Promissory Note

 

 

EFFECTIVE DATE AND PARTIES. This Promissory Note (“Note”) is made effective as
of October 29, 2012. The parties and their addresses are:

 

LENDER (“you” and “your”):

 

Jeanne Rudelius

1850 Major Dr.

Golden Valley, MN 55422

 

BORROWER (“we,” “us,” and “our”):

 

ProUroCare Medical Inc.
a Nevada Corporation
6440 Flying Cloud Dr., STE 101
Eden Prairie, MN 55344

 

PROMISE TO PAY. For value received, we promise to pay you or your order, at your
address, or at such other location as you may designate, the total principal
balance of One Hundred Thousand Dollars $100,000.00 (“Principal”).

 

INTEREST / CONSIDERATION. In consideration for making this loan to us, and in
lieu of any cash interest, we will issue to you 20,000 shares of PUMD $0.00001
par value common stock (the “Consideration Shares”). The Consideration Shares to
be issued will not be registered under the Securities Act or under applicable
state securities acts. The Consideration Shares may not be sold, transferred or
otherwise disposed of except pursuant to an effective registration statement or
appropriate exemption from registration under applicable state law.

 

PAYMENT. We agree to pay the entire unpaid Principal of this Note on or before
December 26, 2012 (“Maturity Date”).

 

PREPAYMENT. We may prepay this Loan in full or in part at any time. Any partial
prepayment will not excuse any later scheduled payments until we pay in full.

 

SECURITY INTEREST. We give you a security interest in all of the Company’s
assets subject to the terms and conditions of Exhibit A hereto.

 

DEFAULT. You may demand payment in full if any of the following occur:

 

Payments. We fail to make a payment in full when due, and fail to make such
payment within five (5) days’ of your giving us notice of such failure to make
the payment.

 

Insolvency or Bankruptcy. Our dissolution or insolvency, the appointment of a
receiver by us or on our behalf, the application of any debtor relief law by us,
the assignment for the benefit of creditors by us or on our behalf, the
voluntary or involuntary termination of our existence, or the commencement of
any proceeding under any present or future federal or state insolvency,
bankruptcy, reorganization, composition or debtor relief law by or against us.

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Business Termination. We merge, dissolve, reorganize or end our business or
existence.

 

Failure to Perform. We fail to perform any condition or to keep any promise or
covenant of this Note and fail to cure this lack of performance within thirty
(30) days of your giving us notice thereof.

 

Misrepresentation. We make any verbal or written statement or provide any
financial information that is untrue, inaccurate, or conceals a material fact at
the time it is made or provided.

 

Judgment. We fail to satisfy or appeal any judgment against us.

 

Forfeiture. The Property is used in a manner or for a purpose that threatens
confiscation by a legal authority.

 

WAIVERS AND CONSENT. To the extent not prohibited by law, we waive protest,
presentment for payment, demand, notice of acceleration, notice of intent to
accelerate and notice of dishonor. You may renew or extend payments on this
Note, regardless of the number of such renewals or extensions. You may invoke
your right of set-off. Your course of dealing, or your forbearance from, or
delay in, the exercise of any of your rights, remedies, privileges or right to
insist upon our strict performance of any provisions contained in this Note
shall not be construed as a waiver by you, unless any such waiver is in writing
and is signed by you.

 

REMEDIES. If we default, and after you give any legally required notice and
opportunity to cure the default, you may at your option do any one or more of
the following,

 

Acceleration. You may make all or any part of the amount owing by the terms of
this Note immediately due.

 

Sources. You may use any and all remedies you have under state or federal law.

 

Set-Off. You may use the right of set-off. This means you may set-off any amount
due and payable under the terms of this Note against any right we have to
receive money from you.

 

Waiver. Except as otherwise required by law, by choosing any one or more of
these remedies you do not give up your right to use any other remedy. You do not
waive a default if you choose not to use a remedy. By electing not to use any
remedy, you do not waive your right to later consider the event a default and to
use any remedies if the default continues or occurs again.

 

COLLECTION EXPENSES AND ATTORNEYS’ FEES. To the extent permitted by law, in the
event of default, we agree to pay all expenses of collection, enforcement or
protection of your rights and remedies under this Note or any other Loan
Document. Expenses include, but are not limited to, attorneys’ fees, court costs
and other legal expenses.

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APPLICABLE LAW. This Note is governed by the laws of Minnesota, the United
States of America, and to the extent required, by the laws of the jurisdiction
where the Property is located, except to the extent such state laws are
preempted by federal law. In the event of a dispute, the exclusive forum, venue
and place of jurisdiction will be in Minnesota, unless otherwise required by
law.

 

SUCCESSORS. This Note shall inure to the benefit of and be enforceable by you
and your successors and assigns and shall be binding upon and enforceable
against us and our successors and assigns.

 

AMENDMENT, INTEGRATION AND SEVERABILITY. This Note may not be amended or
modified by oral agreement. No amendment or modification of this Note is
effective unless made in writing and executed by you and us. This Note is the
complete and final expression of the agreement. If any provision of this Note is
unenforceable, then the unenforceable provision will be severed and the
remaining provisions will still be enforceable.

 

 

 

  ProUroCare Medical Inc.               /s/Richard Thon   Richard Thon   Chief
Financial Officer

 

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Exhibit A

 

Security Interest

 

 

 

SECURITY INTEREST. The term “Secured Debt” refers to the Principal and any
unpaid interest accrued thereon. To secure the payment and performance of the
Secured Debt, subject to your becoming a “Secured Party” by joining the Sharing
Agreement described below, we give you a security interest in all of the
Property described in this Note that we own or have sufficient rights in which
to transfer an interest, now or in the future, wherever the Property is or will
be located, and all proceeds and products from the Property (including, but not
limited to, all parts, accessories, repairs, replacements, improvements, and
accessions to the Property). “Property” is all the collateral given as security
for the Secured Debt and described in this Note, and includes all obligations
that support the payment or performance of the Property. “Proceeds” includes
anything acquired upon the sale, lease, license, exchange, or other disposition
of the Property; any rights and claims arising from the Property; and any
collections and distributions on account of the Property.

 

COLLATERAL SHARING AGREEMENT. The Crown Bank promissory note is guaranteed by
two individuals (the “Crown Guarantors”). In the event of default, the Crown
Guarantors, upon fulfilling their guarantee obligations to Crown Bank, would
assume Crown Bank’s rights to proceeds from the sale of the Company’s assets
that were pledged as collateral. However, the Crown Guarantors have entered into
an Amended and Restated Collateral Sharing Agreement (the “Sharing Agreement”)
with other subordinated secured lenders and the guarantor of other subordinated
bank loans. Pursuant to that agreement, the Crown Guarantors have agreed to
split any proceeds from the sale of the Company’s assets proportionally among
all Secured Parties (up to the aggregate amount of the secured debts) who join
the Sharing Agreement. Upon your joinder to the Sharing Agreement, your security
interest in the Property is equal to security interest of the other Secured
Parties who have joined the Sharing Agreement. The total amount of debt that may
be or may become subject to the Sharing agreement may not exceed $5,000,000.

 

PROPERTY DESCRIPTION. The Property is all assets of the Company, including
inventory, accounts and other rights to payment, equipment and intangibles.

 

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