Unassociated Document


    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. 10-1

            	
              Eden
      Prairie, Minnesota

            
	 
      	
              March
      26, 2010

            


    

     

    FOR VALUE
RECEIVED, The Phillips W. Smith family Trust, or its
successors or assigns ("Holder"), is entitled
to subscribe for and purchase from ProUroCare Medical Inc., a Nevada corporation
(the "Company"), up to
381,173 fully paid and
non-assessable shares of the Company’s common stock, $0.00001 par value per
share (the "Common
Stock"), is subject to the following provisions, terms and
conditions:

     

    1.           Terms and Exercise of
Warrants.

    


    (a)           Warrant
Price.  This warrant shall entitle the Holder thereof, subject
to the provisions of this warrant agreement, to purchase from the Company the
number of shares of Common Stock stated therein, at the price of $1.83 per whole share, subject
to the adjustments provided in Section 2 hereof and in the last sentence of this
Section 1(a).  The term “Warrant Price” as
used in this warrant agreement refers to the price per share at which Common
Stock may be purchased at the time a warrant is exercised.

    


    (b)           Duration of
Warrants.  This warrant may be exercised only until 5:00 p.m.,
Minneapolis, Minnesota time on the earlier to occur of (i) March 26, 2013 or
(ii) the date fixed for redemption of the warrants as provided in Section 4 of
this warrant agreement (the “Expiration Date”).
Except with respect to the right to receive the Redemption Price (as set forth
in Section 4 hereunder), each warrant not exercised on or before the Expiration
Date shall become void, and all rights thereunder and all rights in respect
thereof under this warrant agreement shall cease at 5:00 p.m., Minneapolis,
Minnesota time on the Expiration Date.


    
      
         


      

      
        1

        
          

        

      

      
         


      

    

    


    (c)           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 3(b) 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
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, or SmallCap Market, as the case may be, for the ten (10) business
days immediately preceding the date that the warrant shall have been surrendered
or, if quoted on the Over-the-Counter Bulletin Board (OTCBB), the average of the
closing bid and asked prices on the exercise date, 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.           Adjustments.

     

    (a)           The
number of and kind of securities purchasable upon exercise of the warrants and
the Warrant Price shall be subject to adjustment from time to time as
follows:

    


    (i)           Subdivisions, Combinations
and Other Issuances.  If the Company shall at any time prior to
the expiration of the warrants subdivide its Common Stock, by split-up or
otherwise, or combine its Common Stock, or issue additional shares of its Common
Stock as a dividend with respect to any shares of its Common Stock, the number
of shares of Common Stock issuable on the exercise of the warrants shall be
proportionately increased in the case of a subdivision or stock dividend, or
proportionately decreased in the case of a combination.  Appropriate
adjustments shall also be made to the Warrant Price, but the aggregate purchase
price payable for the total number of shares of Common Stock purchasable under
the warrants (as adjusted) shall remain the same.  Any adjustment
under this Section 2(a)(i) shall become effective at the close of business on
the date the subdivision or combination becomes effective, or as of the record
date of such dividend, or in the event that no record date is fixed, upon the
making of such dividend.


    
      
         


      

      
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    (ii)           Reclassification,
Reorganization, Consolidation, Merger and Other Changes.  In
case of any reclassification, capital reorganization or change in the Common
Stock of the Company (other than as a result of a subdivision, combination, or
stock dividend provided for in Section 2(a)(i) above), or consolidation or
merger of the Company with or into 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 Company’s 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 reclassification, reorganization, change, consolidation,
merger or sale, lawful provision shall be made, and duly executed documents
evidencing the same from the Company or its successor shall be delivered to the
Holder of the warrant, so that the Holder shall have the right at any time prior
to the expiration of the warrant to purchase, at a total price equal to that
payable upon the exercise of the warrant, the kind and amount of shares of stock
and other securities and property receivable in connection with such
reclassification, reorganization, change, consolidation, merger or sale by a
holder of the same number of shares of Common Stock as were purchasable by the
Holder immediately prior to such reclassification, reorganization, change,
consolidation, merger or sale.  In any such case appropriate
provisions shall be made with respect to the rights and interest of the Holder
so that the provisions hereof shall thereafter be applicable with respect to any
shares of stock or other securities and property deliverable upon exercise
hereof, and appropriate adjustments shall be made to the purchase price per
share payable hereunder, provided the aggregate purchase price shall remain the
same.

    


    (b)           Minimum
Adjustment.  Notwithstanding anything herein to the contrary,
no adjustment under this Section 2 need be made to the Warrant Price unless such
adjustment would require an increase or decrease of at least 1% of the Warrant
Price then in effect.  Any lesser adjustment shall be carried forward
and shall be made at the time of and together with the next subsequent
adjustment, which, together with any adjustment or adjustments so carried
forward, shall amount to an increase or decrease of at least 1% of such Warrant
Price.  Any adjustment to the Warrant Price carried forward and not
theretofore made shall be made prior to the conversion of the warrant pursuant
thereto.

    


    (c)           Other
Adjustment.  If the Company at any time or from time to time
shall take any other action, or if any other event occurs, affecting the shares
of Common Stock or its other equity interests, if any, other than an action
described in this Section 2, then, and in each such case, the Warrant Price
shall be adjusted in such manner and at such time as the Board of Directors of
the Company in good faith determines to be equitable in the circumstances (such
determination to be evidenced in a resolution, a certified copy of which shall
be mailed to the Holder).

    


    (d)           Notice of
Adjustment.  Upon any adjustment of the Warrant Price, the
Company shall give written notice thereof, by first class mail, postage prepaid,
addressed to the Holder of this warrant at the address of such Holder as shown
on the books of the Company, which notice shall state the Warrant 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.


    
      
         


      

      
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    (e)           No Fractional
Shares.  Notwithstanding any provision contained in this
warrant agreement to the contrary, the Company shall not issue fractional shares
upon exercise of warrants. If, by reason of any adjustment made pursuant to this
Section 2, the Holder would be entitled, upon the exercise of the warrant, to
receive a fractional interest in a share, the Company shall, upon such exercise,
round up to the nearest whole number the number of the shares of Common Stock to
be issued to the warrant holder.

    


    (f)           Form of
Warrant.  The form of warrant need not be changed because of
any adjustment pursuant to this Section 2, and warrants issued after such
adjustment may state the same Warrant Price and the same number of shares as is
stated in the warrants initially issued pursuant to this warrant agreement.
However, the Company may at any time in its sole discretion make any change in
the form of warrant that the Company may deem appropriate and that does not
affect the substance thereof, and any warrant thereafter issued or
countersigned, whether in exchange or substitution for an outstanding warrant or
otherwise, may be in the form as so changed.

     

    
      3.           
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.

     

    (b)           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:

    

      "THE SECURITIES EVIDENCED BY THIS
CERTIFICATE WERE ISSUED, AND THE SECURITIES ISSUABLE IN CONNECTION WITH THE
CONVERSION OF SUCH SECURITIES WILL BE ISSUED, IN A TRANSACTION EXEMPT FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND APPLICABLE STATE
SECURITIES LAWS, AND IN RELIANCE UPON THE HOLDER’S REPRESENTATION THAT SUCH
SECURITIES WERE BEING ACQUIRED FOR INVESTMENT AND NOT FOR RESALE.  NO
TRANSFER OF THE SECURITIES OR THE SECURITIES ISSUABLE IN CONNECTION WITH THE
CONVERSION OF SUCH SECURTITIES MAY BE MADE ON THE BOOKS OF THE COMPANY UNLESS
(i) SUCH TRANSFER IS MADE PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND APPLICABLE STATE SECURITIES LAWS OR
(ii) UNLESS THE HOLDER SHALL HAVE PROVIDED THE COMPANY WITH AN OPINION OF
COUNSEL REASONABLY ACCEPTABLE TO THE COMPANY TO THE EFFECT THAT NO SUCH
REGISTRATION IS REQUIRED."

    


    
      
         


      

      
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    4.           Redemption.

    


    (a)           Redemption.  Subject
to Section 4(d) hereof, not less than all of the outstanding warrants may be
redeemed, at the option of the Company, at any time after they become
exercisable and prior to their expiration, at the office of the Warrant Agent,
upon the notice referred to in Section 4(b), at the price of $0.01 per warrant
(the “Redemption
Price”), provided that the
last sales price of the Common Stock has been equal to or greater than $4.00 per
share for 10 consecutive trading days.

    


    (b)           Date Fixed for, and Notice
of, Redemption.  In the event the Company shall elect to redeem
the warrants, the Company shall fix a date for the redemption. Notice of
redemption shall be mailed to the Holder by first class mail, postage prepaid,
by the Company not less than 30 days prior to the date fixed for redemption. Any
notice mailed in the manner herein provided shall be conclusively presumed to
have been duly given whether or not the Holder received such
notice.

    


    (c)           Exercise After Notice of
Redemption.  The warrants may be exercised for cash in
accordance with Section 1 of this warrant agreement at any time after notice of
redemption shall have been given by the Company pursuant to Section 4(b) hereof
and prior to the time and date fixed for redemption. On and after the redemption
date, the Holder of the warrants shall have no further rights except to receive,
upon surrender of the warrants, the Redemption Price.

    


    (d)           Outstanding Warrants
Only.  The redemption rights provided for by this Section 4
apply only to outstanding warrants.

    


    5.           Other Provisions Relating to
Rights of Holders of Warrants.

    


    (a)           No Rights as
Stockholder.  A warrant does not entitle the Holder thereof to
any of the rights of a stockholder of the Company, including, without
limitation, the right to receive dividends or other distributions, exercise any
preemptive rights to vote or to consent or to receive notice as stockholders in
respect of the meetings of stockholders or the election of directors of the
Company or any other matter.

    


    (b)           Lost, Stolen, Mutilated, or
Destroyed Warrants.  If any warrant is lost, stolen, mutilated,
or destroyed, the Company may on such terms as to indemnity or otherwise,
including the posting of a lost instrument bond, as they may in their discretion
impose (which shall, in the case of a mutilated warrant, include the surrender
thereof), issue a new warrant of like denomination, tenor, and date as the
warrant so lost, stolen, mutilated, or destroyed. Any such new warrant shall
constitute a substitute contractual obligation of the Company, whether or not
the allegedly lost, stolen, mutilated, or destroyed warrant shall be at any time
enforceable by anyone.

    


    (c)           Reservation of Common
Stock.  The Company shall at all times reserve and keep
available a number of its authorized but unissued shares of Common Stock that
will be sufficient to permit the exercise in full of all outstanding Warrants
issued pursuant to this warrant agreement.


    
      
         


      

      
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      6.          
Piggyback
Registration.

    

     

    (a)           If,
at any time commencing from the date hereof and expiring three (3) 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 of
its intention to do so.  If the Holder notifies the Company within
twenty (20) days after receipt of any such notice of its desire to include any
such Securities in such proposed registration statement, the Company shall
afford the Holder 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 Holder 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.

     

    (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.

     

    
      
         


      

      
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    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., 6440 Flying Cloud Dr., Suite 101, Eden Prairie,
MN  55344, or to such other address as the Company or the Holder shall
notify the other as provided in this Section.

     

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

     

    


     

    Dated:
March 26, 2010.

     

    
      	 
      	
              ProUroCare
      Medical Inc.:

            
	 
      	 
      	 
      
	 	 	 
	 	 	 
	 
      	
              By:

            	
              /s/ Richard C. Carlson

            
	 
      	
              Name:

            	
              Richard
      C. Carlson

            
	 
      	
              Title:

            	
              Chief
      Executive Officer

            


    


    
      
         


      

      
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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:
      3/26/2010

            	 
      
	 
      	
              (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 381,173 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 102,154 shares be
issued in the name of, and be delivered to Phillips W.
Smith  Family Trust, whose address is set forth below the
signature of the undersigned.

     

    
      	
              Dated:
      3/26/2010

            	
              



            
	 
      	
              (Signature)

            


    

     

    ____________

     

    INSTRUCTIONS
FOR REGISTRATION OF SECURITIES

    


    
      	
              Name
      and Address:

            	
              Phillips W. Smith  Family
      Trust

            
	 
      	
              5636 E. Mockingbird Ln.

            
	 
      	
              Paradise Valley AZ 85253

            
	 
      	
              (please
      typewrite or print in block
letters)

            


    

    


    ____________


    
      
         


      

      
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    EXHIBIT
A


     

    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)

            


    


    
      
         


      

      
        9