EXHIBIT 10.7


 


THE WARRANT AND THE
SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT (COLLECTIVELY, THE “SECURITIES”)
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), OR UNDER ANY STATE SECURITIES OR BLUE SKY LAWS (“BLUE SKY LAWS”).  NO TRANSFER, SALE, ASSIGNMENT, PLEDGE,
HYPOTHECATION OR OTHER DISPOSITION OF THIS WARRANT OR THE SECURITIES OR ANY
INTEREST THEREIN MAY BE MADE EXCEPT (A) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND ANY APPLICABLE BLUE SKY
LAWS OR (B) IF THE COMPANY HAS BEEN FURNISHED WITH BOTH AN OPINION OF
COUNSEL FOR THE HOLDER, WHICH OPINION AND COUNSEL SHALL BE SATISFACTORY TO THE
COMPANY, TO THE EFFECT THAT NO REGISTRATION IS REQUIRED BECAUSE OF THE
AVAILABILITY OF AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT AND
APPLICABLE BLUE SKY LAWS, AND ASSURANCES THAT THE TRANSFER, SALE, ASSIGNMENT,
PLEDGE, HYPOTHECATION OR OTHER DISPOSITION WILL BE MADE ONLY IN COMPLIANCE WITH
THE CONDITIONS OF ANY SUCH REGISTRATION OR EXEMPTION.


 


WARRANT


FOR


SHARES OF
COMMON STOCK


OF


PROUROCARE
MEDICAL INC.


 


	
  Warrant No. 32

  	
   

  	
  Plymouth, Minnesota

  
	
   

  	
   

  	
  January 25, 2006

  



 


FOR VALUE RECEIVED, Adron
Holdings, LLC, or its successors or assigns (“Holder”), is
entitled to subscribe for and purchase from ProUroCare Medical Inc., a Nevada
corporation (the “Company”), up to Fifty Thousand (50,000) fully paid and non-assessable shares of the Company’s
common stock, $.00001 par value per share (the “Common Stock”), at the
price of $0.50 per share, subject to adjustments as noted in section 3 below
(the “Warrant Exercise Price”).


 


This warrant may be exercised by Holder at any time or
from time to time on or prior to the fifth anniversary of the date hereof.


 


This warrant is subject to the following provisions,
terms and conditions:


 


1.             Exercise
of Warrant.  The rights represented
by this warrant may be exercised by the Holder, in whole or in part, by written
notice of exercise delivered to the Company at least three days prior to the
intended date of exercise and by the surrender of this warrant (properly
endorsed if required) at the principal office of the Company and, except in
connection with a Cashless Exercise (as defined below), upon payment to it by
cash, certified check or bank draft of the purchase price for such shares. The
shares so purchased shall be deemed to be issued as of the close of business on
the date on which this warrant has been exercised by its surrender and, except
in connection with a Cashless Exercise, payment to the Company of the Warrant
Exercise Price.  Certificates for the
shares of stock so purchased, bearing the restrictive legend set forth in Section 5
of this warrant, shall be delivered to the Holder within 15 days after the
rights represented by this warrant shall have been so exercised, and, unless
this warrant has expired, a new warrant


 


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representing the number of shares, if any, with respect to which this
warrant has not been exercised shall also be delivered to the Holder within
such time.  No fractional shares shall be
issued upon the exercise of this warrant.


 


At the option of the Holder, payment of the Warrant
Exercise Price may be made through a net exercise without payment of the
Warrant Exercise Price in cash by the Holder providing notice to the Company of
the Holder’s election to receive a number of shares of Common Stock in a
cashless exercise (a “Cashless Exercise”). Upon receipt of a notice of
Cashless Exercise, the Company shall deliver to the Holder (without cash
payment by the Holder of any Warrant Exercise Price) that number of shares of
Common Stock that is equal to the quotient obtained by dividing (x) the value
of the portion of the warrant being exercised on the date that the warrant
shall have been surrendered (determined by subtracting the aggregate Warrant
Exercise Price for the number of shares of Common Stock as to which the warrant
is being exercised from the aggregate Fair Market Value (as hereinafter
defined) of such number of shares of Common Stock), by (y) the Fair Market
Value of one share of Common Stock.  A
notice of Cashless Exercise shall state the number of shares of Common Stock as
to which the warrant is being exercised. 
“Fair Market Value” for purposes of this Section shall mean
the average of the Common Stock closing prices reported by the principal
exchange on which the Common Stock is traded, or the last sale prices as
reported by the National Association of Securities Dealers, Inc. Automated
Quotation System (“Nasdaq”) National Market, SmallCap Market, or
Over-the-Counter Bulletin Board (OTCBB), as the case may be, for the ten (10) business
days immediately preceding the date that the warrant shall have been
surrendered or, in the event no public market shall exist for the Common Stock
at the time of such cashless exercise, Fair Market Value shall mean the fair
market value of the Common Stock as the same shall be determined in the good
faith discretion of the Company’s Board of Directors, after full consideration
of all factors then deemed relevant by such Board of Directors in establishing
such value, including by way of illustration and not limitation, the per share
purchase price of the most recent sale of shares of Common Stock by the Company
after the date hereof, as evidenced by the vote of a majority of the directors
then in office. Following a Cashless Exercise, the warrant shall be canceled in
all respects with regard to (a) the number of shares of Common Stock
issued in accordance with the cashless exercise plus (b) the number
of shares of Common Stock used as consideration for the Cashless Exercise.


 


2.             Certain
Covenants of the Company.  The
Company covenants and agrees that all shares that may be issued upon the
exercise of the rights represented by this warrant shall, upon issuance, be
duly authorized and issued, fully paid and non-assessable shares.  The Company further covenants and agrees that
during the period within which the rights represented by this warrant may be
exercised, the Company will at all times have authorized, and reserved for the
purpose of issue or transfer upon exercise of the subscription rights evidenced
by this warrant, a sufficient number of shares of Common Stock to provide for
the exercise of the rights represented by this warrant.


 


3.             Adjustment
of Exercise Price and Number of Shares. 
The number of shares the Holder may purchase and the Warrant Exercise
Price shall be subject to adjustment from time to time as hereinafter provided
in this section 3.


 


(a)           Stock
Dividend, Stock Split or Stock Combination. 
If the Company at any time divides the outstanding shares of its Common
Stock into a greater number of shares (whether


 


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pursuant to a stock
split, stock dividend or otherwise), and conversely, if the outstanding shares
of its Common Stock are combined into a smaller number of shares, the Warrant
Exercise Price in effect immediately prior to such division or combination
shall be proportionately adjusted to reflect the reduction or increase in the
value of each such Common Stock.


 


(b)           Effect
of Reorganization, Reclassification or Merger.  If any capital reorganization or
reclassification of the capital stock of the Company, or consolidation or
merger of the Company with another corporation, or the sale of all or
substantially all of its assets to another corporation shall be effected in
such a way that holders of the Common Stock shall be entitled to receive stock,
securities or assets with respect to or in exchange for such Common Stock, then,
as a condition of such reorganization, reclassification, consolidation, merger
or sale, the Holder shall have the right to purchase and receive upon the basis
and upon the terms and conditions specified in this warrant and in lieu of the
shares of the Common Stock immediately theretofore purchasable and receivable
upon the exercise of the rights represented hereby, such shares of stock, other
securities or assets as would have been issued or delivered to the Holder if it
had exercised this warrant and had received such shares of Common Stock prior
to such reorganization, reclassification, consolidation, merger or sale.


 


(c)           Notice
of Adjustment.  Upon any adjustment
of the Warrant Exercise Price, the Company shall give written notice thereof,
by first class mail, postage prepaid, addressed to the registered Holder of
this warrant at the address of such Holder as shown on the books of the
Company, which notice shall state the Warrant Exercise Price resulting from
such adjustment and the increase or decrease, if any, in the number of shares
purchasable at such price upon the exercise of this warrant, setting forth in
reasonable detail the method of calculation and the facts upon which such
calculation is based.


 


4.             No
rights as Shareholder.  This warrant
shall not entitle the Holder to any voting rights or other rights as a
shareholder of the Company.


 


5.             Application
of Restrictions of Transfer.


 


(a)           No
transfer of this warrant may be completed unless and until (i) the Company
has received an opinion of counsel for the Company that such securities may be
sold pursuant to an exemption from registration under the Securities Act of
1933, as amended (the “Securities Act”), or (ii) a registration
statement relating to this warrant has been filed by the Company and declared
effective by the Commission.  Subject to
the foregoing, this warrant and all rights hereunder are transferable, in whole
or in part, at the principal office of the Company by the Holder in person or
by duly authorized attorney, upon surrender of this warrant properly endorsed
to any person or entity who represents in writing that he/she/it is acquiring
the warrant for investment and without any view to the sale or other
distribution thereof.  Each Holder of this
warrant, by taking or holding the same, consents and agrees that the bearer of
this warrant, when endorsed, may be treated by the Company and all other
persons dealing with this warrant as the absolute owner hereof for any purpose
and as the person entitled to exercise the rights represented by this warrant
or perform the obligations required hereby, or to the transfer hereof on the
books of the Company, any notice to the contrary notwithstanding; but until
such transfer on such books, the Company may treat the registered owner hereof
as the owner for all purposes.


 


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(b)           In no event shall the Holder(s) sell
any shares of Common Stock that are issued upon the exercise of the rights
represented by this warrant within 180 days following the effective date of an
initial public offering of the Common Stock of the Company.


 


(c)           Each
certificate for shares issued upon the exercise of the rights represented by
this warrant shall bear a legend as follows unless, in the opinion of counsel
to the Company, such legend is not required in order to ensure compliance with
the Securities Act:


 


“THESE SHARES HAVE BEEN PURCHASED FOR INVESTMENT WITHIN THE MEANING OF
THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), AND APPLICABLE STATE
SECURITIES LAWS, AND THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT
AND APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL SATISFACTORY TO
THE CORPORATION TO THE EFFECT THAT THE PROPOSED TRANSACTION WITH BE EXEMPT FROM
REGISTRATION.  IN ADDITION, IN NO EVENT MAY THE
SECURITIES REPRESENTED BY THIS CERTIFICATE BE PUBLICLY SOLD, TRANSFERRED,
ASSIGNED, OFFERED, PLEDGED OR OTHERWISE DISTRIBUTED FOR VALUE WITHIN 180 DAYS
FOLLOWING THE EFFECTIVE DATE OF THE INITIAL PUBLIC OFFERING OF COMMON STOCK BY
THE COMPANY.”


 


6.                                       Piggyback
Registration.  


 


(a)           If, at any time commencing from the
date hereof and expiring four (4) years thereafter, the Company proposes
to register any of its securities under the Securities Act of 1933, as amended
(the “Act”) (other than in connection with a merger or pursuant to Form S-8,
S-4 or other comparable registration statement) it will give written notice by
registered mail, at least thirty (30) days prior to the filing of each such
registration statement, to the Holder and to all other Holders of its intention
to do so.  If the Holder or other Holders
notify the Company within twenty (20) days after receipt of any such notice of
its or their desire to include any such Securities in such proposed
registration statement, the Company shall afford each of the Underwriter and
such Holders the opportunity to have any such Securities registered under such
registration statement. In the event any underwriter underwriting the sale of securities
registered by such registration statement shall limit the number of securities
includable in such registration by shareholders of the Company, the number of
such securities shall be allocated pro rata among the Holders and the holders
of other securities entitled to piggyback registration rights.


 


(b)           Notwithstanding the provisions of
this Section 6, the Company shall have the right at any time after it
shall have given written notice pursuant to this Section (irrespective of
whether a written request for inclusion of any such securities shall have been
made) to elect not to file any such proposed registration statement, or to
withdraw the same after the filing but prior to the effective date thereof.


 


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(c)           Notwithstanding anything contained
herein to the contrary, the registration rights granted to each Holder by this Section 6
shall automatically terminate on, and be of no further force or effect from and
after, the date on which such Holder can sell all of the Securities held by
such Holder without registration pursuant to Rule 144(k) promulgated under
the Securities Act of 1933, as amended (or similar exception from
registration).


 


7.             Governing
Law.  This Warrant shall be governed
by and construed in accordance with the laws of the State of Minnesota without
regard to its conflicts-of-law provisions.


 


8.             Amendments
and Waivers.  The provisions of this
Warrant may not be amended, modified or supplemented, and waiver or consents to
departures from the provisions hereof may not be given, unless the Company
agrees in writing and has obtained the written consent of the Holder.


 


9.             Successors
and Assigns.  All the terms and
conditions of this Warrant shall be binding upon and inure to the benefit of
the permitted successors and assigns of the Company and the Holder.


 


10.           Headings
and References.  The headings of this
Warrant are for convenience only and shall not affect the interpretation of
this Warrant.  Unless the context
indicates otherwise, all references herein to Sections are references to
Sections of this Warrant.


 


11.           Notices.  All notices or communications hereunder,
except as herein otherwise specifically provided, shall be in writing.  Notices sent to the Holder shall be mailed,
hand delivered or faxed and confirmed to the Holder at his, her or its address
set forth in the Company’s records. 
Notices sent to the Company shall be mailed, hand delivered or faxed and
confirmed to ProUroCare Medical Inc., One Carlson Parkway, Suite 124,
Plymouth, Minnesota 55447, or to such other address as the Company or the
Holder shall notify the other as provided in this Section.


 


[SIGNATURE PAGE
FOLLOWS]


 


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IN WITNESS WHEREOF, the Company has caused this warrant
to be signed and delivered by its duly authorized officer.


 


 


	
  Dated: January 25,
  2006.

  	
   

  
	
   

  	
   

  
	
   

  	
  PROUROCARE MEDICAL INC.:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Maurice R. Taylor
  II

  	
   

  
	
   

  	
  Name:

  	
  Maurice R. Taylor II

  
	
   

  	
  Title:

  	
  Chairman and CEO

  



 


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WARRANT EXERCISE
(CASH/CHECK)


 


(To be signed only
upon exercise of warrant for cash/check)


 


The undersigned, the holder of the foregoing warrant,
hereby irrevocably elects to exercise the purchase right represented by such
warrant for, and to purchase thereunder,                          of
the shares of Common Stock of ProUroCare Medical Inc. to which such warrant
relates and herewith makes payment of $                         therefor
in cash or by check and requests that the certificates for such shares be
issued in the name of, and be delivered to                                            ,
whose address is set forth below the signature of the undersigned.


 


 


	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
  (Signature)

  



 


 


WARRANT EXERCISE
(CASHLESS)


 


(To be signed only
upon a Cashless Exercise of warrant)


 


The undersigned, the holder of the foregoing warrant,
hereby irrevocably elects to exercise the purchase right represented by such
warrant for                       of
the shares of Common Stock of ProUroCare Medical Inc. to which such warrant
relates pursuant to a Cashless Exercise, and requests that certificates for                           
shares be issued in the name of, and be delivered to                                                              ,
whose address is set forth below the signature of the undersigned.


 


	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
  (Signature)

  



 


 


INSTRUCTIONS FOR
REGISTRATION OF SECURITIES


 


	
  Name and Address:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (please typewrite or
  print in block letters)

  



 


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WARRANT ASSIGNMENT


 


(To be signed only
upon transfer of warrant)


 


FOR VALUE RECEIVED,                                                                             
hereby sells, assigns and transfers unto:


 


	
  Name and Address:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (please typewrite or
  print in block letters)

  



 


the right to purchase                      
shares of Common Stock as represented by this warrant to the extent of                       
shares of Common Stock and as to which such right is exercisable and does
hereby irrevocably constitute and appoint                                         
attorney, to transfer the same on the books of the Company with full power of
substitution in the premises.


 


 


	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
  (Signature)

  



 


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