Document:

Exhibit 10.51

 

	
  LOAN NUMBER

  	
  LOAN NAME

  	
  ACCT. NUMBER

  	
  NOTE DATE

  	
  INITIALS

  
	
  4060026

  	
  PROUROCARE MEDICAL, INC

  	
   

  	
  02/28/09

  	
  KRH

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  NOTE AMOUNT

  	
  INDEX (w/Margin)

  	
  RATE

  	
  MATURITY DATE

  	
  LOAN PURPOSE

  
	
  $1,200,000.00

  	
  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 February 28, 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

 

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 $1,200,000.00 (Principal)
plus interest from February 28, 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 March 1, 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. GOVERNING AGREEMENT. This Note
is further governed by the Commercial Loan Agreement executed between you and
me as a part of this Loan, as modified, amended or supplemented. The Commercial
Loan Agreement states the terms and conditions of this Note, including the
terms and conditions under which the maturity of this Note may be accelerated.
When I sign this Note, I represent to you that I have reviewed and am in
compliance with the terms contained in the Commercial Loan Agreement.

 

6. PAYMENT. I agree to pay this Note
in installments of accrued interest beginning March 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.

 

7. 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,

 

8. LOAN PURPOSE. The purpose of
this Loan is WORKING CAPITAL.

 

9. ADDITIONAL TERMS. THIS NOTE IS
SECURED BY A SEPERATE SECURTY AGREEMENT DATED OCTOBER 10, 2007.

 

THE BORROWERS AND GUARANTORS AGREE
TO PROVIDE ANNUAL FINANCIAL STATEMENTS AND TAX RETURNS.

 

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

 

 

	
  Document Name

  	
  Parties to Document

  	
  Date of Security Document

  
	
  Commercial Loan And Security
  Agreement. PROUROCARE

  	
  PROUROCARE MEDICAL, INC.

  	
  October 10, 2007

  

MEDICAL, INC

 

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. 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.

 

14. 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.

 

15. 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.

 

16. 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.

 

17. 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.

 

18. 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.

 

19. 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.

 

20.
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.

 

21. 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/ RICK CARLSON

  	
   

  
	
   

  	
   

  	
   

  	
  RICK CARLSON, CEOExhibit 10.52

 

FINANCING
AGREEMENT

 

This Financing Agreement (the
“Agreement”) by and between ProUroCare
Medical Inc. (the (“Company”) and Mr. James
L. Davis (‘Davis”) is made as of March 19,
2009.

 

RECITALS

 

WHEREAS,
pursuant to the terms of two promissory notes (the “Notes”)
issued by the Company in favor of Davis, the Company owes to Davis a principal
sum of $187,500.00;

 

WHEREAS,
the Company also owes to Davis interest accrued on the Notes and previous loans
of $13,569.14 (the “Interest”);

 

WHEREAS,
the Notes and Interest are currently due and payable, and the Company desires
to refinance the Notes and Interest, and Davis is willing to provide such
refinancing;

 

WHEREAS, Davis
has made payments to vendors on behalf of the Company for certain services, including
investor relations services, totaling $15,293.07

 

WHEREAS, the
Company has identified certain projects and activities that its management
believes are valuable and in the best interests of the Company, but which are
not currently funded, and Mr. Davis has agreed to provide such funding;
and

 

WHEREAS, Davis
has agreed to provide certain website maintenance activities for the Company’s
website without charge throughout 2009.

 

AGREEMENT

 

NOW,
THEREFORE, in consideration of the foregoing, the Company and
Davis agree as follows:

 

1.                                       Loan
and Issuance of 2009 Note.  Mr. Davis
will loan to the Company $64,637.79 in cash, and the Company will issue a new,
one-year convertible promissory note to Davis in the amount of $281,000.00 in substantially
the form attached hereto as Exhibit A (the “2009 Note”).  The 2009 Note will be interest-free.

 

2.                                       Waiver
and Discharge of Notes and Interest. 
In consideration of the issuance of the 2009 Note and the Shares, Davis
hereby forever waives and discharges the amounts owing under the Notes, the
Interest owed to him by the Company and amounts paid by him on behalf of the
Company to certain vendors in the amount of $15,293.07.  Concurrently with the execution of this
Agreement, the Notes shall be presented by Davis to the Company for
cancellation.

 

3.                                       Payments
and Services from Davis.  Davis or
his affiliate hereby agrees to provide maintenance services for the Company’s
website on an as-needed basis throughout 2009 without charge to the Company.

 

 

4.                                       Miscellaneous.

 

(a)                                  Choice
of Law.  This Agreement shall be
governed by and its provisions construed in accordance with the laws of the
State of Minnesota, as applied to contracts between Minnesota residents entered
into and to be performed entirely within Minnesota without regard to the
conflict of law principles thereof.

 

(b)                                 Amendment
and Termination.  No amendment,
modification, termination or cancellation of this Agreement shall be effective
unless it is in writing signed by both the parties hereto.  No waiver of any of the provisions of this
Agreement shall be deemed or shall constitute a waiver of any other provisions
hereof (whether or not similar) nor shall such waiver constitute a continuing
waiver.

 

(c)                                  Entire
Agreement.  This Agreement sets forth
the entire understanding between the parties hereto and supersedes and merges
all previous written and oral negotiations, commitments, understandings and
agreements relating to the subject matter hereof between the parties hereto.

 

(d)                                 Successors
and Assigns.  This Agreement shall be
binding upon the Company and its successors and assigns, and shall inure to the
benefit of Davis and his heirs, executors, administrators, successors and
assigns, as the case may be.

 

(e)                                  Severability.  Wherever possible each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any such provision shall be prohibited by or invalid
under applicable law, it shall be ineffective only to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Agreement.

 

(f)                                    Counterparts.  This Agreement may be executed in various
counterparts, each of which when so executed and delivered shall be an
original, and all such counterparts together shall constitute one and the same
instrument.

 

2

 

IN
WITNESS WHEREOF, the undersigned have executed this Financing
Agreement this 19th day of March, 2009.

 

 

	
  COMPANY

  	
   

  	
  DAVIS

  
	
   

  	
   

  	
   

  
	
  /s/ Richard C. Carlson

  	
   

  	
  /s/ James L. Davis

  
	
  Richard C. Carlson

  	
   

  	
  James L. Davis

  
	
  Chief Executive Officer

  	
   

  	
   

  

 

[SIGNATURE PAGE TO
FINANCING AGREEMENT]

 

3

 

Exhibit A

 

THIS
NOTE AND THE SECURITIES ISSUABLE UPON CONVERSION HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE
PROVISIONS OF ANY APPLICABLE STATE SECURITIES LAWS.  THIS NOTE AND THE SECURITIES ISSUABLE UPON
CONVERSION HEREOF MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED
OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

 

CONVERTIBLE PROMISSORY
NOTE

 

	
  $281,000.00

  	
  March 19,
  2009

  

 

FOR VALUE RECEIVED, ProUroCare Medical Inc., a Nevada corporation (the
“Company”), hereby promises to pay to James L. Davis (“Holder”), the principal sum of TWO HUNDRED
EIGHTTY-ONE DOLLARS ($281,000.00), together with interest as provided for
herein, in lawful currency of the United States of America.

 

SECTION 1

Terms

 

Section 1.1     No
Interest.  This convertible
promissory note bears no interest.

 

Section 1.2     Maturity.  Subject to the earlier conversion of this
Note, the entire outstanding principal amount of this Note, together with the
interest accrued on this Note from the date of this Note through the date of
payment, shall be payable to the Holder in cash on March 19, 2010 (the “Maturity
Date”).

 

Section 1.3     Optional
Conversion.  At anytime or from time
to time, at the option of the Holder, all or any portion of the outstanding
principal amount of this Note (the “Converted Balance”) may be converted
into that number of shares of the Company’s common stock, $0.00001 par value
per share (the “Common Stock”), as is obtained by dividing the Converted
Balance by $0.55 (the “Conversion Price”).

 

Section 1.4     Optional
Prepayment.  Subject to the Holder’s
right to have some or all of the principal on this Note converted into Common
Stock in accordance with Section 1.3 hereof, the Company may, at its option,
without premium or penalty, upon fifteen (15) days prior written notice to the
Holder, repay the unpaid principal amount of this Note, at any time in whole or
from time to time in part, together with interest accrued thereon to the date
of prepayment.  Any such prepayment shall
be applied first to the payment of accrued interest and then to repayment of
principal.  Upon any partial prepayment
of the unpaid principal amount of this Note, the Holder shall make notation on
this Note of the portion of the principal so prepaid.

 

 

Section 1.5     Subordination.  This Note shall be subordinated in all
respects (including right of payment) to all other indebtedness of the Company,
now existing or hereafter owing, to banks and other such financial
institutions.

 

Section 1.6     No
Fractional Shares or Scrips.  No
fractional shares or scrip representing fractional shares shall be issued upon
the conversion of this Note.  In lieu of
issuing such fractional shares, the Company shall round up the number of shares
to be issued to the nearest whole share.

 

Section 1.7     No
Impairment.  Without limiting or
altering the provisions or obligations of the Company under this Note, the
Company shall not avoid or seek to avoid the observance or performance of any
of the terms to be observed or performed by it pursuant to this Note and shall
at all times in good faith assist in the observance or performance of any of
the terms to be observed or performed by it pursuant to this Note.

 

Section 1.8     Release
of Obligations.  Upon conversion or
prepayment of this Note, the Company shall be forever released from all its
obligations and liabilities under this Note.

 

Section 1.9     Adjustment.

 

(a)                                  Adjustments
for Dividends and Distributions.  In
the event the Company at any time or from time to time after the date hereof
shall make, issue, or fix a record date for the determination of holders of
capital stock entitled to receive a dividend or other distribution (including a
stock split or subdivision) payable in securities of the Company, then and in
such event provisions shall be made so that the Holder shall receive, upon
conversion of this Note, in addition to the number of shares of Common Stock
receivable thereupon, the amount of securities of the Company that the Holder
would have received had this Note been converted into Common Stock on the date
of such event and had the Holder thereafter, during the period from the date of
such event to and including the conversion date, retained such securities
receivable by the Holder as aforesaid during such period, giving application to
all adjustments called for during such period under this Note with respect to
the rights of the Holder under the Note.

 

(b)                                 Adjustment
for Reclassifications, Exchanges, or Substitutions.  If the Common Stock issuable upon the
conversion of this Note shall be changed into the same or different number of
shares of any class or classes of capital stock, whether by capital
reorganization, reclassification, or otherwise (other than a subdivision or
combination of shares or stock dividend, or a reorganization, merger,
consolidation, or sale of assets provided for elsewhere), then and in each such
event the Holder shall have the right thereafter to convert this Note into the
kind and amount of shares of capital stock and other securities and property
receivable upon such reorganization, reclassification, or other change, by
holders of the number of shares of Common Stock into which this Note might have
been converted immediately prior to such reorganization, reclassification or change,
all subject to further adjustment as provided herein.

 

2

 

(c)                                  Reorganization;
Mergers; Consolidations; Sales of Assets. 
If at any time or from time to time there shall be a capital
reorganization of the Common Stock issuable upon conversion of this Note (other
than a subdivision, combination, reclassification, or exchange of shares
provided for elsewhere) or a merger or consolidation of the Company with or
into another corporation, or the sale of all or substantially all of the
Company’s properties and assets to any other entity, then, as a part of such
reorganization, merger, consolidation, or sale, provision shall be made so that
the Holder shall thereafter be entitled to receive upon conversion of this
Note, the number of shares of capital stock or other securities or property of
the Company, or of the successor corporation resulting from such merger or
consolidation or sale, to which a holder of Common Stock deliverable upon
conversion would have been entitled on such capital reorganization, merger,
consolidation, or sale. In any such case, appropriate adjustment shall be made
in the application of the provisions of this Note with respect to the rights of
the Holder after the reorganization, merger, consolidation, or sale to the end
that the provisions of this Note shall be applicable after the event as nearly
equivalent as may be practicable.

 

(d)                                 Adjustment
for Stock Splits and Combinations. 
If the Company at any time or from time to time effects a subdivision of
the outstanding capital stock, the Conversion Price then in effect immediately
before that subdivision shall be proportionately decreased, and conversely, if
the Company at any time or from time to time combines the outstanding shares of
capital stock, the Conversion Price then in effect immediately before the
combination shall be proportionately increased. Any adjustment under this
subsection (d) shall become effective at the close of business on the date
the subdivision or combination becomes effective.

 

SECTION 2

Events of Default

 

Section 2.1  Events of Default.   The entire outstanding principal amount of
this Note, together with all interest accrued thereon (such principal and
accrued interest, the “Outstanding Balance”) shall become due and
payable without any action on the part of the Holder thereof upon the happening
of any of the following events (each, an “Event of Default”):

 

(a)                                  the
Company shall generally not pay its debts as such debts become due, or shall
admit in writing its inability to pay its debts generally, or shall make a
general assignment for the benefit of creditors; or any proceeding shall be
instituted by or against the Company seeking to adjudicate it bankrupt or
insolvent, or seeking liquidation, winding up, reorganization, arrangement,
adjustment, custodianship, protection, or relief of it or its debts under any
law relating to bankruptcy, insolvency or reorganization or relief of debtors,
or seeking the entry of an order for relief or the appointment of a receiver,
custodian trustee, or other similar official for it or for any substantial part
of its property; or

 

(b)                                 the
Company shall default in the due performance or observance of any expressed or
implied covenant, agreement or provision of this Note and such default shall 

 

3

 

have continued uncured
for a period of sixty (60) days after written notice thereof to the Company
from the Holder.

 

Section 2.2 
Suits for Enforcement.  In
case any one or more Events of Default shall have occurred and be continuing,
unless such Events of Default shall have been waived in the manner provided in Section 3.5,
the Holder may proceed to protect and enforce his rights under this Section 2.2
by suit in equity or action at law.  It is agreed that in the event the Holder
prevails in such action, the Holder shall be entitled to receive all reasonable
fees, costs and expenses incurred, including without limitation such reasonable
fees and expenses of attorneys (whether or not litigation is commenced) and
reasonable fees, costs and expenses of appeals.

 

SECTION 3

Miscellaneous

 

Section 3.1     Lost,
Stolen or Mutilated Notes.  Upon
receipt of evidence satisfactory to the Company of the loss, theft, destruction
or mutilation of this Note, and in case of any such loss, theft or destruction,
upon delivery of any customary indemnity agreement reasonably satisfactory to
the Company, or in any case of any such mutilation, upon surrender and
cancellation of this Note, the Company at its expense will issue and deliver a
new Note of like tenor in an amount equal to the amount of such lost, stolen or
mutilated Note and any such lost, stolen or destroyed Note shall thereupon
become void.

 

Section 3.2     Benefit
of Note.  This Note shall be binding
upon, and shall inure to the benefit of and be enforceable by, the Holder and
his successors and assigns.  All of the
covenants and the agreements contained in this Note by or on behalf of the
Company are binding on the Company’s successors and assigns, whether by consolidation,
merger, transfer or license of all or substantially all of the property of the
Company.

 

Section 3.3     Costs
of Collection.  The Company hereby
waives presentment for payment, notice of dishonor, protest and notice of
protest and, following an Event of Default, the Company shall pay all of the
Holder’s costs of collecting or attempting to collect any amount due hereunder,
including but not limited to, all reasonable attorneys’ fees and legal
expenses.

 

Section 3.4     Notices.  All notices required under this Note shall be
deemed to have been given or made for all purposes (i) upon personal delivery, (ii) upon
confirmation receipt that the communication was successfully sent to the
applicable number if sent by facsimile; (iii) one day after being sent,
when sent by professional overnight courier service, or (iv) five days
after posting when sent by registered or certified mail.  Notices to the Company shall be sent to the
principal office of the Company (or at such other place as the Company shall
notify the Holder hereof in writing). 
Notices to the Holder shall be sent to the address of the Holder as set
forth in the books and records of the Company on the date hereof (or at such
other place as the Holder shall notify the Company hereof in writing).

 

Section 3.5     Amendment;
Waiver.  Any term of this Note may be
amended, changed or modified, and the observance of any term of this Note may
be waived (either generally or in a 

 

4

 

particular
instance and either retroactively or prospectively), only with the written
consent of the Company and the Holder

 

Section 3.6     Governing
Law and Construction.  This Note
shall be construed in accordance with and governed by the laws of the State of
Minnesota, without regard to the principles of conflicts of law.  Whenever possible, each provision of this
Note and any other statement, instrument or transaction contemplated hereby and
valid under such applicable law, but, if any provision of this Note or any
other statement, instrument or transaction contemplated hereby or relating
hereto shall be held to be prohibited or invalid under such applicable law,
such provision shall be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Note or any other statement, instrument or
transaction contemplated hereby or relating hereto.

 

IN WITNESS WHEREOF,
the Company has executed this Note as of the date first above written.

 

	
   

  	
  PROUROCARE MEDICAL INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard C. Carlson

  
	
   

  	
   

  	
  Name:

  	
  Richard C. Carlson

  
	
   

  	
   

  	
  Title:

  	
  CEO

  
					

 

5

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