EXHIBIT 4.1
FORM OF NOTE
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
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$
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Promissory Note
No.
[ ,
2008]
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FOR VALUE
RECEIVED, ProUroCare Medical Inc., a Nevada corporation (the
“ Company ”), hereby promises to pay to
(“ Holder ”), the principal sum of
DOLLARS
($ ),
together with interest as provided for herein, in lawful currency
of the United States of America. This Convertible Promissory
Note (this “ Note ”) shall bear interest at a
rate of 10% per annum.
This Note is
issued pursuant to, and is entitled to the benefits of the
provisions of that certain Unit Purchase Agreement, dated as of
,
2008, (the “ Unit Purchase Agreement ”), between
the Company, the Holder and the other parties thereto.
Capitalized terms used herein and not otherwise defined herein
shall have the meaning ascribed to them in the Unit Purchase
Agreement.
SECTION 1
Terms
Section 1.1
Interest Rate . The Company agrees that interest shall
accrue on the outstanding principal amount of this Note from the
date of this Note until the principal and interest have been
converted in accordance with the provisions hereof or paid in full,
with interest accruing at a fixed rate per annum equal to ten
percent (10.0%). Such interest shall be computed on the basis
of actual days elapsed and a year of 360 days.
Section 1.2
Annual Interest Payment . Subject to the earlier
conversion of this Note, the interest accrued on this Note from the
date of this Note through the [one-year anniversary of the date
of the Unit Purchase Agreement] shall be payable to the Holder
in cash on [such one-year anniversary] . At the option
of the Holder, such accrued interest, in whole or in part, may be
converted into that number of fully paid and nonassessable shares
of the Company’s common stock, $0.00001 par value (the
“ Common Stock ”) as is obtained by dividing
(A) the amount of such accrued interest by (B) the
closing price of the Common Stock on [the one-year anniversary
of the date of the Unit Purchase Agreement] .
Section 1.3
Conversion Date . On [the eighteen-month
anniversary of the date of the Unit Purchase Agreement] (the
“ Maturity Date ”), the entire outstanding
principal amount of this Note shall automatically convert into that
number of fully paid and nonassessable shares of Common Stock as is
obtained by dividing (A) the entire outstanding principal
amount of this Note by (B) $0.005 (the “ Conversion
Price ”). All or any portion of the accrued but
unpaid interest on the Note shall, at the option of the Holder, be
(i) converted into that number of fully paid and nonassessable
shares of Common Stock as is obtained by dividing (A) such
accrued but unpaid interest by (B) the Conversion Price or
(ii) paid to the Holder in cash.
Section 1.4
Conversion Upon a Public Offering . In the event that
a Public Offering is completed before the Maturity Date, without
any act by the Company or the Holder hereof, at the effective date
of such Public Offering, the entire outstanding principal amount of
this Note, together with all interest accrued thereon (such
principal and accrued interest, the “ Outstanding
Balance ”) shall be automatically converted into that
number and type of equity securities issued by the Company in a
Public Offering as is obtained by dividing (A) the Outstanding
Balance by (B) the product of (i) the Offering Price and
(ii) 0.70. For purposes of this Note, (i) “
Public Offering ” shall mean an underwritten public
offering of equity securities of the Company and (ii) “
Offering Price ” shall mean the per share or other
unit price at which equity securities of the Company are offered in
the Public Offering.
Section 1.5
Optional Prepayment . Subject to the Holder’s
right to have all interest accrued from the date of this Note
through the [the one-year anniversary of the date of the Unit
Purchase Agreement] converted into Common Stock in accordance
with Section 1.2 hereof, beginning on [the one-year
anniversary of the date of the Unit Purchase Agreement] , the
Company may, at its option, without premium or penalty, upon five
(5) 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. The Company shall prepay such principal and
interest to the Holders of all outstanding Notes on a pro rata
basis. 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 1.6
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 pay all of the cash value of any fractional interest to
Holder.
Section 1.7 No Impairment . Without
limiting or altering the provisions or obligations of the Company
under this Note or the Unit Purchase Agreement, 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 the Unit Purchase Agreement 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 and the
Unit Purchase Agreement.
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Section 1.8 Issuance of Shares .
Holder acknowledges that
the Company currently has insufficient authorized shares of Common
Stock to permit the conversion of this Note and all of the other
similar notes sold pursuant to the Unit Purchase Agreement in
accordance with Section 1.3 hereof.
Section 1.9 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 1.10 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 t
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