Document:

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                                                                   EXHIBIT 10.35

                    ENDOCARE, INC. 2004 STOCK INCENTIVE PLAN

                          NOTICE OF STOCK OPTION AWARD

     Grantee's Name and Address:        ________________________________________

                                        ________________________________________

                                        ________________________________________

      You (the "Grantee") have been granted an option to purchase shares of
Common Stock, subject to the terms and conditions of this Notice of Stock Option
Award (the "Notice"), the Endocare, Inc. 2004 Stock Incentive Plan, as amended
from time to time (the "Plan") and the Stock Option Award Agreement (the "Option
Agreement") attached hereto, as follows. Unless otherwise defined herein, the
terms defined in the Plan shall have the same defined meanings in this Notice.

      Award Number                      ________________________________________

      Date of Award                     ________________________________________

      Vesting Commencement Date         ________________________________________

      Exercise Price per Share          $_______________________________________

      Total Number of Shares Subject
      to the Option (the "Shares")      ________________________________________

      Total Exercise Price              $_______________________________________

      Type of Option:                   _________  Incentive Stock Option

                                        _________  Non-Qualified Stock Option

      Expiration Date:                  ________________________________________

      Post-Termination Exercise
      Period:                           Three (3) Months

Vesting Schedule:

      Subject to the Grantee's Continuous Service and other limitations set
forth in this Notice, the Plan and the Option Agreement, the Option may be
exercised, in whole or in part, in accordance with the following schedule:

      25% of the Shares subject to the Option shall vest twelve months after the
Vesting Commencement Date, and 1/48 of the Shares subject to the Option shall
vest on each monthly anniversary of the Vesting Commencement Date thereafter.

      During any authorized leave of absence, the vesting of the Option as
provided in this schedule shall be suspended after the leave of absence exceeds
a period of ninety (90) days. Vesting of the Option shall resume upon the
Grantee's termination of the leave of absence and

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return to service to the Company or a Related Entity. The Vesting Schedule of
the Option shall be extended by the length of the suspension.

      In the event of the Grantee's change in status from Employee to Consultant
or from an Employee whose customary employment is 20 hours or more per week to
an Employee whose customary employment is fewer than 20 hours per week, vesting
of the Option shall continue only to the extent determined by the Administrator
as of such change in status.

      IN WITNESS WHEREOF, the Company and the Grantee have executed this Notice
and agree that the Option is to be governed by the terms and conditions of this
Notice, the Plan, and the Option Agreement.

                                           Endocare, Inc.,
                                           a Delaware corporation

                                           By:  _______________________________

                                           Title: _____________________________

THE GRANTEE ACKNOWLEDGES AND AGREES THAT THE SHARES SUBJECT TO THE OPTION SHALL
VEST, IF AT ALL, ONLY DURING THE PERIOD OF THE GRANTEE'S CONTINUOUS SERVICE (NOT
THROUGH THE ACT OF BEING HIRED, BEING GRANTED THE OPTION OR ACQUIRING SHARES
HEREUNDER). THE GRANTEE FURTHER ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS
NOTICE, THE OPTION AGREEMENT, OR THE PLAN SHALL CONFER UPON THE GRANTEE ANY
RIGHT WITH RESPECT TO FUTURE AWARDS OR CONTINUATION OF THE GRANTEE'S CONTINUOUS
SERVICE, NOR SHALL IT INTERFERE IN ANY WAY WITH THE GRANTEE'S RIGHT OR THE RIGHT
OF THE COMPANY OR RELATED ENTITY TO WHICH THE GRANTEE PROVIDES SERVICES TO
TERMINATE THE GRANTEE'S CONTINUOUS SERVICE, WITH OR WITHOUT CAUSE, AND WITH OR
WITHOUT NOTICE. THE GRANTEE ACKNOWLEDGES THAT UNLESS THE GRANTEE HAS A WRITTEN
EMPLOYMENT AGREEMENT WITH THE COMPANY TO THE CONTRARY, THE GRANTEE'S STATUS IS
AT WILL.

      The Grantee acknowledges receipt of a copy of the Plan and the Option
Agreement, and represents that he or she is familiar with the terms and
provisions thereof, and hereby accepts the Option subject to all of the terms
and provisions hereof and thereof. The Grantee has reviewed this Notice, the
Plan, and the Option Agreement in their entirety, has had an opportunity to
obtain the advice of counsel prior to executing this Notice, and fully
understands all provisions of this Notice, the Plan and the Option Agreement.
The Grantee hereby agrees that all questions of interpretation and
administration relating to this Notice, the Plan and the Option Agreement shall
be resolved by the Administrator in accordance with Section 13 of the Option
Agreement. The Grantee further agrees to the venue selection and waiver of a
jury trial in accordance with Section 14 of the Option Agreement. The Grantee
further agrees to notify the Company upon any change in the residence address
indicated in this Notice.

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Dated: __________________           Signed: _________________________________
                                                         Grantee

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                                                       AWARD NUMBER: ___________

                    ENDOCARE, INC. 2004 STOCK INCENTIVE PLAN

                          STOCK OPTION AWARD AGREEMENT

      1. Grant of Option. Endocare, Inc., a Delaware corporation (the
"Company"), hereby grants to the Grantee (the "Grantee") named in the Notice of
Stock Option Award (the "Notice"), an option (the "Option") to purchase the
Total Number of Shares of Common Stock subject to the Option (the "Shares") set
forth in the Notice, at the Exercise Price per Share set forth in the Notice
(the "Exercise Price") subject to the terms and provisions of the Notice, this
Stock Option Award Agreement (the "Option Agreement") and the Company's 2004
Stock Incentive Plan, as amended from time to time (the "Plan"), which are
incorporated herein by reference. Unless otherwise defined herein, the terms
defined in the Plan shall have the same defined meanings in this Option
Agreement.

      If designated in the Notice as an Incentive Stock Option, the Option is
intended to qualify as an Incentive Stock Option as defined in Section 422 of
the Code. However, notwithstanding such designation, to the extent that the
aggregate Fair Market Value of Shares subject to Options designated as Incentive
Stock Options which become exercisable for the first time by the Grantee during
any calendar year (under all plans of the Company or any Parent or Subsidiary of
the Company) exceeds $100,000, such excess Options, to the extent of the Shares
covered thereby in excess of the foregoing limitation, shall be treated as
Non-Qualified Stock Options. For this purpose, Incentive Stock Options shall be
taken into account in the order in which they were granted, and the Fair Market
Value of the Shares shall be determined as of the date the Option with respect
to such Shares is awarded.

      2. Exercise of Option.

            (a) Right to Exercise. The Option shall be exercisable during its
term in accordance with the Vesting Schedule set out in the Notice and with the
applicable provisions of the Plan and this Option Agreement. The Option shall be
subject to the provisions of Section 11 of the Plan relating to the
exercisability or termination of the Option in the event of a Corporate
Transaction or Change in Control. The Grantee shall be subject to reasonable
limitations on the number of requested exercises during any monthly or weekly
period as determined by the Administrator. In no event shall the Company issue
fractional Shares.

            (b) Method of Exercise. The Option shall be exercisable by delivery
of an exercise notice (a form of which is attached as Exhibit A) or by such
other procedure as specified from time to time by the Administrator which shall
state the election to exercise the Option, the whole number of Shares in respect
of which the Option is being exercised, and such other provisions as may be
required by the Administrator. The exercise notice shall be delivered in person,
by certified mail, or by such other method (including electronic transmission)
as determined from time to time by the Administrator to the Company accompanied
by payment of the Exercise Price. The Option shall be deemed to be exercised
upon receipt by the Company of such notice accompanied by the Exercise Price,
which, to the extent selected, shall be deemed to

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be satisfied by use of the broker-dealer sale and remittance procedure to pay
the Exercise Price provided in Section 3(d), below.

            (c) Taxes. No Shares will be delivered to the Grantee or other
person pursuant to the exercise of the Option until the Grantee or other person
has made arrangements acceptable to the Administrator for the satisfaction of
applicable income tax and employment tax withholding obligations, including,
without limitation, such other tax obligations of the Grantee incident to the
receipt of Shares or the disqualifying disposition of Shares received on
exercise of an Incentive Stock Option. Upon exercise of the Option, the Company
or the Grantee's employer may offset or withhold (from any amount owed by the
Company or the Grantee's employer to the Grantee) or collect from the Grantee or
other person an amount sufficient to satisfy such tax withholding obligations.

      3. Method of Payment. Payment of the Exercise Price shall be made by any
of the following, or a combination thereof, at the election of the Grantee;
provided, however, that such exercise method does not then violate any
Applicable Law and, provided further, that the portion of the Exercise Price
equal to the par value of the Shares must be paid in cash or other legal
consideration permitted by the Delaware General Corporation Law:

            (a) cash;

            (b) check;

            (c) surrender of Shares or delivery of a properly executed form of
attestation of ownership of Shares as the Administrator may require which have a
Fair Market Value on the date of surrender or attestation equal to the aggregate
Exercise Price of the Shares as to which the Option is being exercised,
provided, however, that Shares acquired under the Plan or any other equity
compensation plan or agreement of the Company must have been held by the Grantee
for a period of more than six (6) months (and not used for another Award
exercise by attestation during such period); or

            (d) payment through a broker-dealer sale and remittance procedure
pursuant to which the Grantee (i) shall provide written instructions to a
Company-designated brokerage firm to effect the immediate sale of some or all of
the purchased Shares and remit to the Company sufficient funds to cover the
aggregate exercise price payable for the purchased Shares and (ii) shall provide
written directives to the Company to deliver the certificates for the purchased
Shares directly to such brokerage firm in order to complete the sale
transaction.

      4. Restrictions on Exercise. The Option may not be exercised if the
issuance of the Shares subject to the Option upon such exercise would constitute
a violation of any Applicable Laws. If the exercise of the Option within the
applicable time periods set forth in Section 6, 7 and 8 of this Option Agreement
is prevented by the provisions of this Section 5, the Option shall remain
exercisable until one (1) month after the date the Grantee is notified by the
Company that the Option is exercisable, but in any event no later than the
Expiration Date set forth in the Notice.

      5. Termination or Change of Continuous Service. In the event the Grantee's
Continuous Service terminates, the Grantee may, but only during the
Post-Termination Exercise

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Period, exercise the portion of the Option that was vested at the date of such
termination (the "Termination Date"). The Post-Termination Exercise Period shall
commence on the Termination Date. In no event, however, shall the Option be
exercised later than the Expiration Date set forth in the Notice. In the event
of the Grantee's change in status from Employee, Director or Consultant to any
other status of Employee, Director or Consultant, the Option shall remain in
effect. In the event of the Grantee's change in status from Employee to Director
or Consultant, vesting of the Option shall continue only to the extent
determined by the Administrator as of such change in status; provided, however,
that with respect to any Incentive Stock Option that shall remain in effect
after a change in status from Employee to Director or Consultant, such Incentive
Stock Option shall cease to be treated as an Incentive Stock Option and shall be
treated as a Non-Qualified Stock Option on the day three (3) months and one (1)
day following such change in status. Except as provided in Sections 6 and 7
below, to the extent that the Option was unvested on the Termination Date, or if
the Grantee does not exercise the vested portion of the Option within the
Post-Termination Exercise Period, the Option shall terminate.

      6. Disability of Grantee. In the event the Grantee's Continuous Service
terminates as a result of his or her Disability, the Grantee may, but only
within twelve (12) months commencing on the Termination Date (but in no event
later than the Expiration Date), exercise the portion of the Option that was
vested on the Termination Date; provided, however, that if such Disability is
not a "disability" as such term is defined in Section 22(e)(3) of the Code and
the Option is an Incentive Stock Option, such Incentive Stock Option shall cease
to be treated as an Incentive Stock Option and shall be treated as a
Non-Qualified Stock Option on the day three (3) months and one (1) day following
the Termination Date. To the extent that the Option was unvested on the
Termination Date, or if the Grantee does not exercise the vested portion of the
Option within the time specified herein, the Option shall terminate. Section
22(e)(3) of the Code provides that an individual is permanently and totally
disabled if he or she is unable to engage in any substantial gainful activity by
reason of any medically determinable physical or mental impairment which can be
expected to result in death or which has lasted or can be expected to last for a
continuous period of not less than twelve (12) months.

      7. Death of Grantee. In the event of the termination of the Grantee's
Continuous Service as a result of his or her death, or in the event of the
Grantee's death during the Post-Termination Exercise Period or during the twelve
(12) month period following the Grantee's termination of Continuous Service as a
result of his or her Disability, the person who acquired the right to exercise
the Option pursuant to Section 8 may exercise the portion of the Option that was
vested at the date of termination within twelve (12) months commencing on the
date of death (but in no event later than the Expiration Date). To the extent
that the Option was unvested on the date of death, or if the vested portion of
the Option is not exercised within the time specified herein, the Option shall
terminate.

      8. Transferability of Option. The Option, if an Incentive Stock Option,
may not be transferred in any manner other than by will or by the laws of
descent and distribution and may be exercised during the lifetime of the Grantee
only by the Grantee. The Option, if a Non-Qualified Stock Option, may not be
transferred in any manner other than by will or by the laws of descent and
distribution, provided, however, that a Non-Qualified Stock Option may be
transferred during the lifetime of the Grantee by gift or pursuant to a domestic
relations order to members of the Grantee's Immediate Family to the extent and
in the manner determined by the

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Administrator. Notwithstanding the foregoing, the Grantee may designate one or
more beneficiaries of the Grantee's Incentive Stock Option or Non-Qualified
Stock Option in the event of the Grantee's death on a beneficiary designation
form provided by the Administrator. Following the death of the Grantee, the
Option, to the extent provided in Section 7, may be exercised (a) by the person
or persons designated under the deceased Grantee's beneficiary designation or
(b) in the absence of an effectively designated beneficiary, by the Grantee's
legal representative or by any person empowered to do so under the deceased
Grantee's will or under the then applicable laws of descent and distribution.
The terms of the Option shall be binding upon the executors, administrators,
heirs, successors and transferees of the Grantee.

      9. Term of Option. The Option must be exercised no later than the
Expiration Date set forth in the Notice or such earlier date as otherwise
provided herein. After the Expiration Date or such earlier date, the Option
shall be of no further force or effect and may not be exercised.

      10. Tax Consequences. Set forth below is a brief summary as of the date of
this Option Agreement of some of the federal tax consequences of exercise of the
Option and disposition of the Shares. THIS SUMMARY IS NECESSARILY INCOMPLETE,
AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE GRANTEE SHOULD
CONSULT A TAX ADVISER BEFORE EXERCISING THE OPTION OR DISPOSING OF THE SHARES.

            (a) Exercise of Incentive Stock Option. If the Option qualifies as
an Incentive Stock Option, there will be no regular federal income tax liability
upon the exercise of the Option, although the excess, if any, of the Fair Market
Value of the Shares on the date of exercise over the Exercise Price will be
treated as income for purposes of the alternative minimum tax for federal tax
purposes and may subject the Grantee to the alternative minimum tax in the year
of exercise. However, the Internal Revenue Service issued proposed regulations
which would subject the Grantee to withholding at the time the Grantee exercises
an Incentive Stock Option for Social Security and Medicare based upon the
excess, if any, of the Fair Market Value of the Shares on the date of exercise
over the Exercise Price. These proposed regulations are subject to further
modification by the Internal Revenue Service and, if adopted, would be effective
only for the exercise of an Incentive Stock Option that occurs two years after
the regulations are issued in final form.

            (b) Exercise of Incentive Stock Option Following Disability. If the
Grantee's Continuous Service terminates as a result of Disability that is not
permanent and total disability as such term is defined in Section 22(e)(3) of
the Code, to the extent permitted on the date of termination, the Grantee must
exercise an Incentive Stock Option within three (3) months of such termination
for the Incentive Stock Option to be qualified as an Incentive Stock Option.
Section 22(e)(3) of the Code provides that an individual is permanently and
totally disabled if he or she is unable to engage in any substantial gainful
activity by reason of any medically determinable physical or mental impairment
which can be expected to result in death or which has lasted or can be expected
to last for a continuous period of not less than twelve (12) months.

            (c) Exercise of Non-Qualified Stock Option. On exercise of a
Non-Qualified Stock Option, the Grantee will be treated as having received
compensation income (taxable at

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ordinary income tax rates) equal to the excess, if any, of the Fair Market Value
of the Shares on the date of exercise over the Exercise Price. If the Grantee is
an Employee or a former Employee, the Company will be required to withhold from
the Grantee's compensation or collect from the Grantee 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.

            (d) Disposition of Shares. In the case of a Non-Qualified Stock
Option, if Shares are held for more than one year, any gain realized on
disposition of the Shares will be treated as long-term capital gain for federal
income tax purposes. In the case of an Incentive Stock Option, if Shares
transferred pursuant to the Option are held for more than one year after receipt
of the Shares and are disposed more than two years after the Date of Award, any
gain realized on disposition of the Shares also will be treated as capital gain
for federal income tax purposes and subject to the same tax rates and holding
periods that apply to Shares acquired upon exercise of a Non-Qualified Stock
Option. If Shares purchased under an Incentive Stock Option are disposed of
prior to the expiration of such one-year or two-year periods, any gain realized
on such disposition will be treated as compensation income (taxable at ordinary
income rates) to the extent of the difference between the Exercise Price and the
lesser of (i) the Fair Market Value of the Shares on the date of exercise, or
(ii) the sale price of the Shares.

      11. Entire Agreement: Governing Law. The Notice, the Plan and this Option
Agreement 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 the Grantee with respect to the subject matter
hereof, and may not be modified adversely to the Grantee's interest except by
means of a writing signed by the Company and the Grantee. Nothing in the Notice,
the Plan and this Option Agreement (except as expressly provided therein) is
intended to confer any rights or remedies on any persons other than the parties.
The Notice, the Plan and this Option Agreement are to be construed in accordance
with and governed by the internal laws of the State of California without giving
effect to any choice of law rule that would cause the application of the laws of
any jurisdiction other than the internal laws of the State of California to the
rights and duties of the parties. Should any provision of the Notice, the Plan
or this Option Agreement be determined to be illegal or unenforceable, such
provision shall be enforced to the fullest extent allowed by law and the other
provisions shall nevertheless remain effective and shall remain enforceable.

      12. Construction. The captions used in the Notice and this Option
Agreement are inserted for convenience and shall not be deemed a part of the
Option for construction or interpretation. Except when otherwise indicated by
the context, the singular shall include the plural and the plural shall include
the singular. Use of the term "or" is not intended to be exclusive, unless the
context clearly requires otherwise.

      13. Administration and Interpretation. Any question or dispute regarding
the administration or interpretation of the Notice, the Plan or this Option
Agreement shall be submitted by the Grantee or by the Company to the
Administrator. The resolution of such question or dispute by the Administrator
shall be final and binding on all persons.

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      14. Venue and Waiver of Jury Trial. The Company, the Grantee, and the
Grantee's assignees pursuant to Section 8 (the "parties") agree that any suit,
action, or proceeding arising out of or relating to the Notice, the Plan or this
Option Agreement shall be brought in the United States District Court for the
Southern District of California (or should such court lack jurisdiction to hear
such action, suit or proceeding, in a New York state court in the County of San
Diego) and that the parties shall submit to the jurisdiction of such court. The
parties irrevocably waive, to the fullest extent permitted by law, any objection
the party may have to the laying of venue for any such suit, action or
proceeding brought in such court. THE PARTIES ALSO EXPRESSLY WAIVE ANY RIGHT
THEY HAVE OR MAY HAVE TO A JURY TRIAL OF ANY SUCH SUIT, ACTION OR PROCEEDING. If
any one or more provisions of this Section 14 shall for any reason be held
invalid or unenforceable, it is the specific intent of the parties that such
provisions shall be modified to the minimum extent necessary to make it or its
application valid and enforceable.

      15. Notices. Any notice required or permitted hereunder shall be given in
writing and shall be deemed effectively given upon personal delivery, upon
deposit for delivery by an internationally recognized express mail courier
service or upon deposit in the United States mail by certified mail (if the
parties are within the United States), with postage and fees prepaid, addressed
to the other party at its address as shown in these instruments, or to such
other address as such party may designate in writing from time to time to the
other party.

      16. Information to Grantee. The Company shall provide to the Grantee,
during the period the Option is outstanding, copies of financial statements of
the Company at least annually.

                                END OF AGREEMENT

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                                    EXHIBIT A

                    ENDOCARE, INC. 2004 STOCK INCENTIVE PLAN

                                 EXERCISE NOTICE

Endocare, Inc.
201 Technology Drive
Irvine, CA  92618
Attention: Secretary

      1. Exercise of Option. Effective as of today, ______________, ___ the
undersigned (the "Grantee") hereby elects to exercise the Grantee's option to
purchase ___________ shares of the Common Stock (the "Shares") of Endocare, Inc.
(the "Company") under and pursuant to the Company's 2004 Stock Incentive Plan,
as amended from time to time (the "Plan") and the [ ] Incentive [ ]
Non-Qualified Stock Option Award Agreement (the "Option Agreement") and Notice
of Stock Option Award (the "Notice") dated ______________, ________. Unless
otherwise defined herein, the terms defined in the Plan shall have the same
defined meanings in this Exercise Notice.

      2. Representations of the Grantee. The Grantee acknowledges that the
Grantee has received, read and understood the Notice, the Plan and the Option
Agreement and agrees to abide by and be bound by their terms and conditions.

      3. Rights as 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 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,
except as provided in Section 10 of the Plan.

      4. Delivery of Payment. The Grantee herewith delivers to the Company the
full Exercise Price for the Shares, which, to the extent selected, shall be
deemed to be satisfied by use of the broker-dealer sale and remittance procedure
to pay the Exercise Price provided in Section 3(d) of the Option Agreement.

      5. Tax Consultation. The Grantee understands that the Grantee may suffer
adverse tax consequences as a result of the Grantee's purchase or disposition of
the Shares. The Grantee represents that the Grantee has consulted with any tax
consultants the Grantee deems advisable in connection with the purchase or
disposition of the Shares and that the Grantee is not relying on the Company for
any tax advice.

      6. Taxes. The Grantee agrees to satisfy all applicable foreign, federal,
state and local income and employment tax withholding obligations and herewith
delivers to the Company the full amount of such obligations or has made
arrangements acceptable to the Company to satisfy such obligations. In the case
of an Incentive Stock Option, the Grantee also agrees, as partial consideration
for the designation of the Option as an Incentive Stock Option, to notify the

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Company in writing within thirty (30) days of any disposition of any shares
acquired by exercise of the Option if such disposition occurs within two (2)
years from the Date of Award or within one (1) year from the date the Shares
were transferred to the Grantee. If the Company is required to satisfy any
foreign, federal, state or local income or employment tax withholding
obligations as a result of such an early disposition, the Grantee agrees to
satisfy the amount of such withholding in a manner that the Administrator
prescribes.

      7. Successors and Assigns. The Company may assign any of its rights under
this Exercise Notice to single or multiple assignees, and this agreement shall
inure to the benefit of the successors and assigns of the Company. This Exercise
Notice shall be binding upon the Grantee and his or her heirs, executors,
administrators, successors and assigns.

      8. Construction. The captions used in this Exercise Notice are inserted
for convenience and shall not be deemed a part of this agreement for
construction or interpretation. Except when otherwise indicated by the context,
the singular shall include the plural and the plural shall include the singular.
Use of the term "or" is not intended to be exclusive, unless the context clearly
requires otherwise.

      9. Administration and Interpretation. The Grantee hereby agrees that any
question or dispute regarding the administration or interpretation of this
Exercise Notice shall be submitted by the Grantee or by the Company to the
Administrator. The resolution of such question or dispute by the Administrator
shall be final and binding on all persons.

      10. Governing Law; Severability. This Exercise Notice is to be construed
in accordance with and governed by the internal laws of the State of California
without giving effect to any choice of law rule that would cause the application
of the laws of any jurisdiction other than the internal laws of the State of
California to the rights and duties of the parties. Should any provision of this
Exercise Notice be determined by a court of law to be illegal or unenforceable,
such provision shall be enforced to the fullest extent allowed by law and the
other provisions shall nevertheless remain effective and shall remain
enforceable.

      11. Notices. Any notice required or permitted hereunder shall be given in
writing and shall be deemed effectively given upon personal delivery, upon
deposit for delivery by an internationally recognized express mail courier
service or upon deposit in the United States mail by certified mail (if the
parties are within the United States), with postage and fees prepaid, addressed
to the other party at its address as shown below beneath its signature, or to
such other address as such party may designate in writing from time to time to
the other party.

      12. Further Instruments. The parties agree to execute such further
instruments and to take such further action as may be reasonably necessary to
carry out the purposes and intent of this agreement.

      13. Entire Agreement. The Notice, the Plan and the Option Agreement are
incorporated herein by reference and together with this Exercise Notice
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 the Grantee with respect to the subject matter
hereof, and may not be modified adversely to the Grantee's interest except by

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means of a writing signed by the Company and the Grantee. Nothing in the Notice,
the Plan, the Option Agreement and this Exercise Notice (except as expressly
provided therein) is intended to confer any rights or remedies on any persons
other than the parties.

Submitted by:                               Accepted by:

GRANTEE:                                    ENDOCARE, INC.

                                            By: _______________________________

                                            Title: ____________________________
 ___________________________________
             (Signature)

Address:                                    Address:

 ___________________________________        201 Technology Drive

 ___________________________________        Irvine, CA  92618

                                       3<PAGE>
                                                                   Exhibit 10.36

LERACH COUGHLIN STOIA GELLER
  RUDMAN & ROBBINS LLP
PATRICK J. COUGHLIN (111070)
JEFFREY W. LAWRENCE (166806)
ELI R. GREENSTEIN (217945)
SHANA E. SCARLETT (217895)
100 Pine Street, Suite 2600
San Francisco, CA  94111
Telephone:  415/288-4545
415/288-4534 (fax)
       -  and  -
WILLIAM S. LERACH (68581)
JOY ANN BULL (138009)
401 B Street, Suite 1700
San Diego, CA  92101
Telephone:  619/231-1058
619/231-7423 (fax)
Lead Counsel for Plaintiffs
[Additional counsel appear on signature page.]

                          UNITED STATES DISTRICT COURT

                         CENTRAL DISTRICT OF CALIFORNIA

                                WESTERN DIVISION

GARY M. SLUTSKY, et al., On Behalf of  )  No. CV-02-8429-DT(CTx)
Themselves and All Others Similarly    )  (Consolidated with CV-02-8455-DT,
Situated,                              )  CV-02-8905-DT, CV-02-9669-DT,
                        Plaintiffs,    )  CV-03-499-DT, CV-03-598-DT and
      vs.                              )  CV-03-922-DT)
ENDOCARE, INC., et al.,                )  CLASS ACTION
                        Defendants.    )  ------------
                                       )  STIPULATION OF SETTLEMENT
                                       )
<PAGE>
      This Stipulation of Settlement dated as of November 1, 2004 (the
"Stipulation"), is made and entered into by and among the following Settling
Parties (as defined further in Section IV hereof) to the above-entitled action:
(i) Lead Plaintiffs (on behalf of themselves and each of the other Settlement
Class Members), by and through Lead Counsel; and (ii) Defendants, by and through
their counsel of record. The Stipulation is intended by the Settling Parties to
fully, finally and forever resolve, discharge and settle the Released Claims (as
defined below), upon and subject to the terms and conditions hereof.

I. THE LITIGATION

      On and after November 1, 2002, seven class action complaints were filed in
the United States District Court for the Central District of California (the
"Court"):

<TABLE>
<CAPTION>
                                                                                           DATE
             ABBREVIATED CASE NAME                                  CASE NUMBER           FILED
<S>                                                                 <C>                  <C>
1.   Slutsky, et al. v. Endocare, Inc., et al.                       CV-02-8429          11/01/02
2.   Ferrari v. Endocare, Inc., et al.                               CV-02-8455          11/04/02
3.   Desert Orchid Partners v. Endocare, Inc., et al.                CV-03-499           11/04/02
4.   Berman v. Endocare, Inc., et al.                                CV-03-598           11/12/02
5.   Kuper v. Endocare, Inc., et al.                                 CV-02-9669          11/14/02
6.   Bradford v. Endocare, Inc., et al.                              CV-02-8905          11/20/02
7.   Bolton v. Paul Mikus, et al.                                    CV-03-922           12/20/02
</TABLE>

      By Order dated February 10, 2003, the cases were consolidated.
Subsequently, plaintiffs filed the Consolidated Class Action Complaint for
Violation of the Federal Securities Laws. Defendants filed a motion to dismiss
that was denied by the Court on April 26, 2004. The operative complaint and the
claims contained therein are referred to herein as the "Litigation."

                                     - 1 -
<PAGE>
II. CLAIMS OF THE LEAD PLAINTIFFS AND BENEFITS OF SETTLEMENT

      The Lead Plaintiffs believe that the claims asserted in the Litigation
have merit and that the evidence developed to date supports the claims. However,
counsel for the Lead Plaintiffs recognize and acknowledge the expense and length
of continued proceedings necessary to prosecute the Litigation against the
Defendants through trial and appeals. Counsel for the Lead Plaintiffs also have
taken into account the uncertain outcome and the risk of any litigation,
especially in complex actions such as this Litigation, as well as the
difficulties and delays inherent in such litigation. Counsel for the Lead
Plaintiffs also are mindful of the inherent problems of proof under and possible
defenses to the federal securities law violations asserted in the Litigation, as
well as the economic status of the company. Counsel for the Lead Plaintiffs
believe that the Settlement set forth in this Stipulation confers substantial
benefits upon the Settlement Class. Based on their evaluation, counsel for the
Lead Plaintiffs have determined that the Settlement set forth in this
Stipulation is in the best interests of the Lead Plaintiffs and the Settlement
Class.

III. DEFENDANTS' STATEMENT AND DENIALS OF WRONGDOING AND LIABILITY

      The Defendants expressly have denied and continue to deny all charges of
wrongdoing or liability against them arising out of any of the conduct,
statements, acts or omissions alleged, or that could have been alleged, in the
Litigation. The Defendants also have denied and continue to deny, inter alia,
the allegations that the Lead Plaintiffs or the Settlement Class have suffered
damage, that the price of Endocare common stock was artificially inflated by
reasons of the alleged misrepresentations, non-disclosures or otherwise, or that
the Lead Plaintiffs or the Settlement Class were harmed by the conduct alleged
in the Litigation.

      Nonetheless, the Defendants have concluded that further conduct of the
Litigation would be protracted and expensive, and that it is desirable that the
Litigation be fully and finally settled in the manner and upon the terms and
conditions

                                     - 2 -
<PAGE>
set forth in this Stipulation. The Defendants have also taken into account the
uncertainty and risks inherent in any litigation, especially in complex cases
like this Litigation. The Defendants have, therefore, determined that it is
desirable and beneficial to them that the Litigation be settled in the manner
and upon the terms and conditions set forth in this Stipulation.

IV. TERMS OF STIPULATION AND AGREEMENT OF SETTLEMENT

      NOW, THEREFORE, IT IS HEREBY STIPULATED AND AGREED by the Lead Plaintiffs
for themselves and on behalf of the other Settlement Class Members, and by
Defendants, by and through their respective counsel, that, subject to the
approval of the Court as set forth herein, the Litigation and the Released
Claims shall be finally and fully compromised, settled and released, and the
Litigation shall be dismissed with prejudice, as to the Settling Parties, and
the Released Persons, upon and subject to the terms and conditions of this
Stipulation, as follows.

      1. DEFINITIONS

      As used in the Stipulation, the following terms have the meanings
specified below:

      1.1 "Authorized Claimant" means any claimant whose timely claim for
recovery has been allowed pursuant to the terms of the Stipulation and the Plan
of Allocation.

      1.2 "Claimant" means any Settlement Class Member who files a Proof of
Claim in such form and manner, and within such time, as the Court shall
prescribe.

      1.3 "Claims Administrator" means RG/2 Claims Administration LLC.

      1.4 "Defendants" means Endocare and the Individual Defendants.

      1.5 "Endocare" means Endocare, Inc.

      1.6 "Effective Date" means the first date by which all of the events and
conditions specified in P. 8.1 of this Stipulation have occurred or have been
met.

                                     - 3 -
<PAGE>
      1.7 "Escrow Agent" means Lerach Coughlin Stoia Geller Rudman & Robbins LLP
or its successor(s).

      1.8 "Final" means the latest of:

            (a) the date of final affirmance of any appeal of any judgment or
order of dismissal, the expiration of the time for a petition for a writ of
certiorari or writ of review to review any judgment or order of dismissal and,
if certiorari or review is granted, the date of final affirmance of any judgment
or order of dismissal following review pursuant to that grant; or

            (b) the date of final dismissal or withdrawal of any appeal from any
judgment or order of dismissal or the final dismissal, denial or withdrawal of
any proceeding on certiorari or writ of review to review any judgment or order
of dismissal; or

            (c) the expiration date of the time for the filing or noticing of
any appeal from any judgment or order of dismissal.

      1.9 "Individual Defendants" means Paul Mikus and John V. Cracchiolo.

      1.10 "Judgment" means the Final Judgment and Order of Dismissal with
Prejudice to be rendered by the Court, substantially in the form attached hereto
as Exhibit B.

      1.11 "Lead Counsel" means Joy Ann Bull, Lerach Coughlin Stoia Geller
Rudman & Robbins LLP, 401 B Street, Suite 1700, San Diego, California 92101, and
Jeffrey W. Lawrence, Lerach Coughlin Stoia Geller Rudman & Robbins LLP, 100 Pine
Street, Suite 2600, San Francisco, California 94111.

      1.12 "Lead Plaintiffs" means Massachusetts State Guaranteed Annuity Fund,
Massachusetts State Carpenters Pension Fund, and Bill and Jayni Crow.

      1.13 "Notice Order" means the order preliminarily approving the Settlement
provided for in P. 4.1.

      1.14 "Person" means a natural person, individual, corporation,
partnership, limited partnership, association, joint venture, joint stock
company, estate, legal

                                     - 4 -
<PAGE>
representative, trust, unincorporated association, government or any political
subdivision or agency thereof, and any business or legal entity and their/its
heirs, executors, administrators, predecessors, successors, representatives, or
assignees.

      1.15 "Plan of Allocation" means a plan or formula of allocation of the
Settlement Fund which shall be described in the "Notice of Pendency and Proposed
Settlement of Class Action" to be sent to Settlement Class Members in connection
with the Settlement whereby the Settlement Fund shall be distributed to
Authorized Claimants after payment of expenses of notice and administration of
the Settlement, any taxes, penalties or interest or tax preparation fees owed by
the Settlement Fund, and such attorneys' fees, expenses and interest as may be
awarded by the Court. The Plan of Allocation is not part of this Stipulation.

      1.16 "Preliminary Approval" means the approval granted by the Court in the
Notice Order or an order signed by the Court substantially in the form attached
hereto as Exhibit A.

      1.17 "Related Parties" means each of a Defendant's current and former
employees, agents, directors, officers, legal representatives, predecessors,
successors, parents, subsidiaries, divisions, joint ventures, assigns,
executors, administrators, insurers, reinsurers, spouses, heirs, related or
affiliated entities, any entity in which any Defendant and/or any member of an
Individual Defendant's immediate family has a controlling interest, any members
of the Individual Defendants' immediate families, or any trust of which any
Defendant is the settlor or which is for the benefit of any Defendant and/or
member(s) of his family.

      1.18 "Released Claims" shall collectively mean all claims (including
"Unknown Claims" as defined in P. 1.27 hereof), demands, rights, liabilities and
causes of action of every nature and description whatsoever, known or unknown,
whether or not concealed or hidden, asserted or that might have been asserted,
including, without limitation, claims for negligence, gross negligence, breach
of duty of care and/or breach of duty of loyalty, fraud, breach of fiduciary
duty or violations of any state or

                                     - 5 -
<PAGE>
federal statutes, rules or regulations, by any Lead Plaintiff or Settlement
Class Member against the Defendants arising out of, based upon or related to
both the acquisition of Endocare common stock by any Settlement Class Member
during the Settlement Class Period and the facts, transactions, events,
occurrences, acts, disclosures, statements, omissions or failures to act which
were or could have been alleged in the Litigation, based upon the facts which
were alleged.

      1.19 "Released Persons" means each and all of the Defendants and their
Related Parties, and specifically excludes KPMG, LLP.

      1.20 "Settlement" means the terms and conditions set forth in this
Stipulation of Settlement.

      1.21 "Settlement Class" means all Persons, excluding the Defendants,
members of the immediate family of each of the Individual Defendants, any entity
in which any Defendant has a controlling interest and the legal representatives,
officers, directors, heirs, successors or assigns of any excluded party, who
acquired Endocare common stock between February 8, 2001 and October 31, 2002,
inclusive. Also excluded from the Settlement Class are those Persons who submit
a Request for Exclusion pursuant to the Notice of Pendency and Proposed
Settlement of Class Action to be sent to the Settlement Class.

      1.22 "Settlement Class Member" or "Member of the Settlement Class" mean a
Person who falls within the definition of the Settlement Class as set forth in
P. 1.21 of the Stipulation. 1.23 "Settlement Class Period" means the period from
February 8, 2001 through October 31, 2002, inclusive.

      1.24 "Settlement Fund" means the principal amount of Eight Million Nine
Hundred Fifty Thousand Dollars ($8.95 million) together with any interest earned
or accrued thereon, while in escrow or as provided by P. 2.1 of this
Stipulation.

      1.25 "Settlement Hearing" means the hearing to determine whether the
proposed settlement of the Litigation should be approved as fair, reasonable and

                                     - 6 -
<PAGE>
adequate; whether the proposed Plan of Allocation of the Net Settlement Fund (as
defined in P. 6.2(d)) should be approved; and whether the application of Lead
Counsel for attorneys' fees and expenses should be approved.

      1.26 "Settling Parties" means, collectively, each of the Defendants, and
the Lead Plaintiffs on behalf of themselves and each of the Settlement Class
Members.

      1.27 "Unknown Claims" means any Released Claims which the Lead Plaintiffs
or any other Settlement Class Members do not know or suspect to exist in their
favor at the time of the release of the Released Persons which, if known by
them, might have affected their settlement with and release of the Released
Persons, or might have affected their decision whether to object to this
Settlement. With respect to any and all Unknown Claims and Released Claims
against the Released Persons, the Settling Parties stipulate and agree that,
upon the Effective Date, the Lead Plaintiffs shall expressly waive and
relinquish, and the other Settlement Class Members shall be deemed to have, and
by operation of the Judgment shall have, expressly waived and relinquished, to
the fullest extent permitted by law, the provisions, rights, and benefits
conferred by Section 1542 of the California Civil Code, which provides:

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

The Lead Plaintiffs shall expressly and each of the Settlement Class Members
shall be deemed to have, and by operation of the Judgment shall have, expressly
waived any and all provisions, rights and benefits conferred by any law of any
state or territory of the United States, or principle of common law, or of
international or foreign law, which is similar, comparable or equivalent to
Section 1542 of the California Civil Code. The Lead Plaintiffs and the other
Settlement Class Members may hereafter discover facts in addition to or
different from those which he, she or it now knows or believes to be

                                     - 7 -
<PAGE>
true with respect to the Unknown Claims and Released Claims, but hereby
stipulate and agree that upon the Effective Date, the Lead Plaintiffs fully,
finally and forever settle and release, and each other Settlement Class Member
shall be deemed to have, and by operation of the Judgment shall have, fully,
finally, and forever settled and released any and all Unknown Claims and
Released Claims against the Released Persons, known or unknown, suspected or
unsuspected, contingent or non-contingent, whether or not concealed or hidden,
which now exist, or heretofore have existed, upon any theory of law or equity
now existing or coming into existence in the future, including, but not limited
to, conduct which is negligent, intentional, with or without malice, or a breach
of any duty, law or rule, without regard to the subsequent discovery or
existence of such different or additional facts. The Settling Parties
acknowledge that the foregoing waiver was bargained for and a key element of the
Settlement of which the release in this P. 1.27 is a part.

      2. ESTABLISHMENT AND MAINTENANCE OF THE SETTLEMENT FUND

      2.1 Endocare shall pay or cause to be paid Eight Million Four Hundred and
Fifty Thousand Dollars ($8,450,000) into an interest bearing escrow account
maintained by the Escrow Agent within thirty (30) days from the date of
Preliminary Approval. If the agreed upon amount is not paid before the above
date, the unpaid amount shall bear interest at 5% per annum from the date due
until such amount is received by the Escrow Agent.

      2.2 The Individual Defendants shall pay $250,000 each into an interest
bearing escrow account maintained by the Escrow Agent within thirty (30) days
from the date of Preliminary Approval. If the agreed upon amount is not paid
before the above date, the unpaid amount shall bear interest at 5% per annum
from the date due until such amount is received by the Escrow Agent.

      2.3 As a material part of the Settlement, Defendants agree to provide
plaintiffs, within ten (10) business days of Preliminary Approval, access to all
paper documents produced to the SEC by Endocare in connection with the current
SEC

                                     - 8 -
<PAGE>
investigation of Endocare and certain of its officers and directors. In
addition, Defendants agree to be interviewed by Lead Counsel at Lead Counsel's
request after Final Approval. With respect to the Individual Defendants, in
light of the pendency of investigations by the SEC and the United States
Department of Justice, Lead Plaintiffs agree that the Individual Defendants may
postpone interviews until such time as such investigations, and any proceedings
arising from such investigations, are completed.

      3. ADMINISTRATION OF THE SETTLEMENT FUND

            A. THE ESCROW AGENT

      3.1 The Escrow Agent shall invest the Settlement Fund in instruments
backed by the full faith and credit of the United States Government or fully
insured by the United States Government or an agency thereof and shall reinvest
the proceeds of these instruments as they mature in similar instruments at the
then-current market rates. Neither Defendants nor Defendants' counsel of record
shall have any responsibility or liability for investment decisions.

      3.2 The Escrow Agent shall not disburse the Settlement Fund except as
provided for in the Stipulation, or by an order of the Court, or with the
written agreement of Defendants' counsel of record and Lead Counsel.

      3.3 The Escrow Agent is authorized to execute such transactions on behalf
of the Settlement Class Members as are consistent with the terms of the
Stipulation.

      3.4 All funds held by the Escrow Agent shall be deemed and considered to
be in custodia legis of the Court, and shall remain subject to the jurisdiction
of the Court, until such time as such funds shall be distributed pursuant to the
Stipulation, the Plan of Allocation and/or further order(s) of the Court.

      3.5 Within ten (10) days after the transfer of the Settlement Fund or a
portion thereof to the Escrow Agent, the Escrow Agent may establish a "Notice
and Administration Fund," and $100,000 may be transferred from the Settlement
Fund to it. The Notice and Administration Fund may be used by Lead Counsel to
pay costs and expenses reasonably and actually incurred in connection with
providing notice to

                                     - 9 -
<PAGE>
the Settlement Class, locating Settlement Class Members, assisting with the
filing of claims, administering and distributing the Settlement Fund to the
Members of the Settlement Class, processing Proof of Claim and Release forms and
paying escrow fees and costs, if any. The Notice and Administration Fund may
also be invested and earn interest as provided for in P. 3.1 of this
Stipulation.

      3.6 On the Effective Date, any balance (including interest) then remaining
in the Notice and Administration Fund, less expenses incurred but not yet paid,
may be transferred by the Escrow Agent to, and deposited and credited as part
of, the Settlement Fund to be applied as set forth in P. 6.2 below. Thereafter,
Lead Counsel shall have the right to use such portions of the Settlement Fund as
are, in their exercise of reasonable judgment, necessary to carry out the
purposes set forth in P. 3.5. Except as permitted by P. P. 3.5, 3.7 and 7.2,
Lead Counsel and the Escrow Agent shall not disburse any portion of the
Settlement Fund prior to the Effective Date.

            B. TAXES

      3.7 (a) The Settling Parties and the Escrow Agent agree to treat the
Settlement Fund as being at all times a "qualified settlement fund" within the
meaning of Treas. Reg. Section 1.468B-1. In addition, the Escrow Agent shall
timely make such elections as necessary or advisable to carry out the provisions
of this P. 3.7, including the "relation-back election" (as defined in Treas.
Reg. Section 1.468B-1) back to the earliest permitted date. Such election shall
be made in compliance with the procedures and requirements contained in such
regulations. It shall be the responsibility of the Escrow Agent to timely and
properly prepare and deliver the necessary documentation for signature by all
necessary parties, and thereafter to cause the appropriate filing to occur.

            (b) For the purposes of Section 468B of the Internal Revenue Code of
1986, as amended and Treas. Reg. Section 1.468B, the "administrator" shall be
the Escrow Agent. The Escrow Agent shall timely and properly file all
informational and other tax returns necessary or advisable with respect to the
Settlement Fund (including without

                                     - 10 -
<PAGE>
limitation the returns described in Treas. Reg.
Section 1.468B-2(k)). Such returns (as well as the election described in P.
3.7(a)) shall be consistent with this P. 3.7 and in all events shall reflect
that all taxes (including any estimated taxes, interest or penalties) on the
income earned by the Settlement Fund shall be paid out of the Settlement Fund as
provided in P. 3.7(c) hereof.

            (c) All (i) taxes (including any estimated taxes, interest or
penalties) arising with respect to the income earned by the Settlement Fund
("Taxes") and (ii) expenses and costs incurred in connection with the operation
and implementation of this P. 3.7 (including, without limitation, expenses of
tax attorneys and/or accountants and mailing and distribution costs and expenses
relating to filing (or failing to file) the returns described in this P. 3.7)
("Tax Expenses"), shall be paid out of the Settlement Fund; in all events the
Defendants shall have no liability or responsibility for the Taxes, the Tax
Expenses, or the filing of any tax returns or other documents with the Internal
Revenue Service or any other state or local taxing authority. The Escrow Agent
shall indemnify and hold Defendants harmless for Taxes and Tax Expenses
(including, without limitation, Taxes payable by reason of any such
indemnification). Further, Taxes and Tax Expenses shall be treated as, and
considered to be, a cost of administration of the Settlement and shall be timely
paid by the Escrow Agent out of the Settlement Fund without prior order from the
Court, and the Escrow Agent shall be obligated (notwithstanding anything herein
to the contrary) to withhold from distribution to Authorized Claimants any funds
necessary to pay such amounts (as well as any amounts that may be required to be
withheld under Treas. Reg. Section 1.468B-2(1)(2)); the Defendants are not
responsible and shall have no liability therefor, or for any reporting
requirements that may relate thereto. The Settling Parties hereto agree to
cooperate with the Escrow Agent, each other, and their tax attorneys and
accountants to the extent reasonably necessary to carry out the provisions of
this P. 3.7.

                                     - 11 -
<PAGE>
            (d) For the purpose of this P. 3.7, references to the Settlement
Fund shall include both the Settlement Fund and the Notice and Administration
Fund, and shall also include any earnings thereon.

            C. TERMINATION

      3.8 In the event that the Stipulation is not approved, or is terminated,
canceled, or fails to become effective for any reason, the Settlement Fund
(including accrued interest) and the funds in the Notice and Administration Fund
(less expenses actually paid, incurred or due and owing in connection with the
Settlement provided for herein) shall be refunded pro rata to the entities
making the payments as provided in P. 8.6 below.

            D. BANKRUPTCY CONTINGENCY

      3.9 If a case is commenced with respect to Endocare under Title 11 of the
United States Code (Bankruptcy), or a trustee, receiver or conservator is
appointed under any similar law, and in the event of the entry of a final order
of a court of competent jurisdiction determining the transfer of the payment
pursuant to P. 2.1, or any portion thereof, to be a preference, voidable
transfer, fraudulent conveyance or similar transaction as to Endocare, then, as
to Endocare only, the releases given and Judgment entered in favor of Endocare
pursuant to this Stipulation shall be null and void, but only to the extent of
any recovery of such preference, voidable transfer, fraudulent conveyance, or
similar transaction. The release given and the Judgment entered in favor of the
other Defendants shall remain in effect.

      4. NOTICE ORDER AND SETTLEMENT HEARING

      4.1 Promptly after execution of the Stipulation, the Settling Parties
shall submit the Stipulation together with its Exhibits to the Court and shall
jointly apply for entry of the Notice Order, substantially in the form of
Exhibit A attached hereto, requesting preliminary approval of the Settlement set
forth in this Stipulation, and approval for the mailing of the Notice of
Pendency and Proposed Settlement of Class Action ("Notice") and publication of a
summary notice substantially in the forms of

                                     - 12 -
<PAGE>
Exhibits A-1 and A-3 attached hereto. The Notice shall include the general terms
of the Settlement set forth in the Stipulation, the proposed Plan of Allocation,
the general terms of the Fee and Expense Application and the date of the
Settlement Hearing.

      4.2 After notice is given, Lead Counsel will request that the Court
approve the proposed Plan of Allocation and the Fee and Expense Application, and
the Settling Parties shall request and obtain from the Court a Final Judgment
essentially identical to the form attached to this Stipulation as Exhibit B. The
Final Judgment will (among other things):

            (a) find that the Court has personal jurisdiction over all
Settlement Class Members and that the Court has subject matter jurisdiction to
approve the Stipulation; including all exhibits thereto;

            (b) approve the Stipulation and the proposed settlement as fair,
reasonable and adequate as to, and in the best interests of, each of the
Settling Parties and the Settlement Class Members; direct the Settling Parties
and their counsel to implement and consummate the Stipulation according to its
terms and provisions; and declare the Stipulation to be binding on, and have res
judicata and preclusive effect in all pending and future lawsuits or other
proceedings maintained by or on behalf of, Lead Plaintiffs and all other
Settlement Class Members, as well as their heirs, executors and administrators,
successors and assigns;

            (c) finally certify the Settlement Class for settlement purposes;

            (d) find that the Notice, the Summary Notice and the notice
methodology implemented pursuant to the Stipulation (i) constitute the best
practicable notice, (ii) constitute notice that is reasonably calculated, under
the circumstances, to apprise Settlement Class Members of the pendency of the
Litigation, their right to object to or exclude themselves from the proposed
settlement and to appear at the Settlement Hearing, (iii) are reasonable and
constitute due, adequate and sufficient notice to all Persons entitled to
receive notice, and (iv) meet all applicable

                                     - 13 -
<PAGE>
requirements of the Federal Rules of Civil Procedure, the Due Process Clause of
the United States Constitution and the applicable Rules of the Court;

            (e) find that Lead Counsel and the Lead Plaintiffs adequately
represented the Settlement Class for purposes of entering into and implementing
the Settlement;

            (f) dismiss the Litigation (including all individual claims and
Settlement Class claims presented thereby) on the merits and with prejudice,
without fees or costs to any party except as provided in the Stipulation;

            (g) incorporate the releases set forth above in P. 5.1 to P. 5.2
below;

            (h) find that, pursuant to Section 21D of the Securities Exchange
Act of 1934 (the "Exchange Act"), 15 U.S.C. Section 78u-4(f)(7), and federal
case law, the Judgment bars and permanently enjoins all Persons from instituting
or prosecuting any action or proceeding against the Defendants for equitable,
partial, comparative, or complete contribution, or indemnity however
denominated, arising out of or relating in any way to the Released Claims;

            (i) bar and enjoin all Settlement Class Members who have not been
excluded from the Settlement Class from (i) filing, commencing, prosecuting,
intervening in, or participating (as class members or otherwise) in, any lawsuit
in any jurisdiction based on the Released Claims;

            (j) without affecting the finality of the Final Judgment for
purposes of appeal, retain jurisdiction as to all matters relating to
administration, consummation, enforcement and interpretation of the Stipulation
and the Final Judgment, and for any other necessary purpose; and

            (k) incorporate any other provisions, as the Court deems necessary
and just.

      5. RELEASES

      5.1 Upon the Effective Date, as defined in P. 1.6 hereof, the Lead
Plaintiffs and each of the Settlement Class Members shall be deemed to have, and
by operation

                                     - 14 -
<PAGE>
of the Judgment shall have, fully, finally, and forever released, relinquished
and discharged all Released Claims (including Unknown Claims) against each and
all of the Released Persons, whether or not such Settlement Class Member
executes and delivers the Proof of Claim and Release.

      5.2 Upon the Effective Date, as defined in P. 1.6 hereof, each of the
Released Persons shall be deemed to have, and by operation of the Judgment shall
have, fully, finally, and forever released, relinquished and discharged each and
all of the Settlement Class Members, the Lead Plaintiffs and Lead Counsel, from
all claims (including Unknown Claims), arising out of, relating to, or in
connection with the institution, prosecution, assertion, settlement or
resolution of the Litigation or the Released Claims.

      5.3 Only those Settlement Class Members filing valid and timely Proof of
Claim and Release forms shall be entitled to participate in the Settlement and
receive a distribution from the Settlement Fund. The Proof of Claim and Release
to be executed by Settlement Class Members shall release all Released Claims
against the Released Persons, and shall be substantially in the form contained
in Exhibit A-2 attached hereto. All Settlement Class Members shall be bound by
the releases set forth in this Section IV.5 whether or not they submit a valid
and timely Proof of Claim and Release.

      6.    ADMINISTRATION AND CALCULATION OF CLAIMS AND SUPERVISION AND
            DISTRIBUTION OF THE SETTLEMENT FUND

      6.1 The Claims Administrator shall administer and calculate the claims
submitted by Settlement Class Members. Defendants shall have no role in or
responsibility for the review or evaluation of Proof of Claim and Release forms.
This is not a claims-made settlement and, if all conditions under the
Stipulation are satisfied, the Settlement becomes Final, and the Settlement is
not successfully collaterally attacked, no portion of the Settlement Fund will
be returned to any Defendant or their insurers.

                                     - 15 -
<PAGE>
      6.2 The Settlement Fund shall be applied as follows:

            (a) to pay all unpaid costs and expenses reasonably and actually
incurred in connection with providing notice, including locating Settlement
Class Members, assisting with the filing of claims, administering and
distributing the Settlement Fund to the Settlement Class, processing Proof of
Claim and Release forms and paying escrow fees and costs, if any;

            (b) to pay Taxes and Tax Expenses;

            (c) to pay Lead Counsel's attorneys' fees and expenses, with
interest thereon (the "Fee and Expense Award"), if and to the extent allowed by
the Court; and

            (d) to distribute the balance of the Settlement Fund (the "Net
Settlement Fund") to Authorized Claimants as allowed by the Stipulation, the
Plan of Allocation, or the Court.

      6.3 Upon the Effective Date and thereafter, in accordance with the terms
of this Stipulation, the Plan of Allocation, or such further approval and
further order(s) of the Court as may be necessary or as circumstances may
require, the Net Settlement Fund shall be distributed to Authorized Claimants,
subject to and in accordance with the following:

            (a) Within ninety (90) days after the mailing of the Notice or such
other time as may be set by the Court, each Person claiming to be an Authorized
Claimant shall be required to submit to the Claims Administrator a completed
Proof of Claim and Release, substantially in the form of Exhibit A-2 attached
hereto, signed under penalty of perjury and supported by such documents as
specified in the Proof of Claim and Release and as are reasonably available to
the Authorized Claimant.

            (b) Except as otherwise ordered by the Court, all Settlement Class
Members who fail to timely submit valid Proof of Claim and Release forms within
such period, or such other period as may be ordered by the Court, shall be
forever barred from receiving any payments pursuant to this Stipulation and the
Settlement set

                                     - 16 -
<PAGE>
forth herein, but will in all other respects be subject to and bound by the
provisions of this Stipulation, the Settlement and releases contained herein,
and the Judgment.

            (c) The Net Settlement Fund shall be distributed to the Authorized
Claimants substantially in accordance with a Plan of Allocation to be described
in the Notice mailed to Settlement Class Members and approved by the Court. The
Plan of Allocation shall not be a part of the Stipulation. If there is any
balance remaining in the Net Settlement Fund after six (6) months from the date
of distribution of the Net Settlement Fund (whether by reason of tax refunds,
uncashed checks or otherwise), Lead Counsel shall, if feasible, reallocate such
balance among Authorized Claimants in an equitable and economic fashion.
Thereafter, any balance which still remains in the Net Settlement Fund shall be
donated to an appropriate non-profit organization. Any orders or proceedings
relating to the Plan of Allocation shall not operate to terminate or cancel this
Stipulation, and shall have no effect on the finality of the Judgment.

      6.4 The Defendants shall not have any responsibility for, interest in, or
liability whatsoever with respect to the investment or distribution of the
Settlement Fund, the Plan of Allocation, the determination or administration of
taxes, or any losses incurred in connection therewith. No Person shall have any
claim of any kind against Defendants, or Defendants' counsel with respect to the
matters set forth in this Section IV.6; and the Settlement Class Members and
Lead Counsel release Defendants and their counsel of record from any and all
liability and claims with respect to the investment or distribution of the
Settlement Fund.

      6.5 No Person shall have any claim against Lead Counsel, the Claims
Administrator, or any entity designated by Lead Counsel, based on distributions
made substantially in accordance with the Stipulation and the Settlement
contained herein, the Plan of Allocation, or further order(s) of the Court.

                                     - 17 -
<PAGE>
      7.    LEAD COUNSEL'S ATTORNEYS' FEES AND REIMBURSEMENT OF EXPENSES

      7.1 Lead Counsel may submit an application or applications (the "Fee and
Expense Application") for distributions to them from the Settlement Fund for:
(i) an award of attorneys' fees; plus (ii) reimbursement of expenses incurred in
connection with prosecuting the Litigation, including the fees and expenses of
any experts or consultants, incurred in connection with prosecuting the
Litigation; plus (iii) interest on such attorneys' fees and expenses at the same
rate and for the same periods as earned by the Settlement Fund (until paid), as
may be awarded by the Court. Lead Counsel reserve the right to make additional
applications for fees and expenses incurred.

      7.2 Subject to the following sentence, the attorneys' fees and expenses,
including the fees and expenses of experts and consultants, as awarded by the
Court, shall be transferred to Lead Counsel from the Settlement Fund,
immediately after the Court executes the Fee and Expense Award. However, no such
distribution shall occur until entry of the Judgment. In the event that the
Judgment or the order making the Fee and Expense Award is reversed or modified
on appeal, and in the event that the Fee and Expense Award has been paid to any
extent, then Lead Counsel shall within five (5) business days from the event
which precludes the Effective Date from occurring, refund to the Settlement Fund
the fees, expenses and interest previously paid to them from the Settlement
Fund, including accrued interest on any such amount at the average rate earned
on the Settlement Fund from the time of withdrawal until the date of refund. As
a condition of receiving such fees and expenses, Lead Counsel, on behalf of
itself and each of its partners, agrees that the law firm and its partners are
subject to the jurisdiction of the Court for the purpose of enforcing this P.
7.2 of this Stipulation. Without limitation, Lead Counsel and its partners agree
that the Court may, upon application of Defendants and notice to Lead Counsel,
summarily issue orders, including, but not limited to, judgments and attachment
orders, and may make

                                     - 18 -
<PAGE>
appropriate findings of or sanctions for contempt, against them or any of them
should such law firm fail timely to repay fees and expenses pursuant to this P.
7.2 of this Stipulation.

      7.3 Defendants and their Related Parties shall have no responsibility for,
and no liability whatsoever with respect to, any payment to Lead Counsel or any
other Person who receives payment from the Settlement Fund.

      7.4 Defendants and their Related Parties shall have no responsibility for,
and no liability whatsoever with respect to any Fee and Expense Award that this
Court may make, and Defendants and the Released Persons take no position with
respect to such matters.

      7.5 The procedure for and the allowance or disallowance by the Court of
any applications by any of the counsel for the Lead Plaintiffs for attorneys'
fees and expenses, including the fees and expenses of experts and consultants,
to be paid out of the Settlement Fund, are not part of the Settlement set forth
in this Stipulation, and are to be considered by the Court separately from the
Court's consideration of the fairness, reasonableness and adequacy of the
Settlement set forth in this Stipulation, and any order or proceeding relating
to the Fee and Expense Application, or any appeal from any order relating
thereto, shall not operate to terminate or cancel the Stipulation, or affect or
delay the finality of the Judgment approving this Stipulation and the Settlement
of the Litigation set forth herein.

      8.    CONDITIONS OF SETTLEMENT, EFFECT OF DISAPPROVAL, CANCELLATION OR
            TERMINATION

      8.1 The Effective Date of the Stipulation shall be conditioned on the
occurrence of the following events:

            (a) Defendants shall have timely transferred or caused to be timely
transferred the Settlement Fund to the Escrow Agent as set forth in P. P.
2.1-2.2 above;

            (b) Defendants have provided access to the documents described in P.
2.3 above;

                                     - 19 -
<PAGE>
            (c) the Court has entered the Notice Order, as required by P. 4.1,
above;

            (d) the Court has entered the Judgment, or a judgment substantially
in the form of Exhibit B attached hereto; and (e) the Judgment of the Court has
become Final, as defined in P. 1.8, above.

      8.2 Upon the occurrence of all of the events referenced in P. 8.1 above,
any and all remaining interest or right of Defendants in or to the Settlement
Fund, if any, shall be absolutely and forever extinguished.

      8.3 Neither a modification nor a reversal on appeal of any Plan of
Allocation or of any amount of attorneys' fees, expenses and interest awarded by
the Court to Lead Counsel shall constitute grounds for cancellation and
termination of this Stipulation.

      8.4 If prior to the Settlement Hearing, any Persons who otherwise would be
Members of the Settlement Class have timely requested exclusion ("Requests for
Exclusion") from the Settlement Class in accordance with the provisions of the
Notice Order and the notice given pursuant thereto, and such Persons in the
aggregate purchased a number of shares of Endocare common stock during the
Settlement Class Period in an amount greater than the sum specified in a
separate "Supplemental Agreement" between the Settling Parties, Endocare shall
have, in its sole and absolute discretion, the option to terminate this
Stipulation in accordance with the procedures set forth in the Supplemental
Agreement. The Supplemental Agreement will not be filed with the Court unless
and until a dispute among the Settling Parties concerning its interpretation or
application arises. Copies of all Requests for Exclusion received, together with
copies of all written revocations of Requests for Exclusion, shall be delivered
to Defendants' counsel of record within five (5) business days of receipt by
Lead Plaintiffs or Lead Counsel but in no event later than seven (7) business
days before the Settlement Hearing. Endocare may terminate the Stipulation by
serving written notice of termination on the Court and Lead Counsel by hand
delivery or first

                                     - 20 -
<PAGE>
class mail, postmarked on or before five (5) business days after the Court
grants additional exclusion for any reason, or on or before three (3) business
days before the Settlement Hearing, whichever occurs last.

      8.5 If all of the conditions specified in P. 8.1 hereof are not met, then
this Stipulation shall be canceled and terminated unless Lead Counsel and
Defendants' counsel mutually agree in writing to proceed with this Stipulation.

      8.6 Unless otherwise ordered by the Court, in the event this Stipulation
shall terminate, or be canceled, or shall not become effective for any reason,
within five (5) business days after written notification of such event is sent
by Defendants' counsel or Lead Counsel to the Escrow Agent, the Settlement Fund
(including accrued interest), plus any amount then remaining in the Notice and
Administration Fund (including accrued interest) and less expenses and costs
which have either been disbursed pursuant to P. P. 3.5 or 3.6 hereof, or are
determined to be chargeable to the Notice and Administration Fund, shall be
refunded by the Escrow Agent pursuant to written instructions from Defendants'
counsel. In such event the Defendants shall be entitled to any tax refund owing
to the Settlement Fund. At the request of the Defendants or Defendants' counsel,
the Escrow Agent or its designee shall apply for any such refund and pay to
Defendants the proceeds, less the cost of obtaining the tax refund.

      8.7 If the Effective Date does not occur, or if the Stipulation is
terminated pursuant to its terms, the Settling Parties shall be restored to
their respective positions in the Litigation as of October 31, 2004. In such
event, the terms and provisions of the Stipulation, with the exception of P. P.
3.4, 3.7, 3.8, 6.4-6.5, 7.2-7.5, and 8.1-8.8 herein, shall have no further force
and effect with respect to the Settling Parties and shall not be used in the
Litigation or in any other proceeding for any purpose, except as provided
herein. Any judgment or order entered by the Court in accordance with the terms
of this Stipulation shall be treated as vacated nunc pro tunc. No order of the
Court or modification or reversal on appeal of any order of the Court concerning
the

                                     - 21 -
<PAGE>
amount of any attorneys' fees, expenses and interest awarded by the Court to
Lead Counsel shall constitute grounds for cancellation or termination of this
Stipulation.

      8.8 If the Effective Date does not occur, or if the Stipulation is
terminated pursuant to its terms, neither the Lead Plaintiffs nor Lead Counsel
shall have any obligation to repay any amounts actually and properly disbursed
from the Notice and Administration Fund. In addition, any expenses already
incurred and properly chargeable to the Notice and Administration Fund pursuant
to P. 3.5 hereof at the time of such termination or cancellation but which have
not been paid, shall be paid by the Escrow Agent from the Notice and
Administration Fund in accordance with the terms of the Stipulation prior to the
balance being refunded in accordance with P. 8.6 above.

      9.    MISCELLANEOUS PROVISIONS

      9.1 The Settling Parties (a) acknowledge that it is their intent to
consummate this agreement; and (b) agree to cooperate to the extent necessary to
effectuate and implement all terms and conditions of this Stipulation and to
exercise their best efforts to accomplish the foregoing terms and conditions of
this Stipulation.

      9.2 The Settling Parties intend this Stipulation to be a final and
complete resolution of all disputes between them with respect to the Litigation.
The Settlement compromises claims which are contested and shall not be deemed an
admission by any Settling Party as to the merits of any claim or defense. While
retaining their right to deny that the claims advanced in the Litigation were
meritorious, Defendants, in any statement made to any media (whether or not for
attribution), will not deny that the Litigation was filed in good faith and is
being settled voluntarily after consultation with competent legal counsel. The
Final Judgment will contain a statement that during the course of the
Litigation, the Settling Parties and their respective counsel at all times
complied with the requirements of Federal Rule of Civil Procedure 11. The
Settling Parties agree that the amount paid to the Settlement Fund and the other
terms of the Settlement were negotiated in good faith by the Settling Parties,
and reflect a settlement that was reached voluntarily after consultation with
competent legal

                                     - 22 -
<PAGE>
counsel. The Settling Parties reserve their right to rebut, in a manner that
such party determines to be appropriate, any contention made in any public forum
that the Litigation was brought or defended in bad faith or without a reasonable
basis.

      9.3 Neither this Stipulation nor the Settlement contained herein, nor any
act performed or document executed pursuant to or in furtherance of this
Stipulation or the Settlement: (i) is or may be deemed to be or may be used as
an admission of, or evidence of, the validity of any Released Claim, or of any
wrongdoing or liability of the Defendants, or (ii) is or may be deemed to be or
may be used as an admission of, or evidence of, any fault or omission of any of
the Defendants in any civil, criminal or administrative proceeding in any court,
administrative agency or other tribunal. Defendants may file this Stipulation
and/or the Judgment in any action that may be brought against them in order to
support a defense or counterclaim based on principles of res judicata,
collateral estoppel, release, good-faith settlement, judgment bar or reduction
or any theory of claim preclusion or issue preclusion or similar defense or
counterclaim.

      9.4 All agreements made and orders entered during the course of the
Litigation relating to the confidentiality of information shall survive this
Stipulation.

      9.5 All of the Exhibits to the Stipulation are material and integral parts
hereof and are fully incorporated herein by this reference.

      9.6 The Stipulation may be amended or modified only by a written
instrument signed by or on behalf of all Settling Parties or their
successors-in-interest.

      9.7 The Stipulation and the Exhibits attached hereto constitute the entire
agreement among the Settling Parties, and no representations, warranties or
inducements have been made to any Settling Party concerning this Stipulation or
its Exhibits other than the representations, warranties and covenants contained
and memorialized in such documents. Except as otherwise provided herein, each
Settling Party shall bear its own costs.

                                     - 23 -
<PAGE>
      9.8 Lead Counsel, on behalf of the Settlement Class, are expressly
authorized by the Lead Plaintiffs to take all appropriate action required or
permitted to be taken by the Settlement Class pursuant to the Stipulation to
effectuate its terms and also are expressly authorized to enter into any
modifications or amendments to this Stipulation on behalf of the Settlement
Class which they deem appropriate.

      9.9 Each counsel or other Person executing the Stipulation or any of its
Exhibits on behalf of any Settling Party hereby warrants that such Person has
the full authority to do so.

      9.10 The Stipulation may be executed in one or more counterparts. All
executed counterparts and each of them shall be deemed to be one and the same
instrument. A complete set of original executed counterparts shall be filed with
the Court.

      9.11 The Stipulation shall be binding upon, and inure to the benefit of,
the successors and assigns of the Settling Parties.

      9.12 The Court shall retain jurisdiction with respect to implementation
and enforcement of the terms of this Stipulation, and all Settling Parties
submit to the jurisdiction of the Court for purposes of implementing and
enforcing the Settlement embodied in this Stipulation.

      9.13 The Stipulation shall be construed and enforced in accordance with
the laws of the State of California without giving effect to that State's
choice-of-law principles.

                                     - 24 -
<PAGE>
IN WITNESS WHEREOF, the Settling Parties have caused
the Stipulation to be executed, by their duly authorized attorneys dated as of
November 1, 2004.

                                      LERACH COUGHLIN STOIA GELLER
                                      RUDMAN & ROBBINS LLP
                                      PATRICK J. COUGHLIN
                                      JEFFREY W. LAWRENCE
                                      ELI R. GREENSTEIN
                                      SHANA E. SCARLETT
                                      100 Pine Street, Suite 2600
                                      San Francisco, CA 94111
                                      Telephone: 415/288-4545
                                      415/288-4534 (fax)

                                      LERACH COUGHLIN STOIA GELLER
                                      RUDMAN & ROBBINS LLP
                                      WILLIAM S. LERACH
                                      JOY ANN BULL

                                                /s/ JOY ANN BULL
                                      ------------------------------------------
                                                  JOY ANN BULL

                                      401 B Street, Suite 1700
                                      San Diego, CA 92101
                                      Telephone: 619/231-1058
                                      619/231-7423 (fax)

                                      Lead Counsel for Plaintiffs

                                      DeCARLO, CONNOR & SELVO
                                      JOHN T. DeCARLO
                                      533 South Fremont Avenue, 9th Floor
                                      Los Angeles, CA 90071-1706
                                      Telephone: 213/488-4100
                                      213/488-4180 (fax)

                                      Attorneys for Plaintiffs

                                      MORRISON & FOERSTER, LLP
                                      ROBERT STERN

                                                  /s/ ROBERT STERN
                                      ------------------------------------------
                                                    ROBERT STERN

                                     - 25 -
<PAGE>
                                      555 West Fifth Street
                                      Suite 3500
                                      Los Angeles, CA  90013-1024
                                      Telephone:  213/892-5200
                                      213/892-5454 (fax)
                                      Attorneys for Defendant Endocare, Inc.

                                      ORRICK, HERRINGTON &
                                        SUTCLIFFE LLP
                                      REECE BADER

                                                  /s/ REECE BADER
                                      ------------------------------------------
                                                    REECE BADER
                                      1000 Marsh Road
                                      Menlo Park, CA 94025-1021
                                      Telephone:  650/614-7740
                                      650/614-7401 (fax)

                                      Attorneys for Defendant Paul Mikus

                                      COVINGTON & BURLING LLP
                                      JOHN POTTER
                                                  /s/ JOHN POTTER
                                      ------------------------------------------
                                                    JOHN POTTER

                                      One Front Street
                                      San Francisco, CA 94111
                                      Telephone:  415/591-7061
                                      415/955-6561 (fax)
                                      Attorneys for Defendant John Cracchiolo

                                     - 26 -
<PAGE>
                     DECLARATION OF SERVICE BY UPS DELIVERY

      I, the undersigned, declare:

      1. That declarant is and was, at all times herein mentioned, a citizen of
the United States and a resident of the County of San Diego, over the age of 18
years, and not a party to or interest in the within action; that declarant's
business address is 401 B Street, Suite 1700, San Diego, California 92101.

      2. That on November 11, 2004, declarant served by UPS, next day delivery,
the STIPULATION OF SETTLEMENT to the parties listed on the attached Service
List.

      I declare under penalty of perjury that the foregoing is true and correct.
Executed this 11th day of November, 2004, at San Diego, California.

                                                 /s/ YVETTE D. GRAY
                                      ------------------------------------------
                                                   YVETTE D. GRAY

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