Exhibit 10.1


 


	
  LOAN NUMBER

  	
   

  	
  LOAN NAME

  	
   

  	
  ACCT. NUMBER

  	
   

  	
  NOTE DATE

  	
   

  	
  INITIALS

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4090817

  	
   

  	
  PROUROCARE MEDICAL, INC

  	
   

  	
   

  	
   

  	
  06/12/09

  	
   

  	
  KRH

  
	
  NOTE AMOUNT

  	
   

  	
  INDEX (w/Margin)

  	
   

  	
  RATE

  	
   

  	
  MATURITY DATE

  	
   

  	
  LOAN PURPOSE

  
	
  $100,000.00

  	
   

  	
  Wall Street Journal Prime
  plus

  	
   

  	
  6.000%

  	
   

  	
  03/28/10

  	
   

  	
  Commercial

  
	
   

  	
   

  	
  1.000%

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


Creditor Use Only


 


PROMISSORY NOTE


(Commercial - Single Advance)


 


DATE AND PARTIES. The date of this Promissory Note (Note) is June 12,
2009. The parties and their addresses are:


 


LENDER:


CROWN BANK


6600 France Avenue South Ste
125


Edina, Minnesota 55435


Telephone:                (952)
285-5800


 


BORROWER:


PROUROCARE MEDICAL INC.


a Nevada Corporation


6440 FLYING CLOUD DRIVE #101


EDEN PRAIRIE, Minnesota 55344


 


PRO URO CARE, INC.


a Minnesota Corporation


6440 FLYING CLOUD DRIVE #101


EDEN PRAIRIE, Minnesota 55344


 


1. DEFINITIONS. As used in this
Note, the terms have the following meanings:


 


A.
Pronouns. The pronouns “I,” “me,” and “my” refer to each Borrower signing this
Note, individually and together. “You” and “Your” refer to the Lender.


B.
Note. Note refers to this document, and any extensions, renewals, modifications
and substitutions of this Note.


C.
Loan. Loan refers to this transaction generally, including obligations and
duties arising from the terms of all documents prepared or submitted for this transaction
such as applications, security agreements, disclosures or notes, and this Note,


D.
Loan Documents. Loan Documents refer to all the documents executed as a part of
or in connection with the Loan,


E.
Property. Property is any property, real, personal or intangible, that secures
my performance of the obligations of this Loan.


F.
Percent. Rates and rate change limitations are expressed as annualized
percentages.


 


2. PROMISE TO PAY. For value
received, I promise to pay you or your order, at your address, or at such other
location as you may designate, the principal sum of $100,000.00 (Principal)
plus interest from June 12, 2009 on the unpaid Principal balance until
this Note matures or this obligation is accelerated.


 


3. INTEREST. Interest will accrue
on the unpaid Principal balance of this Note at the rate of 6.000 percent (Interest
Rate) until June 13, 2009, after which time it may change as described in
the Variable Rate subsection,


 


A.
Interest After Default. If you declare a default under the terms of the Loan,
including for failure to pay in full at maturity, you may increase the Interest
Rate otherwise payable as described in this section. In such event, interest
will accrue on the unpaid Principal balance of this Note at a rate equal to the
rate in effect prior to default, plus 2.000 percent. until paid in full.


B.
Maximum Interest Amount. Any amount assessed or collected as interest under the
terms of this Note will be limited to the maximum lawful amount of interest
allowed by state or federal law, whichever is greater. Amounts collected in
excess of the maximum lawful amount will be applied first to the unpaid
Principal balance. Any remainder will be refunded to me.


C.
Statutory Authority. The amount assessed or collected on this Note is
authorized by the Minnesota usury laws under Minn. Stat. t 47.59.


D.
Accrual. Interest accrues using an Actual/36D days counting method.


E.
Variable Rate. The Interest Rate may change during the term of this
transaction,


 


(1) Index.
Beginning with the first Change Date, the Interest Rate will be based on the
following index: the base rate on corporate loans posted by at least 75% of the
30 largest U.S. banks known as the Wall Street Journal U.S. Prime Rate.


The
Current Index is the most recent index figure available on each Change Date.
You do not guaranty by selecting this Index, or the margin, that the Interest
Rate on this Note will be the same rate you charge on any other loans or class
of loans you make to me or other borrowers, If this Index is no longer
available, you will substitute a similar index. You will give me notice of your
choice.


(2) Change
Date. Each date on which the Interest Rate may change is called a Change Date.
The Interest Rate may change March 1, 2009 and daily thereafter.


(3) Calculation
Of Change. On each Change Date you will calculate the Interest Rate, which will
be the Current Index plus 1.000 percent. The result of this calculation will be
rounded up to the nearest .001 percent. Subject to any limitations, this will
be the Interest Rate until the next Change Date. The new Interest Rate will
become effective on each Change Date. The Interest Rate and other charges on
this Note will never exceed the highest rate or charge allowed by law for this
Note.


(4) Limitations,
The Interest Rate changes are subject to the following limitations:


(a) Lifetime.
The Interest Rate will never be less than 6.000 percent.


(5) Effect
Of Variable Rate. A change in the Interest Rate will have the following effect
on the payments: The amount of scheduled payments and the amount of the final
payment will change.


 


4. REMEDIAL CHARGES. In addition to
interest or other finance charges, I agree that I will pay these additional
fees based on my method and pattern of payment. Additional remedial charges may
be described elsewhere in this Note.


 


A.
Late Charge. If a payment is more than 10 days late, I will be charged 5.000
percent of the Unpaid Portion of Payment, I will pay this late charge promptly
but only once for each late payment. This amount may then increase so as to
always be the highest amount allowed by law under Minnesota Statutes 47.59.


 


5. PAYMENT. I agree to pay this
Note in installments of accrued interest beginning June 28, 2009, and then
on the 28th day of each month thereafter, I agree to pay the entire unpaid
Principal and any accrued but unpaid interest on March 28, 2010.


 


Payments will be rounded up to the
nearest $01. With the final payment I also agree to pay any additional fees or
charges owing and the amount of any advances you have made to others on my
behalf. Payments scheduled to be paid on the 29th, 30th or 31st day of a month
that contains no such day will, instead, be made on the last day of such month.


 


Each payment I make on this Note
will be applied first to interest that is due then to principal that is due,
and finally to any charges that I owe other than principal and interest. If you
and I agree to a different application of payments, we will describe our
agreement on this Note. You may change how payments are applied in your sole
discretion without notice to me. The actual amount of my final payment will
depend on my payment record.


 


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


 


7. LOAN PURPOSE. The purpose of
this Loan is BRIDGE FINANCING.


 


8. ADDITIONAL TERMS.  THE BORROWER IS REQUIRED TO SUBMIT A TAX
RETURN ON AN ANNUAL BASIS.


 


GUARANTOR IS REQUIRED TO SUBMIT A
PERSONAL FINANCIAL STATEMENT AND TAX RETURN ON AN ANNUAL BASIS.


 


9. SECURITY.  This loan is secured by separate instruments
prepared together with this Note as follows:


 

















 


	
  Document Name

  	
   

  	
  Parties to Document

  
	
  Security Agreement. PROUROCARE
  MEDICAL INC.

  	
   

  	
  PROUROCARE MEDICAL INC.

  



 


10.
DEFAULT. I will be in default if any of the following occur:


 


A. Payments. I fail to make a payment in full when due.


B. Insolvency or Bankruptcy. The death, dissolution or insolvency of,
appointment of a receiver by or on behalf of, application of any debtor relief
law, the assignment for the benefit of creditors by or on behalf of, the
voluntary or involuntary termination of existence by, 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 me
or any co-signer, endorser, surety or guarantor of this Agreement or any other
obligations I have with you.


C.  Business
Termination. I merge, dissolve, reorganize, end my business or existence, or a
partner or majority owner dies or is declared legally incompetent.


D. New Organizations.  Without
your written consent, I organize, merge into, or consolidate with an entity;
acquire all or substantially all of the assets of another; materially change
the legal structure, management, ownership or financial condition; or effect or
enter into a domestication, conversion or interest exchange.


E. Failure to Perform. I fail to perform any condition or to keep any
promise or covenant of this Agreement.


F. Other Documents. A default occurs under the terms of any other Loan
Document.


G. Other Agreements. I am in default on any other debt or agreement I
have with you.


H. Misrepresentation. I 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.


I. Judgment. I fail to satisfy or appeal any judgment against me.


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


K. Name Change. I change my name or assume an additional name without
notifying you before making such a change,


L. Property Transfer. I transfer all or a substantial part of my money
or property.


M. Property Value. You determine in good faith that the value of the
Property has declined or is impaired.


N. Material Change. Without first notifying you, there is a material
change in my business, including ownership, management, and financial
conditions.


O. Insecurity. You determine in good faith that a material adverse
change has occurred in my financial condition from the conditions set forth in
my most recent financial statement before the date of this Agreement or that
the prospect for payment or performance of the Loan is impaired for any reason.


 


11. DUE ON SALE OR ENCUMBRANCE. You
may, at your option, declare the entire balance of this Note to be immediately
due and payable upon the creation of, or
contract for the creation of, any lien, encumbrance, transfer or sale of all or
any part of the Property. This right is subject to the restrictions imposed by
federal law 112 C.F.R. 5911, as applicable. However, if I am in default under
this Agreement, I may not sell the inventory portion of the Property even in
the ordinary course of business,


 


12. WAIVERS AND CONSENT. To
the extent not prohibited by law, I waive protest, presentment for payment,
demand, notice of acceleration, notice of intent to accelerate and notice of
dishonor.


 


A.
Additional Waivers By Borrower. In addition, I, and any party to this Note and
Loan, to the extent permitted by law, consent to certain actions you may take,
and generally waive defenses that may be available based on these actions or
based on the status of a party to this Note.


 


(1) You
may renew or extend payments on this Note, regardless of the number of such
renewals or extensions.


(2) You
may release any Borrower, endorser, guarantor, surety, accommodation maker or
any other co-signer.


(3) you
may release, substitute or impair any Property securing this Note.


(4) You,
or any institution participating in this Note, may invoke your right of
set-off.


(5) You
may enter into any sales, repurchases or participations of this Note to any
person in any amounts and I waive notice of such sales, repurchases or
participations.


(6) I
agree that any of us signing this Note as a Borrower is authorized to modify
the terms of this Note or any instrument securing, guarantying or relating to
this Note.


(7) I
agree that you may inform any party who guarantees this Loan of any Loan
accommodations, renewals, extensions, modifications, substitutions or future
advances.


 


B.
No Waiver By Lender. 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 my strict performance of any provisions contained in this Note, or any
other Loan Document, shall not be construed as a waiver by you, unless any such
waiver is in writing and is signed by you.


 


13. REMEDIES. After I default,
you may at your option do any one or more of the following.


 


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


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


C. Insurance Benefits. You may make a claim for any and all insurance
benefits or refunds that may be available on my default.


D. Payments Made On My Behalf. Amounts advanced on my behalf will be
immediately due and may be added to the balance owing under the terms of the Loan,
and accrue interest at the highest post-maturity interest rate.


E. 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 the Loan against any right I have
to receive money from you.


 


My right to receive money from you includes any deposit or share account
balance I have with you; any money owed to me on an item presented to you or in
your possession for collection or exchange; and any repurchase agreement or
other non-deposit obligation. “Any amount due and payable under the terms of
the Loan” means the total amount to which you are entitled to demand payment
under the terms of the Loan at the time you set-off.


 


Subject to any other written contract, if my right to receive money from
you is also owned by someone who has not agreed to pay the Loan, your right of
set- off will apply to my interest in the obligation and to any other amounts I
could withdraw on my sole request or endorsement.


 


Your right of set-off does not apply to an account or other obligation
where my rights arise only in a representative capacity. It also does not apply
to any Individual Retirement Account or other tax-deferred retirement account.


 


You will not be liable for the dishonor of any check when the dishonor
occurs because you set-off against any of my accounts. I agree to hold you
harmless from any such claims arising as a result of your exercise of your
right of set-off.


 


F. 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,


 


14.
COLLECTION EXPENSES AND ATTORNEYS’ FEES. On or after Default, to the extent
permitted by law, I agree to pay all expenses of collection, enforcement or
protection of your rights and remedies under this Agreement or any other Loan
Document, Expenses include, but are not limited to, attorneys’ fees, court
costs and other legal expenses. If not paid immediately, these expenses will
bear interest from the date of payment until paid in full at the highest
interest in effect as provided in the terms of this Loan. All fees and expenses
will be secured by the Property I have granted to you, if any. In addition, to
the extent permitted by the United States Bankruptcy Code, I agree to pay the
reasonable attorneys’ fees incurred by you to protect your rights and interests
in connection with any bankruptcy proceedings initiated by or against me.


 


15. COMMISSIONS. I understand and
agree that you or your affiliate will earn commissions or fees on any insurance
products, and may earn such fees on other services that I buy through you or
your affiliate.


 


16.
WARRANTIES AND REPRESENTATIONS. I make to you the following warranties and
representations which will continue as long as this Loan is in effect:


 


A. Power. I am duly organized, and validly existing and in good standing
in all jurisdictions in which I operate. I have the power and authority to
enter into this transaction and to carry on my business or activity as it is
now being conducted and, as applicable, am qualified to do so in each jurisdiction
in which I operate.


B. Authority. The execution, delivery and performance of this Loan and
the obligation evidenced by the Note are within my powers, have been duly
authorized, have received all necessary governmental approval, will not violate
any provision of law, or order of court or governmental agency, and will not
violate any agreement to which I am a party or to which I am or any of my
property is subject.


C. Business Name. Other than previously disclosed in writing to you I
have not changed my name or principal place of business within the last 10
years and have not used any other trade or fictitious name. Without your prior
written consent, I do not and will not use any other name and will preserve my
existing name, trade names and franchises.


 


17. INSURANCE. I agree to
obtain the insurance described in this Loan Agreement.


 

















 


A. Property
Insurance. I will insure or retain insurance coverage on the Property and abide
by the insurance requirements of any security instrument securing the Loan.


B. Insurance
Warranties. I agree to purchase any insurance coverages that are required, in
the amounts you require, as described in this or any other documents I sign for
the Loan. I will provide you with continuing proof of coverage. I will buy or
provide insurance from a firm licensed to do business in the State where the
Property is located. If I buy or provide the insurance from someone other than
you, the firm will be reasonably acceptable to you. I will have the insurance
company name you as loss payee on any insurance policy. You will apply the
insurance proceeds toward what l owe you on the outstanding balance. I agree
that if the insurance proceeds do not cover the amounts I still owe you, I will
pay the difference. I will keep the insurance until all debts secured by this
agreement are paid. If I want to buy the insurance from you, I have signed a
separate statement agreeing to this purchase.


 


18. 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.


 


19. JOINT AND INDIVIDUAL LIABILITY
AND SUCCESSORS. My obligation to pay the Loan is independent of the obligation
of any other person who has also agreed to pay it. You may sue me alone, or
anyone else who is obligated on the Loan, or any number of us together, to
collect the Loan. Extending the Loan or new obligations under the Loan, will
not affect my duty under the Loan and I will still be obligated to pay the
Loan. 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
me and my personal representatives, successors, heirs and assigns.


 


20. 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 me. This Note and the other Loan Documents are 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.  No present or future agreement securing any
other debt I owe you will secure the payment of this Loan if, as a result, this
Loan would become subject to Section 670 of the John Warner National
Defense Authorization Act for Fiscal Year 2007.


 


21. INTERPRETATION. Whenever used,
the singular includes the plural and the plural includes the singular. The
section headings are for convenience only and are not to be used to interpret
or define the terms of this Note.


 


22. NOTICE, FINANCIAL REPORTS AND
ADDITIONAL DOCUMENTS. Unless otherwise required by law, any notice will be
given by delivering it or mailing it by first class mail to the appropriate
party’s address listed in the DATE AND PARTIES section, or to any other address
designated in writing. Notice to one Borrower will be deemed to be notice to
all Borrowers. I will inform you in writing of any change in my name, address
or other application information. I agree to sign, deliver, and file any
additional documents or certifications that you may consider necessary to
perfect, continue, and preserve my obligations under this Loan and to confirm
your lien status on any Property. Time is of the essence.


 


23. CREDIT INFORMATION. I agree to
supply you with whatever information you reasonably request. You will make
requests for this information without undue frequency, and will give me
reasonable time in which to supply the information.


 


24. ERRORS AND OMISSIONS. I agree, if requested by you, to fully
cooperate in the correction, if necessary, in the reasonable discretion of you
of any and all loan closing documents so that all documents accurately describe
the loan between you and me. I agree to assume all costs including by way of
illustration and not limitation, actual expenses, legal fees and marketing
losses for failing to reasonably comply with your requests within thirty (30)
days.


 


25. SIGNATURES. By signing, I agree
to the terms contained in this Note. I also acknowledge receipt of a copy of
this Note.


 


	
  BORROWER:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PROUROCARE MEDICAL INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By 

  	
  /s/ RICHARD C. CARLSON

  	
   

  
	
   

  	
   

  	
  RICHARD C. CARLSON, CEO

  
	
   

  	
   

  	
   

  
	
   

  	
  PRO URO CARE, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By 

  	
  /s/ RICHARD C. CARLSON

  	
   

  
	
   

  	
   

  	
  Authorized signer