COMPENSATION AGREEMENT
                             ----------------------

     Agreement  dated  as  of  the 25th day of June, 2001 by and between John V.
Cracchiolo  ("Optionee")  and  Endocare,  Inc.,  a  Delaware  corporation  (the
"Corporation").
                               W I T N E S S E T H
                               -------------------
     WHEREAS,  Optionee  is  to  provide  services  to  the Corporation, and the
Corporation  wishes  to  provide an equity incentive to Optionee to provide such
services.
NOW, THEREFORE, in consideration of the above promises, the parties hereto agree
as  follows:
On  June  25,  2001, Optionee was granted an option to acquire 300,000 shares of
the Corporation's Common Stock (the "Option") under the terms and conditions set
forth  in  the  Stock  Option  Agreement,  attached  hereto  as  Exhibit  A.
Corporation  and  Optionee  acknowledge  and agree that the Option is granted as
compensation  for  services  and  not  for  any  capital-raising  purposes or in
connection  with  any  capital-raising  activities.
This  agreement is intended to constitute a written employee benefit plan within
the  meaning  of  Rule  405  of  the  Securities  Act  of  1933,  as  amended.
Nothing  herein  or in the Stock Option Agreement shall confer upon Optionee any
right  to  continue  in  the  Corporation's  employ or service for any period of
specific  duration or interfere with or otherwise restrict in any way the rights
of  the  Corporation  or Optionee, which rights are hereby expressly reserved by
each  party, to terminate Optionee's service at any time for any reason, with or
without  cause.
     IN  WITNESS  WHEREOF, the parties hereto have executed this agreement as of
the  date  first  above  written.

          ENDOCARE,  INC.

OPTIONEE:
                          By:

                          Title:


<PAGE>
                                 ENDOCARE, INC.
                             STOCK OPTION AGREEMENT
     Unless  otherwise  defined  herein, the capitalized terms used herein shall
have  the  defined  meanings  in  the  attached  Appendix.
I.     NOTICE  OF  STOCK  OPTION  GRANT
John  V.  Cracchiolo

     You  have  been  granted an option to purchase Common Stock of the Company,
subject  to  the  terms and conditions of this Option Agreement and Compensation
Agreement  attached  hereto  as  Exhibit  A,  as  follows:
                                 ----------
Grant  Number
Date  of  Grant     June  25,  2001
                    ---------------
Vesting  Commencement  Date     June  25,  2001
                                ---------------
Exercise  Price  Per  Share     $13.75
                                ------
Total  Number  of  Shares  Granted     300,000
                                       -------
Total  Exercise  Price     $4,125,000
                           ----------
       Incentive  Stock  Option
Type  of  Option       X  Nonstatutory  Stock  Option
                     ---
Term/Expiration  Date     June  25,  2011
                          ---------------

Nonstatutory  Stock  Option.  This  Option is a nonstatutory stock option and is
---------------------------
not  intended  to  qualify  as  an  incentive stock option within the meaning of
Section  422  of  the  Code.

Vesting  Schedule:
-----------------
     This  Option  may be exercised, in whole or in part, in accordance with the
following  schedule:
62,500 of the Shares subject to the Option shall vest upon Optionee's completion
of twelve (12) months of Service measured from the Vesting Commencement Date and
an  additional  one  thirty-sixth (1/36) of 187,500 of the Shares subject to the
Option shall vest upon Optionee's completion of each additional month of Service
over the thirty-six (36) month period measured from the first anniversary of the
Vesting  Commencement  Date.
The  remaining  50,000  of  the Shares subject to the Option shall vest upon the
earlier  of  (i)  June  25,  2006  or  (ii)  attainment of the performance based
objective  to  be  mutually  agreed upon between Optionee and the Company within
ninety (90) days of the Vesting Commencement Date and to be set forth on Exhibit
                                                                         -------
B  to  this  Option  Agreement.
For  purposes  of  this  Option  Agreement,  "Service" shall mean the Optionee's
performance  of  services  for  the Company (or any Parent or Subsidiary) in the
capacity  of  an  Employee,  Director  or  Consultant.
Termination  Period:
-------------------
     To  the  extent  vested,  this Option may be exercised for ninety (90) days
after  termination  of the Optionee's Service for any reason other than death or
Disability.  However,  if  the Optionee's Service terminates due to the death or
Disability  of  the  Optionee, this Option may be exercised for the time periods
specified  below.  In  no  event  shall  this Option be exercised later than the
Term/Expiration  Date  specified  above.
In  the  event  that  Optionee's  Service as an Employee, Consultant or Director
terminates  as  a result of the Optionee's Disability, the Optionee may exercise
his  Option  at  any  time  within  twelve  (12)  months  from  the date of such
termination, but only to the extent that Optionee was entitled to exercise it at
the  date  of such termination (but in no event later than the expiration of the
term  of  such  Option as set forth in the Notice of Grant).  If, at the date of
termination,  the  Optionee  is  not entitled to exercise the Option for all the
Shares,  then  the Option shall immediately terminate with respect to the Shares
covered  by  the  unexercisable  portion  of  such Option. If, after the date of
Optionee's  termination, the Optionee does not, within the time specified in the
Option,  exercise  his or her Option for all the Shares for which that Option is
exercisable  on  such  termination  date,  then  the Option shall terminate with
respect  to  those  remaining  Shares.
In  the  event  that  Optionee's  Service as an Employee, Consultant or Director
terminates  as  a result of the Optionee's death, the Option may be exercised at
any  time within twelve (12) months following the date of death (but in no event
later  than the expiration of the term of such Option as set forth in the Notice
of  Grant),  by  the Optionee's estate nor by a person who acquired the right to
exercise  the  Option by bequest or inheritance, but only to the extent that the
Optionee  was  entitled  to exercise the Option at the date of death. If, at the
time  of death, the Optionee was not entitled to exercise the Option for all the
Shares,  then  the Option shall immediately terminate with respect to the Shares
covered by the unexercisable portion of such Option. If, after Optionee's death,
the  Optionee's estate or a person who acquired the right to exercise the Option
by  bequest  or  inheritance  does not, within the time specified in the Option,
exercise  the  Option for all the Shares for which that Option is exercisable on
the  date  of  Optionee'  death, then the Option shall terminate with respect to
those  remaining  Shares.


     AGREEMENT
     Grant  of  Option.  The  Company hereby grants to the Optionee named in the
     -----------------
Notice  of Grant attached as Part I of this Option Agreement (the "Optionee") an
option  (the  "Option")  to  purchase  the number of Shares, as set forth in the
Notice  of  Grant,  at  the  exercise price per share set forth in the Notice of
Grant  (the  "Exercise  Price").
     Exercise  of  Option.
     --------------------
     Right  to  Exercise.  This  Option  is  exercisable  during  its  term  in
     -------------------
accordance  with  the  Vesting  Schedule  set out in the Notice of Grant and the
     ----
other  applicable  provisions  of  this  Option  Agreement.  In  the  event  of
Optionee's  death,  Disability  or  other termination of Optionee's Service, the
exercisability  of  the  Option is governed by the applicable provisions of this
Option  Agreement.
     Method  of Exercise.  This Option is exercisable by delivery of an exercise
     -------------------
notice,  in  the form attached as Exhibit C (the "Exercise Notice"), which shall
                                  ---------
state  the  election  to exercise the Option, the number of Shares in respect of
which  the  Option  is  being exercised (the "Exercised Shares"), and such other
representations  and agreements as may be required by the Company.  The Exercise
Notice  shall  be  signed by the Optionee and shall be delivered in person or by
certified  mail  to  the Secretary of the Company.  The Exercise Notice shall be
accompanied  by  payment  of  the  aggregate  Exercise Price as to all Exercised
Shares.  This Option shall be deemed to be exercised upon receipt by the Company
of  such  fully  executed Exercise Notice accompanied by such aggregate Exercise
Price.  The  Option  may  not  be  exercised  for  a  fraction  of  a  Share.
     No  Shares  shall  be issued pursuant to the exercise of this Option unless
such  issuance and exercise complies with all relevant provisions of law and the
requirements  of  any  stock exchange or quotation service upon which the Shares
are  then  listed.  Assuming  such  compliance,  for  income  tax  purposes  the
Exercised Shares shall be considered transferred to the Optionee on the date the
Option is exercised with respect to such Exercised Shares.  The inability of the
Company  to obtain authority from any regulatory body having jurisdiction, which
authority  is  deemed  by  the  Company's  counsel to be necessary to the lawful
issuance  and  sale  of  any  Shares hereunder, shall relieve the Company of any
liability  in  respect  of  the failure to issue or sell such Shares as to which
such  requisite  authority  shall  not  have  been  obtained.
     Rights as a Stockholder. Until the stock certificate evidencing such Shares
     -----------------------
     is  issued  (as  evidenced  by  the  appropriate  entry on the books of the
Company or of a duly authorized transfer agent of the Company), no right to vote
or  receive  dividends  or  any  other  rights as a stockholder shall exist with
respect to the Exercised Shares, notwithstanding the exercise of the Option. The
Company  shall  issue  (or  cause  to be issued) such stock certificate promptly
after  the  Option  is  exercised.  No adjustment will be made for a dividend or
other right for which the record date is prior to the date the stock certificate
is  issued.
     Method of Payment.  Payment of the aggregate Exercise Price shall be by any
     -----------------
of  the  following,  or  a combination thereof, at the election of the Optionee:
     cash;  or
     check;  or
     delivery  of  a  properly executed exercise notice together with such other
documentation  as  the  Company  and the broker, if applicable, shall require to
effect an exercise of the Option and delivery to the Company of the sale or loan
proceeds  required  to  pay  the  exercise  price;  or
     surrender  of  other  Shares  which (i) have been owned by the Optionee for
more  than  six  (6) months on the date of surrender and (ii) have a Fair Market
Value  on  the  date  of  surrender equal to the aggregate Exercise Price of the
Exercised  Shares.
     Limited  Transferability  of  Option.    This  Option  shall  be  neither
     ------------------------------------
transferable  nor  assignable  by  Optionee other than by will or by the laws of
     ---
descent and distribution following Optionee's death and may be exercised, during
     Optionee's  lifetime,  only  by  Optionee.  However,  this  Option  may, in
connection  with  the  Optionee's  estate  plan, be assigned in whole or in part
during Optionee's lifetime to one or more Family Members of the Optionee or to a
trust  established for the exclusive benefit of one or more such Family Members.
The  assigned  portion  shall  be  exercisable only by the person or persons who
acquire  a  proprietary interest in the Option pursuant to such assignment.  The
terms  applicable  to  the assigned portion shall be the same as those in effect
for  this  Option  immediately  prior  to  such  assignment.
     For  purposes  of this Section 5, a "Family Member" shall be limited to the
Optionee's  children,  stepchildren,  grandchildren,  parents,  stepparents,
grandparents,  spouse,  former spouse, siblings, nieces, nephews, mother-in-law,
father-in-law,  son-in-law,  daughter-in-law,  brother-in-law, or sister-in-law,
including  adoptive  relationships,  a  trust  in  which  any  of  the foregoing
individuals  have  more  than  a  fifty  percent  (50%)  beneficial  interest, a
foundation  in  which any of the foregoing individuals (or the Optionee) control
the  management  of  assets,  and any other entity in which any of the foregoing
individuals  (or  Optionee)  own  more  than  fifty  percent (50%) of the voting
interests.
     Term  of Option.  This Option may be exercised only within the term set out
     ---------------
in the Notice of Grant, and may be exercised during such term only in accordance
     with  the  terms  of  this  Option  Agreement.
     Tax  Consequences.  Some  of  the  federal  and  Delaware  tax consequences
     -----------------
relating  to  this  Option,  as of the date of this Option, are set forth below.
THIS  SUMMARY  IS  NECESSARILY  INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE
SUBJECT  TO CHANGE.  THE OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING
THIS  OPTION  OR  DISPOSING  OF  THE  SHARES.
     Exercising  the  Option.  The  Optionee  may  incur  regular  federal  tax
     -----------------------
liability  upon  exercise of the Option.  The Optionee will be treated as having
received compensation income (taxable at ordinary income tax rates) equal to the
     excess,  if  any,  of  the Fair Market Value of the Exercised Shares on the
date  of  exercise  over  their aggregate Exercise Price.  If the Optionee is an
Employee or a former Employee, the Company will be required to withhold from his
or  her  compensation  or collect from Optionee and pay to the applicable taxing
authorities  an amount in cash equal to a percentage of this compensation income
at  the  time  of  exercise,  and may refuse to honor the exercise and refuse to
deliver  Shares  if  such  withholding  amounts are not delivered at the time of
exercise.
     Disposition  of  Shares.  If the Optionee holds the Shares for at least one
     -----------------------
year,  any  gain  realized  on  disposition  of  the  Shares  will be treated as
long-term  capital  gain  for  federal  income  tax  purposes.
1.     Adjustment  in  Option  Shares.  Should  any change be made to the Common
       ------------------------------
Stock  by  reason  of  any  stock  split,  stock  dividend,  recapitalization,
combination  of  shares,  exchange  of  shares  or  other  change  affecting the
outstanding  Common  Stock  as  a  class  without  the  Company's  receipt  of
consideration,  appropriate  adjustments  shall be made to (i) the number and/or
class  of securities subject to this Option and (ii) the Exercise Price in order
to  reflect  such  change  and  thereby  preclude  a  dilution or enlargement of
benefits  hereunder.
     Extraordinary  Events.
     ---------------------
     The  Option  shall  terminate  upon  the occurrence of any of the following
events  ("Extraordinary  Events"):
     The  dissolution, liquidation, or sale of all (or substantially all) of the
assets  of  the  Company;
(i)     Any  reorganization,  merger, or consolidation in which the Company does
not  survive;
(ii)     The  acquisition  by  any person or group (as defined in Section 13D of
the  Exchange  Act)  of beneficial ownership of more than fifty percent (50%) of
the  Company  Stock;  or
(iii)     Any reorganization, merger, or consolidation in which the Company does
survive  but  the  Shares  outstanding immediately preceding the transaction are
converted  by virtue of the transaction into other property, whether in the form
of  securities,  cash,  or  otherwise. However, in no case will an Extraordinary
Event  be  deemed to have occurred as a result of a sale of stock to the Company
or  to  a  holding  company  established  by  the  Company.
     If an Extraordinary Event occurs, the Option shall become fully exercisable
and  Optionee  shall  have  the  right  to exercise any unexpired portion of the
Option  prior to the Extraordinary Event, however, the effectiveness of any such
exercise  shall  be:
(iv)     Conditioned  upon:
(A)     The  Extraordinary  Event  actually  occurring;  and
(B)     The  Company's  receipt of the notice of exercise within the time period
established  by  the  Company;  and
(v)     Delayed  until  immediately  prior  to  the  Extraordinary  Event.
     Entire  Agreement;  Governing  Law.  This  Option  Agreement  and  the
     ----------------------------------
Compensation  Agreement  attached  hereto  as  Exhibit  A  constitute the entire
     ------                                    ----------
agreement of the parties with respect to the subject matter hereof and supersede
     in  their entirety all prior undertakings and agreements of the Company and
Optionee  with  respect  to  the  subject matter hereof, and may not be modified
adversely  to the Optionee's interest except by means of a writing signed by the
Company  and  Optionee.  This  agreement  is governed by Delaware law except for
that  body  of  law  pertaining  to  conflict  of  laws.
     By  your signature and the signature of the Company's representative below,
you  and the Company agree that this Option is granted under and governed by the
terms  and  conditions of the this Option Agreement.  Optionee has reviewed this
Option Agreement in its entirety, has had an opportunity to obtain the advice of
counsel  prior  to  executing  this  Option  Agreement and fully understands all
provisions  of  the  Option  Agreement.  Optionee  hereby  agrees  to  accept as
binding,  conclusive  and  final all decisions or interpretations of the Company
upon any questions relating to the Option Agreement.  Optionee further agrees to
notify  the  Company  upon  any change in the residence address indicated below.

OPTIONEE:
                                               ENDOCARE,  INC,

Signature                                      By:
 Title:  _________________________________
 Date:   ________________,  2001

Address:

          Date:,  2001


                                CONSENT OF SPOUSE
     The  undersigned  spouse of Optionee has read and hereby approves the terms
and  conditions  of  this  Option  Agreement.  In consideration of the Company's
granting  his  or  her  spouse the right to purchase Shares as set forth in this
Option  Agreement,  the undersigned hereby agrees to be irrevocably bound by the
terms  and  conditions  of  this  Option  Agreement  and further agrees that any
community  property  interest  shall be similarly bound.  The undersigned hereby
appoints  the  undersigned's spouse as attorney-in-fact for the undersigned with
respect  to  any  amendment  or  exercise of rights under this Option Agreement.

Spouse  of  Optionee

Date:               __________________,  2001

<PAGE>
                                    EXHIBIT A

                             COMPENSATION AGREEMENT


<PAGE>
                                    EXHIBIT B

                              PERFORMANCE OBJECTIVE


<PAGE>
                                    EXHIBIT C

                                 EXERCISE NOTICE


<PAGE>
                                    APPENDIX
                                    --------


     The  following  definitions  shall be in effect under the Option Agreement:
A.     "CODE"  means  the  Internal  Revenue  Code  of  1986,  as  amended.
B.     "COMMON  STOCK"  means  the  common  stock  of  the  Company.
C.     "COMPANY"  means  Endocare,  Inc.,  a  Delaware  corporation.
D.     "CONSULTANT"  means  any  person,  including  an  advisor, engaged by the
Company  or a Parent or Subsidiary to render services in a non-employee capacity
and  who  is  compensated  for  such  services.
E.     "DIRECTOR"  means  a  member  of  the  Board.
F.     "DISABILITY"  means  total  and  permanent  disability as defined in Code
Section  22(e)(3).
G.     "EMPLOYEE"  means  any person, including Officers and Directors, employed
by the Company or any Parent or Subsidiary of the Company.  Neither service as a
Director  nor  payment of a director's fee by the Company shall be sufficient to
constitute  "employment"  by  the  Company.
H.     "EXCHANGE  ACT"  means  the  Securities Exchange Act of 1934, as amended.
I.     "FAIR  MARKET  VALUE"  means,  as  of any date, the value of Common Stock
determined  as  follows:
     If  the  Common  Stock  is  admitted  to  trading  or  listed on a national
securities  exchange,  Fair  Market  Value shall be the last reported sale price
regular way, or if no such reported sale takes place on that day, the average of
     the  last  reported  bid  and ask prices regular way, in either case on the
principal  national securities exchange on which the Common Stock is admitted to
trading  or  listed.
     If  not  admitted to trading or listed on any national securities exchange,
Fair  Market  Value shall be the last sale price on that day of the Common Stock
reported  on  the  Nasdaq National Market or the Nasdaq SmallCap Market ("Nasdaq
Stock Market") or, if no such reported sale takes place on that day, the average
of  the  closing  bid  and  ask  prices  on  that  day.
If  not  included  on  the  Nasdaq  Stock Market, Fair Market Value shall be the
average  of  the  closing  bid  and  ask  prices of the Common Stock on that day
reported  by  the  Nasdaq electronic bulletin board, or any comparable system on
that  day.
If  the  Common Stock is not included on the Nasdaq electronic bulletin board or
any comparable system, Fair Market Value shall be the closing bid and ask prices
on that day as furnished by any member of the National Association of Securities
Dealers,  Inc.  selected  from  time  to  time  by the Company for that purpose.
J.     "OFFICER"  means  a  person  who  is an officer of the Company within the
meaning  of  Section  16  of  the  Exchange  Act  and  the rules and regulations
promulgated  thereunder.
K.     "OPTION  AGREEMENT"  means  this  Stock  Option  Agreement.
L.     "PARENT" means a "parent corporation," whether now or hereafter existing,
as  defined  in  Section  424(e)  of  the  Code.
M.     "SHARE"  means  a  share  of  the  Common  Stock.
N.     "SUBSIDIARY"  means  a "subsidiary corporation," whether now or hereafter
existing,  as  defined  in  Section  424(f)  of  the  Code.