EXHIBIT 10.2
                                                                    ------------


                              DEVELOPMENT AGREEMENT
                                       FOR
                                SENSOR GUIDED DRE


This document  serves as a Development  Agreement  for  ProUroCare  Medical Inc.
(ProUroCare)  pertaining  to the  development  of the Prostate  Tactile  Imaging
System  (Sensor  Guided  DRE)  with the  positioning  capability.  Work is to be
performed by Artann  Laboratories,  Inc. (Artann) and Armen Sarvazyan in concert
with  Minnetronix  Inc. for ProUroCare in accordance  with the details  outlined
below.

1.   DESIGN FREEZE AND ASSEMBLY OF A PROTOTYPE.

Scope:
------

     o    Stage 1. Finalize the design of all components of the Prostate Tactile
          Imaging  System with the  positioning  capability.  Add to the current
          angular   orientation   system  additional  axial  positioning  means.
          Redesign the  transrectal  probe to accommodate  the components of the
          positioning  system.  Build a prototype probe with optimized  geometry
          and tactile sensor array configuration.  Make necessary changes in the
          software to provide  simultaneous  acquisition  and  processing of the
          position and pressure  pattern data.  Test and validate the components
          and the  entire  assembly  in  laboratory  experiments,  document  the
          testing results.

     o    Duration of Stage 1 is 2 months and the budget is $100,000.

     o    Stage 2. Build 2 (two)  prototypes  of the  Prostate  Tactile  Imaging
          System with the positioning capability. Design algorithms and software
          for the real-time  reconstruction  and imaging the  prostate.  Perform
          evaluation  testing of the prototype.  Possibly,  the prototype  could
          also be tested in  clinical  environment  on a few  patients,  however
          clinical   testing  will  not  constitute  an  obligation  under  this
          contract.

     o    Duration of Stage 2 is 3 months and the budget is $80,000.

Total duration:    5 months
---------------

Total budget:      $180,000
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2.   ASSISTANCE TO MINNETRONIX INC.

Artann Laboratories shall assist Minnetronix Inc. or an alternative appointed by
ProUroCare  in the  development  of the  systems  for  evaluation  in a clinical
environment.  This service  relationship  shall include Artann's  cooperation in
development of a complete Technical Data File by Minnetronix Inc.

Duration:  Artann's  services could be requested after 3 months from the date of
signing of this  agreement.  The no-fee  consulting and at-cost  services option
will be  available  for 6 months  from the start date of the  relationship  with
Minnetronix  and could be extended  per mutual  agreement of both  parties.  The
completion of the service  portion of the agreement is expected to extend beyond
the SGDRE system delivery and will not be used as a milestone for the purpose of
the agreement or the R&D Agreement.

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Cost:  Artann's  staff  including  Armen  Sarvazyan  will  be  available  to the
designated  engineers from  Minnetronix Inc. at no charge for the consulting and
advisory  services  including:  unlimited  telephone  consultations  and  Artann
facilities   visits.   Any   additional   hardware  and  software   development,
experimental work, document  preparation or travel requested by Minnetronix Inc.
will be billed to ProUroCare at reasonable  cost according to hours spend on the
project.  The  reasonableness  of such  requests  will be  mediated by a trustee
designated by both parties, namely Vladimir Drits.

Payment:  The payment  shall be  distributed  in  accordance  with the following
schedule:

     o    50% advance payment upon commencement of each milestone.

     o    50% final payment upon delivery of each milestone.

Notes: Start date shall be July 15, 2004. Payment Terms: Net 15, 3% interest per
month applies after the 15-day period.


ARTANN LABORATORIES, INC.

By:  /s/Armen Sarvazyan
  ------------------------
Its: Chief Scientist
   -----------------------


PROUROCARE MEDICAL INC.

By:  /s/Michael P. Grossman
  -------------------------

Its: President and CEO
   ------------------------


ARMEN SARVAZYAN

By:  /s/Armen Sarvazyan
  ------------------------

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