Form Of Warrant

Form of Warrant

by Endocare, Inc.
September 10th, 1996

   1
                                                                 EXHIBIT 10.9

                                FORM OF WARRANT

THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"), AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED
OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
ACT COVERING SUCH SECURITIES, THE SALE IS MADE IN ACCORDANCE WITH RULE 144
UNDER THE ACT, OR THE COMPANY RECEIVES AN OPINION OF COUNSEL FOR THE HOLDER OF
THESE SECURITIES REASONABLY SATISFACTORY TO THE COMPANY STATING THAT SUCH SALE,
TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND
PROSPECTUS DELIVERY REQUIREMENTS OF THE ACT.


                                 ENDOCARE, INC.

                                    WARRANT


         1.  Number of Shares Subject to Warrant.  FOR VALUE RECEIVED, on and
after the date of this Warrant, and subject to the terms and conditions herein,
______________________, a ______________________ (the "Holder") is entitled to
purchase from Endocare, Inc., a Delaware corporation (the "Company"), at any
time before 5:00 p.m. California time on August 26, 2001 at the Exercise Price
(as defined herein), ______________________________ (_____) shares of fully paid
and nonassessable shares of common stock, par value $.001 per share, of the
Company, subject to adjustment as set forth in Section 3 hereof.

         2.  Definitions.  As used in this Warrant, the following terms shall
have the definitions ascribed to them below:

             (a)     "Company": Endocare, Inc., a Delaware corporation.

             (b)     "Common Stock": Common stock, par value $.001 per share, of
the Company.

             (c)     "Exercise Price": Three Dollars ($3), subject to adjustment
pursuant to Section 3 below.

             (d)     "Holder": ______________________________________________, a
____________________________, and its transferees and assigns.

             (e)     "Notes":  the Convertible Secured Promissory Notes of even
date herewith in favor of the Holder and certain other persons. When used herein
in the singular, "Note" refers to the Convertible Secured Promissory Notes of
even date herewith in favor of the Holder.

             (f)     "Warrant Stock": Shares of Common Stock or other securities
purchasable upon exercise of this Warrant.
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         3.  Adjustment of Exercise Price and Number of Shares. The number of
shares of Warrant Stock issuable upon the exercise hereof and the Exercise Price
shall be subject to adjustment from time to time, and the Company agrees to
provide notice to the Holder upon the occurrence of certain events, as follows:

             (a)     Reclassification, etc.  If the Company at any time, by
subdivision, combination or reclassification of securities or otherwise, changes
any of the securities to which purchase rights under this Warrant exist into the
same or a different number or type of securities of any class or classes, this
Warrant shall thereafter be to acquire such number and kind of securities as
would have been issuable as the result of such change with respect to the
securities which were subject to the purchase rights under this Warrant
immediately prior to such subdivision, combination, reclassification or other
change.  If shares of the Common Stock are split, subdivided, recapitalized,
reclassified or combined into a greater or smaller number of shares, the
Exercise Price shall be proportionately reduced (in the case of actions
resulting in a greater number of outstanding shares) or proportionately
increased (in the case of actions resulting in a smaller number of outstanding
shares), in both cases by the ratio which the total number of shares of Common
Stock outstanding immediately after such event bears to the total number of
shares of Common Stock outstanding immediately prior to such event.

             (b)     Merger, Sale of Assets, etc.  If at any time the Company
proposes to consolidate with or merge with or be acquired by any other
corporation, the Company shall give the Holder thirty (30) days advance notice
of the effective date of such transaction.  Such transactions shall not result
in termination of this Warrant, but this Warrant shall thereupon automatically
be exchanged for and converted into and become a warrant of the surviving or
acquiring corporation that shall entitle the Holder to acquire the number of
shares of stock or other property which the Holder would have been entitled to
receive under the terms of such transaction if the Holder had exercised or
converted this Warrant in full immediately prior to the effective time of such
transaction.

             (c)     Adjustment for Dividends in Stock.  If at any time or from
time to time on or after the date hereof the holders of Common Stock receive, or
become entitled to receive, without payment therefor, other or additional
securities of the Company by way of dividend, then and in each case, the Holder
shall, upon the exercise hereof, be entitled to receive, in addition to the
number of shares of Warrant Stock receivable thereupon, and without payment of
any additional consideration therefor, the amount of such other or additional
securities of the Company which the Holder would hold on the date of such
exercise had it been the holder of record of such Warrant Stock on the date
hereof and had thereafter, during the period from the date hereof to and
including the date of such exercise, retained such shares and/or all other
additional stock receivable by it as aforesaid during such period, giving effect
to all adjustments called for during such period by this paragraph (c).


             (d)     Other Dilutive Events.  If any event shall occur as to
which the provisions of Sections 3(a), 3(b) or 3(c) are not strictly applicable
but the failure to make any adjustment would not fairly protect the purchase
rights represented by this Warrant in accordance with the essential intent and
principles of such sections, then, in each such case, the Company and the Holder
shall appoint a firm of independent public accountants of recognized national





                                      -2-
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standing, which shall give its opinion upon the adjustment, if any, on a basis
consistent with the essential intent and principles established in Sections
3(a), 3(b) and 3(c), necessary to preserve, without dilution, the purchase
rights represented by this Warrant.  Upon receipt of such opinion, the Company
shall promptly cause the adjustments described therein to become effective as
of the occurrence of such event.  The Company shall not, by amendment of its
charter or through any consolidation, merger, reorganization, transfer of
assets, dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms of
this Warrant, but shall at all times in good faith assist in the carrying out
of all such terms and in the taking of all such action as may be necessary or
appropriate in order to protect the Holder's rights against dilution or other
impairment.  Notwithstanding the foregoing, no adjustment to the number of
shares of Warrant Stock issuable upon the exercise hereof or the Exercise Price
shall be made for:  (a) the issuance of any shares of Common Stock, options to
purchase, or other securities convertible or exchangeable into, shares of
Common Stock, or any issuance of shares of Common Stock upon exercise,
conversion or exchange of such securities (each a "Convertible Security"), to
any employee, director, consultant or other agent of the Company pursuant to
any incentive plan, licensing agreement, compensation arrangement, bonus,
award, purchase plan, stock option or other similar arrangement, in each case
adopted by the Board of Directors of the Company; or (b) any other issuance of
Common Stock or Convertible Securities in an amount not to exceed an additional
3,000,000 shares of Common Stock of the Company (not including any shares of
Common Stock issuable pursuant to the provisions of the Notes or any of the
related Warrants), and subject to adjustment of such number for events that
would adjust the number of shares of Warrant Stock issuable upon the exercise
hereof or Exercise Price as set forth in this Section 3.

         4.  No Shareholder Rights.  This Warrant, by itself, as distinguished
from any shares purchased hereunder, shall not entitle the Holder to any of the
rights of a shareholder of the Company.

         5.  Reservation of Stock.  On and after the date of this Warrant, the
Company shall reserve from its authorized and unissued shares of Common Stock a
sufficient number of shares to provide for the issuance of Warrant Stock upon
the exercise this Warrant.

         6.  Exercise of Warrant.  This Warrant may be exercised in whole or
part by the Holder, at any time after the date hereof and prior to the
termination of this Warrant, by the surrender of this Warrant, together with the
Notice of Exercise and Investment Representation Statement attached hereto as
Attachments 1 and 3, respectively, duly completed and executed, at the Company's
principal office, accompanied by payment in full of the Exercise Price in cash
or by check with respect to the shares of Warrant Stock being purchased.  This
Warrant shall be deemed to have been exercised immediately prior to the close of
business on the date of its surrender for exercise, together with the payment in
full of the Exercise Price and documents as provided above, and the person
entitled to receive the shares of Warrant Stock issuable upon such exercises
shall be treated for all purposes as holder of such shares of record as of the
close of business on such date.  As promptly as practicable after such date, the
Company shall issue and deliver to the person or persons entitled to receive the
same a certificate or certificates for the number of full shares of Warrant
Stock issuable upon such exercise.





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         7.  Conversion.  In lieu of exercising this Warrant or any portion
hereof, the Holder shall have the right to convert this Warrant or any portion
hereof into Warrant Stock by executing and delivering to the Company at its
principal office the written notice of conversion in the form attached hereto as
Attachment 2, specifying the portion of the Warrant to be converted, and
accompanied by this Warrant.  Except as provided below, the date of delivery of
such notice shall be the conversion date.  The number of shares of Warrant Stock
to be issued upon such conversion shall be computed using the following formula:

                               X = (P)(Y)(A-B)/A

where           X =  the number of shares of Warrant Stock to be issued to
                     the Holder for the portion of the Warrant being converted.

                P =  the portion of the Warrant being converted.

                Y =  the total number of shares of Warrant Stock issuable
                     upon exercise of the Warrant in full.

                A =  the fair market value of one share of Warrant Stock,
                     which shall mean (i) the average of the daily closing sale
                     prices (or, if no sales are reported, the average of the
                     closing bid and asked prices) of the Common Stock for the
                     thirty (30) trading days before the conversion date or (ii)
                     in the absence of a public market for the Common Stock,
                     such other value as the Company and the Holder shall
                     mutually agree.

                B =  the Exercise Price on the conversion date.

Any portion of this Warrant that is converted shall be immediately canceled.
If, as of the last day of the exercise period, this Warrant has not been fully
exercised, then as of such date this Warrant shall be automatically converted,
in full, in accordance with this section, without any action or notice by the
Holder.  For purposes of such automatic conversion, the date of automatic
conversion shall be the conversion date.

         8.  Certificate of Adjustment.  Whenever the Exercise Price or number
or type of securities issuable upon exercise of this Warrant is adjusted, the
Company shall promptly deliver to the Holder a certificate of an officer of the
Company setting for the nature of such adjustment and a brief statement of the
facts requiring such adjustment.

         9.  Registration Rights.  If the Company at any time determines to
register under the Securities Act of 1933, as amended (the "Securities Act") any
of its Common Stock, either for its own account or for the account of one or
more security holders, other than a registration relating solely to (i) employee
benefit plans or on Form S-8 or (ii) a transaction under SEC Rule 145 or on Form
S-4, the Company shall promptly give the Holder written notice thereof and shall
include in such registration (and any related qualification under blue sky laws
or other compliance) the Warrant Stock specified in a written request from the
Holder made





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within thirty (30) days after receipt of such notice by the Holder; provided,
however, that for purposes of the registration rights set forth in this Section
9, each share of Warrant Stock shall cease to be registrable under this Section
9 when (i) a registration statement covering such Warrant Stock shall have
become effective under the Securities Act, and such Warrant Stock shall have
been disposed of in accordance with such registration statement, (ii) such
Warrant Stock shall have been distributed to the public pursuant to Rule 144 or
Rule 144A (or any successor provisions) under the Securities Act or (iii) such
Warrant Stock shall have ceased to be outstanding.  The Company may effect the
registration of the Warrant Stock under the Securities Act of 1933 on any
suitable registration form permitted by the Securities and Exchange Commission
("SEC"), including Form S-3, provided that such form is reasonably acceptable
to the Holder to permit the disposition of the Warrant Stock in accordance with
the intended method of disposition specified by the Holder in its request for
registration.  The Company shall provide the Holder with copies of all
correspondence with the SEC related to such registration and reasonable
opportunity to review and comment on drafts of the registration statement and
responses to comments and correspondence of the SEC.  No information relating
to the Holder shall be included in any registration statement or other document
filed with the SEC or any other governmental authority without the Holder's
consent, except that the Company may file this Warrant and disclose related
information if required by applicable law, rule, regulation or order of any
jurisdiction, governmental authority, securities exchange or court of competent
jurisdiction.  Without limiting the generality of the foregoing, the Company
shall (x) notify the Holder promptly of all action by the SEC relating to the
registration statement and the registration of the Warrant Stock; (y) furnish
to the Holder such opinions of the Company's counsel and comfort letters of the
Company's independent auditors as the Holder may reasonably request; and (z)
furnish the Holder with sufficient copies of the registration statement, each
amendment and supplement thereto, all exhibits and documents incorporated by
reference, and prospectuses to facilitate the disposition of the Warrant Stock.
Nothing herein shall require the Company to qualify generally to do business as
a foreign corporation in any jurisdiction where it would not otherwise be
required to qualify or to subject itself to taxation in any such jurisdiction,
or to consent to general service of process in any such jurisdiction.  The
Company shall indemnify the Holder, each of its officers, directors, partners
and affiliates, and each person controlling such persons (each, an "Indemnified
Party"), against all expenses, claims, losses, damages or liabilities (or
actions in respect thereof), including any of the foregoing incurred in
settlement with the prior written consent of the Company (which consent shall
not be unreasonably withheld) of any litigation, threatened or pending, arising
out of or based on any untrue statement (or alleged untrue statement) of a
material fact contained in any registration statement or prospectus, or any
omission (or alleged omission) to state therein a material fact required (or
alleged to be required) to be stated therein to make the statements not
misleading, or any violation by the Company of the Securities Act of 1933 or
any rule thereunder.  Notwithstanding the foregoing, the Company shall not be
liable to any Indemnified Party for any expense, claim, loss, damage or
liability (or action in respect thereof) to the extent that it arises from or
is based upon (i) information relating to such Indemnified Party furnished for
use in connection with such registration by such Indemnified Party or its
agents, (ii) any untrue statement or alleged untrue statement of, or any
omission or alleged omission to state therein, a material fact contained in or
omitted from any registration statement or prospectus relating to the Warrant
Stock delivered by such Indemnified Party after the Company notified such
Indemnified Party that such registration statement or prospectus contained such
untrue statement, alleged untrue statement, omission or alleged omission or a
material fact or (iii) the failure of





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such Indemnified Party to deliver any preliminary or final prospectus, or any
amendments or supplements thereto, required under applicable securities laws to
be so delivered.  All information provided by Holder for use in any
registration statement hereunder shall be true and correct in all material
respects and shall not omit any material fact which is required to make such
information not false misleading.

         10.  Transfer of Warrant.  This Warrant may be transferred or assigned
by the Holder, in whole or in part, provided that (i) ten (10) days prior
written notice is given to the Company, and (ii) in the case of assignment or
transfer to a non-affiliate, the Holder provides, at the Company's request, an
opinion of counsel satisfactory to the Company that such transfer does not
require registration under the Act and the securities law applicable with
respect to any other jurisdiction, and (iii) the Company reasonably determines
that the transferee is not an actual or potential competitor or affiliate of
such a competitor of the Company.

         11.  Original Issue Discount.  The Holder and the Company hereby
acknowledge and agree that this Warrant is part of an investment unit within the
meaning of Section 1273(c)(2) of the Internal Revenue Code which includes a Note
of even date herewith.  The Holder and the Company further agree, as between the
Holder and the Company, that the fair market value of this Warrant is equal to
____________________ dollars ($_____) and that, pursuant to Treas. Reg. Section
1.1273-2(h), _________________________________ dollars ($_____) of the issue
price of the investment unit will be allocable to the Warrant and the balance
shall be allocable to the Note.  The Holder and the Company agree to prepare
their federal income tax returns in a manner consistent with the foregoing
agreement and, pursuant to Treas. Reg. Section 1.1273, the original issue
discount on the Note shall be considered to be zero.

         12.  Termination.  This Warrant shall terminate at 5:00 p.m, California
time, on August 26, 2001.





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         13.  Miscellaneous.  This Warrant shall be governed by the laws of the
State of California, as such laws are applied to contracts to be entered into
and performed entirely in California by California residents.  The headings
herein are for purposes of convenience and reference only, and shall not be
deemed to constitute a part hereof.  The terms of this Warrant may not be
changed or waived orally, but only by an instrument in writing signed by the
Company and the Holder.  All notices and other communications from the Company
to the Holder shall be delivered personally or mailed by first class mail,
postage prepaid, to the last address furnished to the Company in writing by the
Holder, and if mailed shall be deemed given three days after deposit in the
United States mail.


         ISSUED:  August 26, 1996

                                                  ENDOCARE, INC.


                                                  By:
                                                     ---------------------------

                                                  Title:
                                                        ------------------------
 




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                                  ATTACHMENT 1


NOTICE OF EXERCISE

TO:      ENDOCARE, INC.

         1.  The undersigned hereby elects to purchase _____________ shares of
the Warrant Stock of Endocare, Inc. pursuant to the terms of the attached
Warrant, and tenders herewith payment of the purchase price in full, together
with all applicable transfer taxes, if any.

         2.  Please issue a certificate or certificates representing said shares
of Warrant Stock in the name of the undersigned or in such other name as is
specified below:


                   ------------------------------------------
                                     (Name)


                   ------------------------------------------
                                   (Address)



- -----------------------            ---------------------------------------
       (Date)                             (Name of Warrant Holder)


                                   By:
                                      ------------------------------------

                                   Title:
                                         ---------------------------------
                                         (Name of purchaser, and title and
                                         signature of authorized person)





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                                  ATTACHMENT 2


NOTICE OF CONVERSION

TO:      ENDOCARE, INC.

         1.  The undersigned hereby elects to acquire _______________________ 
shares of the Warrant Stock of Endocare, Inc. pursuant to the terms of the 
attached Warrant, by conversion of ________ percent (___%) of the Warrant.

         2.  Please issue a certificate or certificates representing said shares
of Common Stock in the name of the undersigned or in such other name as is
specified below:


                   ------------------------------------------
                                     (Name)


                   ------------------------------------------
                                   (Address)



- -------------------------         -------------------------------------------
        (Date)                             (Name of Warrant Holder)


                                  By:
                                     ----------------------------------------

                                  Title:
                                        -------------------------------------
                                         (Name of purchaser, and title and
                                         signature of authorized person)





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                                  ATTACHMENT 3


                      INVESTMENT REPRESENTATION STATEMENT

                          Shares of the Warrant Stock
                    (as defined in the attached Warrant) of
                                 ENDOCARE, INC.

In connection with the purchase of the above-listed securities, the undersigned
hereby represents to Endocare, Inc. (the "Company") as follows:

         (a)   The shares of Warrant Stock to be received upon the exercise of
the Warrant (the "Securities") will be acquired for investment for its own
account, not as a nominee or agent, and not with a view to the sale or
distribution of any part thereof, and the undersigned has no present intention
of selling, granting participation in or otherwise distributing the same, but
subject, nevertheless, to any requirement of law that the disposition of its
property shall at all times be within its control.  By executing this Statement,
the undersigned further represents that it does not have any contract,
undertaking, agreement or arrangement with any person to sell, transfer, or
grant participations to such person or to any third person, with respect to any
Securities issuable upon exercise of this warrant.

         (b)   The undersigned understands that the Securities issuable upon
exercise of the Warrant at the time of issuance may not be registered under the
Securities Act of 1933, as amended (the "Act"), and applicable state securities
laws, on the ground that the issuance of such securities is exempt pursuant to
Section 4 (2) of the Act and state law exemptions relating to offers and sales
not by means of a public offering, and that the Company's reliance on such
exemptions is predicated on the undersigned's representations set forth herein.

         (c)   The undersigned agrees that in no event will it make a
disposition of any Securities acquired upon the exercise of the Warrant unless
and until (i) it shall have notified the Company of the proposed disposition and
shall have furnished the Company with a statement of the circumstances
surrounding the proposed disposition, and (ii) it shall have furnished the
Company with an opinion of counsel satisfactory to the Company and Company's
counsel to the effect that (A) appropriate action necessary for compliance with
the Act and any applicable state securities laws has been taken or an exemption
from the registration requirements of the Act and such laws is available, and
(B) that the proposed transfer will not violate any of said laws.

         (d)   The undersigned acknowledges that an investment in the Company is
highly speculative and represents that it is able to fend for itself in the
transactions contemplated by this Statement, has such knowledge and experience
in financial and business matters as to be capable of evaluating the merits and
risks of its investments, and has the ability to bear the economic risks
(including the risk of a total loss) of its investment.  The undersigned
represents that it has had the opportunity to ask questions of the Company
concerning the Company's business and assets and to obtain any additional
information which it considered necessary to verify the accuracy of or to
amplify the Company's disclosures, and has had all questions which have been
asked by it satisfactorily answered by the Company.





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         (e)   The undersigned acknowledges that the Warrant Stock issuable upon
exercise of the Warrant must be held indefinitely unless subsequently registered
under the Act or an exemption from such registration is available. The
undersigned is aware of the provisions of Rule 144 promulgated under the Act
which permit limited resale of shares purchased in a private placement subject
to the satisfaction of certain conditions, including, among other things, the
existence of a public market for the shares, the availability of certain current
public information about the Company, the resale occurring not less than two
years after a party has purchased and paid for the security to be sold, the sale
being through a "broker's transaction" or in transactions directly with a
"market makers" (as provided by Rule 144(f)) and the number of shares being sold
during any three-month period not exceeding specified limitations.


Dated: 
      -----------------------
                                             ---------------------------------
                                             (Signature)


                                             ---------------------------------
                                             (Typed or Printed Name)


                                             ---------------------------------
                                             (Title)





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