Exhibit 10.54


 





 


March 19, 2009


 


Mr. Phil Smith


TTE, Phillips W. Smith
Family Trust


7501 North Ironwood Drive


Paradise Valley, AZ 85253


 


Dear Phil,


 


This letter is to
document our agreement today concerning the consideration ProUroCare Medical
Inc. (the “Company”) will provide to you regarding the extension of the
maturity date of your $600,000 loan (the “Loan”) to the Company.  We will prepare additional documents for your
signature as drafted by our attorneys, including a subscription agreement
and/or representation of investment intent, as soon as possible.


 


As consideration for extending
the maturity date of the Loan to March 28, 2010 (unless earlier repaid),
the Company agrees to provide compensation to you according to the “Lender/Guarantor
Compensation” sheet attached.  The amount
of compensation to be provided will be determined by the applicable
compensation formulas applied to the value of the Loan.  In the interest of fairness to you, vis-à-vis the Crown Bank guarantors, we will use $1,000,000
as the value of the Loan for purposes of this calculation. The stock price or
warrant exercise price used in the computation of compensation to be issued
will be as described on the attached compensation sheet based on the date of
this letter agreement.  Please indicate
your choice of compensation method – stock or warrants – in the space indicated
below.


 


It is the Company’s
intent to repay the Loan as soon as possible. 
We will initially issue the stock or warrant compensation on the basis
of a six-month minimum extension, i.e. six months of compensation shall be paid
at the commencement of the extended term. 
Thereafter, if the Loan should be repaid after August 31, 2009,
beginning September 1, 2009, one month of stock or warrant compensation
will be accrued for each calendar month or portion thereof after that date that
the Loan is outstanding, with such compensation to be issued upon the
retirement of the Loan.


 


Thank you for you
support!


 


Sincerely,


 


	
  /s/Richard C. Carlson

  	
   

  
	
   

  	
   

  
	
  Richard C. Carlson

  	
   

  
	
  Chief Executive Officer

  	
   

  



 


If you agree to the
above terms, please sign and date below, and fax it back to 952-843-7031.


 


	
  /s/Phil Smith

  	
   

  	
  Compensation method:
  (check one):

  
	
  Signature

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Stock

  	
  x

  
	
  3/19/2009

  	
   

  	
   

  	
  Warrants

  	
  o

  
	
  Date

  	
   

  	
   

  



 


 


	
  ProUroCare
  Medical Inc., 6440 Flying Cloud Drive, Suite 101, Eden Prairie, MN 55344

  	
   

  	
  Phone:
  952.476.9093 Fax: 952.843-7031

  



 

















 


Lender/Guarantor Compensation


Pursuant to ProUroCare Loan Renewals


March 19, 2009


 


Option #1- Stock compensation:


 


(dollar amount of commitment/guarantee/loan)


 


multiplied by


 


(the fraction of the year the loan/commitment is to be outstanding)


 


multiplied by


 


(10%)


 


divided by


 


(the average closing stock price over the previous 10 business days)


 


On
March 19, 2009, this option results as follows:


$1,000,000
guarantee, 6 months, average closing stock price $0.75:


$1,000,000
* 0.5 * 0.1/$0.75 = 66,667 shares


Monthly
accrual after 6 month = 11,111 shares per month


 


Option #2 - Alternative warrant compensation:


 


5
year warrants, cashless exercise, exercisable 1 year after grant, number of
warrants determined by the following formula:


 


(stock compensation per above)


 


multiplied by


 


(120%)


 


Warrant exercise price = the average closing stock
price over the previous 10 business days


 


On
March 19, 2009, this option results as follows:


66,667
shares * 120% = 80,000 warrants exercisable at $0.75 per share


Monthly
accrual after 6 month = 13,333 warrants per month