**Exhibit 10.54**

 

 

March 19, 2009

 

Mr. Phil Smith

TTE, Phillips W. SmithFamily Trust

7501 North Ironwood Drive

Paradise Valley, AZ 85253

 

Dear Phil,

 

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

 

As consideration for extendingthe maturity date of the Loan to March 28, 2010 (unless earlier repaid),the Company agrees to provide compensation to you according to the “Lender/GuarantorCompensation” sheet attached.  The amountof compensation to be provided will be determined by the applicablecompensation 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 $1,000,000as the value of the Loan for purposes of this calculation. The stock price orwarrant exercise price used in the computation of compensation to be issuedwill be as described on the attached compensation sheet based on the date ofthis letter agreement.  Please indicateyour choice of compensation method – stock or warrants – in the space indicatedbelow.

 

It is the Company’sintent to repay the Loan as soon as possible. We will initially issue the stock or warrant compensation on the basisof a six-month minimum extension, i.e. six months of compensation shall be paidat 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 compensationwill be accrued for each calendar month or portion thereof after that date thatthe Loan is outstanding, with such compensation to be issued upon theretirement of the Loan.

 

Thank you for yousupport!

 

Sincerely,

 
| /s/Richard C. Carlson   |   |
|-------------------------|--------|
|                    |   |
| Richard C. Carlson      |   |
| Chief Executive Officer |   |

 

If you agree to theabove 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)

 

OnMarch 19, 2009, this option results as follows:

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

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

Monthlyaccrual after 6 month = 11,111 shares per month

 

***Option #2 - Alternative warrant compensation:***

 

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

 

(stock compensation per above)

 

multiplied by

 

(120%)

 

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

 

OnMarch 19, 2009, this option results as follows:

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

Monthlyaccrual after 6 month = 13,333 warrants per month

 

----