) were determined by pro rata allocation or by any other method of
allocation that does not take into account the equitable considerations referred to in the
immediately preceding paragraph. Notwithstanding the provisions of this Section 5(d), no
Holder shall be required to contribute, in the aggregate, any amount in excess of the amount by
which the proceeds actually received by such Holder from the sale of the Registrable Securities
subject to the Proceeding exceeds the amount of any damages that such Holder has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.

          The indemnity and contribution agreements contained in this Section are in addition to any
liability that the Indemnifying Parties may have to the Indemnified Parties.

          6. Miscellaneous

          (a) Remedies. In the event of a breach by the Company or by a Holder of any of their
obligations under this Agreement, each Holder or the Company, as the case may be, in addition to
being entitled to exercise all rights granted by law and under this Agreement, including recovery
of damages, will be entitled to specific performance of its rights under this Agreement. The
Company and each Holder agree that monetary damages would not provide adequate compensation for any
losses incurred by reason of a breach by it of any of the provisions of this Agreement and hereby
further agrees that, in the event of any action for

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specific performance in respect of such breach, it shall waive the defense that a remedy at
law would be adequate.

          (b) Amendments and Waivers. The provisions of this Agreement, including the
provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents
to departures from the provisions hereof may not be given, unless the same shall be in writing and
signed by the Company and the Holders of at least a majority of the then outstanding Registrable
Securities. Notwithstanding the foregoing, a waiver or consent to depart from the provisions
hereof with respect to a matter that relates exclusively to the rights of Holders and that does not
directly or indirectly affect the rights of other Holders may be given by Holders of at least a
majority of the Registrable Securities to which such waiver or consent relates; provided,
however, that the provisions of this sentence may not be amended, modified, or supplemented
except in accordance with the provisions of the immediately preceding sentence.

          (c) No Inconsistent Agreements. Neither the Company nor any of its subsidiaries has
entered, as of the date hereof, nor shall the Company or any of its subsidiaries, on or after the
date of this Agreement, enter into any agreement with respect to its securities that would have the
effect of impairing the rights granted to the Holders in this Agreement or otherwise conflicts with
the provisions hereof. Except as and to the extent specified in the SEC Filings (as defined in the
Subscription Agreement), neither the Company nor any Subsidiary has previously entered into any
agreement granting any registration rights with respect to any of its securities to any person that
have not been satisfied in full.

          (d) No Piggyback on Registrations. Neither the Company nor any of its security
holders (other than the Holders in such capacity pursuant hereto) may include securities of the
Company in the Registration Statement other than the Registrable Securities, and the Company shall
not after the date hereof enter into any agreement providing any such right to any of its security
holders.

          (e) Compliance. Each Holder covenants and agrees that it will comply with the
prospectus delivery requirements of the Securities Act as applicable to it in connection with sales
of Registrable Securities pursuant to the Registration Statement.

          (f) Piggy-Back Registrations. If at any time during the Effectiveness Period there is
not an effective Registration Statement covering all of the Registrable Securities and the Company
shall determine to prepare and file with the Commission a registration statement (not including a
post-effective amendment to a previously filed registration statement) relating to an offering for
its own account or the account of others under the Securities Act of any of its equity securities,
other than on Form S-4 or Form S-8 (each as promulgated under the Securities Act) or their then
equivalents relating to equity securities to be issued solely in connection with any acquisition of
any entity or business or equity securities issuable in connection with stock option or other
employee benefit plans or arrangements, then the Company shall send to each Holder written notice
of such determination and, if within fifteen days after receipt of such notice, any such Holder
shall so request in writing, the Company shall include in such registration statement all or any
part of such Registrable Securities such holder requests to be registered.

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          (g) Notices. Any and all notices or other communications or deliveries required or
permitted to be provided hereunder shall be in writing and shall be deemed given and effective on
the earliest of (a) the date of transmission, if such notice or communication is delivered via
facsimile at the facsimile telephone number or via e-mail to the e-mail address specified in this
Agreement prior to 5:30 p.m. (Pacific time) on a business day, (b) the next business day after the
date of transmission, if such notice or communication is delivered via facsimile at the facsimile
telephone number or via e-mail to the e-mail address specified in this Agreement on a day that is
not a business day or later than 5:30 p.m. (Pacific time) and earlier than 11:59 p.m. (Pacific
time) on any business day, (c) the business day following the date of mailing, if sent by U.S.
nationally recognized overnight courier service, or (d) upon actual receipt by the party to whom
such notice is required to be given. The address for such notices and communications shall be as
set forth on the signature pages to this Agreement or such other addresses for notices and
communications as either party may communicate to the other party in accordance with this
Section 6(g).

          (h) Successors and Assigns. This Agreement shall inure to the benefit of and be
binding upon the successors and permitted assigns of each of the parties and shall inure to the
benefit of each Holder. The Company may not assign its rights or obligations hereunder without the
prior written consent of each Holder; provided, however, that, without such written consent, the
Company may assign its rights and obligations hereunder to any surviving or successor entity the
outstanding securities of which have become Registrable Securities and that agrees to assume all of
the obligations of the Company hereunder in connection with a merger or consolidation of the
Company with such other entity. Each Holder may assign its rights and obligations hereunder in the
manner and to the extent permitted under the Subscription Agreement; provided, that (i) the
assignee agrees in writing to be bound by the terms of this Agreement, and (ii) the Company is
given written notice of such assignment, including the name and address of such assignee and
identification of the Registrable Securities with respect to which such registration rights are
being assigned.

          (i) Counterparts. This Agreement may be executed in any number of counterparts, each
of which when so executed shall be deemed to be an original and, all of which taken together shall
constitute one and the same Agreement. In the event that any signature is delivered by facsimile
transmission, such signature shall create a valid binding obligation of the party executing (or on
whose behalf such signature is executed) the same with the same force and effect as if such
facsimile signature were the original thereof.

          (j) Governing Law; Venue; Waiver Of Jury Trail. ALL QUESTIONS CONCERNING THE
CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. EACH PARTY HEREBY
IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS SITTING IN THE
CITY OF NEW YORK, BOROUGH OF MANHATTAN, FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
CONNECTION HEREWITH OR WITH ANY TRANSACTION CONTEMPLATED HEREBY OR DISCUSSED HEREIN (INCLUDING WITH
RESPECT TO THE ENFORCEMENT OF ANY OF THE TRANSACTION DOCUMENTS), AND HEREBY IRREVOCABLY WAIVES, AND
AGREES NOT TO ASSERT IN ANY SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT

11

 

PERSONALLY SUBJECT TO THE JURISDICTION OF ANY SUCH COURT, THAT SUCH SUIT, ACTION OR PROCEEDING
IS IMPROPER. EACH PARTY HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS TO
PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING BY MAILING A COPY THEREOF VIA
REGISTERED OR CERTIFIED MAIL OR OVERNIGHT DELIVERY (WITH EVIDENCE OF DELIVERY) TO SUCH PARTY AT THE
ADDRESS IN EFFECT FOR NOTICES TO IT UNDER THIS AGREEMENT AND AGREES THAT SUCH SERVICE SHALL
CONSTITUTE GOOD AND SUFFICIENT SERVICE OF PROCESS AND NOTICE THEREOF. NOTHING CONTAINED HEREIN
SHALL BE DEEMED TO LIMIT IN ANY WAY ANY RIGHT TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW. THE
COMPANY HEREBY WAIVES ALL RIGHTS TO A TRIAL BY JURY.

          (k) Cumulative Remedies. The remedies provided herein are cumulative and not
exclusive of any remedies provided by law.

          (l) Severability. If any term, provision, covenant or restriction of this Agreement
is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in
full force and effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their reasonable efforts to find and employ an alternative means to achieve the
same or substantially the same result as that contemplated by such term, provision, covenant or
restriction. It is hereby stipulated and declared to be the intention of the parties that they
would have executed the remaining terms, provisions, covenants and restrictions without including
any of such that may be hereafter declared invalid, illegal, void or unenforceable.

          (m) Headings. The headings in this Agreement are for convenience of reference only
and shall not limit or otherwise affect the meaning hereof.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.

SIGNATURE PAGES FOLLOW.]

12

 

     IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the
date first written above.

	 	 	 	 	 
	 	ENDOCARE, INC.

 	 
	 	By:  	/s/ Craig T. Davenport
 	 
	 	 	Craig T. Davenport 	 
	 	 	CEO, President & Chairman 	 
	 
	 	Address for Notice:

Endocare, Inc.

201 Technology Drive

Irvine, CA 92618

Telephone No.: (949) 450-5422

Facsimile No.: (949) 450-5309

E-mail Address: MRodriguez@endocare.com

Attn: Chief Financial Officer

With copies to:

Telephone No.: (949) 450-5425

Facsimile No.: (949) 450-5310

E-mail Address: CDavis@endocare.com

Attn: General Counsel
 	 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.

SIGNATURE PAGE OF PURCHASER FOLLOW.]

13

 

	 	 	 	 	 
	 	FRAZIER HEALTHCARE V, L.P.

By: FHM V, LP, its general partner

By: FHM V, LLC, its general partner 	 
	 
	 	By:  	                        /s/ Thomas S. Hodge
 	 
	 	 	Thomas S. Hodge 	 
	 	 	Chief Operating Officer 	 
	 
	 	Address for Notice:

c/o Frazier Healthcare Ventures

601 Union Street, Suite 3200

Seattle, WA 98101

Telephone No.: (206) 621-7200

Facsimile No.: (206) 621-1848

E-mail Address:

Attn: Chief Operating Officer

With copies to:

Proskauer Rose LLP

1585 Broadway

New York, NY 10036-8299

Telephone No.: (212) 969-3000

Facsimile No.: (212) 969-2900

E-mail Address: akansler@proskauer.com

Attn: Adam J. Kansler

    	 

14

 

Annex A

Plan of Distribution

       The selling stockholders may, from time to time, sell any or all of their shares of
common stock on any stock exchange, market or trading facility on which the shares are traded or in
private transactions. These sales may be at fixed or negotiated prices. The selling stockholders
may use any one or more of the following methods when selling shares:

	•	 	ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;
	 
	•	 	block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell
a portion of the block as principal to facilitate the transaction;
	 
	•	 	purchases by a broker-dealer as principal and resale by the broker-dealer for its account;
	 
	•	 	an exchange distribution in accordance with the rules of the applicable exchange;
	 
	•	 	privately negotiated transactions;
	 
	•	 	short sales;
	 
	•	 	broker-dealers may agree with the selling stockholders to sell a specified number of such shares at a
stipulated price per share;
	 
	•	 	a combination of any such methods of sale; and
	 
	•	 	any other method permitted pursuant to applicable law.

     The selling stockholders may also sell shares under Rule 144 under the Securities Act, if
available, rather than under this prospectus.

     The selling stockholders may also engage in short sales against the box, puts and calls and
other transactions in our securities or derivatives of our securities and may sell or deliver
shares in connection with these trades.

     Broker-dealers engaged by the selling stockholders may arrange for other brokers-dealers to
participate in sales. Broker-dealers may receive commissions or discounts from the selling
stockholders (or, if any broker-dealer acts as agent for the purchaser of shares, from the
purchaser) in amounts to be negotiated. The selling stockholders do not expect these commissions
and discounts to exceed what is customary in the types of transactions involved. Any profits on
the resale of shares of common stock by a broker-dealer acting as principal might be deemed to be
underwriting discounts or commissions under the Securities Act. Discounts, concessions,
commissions and similar selling expenses, if any, attributable to the sale of shares will be borne
by a selling stockholder. The selling stockholders may agree to indemnify any

 

 

agent, dealer or broker-dealer that participates in transactions involving sales of the shares if
liabilities are imposed on that person under the Securities Act.

     The selling stockholders may from time to time pledge or grant a security interest in some or
all of the shares of common stock owned by them and, if they default in the performance of their
secured obligations, the pledgees or secured parties may offer and sell the shares of common stock
from time to time under this prospectus after we have filed an amendment to this prospectus under
Rule 424(b)(3) or other applicable provision of the Securities Act of 1933 amending the list of
selling stockholders to include the pledgee, transferee or other successors in interest as selling
stockholders under this prospectus.

     The selling stockholders also may transfer the shares of common stock in other circumstances,
in which case the transferees, pledgees or other successors in interest will be the selling
beneficial owners for purposes of this prospectus and may sell the shares of common stock from time
to time under this prospectus after we have filed an amendment to this prospectus under Rule
424(b)(3) or other applicable provision of the Securities Act of 1933 amending the list of selling
stockholders to include the pledgee, transferee or other successors in interest as selling
stockholders under this prospectus.

     The selling stockholders and any broker-dealers or agents that are involved in selling the
shares of common stock may be deemed to be “underwriters” within the meaning of the Securities Act
in connection with such sales. In such event, any commissions received by such broker-dealers or
agents and any profit on the resale of the shares of common stock purchased by them may be deemed
to be underwriting commissions or discounts under the Securities Act.

     We are required to pay all fees and expenses incident to the registration of the shares of
common stock, other than the fees and disbursements of counsel to the selling stockholders. We
have agreed to indemnify the selling stockholders against certain losses, claims, damages and
liabilities, including liabilities under the Securities Act.

     The selling stockholders have advised us that they have not entered into any agreements,
understandings or arrangements with any underwriters or broker-dealers regarding the sale of their
shares of common stock, nor is there an underwriter or coordinating broker acting in connection
with a proposed sale of shares of common stock by any selling stockholder. If we are notified by
any selling stockholder that any material arrangement has been entered into with a broker-dealer
for the sale of shares of common stock, if required, we will file a supplement to this prospectus.
If the selling stockholders use this prospectus for any sale of the shares of common stock, they
will be subject to the prospectus delivery requirements of the Securities Act.

     The anti-manipulation rules of Regulation M under the Securities Exchange Act of 1934 may
apply to sales of our common stock and activities of the selling stockholders.exv10w1

 

Exhibit 10.1

Tatum, LLC

Full-Time Permanent Engagement Resources Agreement

January 1, 2007

Xponential, Inc.

6400 Atlantic Blvd., Suite 190

Norcross, GA 30071

Dear Mr. Moyers:

Tatum, LLC (“Tatum”) understands that each of Xponential, Inc. (“Xponential”) and American
IronHorse Motorcycle Company, Inc. (“American Ironhorse”) (collectively, the “Company”) desire to
hire Robert Schleizer, one of our partners, as an employee of the Company (the “Employee”). The
Company acknowledges that the Employee is and will remain a partner in our firm so that he will
have access to our firm’s resources for use in his employment with the Company. This Full-Time
Permanent Engagement Resources Agreement (the “Resources Agreement”) sets forth the rights of the
Company, through the Employee, to use such resources for the benefit of the Company and for the
payment for such services and for making the Employee available for service to the Company.

Since the Employee will be under the control and direct management of the Company, and not Tatum,
Tatum’s obligations to the Company are exclusively those set forth in this Resources Agreement.
This document will serve as the entire agreement between the Company and Tatum.

Compensation

Xponential, on behalf of the Company, will pay directly to Tatum, as compensation for resources
provided, (i) $ 50,000, payable on the date of signing this Resources Agreement (the “Signing Fee”)
and (ii) $1,000 per month during the term of this Resources Agreement, including any months with
respect to which any severance payment is made, payable at the same time the Employee is paid. In
addition, Xponential will pay to Tatum twenty five percent (25%) of Employee’s cash bonuses earned
as an employee of Xponential during the year ended December 31, 2007 payable on the date Employee
receives payment of the bonus and American IronHorse will pay to Tatum twenty five percent (25%) of
Employee’s cash bonuses earned as an employee of American IronHorse during the year ended December
31, 2007 payable on the date Employee receives payment of the bonus. For example, with respect to
the cash bonuses, if Employee is entitled to a $100,000 bonus from Xponential, Xponential will pay
Tatum $25,000 and Employee $75,000.

In addition, the Company acknowledges that the Employee will share with Tatum 15% of any cash
proceeds realized from any Equity Bonus that the Employee may be granted.

For purposes hereof, “Equity Bonus” means any stock, option, warrant, or similar right (i.e., not
yet realized in cash) that is granted, in each case in connection with services rendered by the
Employee and “Salary” means all compensation paid to Employee, except bonuses and benefits
(including medical benefits subsidy paid to Employee). Tatum shall look only to Employee with
respect to payment of any portion of an Equity Bonus. All compensation payable or deliverable to
Tatum is referred to herein as the “Resource Fee.”

Payment of the Signing Fee will be made concurrently with the signing of this Resources Agreement.
All other payments to Tatum should be made by direct deposit through the Company’s payroll, or by
an automated clearing house (“ACH”) payment at the same time as payments are made to the Employee.
If

 

 

such payment method is not available and payments are made by check, Tatum will issue invoices to
the Company, and the Company agrees to pay such invoices no later than ten (10) days after receipt
of invoices.

Termination

This Resources Agreement will terminate immediately upon the effective date of termination or
expiration of the Employee’s employment with Xponential and American IronHorse or upon the Employee
ceasing to be a partner of Tatum.

In the event that either party commits a breach of this Resources Agreement and fails to cure the
same within seven (7) days following delivery by the non-breaching party of written notice
specifying the nature of the breach, the non-breaching party will have the right to terminate this
Resources Agreement immediately effective upon written notice of such termination.

Hiring Employee Outside of Resources Agreement

During the twelve (12)-month period following termination or expiration of this Resources Agreement
other than (i) as a result of Tatum’s termination of Employee’s membership interest in Tatum
without good cause as determined by Tatum in its sole good faith discretion or (ii) other than in
connection with another Tatum agreement, the Company will not employ the Employee, or engage the
Employee as an independent contractor, to render services of substantially the same nature as those
for which Tatum is making the Employee available pursuant to this Resources Agreement. The parties
recognize and agree that a breach by the Company of this provision would result in the loss to
Tatum of the Employee’s valuable expertise and revenue potential and that such injury will be
impossible or very difficult to ascertain. Therefore, in the event this provision is breached,
Tatum will be entitled to receive as liquidated damages an amount equal to forty-five percent (45%)
of the Employee’s Annualized Compensation (as defined below), which amount the parties agree is
reasonably proportionate to the probable loss to Tatum and is not intended as a penalty. If,
however, a court or arbitrator, as applicable, determines that liquidated damages are not
appropriate for such breach, Tatum will have the right to seek actual damages. The amount will be
due and payable to Tatum upon written demand to the Company. For this
purpose, “Annualized
Compensation’’ will mean the Employee’s most recent annual Salary and the maximum amount of any
bonus for which the Employee was eligible with respect to the then current bonus year.

Insurance

The Company will provide Tatum or the Employee with written evidence that the Company maintains
directors’ and officers’ insurance in an amount reasonably acceptable to the Employee at no
additional cost to the Employee, and the Company will maintain such insurance at all times while
this agreement remains in effect.

Furthermore, the Company will maintain such insurance coverage with respect to occurrences arising
during the term of this agreement for at least three years following the termination or expiration
of this agreement or will purchase a directors’ and officers’ extended reporting period, or “tail,”
policy to cover the Employee.

Disclaimers, Limitations of Liability & Indemnity

It is understood that Tatum does not have a contractual obligation to the Company other than to
make its resources available to the Employee (by virtue of the Employee being a partner in Tatum)
for the benefit of the Company under the terms and conditions of this Resources Agreement. The
Resource Fee will be for the resources provided and for making the Employee available for service
to the Company. Tatum

 

 

assumes no responsibility or liability under this Resources Agreement other than to render the
services called for hereunder and will not be responsible for any action taken by the Company in
following or declining to follow any of Tatum’s advice or recommendations.

Tatum represents to the Company that Tatum has conducted its standard screening and investigation
procedures with respect to the Employee becoming a partner in Tatum, and the results of the same
were satisfactory to Tatum. Tatum disclaims all other warranties, either express or implied.
Without limiting the foregoing, Tatum makes no representation or warranty as to the accuracy or
reliability of reports, projections, forecasts, or any other information derived from use of
Tatum’s resources, and Tatum will not be liable for any claims of reliance on such reports,
projections, forecasts, or information. Tatum will not be liable for any non-compliance of
reports, projections, forecasts, or information or services with federal, state, or local laws or
regulations. Such reports, projections, forecasts, or information or services are for the sole
benefit of the Company and not any unnamed third parties.

In the event that any partner of Tatum (including without limitation the Employee to the extent not
otherwise entitled in his or her capacity as an officer of the Company) is subpoenaed or otherwise
required to appear as a witness or Tatum or such partner is required to provide evidence, in either
case in connection with any action, suit, or other proceeding initiated by a third party against
the Company or by the Company against a third party, then the Company shall reimburse Tatum for the
costs and expenses (including reasonable attorneys’ fees) actually incurred by Tatum or such
partner and provide Tatum with compensation at Tatum’s customary rate for the time incurred.

The Company agrees that, with respect to any claims the Company may assert against Tatum in
connection with this Resources Agreement or the relationship arising hereunder, Tatum’s total
liability will not exceed two (2) months of the then current monthly Resource Fee.

As a condition for recovery of any liability, the Company must assert any claim against Tatum
within three (3) months after discovery or sixty (60) days after the termination or expiration of
this Resources Agreement, whichever is earlier.

Tatum will not be liable in any event for incidental, consequential, punitive, or special damages,
including without limitation, any interruption of business or loss of business, profit, or
goodwill.

Arbitration

If the parties are unable to resolve any dispute arising out of or in connection with this
Resources Agreement, either party may refer the dispute to arbitration by a single arbitrator
selected by the parties according to the rules of the American Arbitration Association (“AAA”), and
the decision of the arbitrator will be final and binding on both parties. Such arbitration will be
conducted by the Atlanta, Georgia office of the AAA. In the event that the parties fail to agree
on the selection of the arbitrator within thirty (30) days after either party’s request for
arbitration under this paragraph, the arbitrator will be chosen by AAA. The arbitrator may in his
discretion order documentary discovery but shall not allow depositions without a showing of
compelling need. The arbitrator will render his decision within ninety (90) days after the call
for arbitration. The arbitrator will have no authority to award punitive damages. Judgment on the
award of the arbitrator may be entered in and enforced by any court of competent jurisdiction. The
arbitrator will have no authority to award damages in excess or in contravention of this Resources
Agreement and may not amend or disregard any provision herein. Notwithstanding the foregoing, no
issue related to the ownership of intellectual property will be subject to arbitration but will
instead be subject to determination by a court of competent jurisdiction, and either party may seek
injunctive relief in any court of competent jurisdiction.

 

 

Miscellaneous

Tatum will be entitled to receive all reasonable costs and expenses incidental to the collection of
overdue amounts under this Resources Agreement, including but not limited to reasonable attorneys’
fees actually incurred.

The Company agrees to allow Tatum to use the Company’s logo and name on Tatum’s website and other
marketing materials for the sole purpose of identifying the Company as a client of Tatum. Tatum
will not use the Company’s logo or name in any press release or general circulation advertisement
without the Company’s prior written consent.

Neither the Company nor Tatum will be deemed to have waived any rights or remedies accruing under
this Resources Agreement unless such waiver is in writing and signed by the party electing to waive
the right or remedy. This Resources Agreement binds and benefits the successors of Tatum and the
Company.

Neither party will be liable for any delay or failure to perform under this Resources Agreement
(other than with respect to payment obligations) to the extent such delay or failure is a result of
an act of God, war, earthquake, civil disobedience, court order, labor dispute, or other cause
beyond such party’s reasonable control.

The terms of this Resources Agreement are severable and may not be amended except in a writing
signed by Tatum and the Company. If any portion of this Resources Agreement is found to be
unenforceable, the rest of the Resources Agreement will be enforceable except to the extent that
the severed provision deprives either party of a substantial portion of its bargain.

The provisions in this Resources Agreement concerning payment of compensation and reimbursement of
costs and expenses, limitation of liability, directors’ and officers’ insurance, and arbitration
will survive any termination or expiration of this Resources Agreement.

This Resources Agreement will be governed by and construed in all respects in accordance with the
laws of the State of Georgia, without giving effect to conflicts-of-laws principles.

Nothing in this Resources Agreement shall confer any rights upon any person or entity other than
the parties hereto and their respective successors and permitted assigns and the Employee.

Each person signing below is authorized to sign on behalf of the party indicated, and in each case
such signature is the only one necessary.

Anything herein to the contrary notwithstanding, this Resources Agreement supersedes all prior
agreements between Tatum and the Company relating to Employee effective as of January 1, 2007.

Bank Lockbox Mailing Address for Deposit and Resource Fee only:

Tatum, LLC

P.O. Box 403291

Atlanta, GA 30384-3291

 

 

Electronic Payment Instructions for Deposit and Resource Fee:

	 	 	 
	Bank Name: Bank of America
	 	 
	Branch: Atlanta
	 	 
	Routing Number:

	 	For ACH Payments: XXXXXXX
	 

	 	For Wires: XXXXXX
	Account Name: Tatum, LLC
	 	 
	Account Number: XXXXXXX
	 	 
	Please reference Xponential in the body of the wire.

Although Xponential and American IronHorse are both parties to this Resources Agreement and
collectively defined as the “Company,” the obligations of each of Xponential and American IronHorse
hereunder relate only to the employment of Robert Schleizer by such entity. Neither Xponential nor
American IronHorse are assuming the obligations of the other party or otherwise guaranteeing the
performance of any obligations of the other party hereunder.

Please sign below and return a signed copy of this letter to indicate the Company’s agreement with
its terms and conditions.

We look forward to serving you.

Sincerely yours,

	 	 	 
	TATUM, LLC
	 
	 	 
	By:

	 	/s/ Douglas M. Payne
	 

	 	 
	 
	 	 
	Area Managing Partner for TATUM, LLC
	 
	 	 
	Date:

	 	May 23, 2007
	 

	 	 
	 
	 	 

Acknowledged and agreed by:

	 	 	 	 	 
	 	 	Xponential, Inc.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Dwayne A. Moyers
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Title:
	 	Chief Executive Officer
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Date:
	 	May 21, 2007
	 

	 	 	 	 
	 
	 	 	 	 
	 	 	American IronHorse Motorcycle Company, Inc.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Dwayne A. Moyers
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Title:
	 	Chairman
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Date:
	 	May 21, 2007

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