EXHIBIT 10.8


COMMERCIAL GUARANTY


 


	
  Principal 

  	
  Loan Date 

  	
  Maturity 

  	
  Loan No.

  	
  Call/Coll

  	
  Account 

  	
  Officer 

  M3Y

  	
  Initials

  
	
  References
  in the shaded area are for Lender’s use only and do not limit the
  applicability of this document to any particular loan or item.  Any item above containing “* * *” has been
  omitted due to text length limitations.

  



 


	
  Borrower:

  	
  MEDICAL
  CV, INC. 

  9724 S ROBERT TRL 

  INVER GROVE HEIGHTS, MN 55077

  	
   

  	
  Lender:

  	
  ASSOCIATED
  BANK MINNESOTA, 

  NATIONAL ASSOCIATION 

  1801 RIVERSIDE AVENUE 

  MINNEAPOLIS, MN 55454

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Guarantor:

  	
  PAUL MILLER

  1809 LYDIA AV W

  ROSEVILLE, MN 55113

  	
   

  	
   

  	
   

  	
   

  



 




 





 


AMOUNT OF GUARANTY.  The principal amount of this Guaranty is Two
Million & 00/100 Dollars ($2,000,000.00).


CONTINUING GUARANTY.  For good and valuable consideration, PAUL
MILLER (“Guarantor”) absolutely and unconditionally guarantees and promises to
pay to ASSOCIATED BANK MINNESOTA, NATIONAL ASSOCIATION (“Lender”) or its order,
in legal tender of the United States of America, the Indebtedness (as that term
is defined below) of MEDICAL CV, INC. (“Borrower”) to Lender on the terms and
conditions set forth in the Guaranty. 
The obligations of Guarantor under this Guaranty are continuing.


MAXIMUM LIABILITY.  The maximum liability of Guarantor under
this Guaranty shall not exceed at any one time the sum of the principal amount
of $2,000,000.00, plus all interest thereon, plus all of Lender’s costs,
expenses, and reasonable attorneys’ fees incurred in connection with or
relating to (A) the collection of the Indebtedness, (B) the collection and sale
of any collateral for the Indebtedness or this Guaranty, or (C) the enforcement
of this Guaranty.  Attorneys’ fees
include, without limitation, reasonable attorneys’ fees whether or not there is
a lawsuit, and if there is a lawsuit, any fees and costs for trial and appeals.


The
above limitation on liability is not a restriction on the amount of the
Indebtedness of Borrower to Lender either in the aggregate or at any one
time.  If Lender presently holds one or
more guaranties, or hereafter receives additional guaranties from Guarantor,
Lender’s rights under all guaranties shall be cumulative.  This Guaranty shall not (unless specifically
provided below to the contrary) affect or invalidate any such other
guaranties.  Guarantor’s liability will
be Guarantor’s aggregate liability under the terms of this Guaranty and any
such other unterminated guaranties.


INDEBTEDNESS GUARANTEED.  The Indebtedness guaranteed by this Guaranty
includes any and all of Borrower’s indebtedness to Lender and is used in the
most comprehensive sense and means and includes any and all of Borrower’s
liabilities, obligations and debts to Lender, now existing or hereinafter
incurred or created, including, without limitation, all loans, advances,
interest, costs, debts, overdraft indebtedness, credit card indebtedness, lease
obligations, other obligations, and liabilities of Borrower, or any of them,
and any present or future judgments against Borrower, or any of them; and
whether any such Indebtedness is voluntarily or involuntarily incurred, due or
not due, absolute or contingent, liquidated or unliquidated, determined or
undetermined; whether Borrower may be liable individually or jointly with
others, or primarily or secondarily, or as guarantor or surety; whether recovery
on the Indebtedness may be or may become barred or unenforceable against
Borrower for any reason whatsoever; and whether the Indebtedness arises from
transactions which may be voidable on account of infancy, insanity, ultra
vires, or otherwise.


 


 

















 


DURATION OF GUARANTY.  This Guaranty will take effect when received
by Lender without the necessity of any acceptance by Lender, or any notice to
Guarantor or to Borrower, and will continue in full force until all
Indebtedness incurred or contracted before receipt by Lender of any notice of
revocation shall have been fully and finally paid and satisfied and all of
Guarantor’s other obligations under this Guaranty shall have been performed in
full.  If Guarantor elects to revoke
this Guaranty, Guarantor may only do so in writing.  Guarantor’s written notice of revocation must be mailed to
Lender, by certified mail, at Lender’s address listed above or such other place
as Lender may designate in writing. 
Written revocation of this Guaranty will apply only to advances or new
Indebtedness created after actual receipt by Lender of Guarantor’s written
revocation.  For this purpose and
without limitation, the term “new Indebtedness” does not include Indebtedness
which at the time of notice of revocation is contingent, unliquidated,
undetermined or not due and which later becomes absolute, liquidated,
determined or due.  This Guaranty will
continue to bind Guarantor for all Indebtedness incurred by Borrower or
committed by Lender prior to receipt of Guarantor’s written notice of
revocation, including any extensions, renewals, substitutions or modifications
of the Indebtedness.  All renewals,
extensions, substitutions, and modifications of the Indebtedness granted after
Guarantor’s revocation, are contemplated under this Guaranty and, specifically
will not be considered to be new Indebtedness. 
This Guaranty shall bind Guarantor’s estate as to Indebtedness created
both before and after Guarantor’s death or incapacity, regardless of Lender’s
actual notice of Guarantor’s death. 
Subject to the foregoing, Guarantor’s executor or administrator or other
legal representative may terminate this Guaranty in the same manner in which
Guarantor might have terminated it and with the same effect.  Release of any other guarantor or termination
of any other guaranty of the Indebtedness shall not affect the liability of
Guarantor under this Guaranty.  A
revocation Lender receives from any one or more Guarantors shall not affect the
liability of any remaining Guarantors under this Guaranty.  It is anticipated that fluctuations may occur in the
aggregate amount of Indebtedness covered by this Guaranty, and Guarantor
specifically acknowledges and agrees that reductions in the amount of
Indebtedness, even to zero dollars ($0.00), prior to Guarantor’s written
revocation of this Guaranty shall not constitute a termination of this
Guaranty.  This Guaranty is beinging
upon Guarantor and Guarantor’s heirs, successors and assigns so long as any of
the guaranteed Indebtedness remains unpaid and even though the Indebtedness
guaranteed may from time to time be zero dollars ($0.00).


GUARANTOR’S AUTHORIZATION TO LENDER.  Guarantor authorizes Lender, either before
or after any revocation hereof, without notice or demand and without lessening
Guarantor’s liability under this Guaranty, from time to time: (A) prior to
revocation as set forth above, to make one or more additional secured or
unsecured loans to Borrower, to lease equipment or other goods to Borrower, or
otherwise to extend additional credit to Borrower; (B) to alter, compromise,
renew, extend, accelerate, or otherwise change one or more times the time for
payment or other terms of the Indebtedness or any part of the Indebtedness,
including increases and decreases of the rate of interest on the Indebtedness;
extensions may be repeated and may be for longer than the original loan term;
(C) to take and hold security for the payment of this Guaranty or the
Indebtedness, and exchange, enforce, waive, subordinate, fail or decide not to
perfect, and release any such security, with or without the substitution of new
collateral; (D) to release, substitute, agree not to sue, or deal with any one
or more of Borrower’s sureties, endorsers, or other guarantors on any terms or
in any manner Lender may choose; (E) to determine how, when and what
application of payments and credits shall be made on the Indebtedness; (F) to
apply such security and direct the order or manner of sale thereof, including
without limitation, any nonjudicial sale permitted by the terms of the
controlling security agreement or deed of trust, as Lender in its discretion
may determine; (G) to sell, transfer, assign or grant participations in all or
any part of the Indebtedness; and (H) to assign or transfer this Guaranty in
whole or in part.


 


 

















 


GUARANTOR’S REPRESENTATIONS AND
WARRANTIES.  Guarantor
represents and warrants to Lender that (A) no representations or agreements of
any kind have been made to Guarantor which would limit or qualify in any way
the terms of this Guaranty; (B) this Guaranty is executed at Borrower’s request
and not at the request of Lender; (C) Guarantor has full power, right and
authority to enter into this Guaranty; (D) the provisions of this Guaranty do
not conflict with or result in a default under any agreement or other
instrument binding upon Guarantor and do not result in a violation of any law,
regulation, court decree or order applicable to Guarantor; (E) Guarantor has
not and will not, without the prior written consent of Lender, sell, lease,
assign, encumber, hypothecate, transfer, or otherwise dispose of all or
substantially all of Guarantor’s assets, or any interest therein; (F) upon
Lender’s request, Guarantor will provide to Lender financial and credit
information in form acceptable to Lender, and all such financial information
which currently has been, and all future financial information which will be
provided to Lender is and will be true and correct in all material respects and
fairly present Guarantor’s financial condition as of the dates the financial information
is provided; (G) no material adverse change has occurred in Guarantor’s
financial condition since the date of the most recent financial statements
provided to Lender and no event has occurred which may materially adversely
affect Guarantor’s financial condition; (H) no litigation, claim,
investigation, administrative proceeding or similar action (including those for
unpaid taxes) against Guarantor is pending or threatened; (I) Lender has made
no representation to Guarantor as to the creditworthiness of Borrower; and (J)
Guarantor has established adequate means of obtaining from Borrower on a
continuing basis information regarding Borrower’s financial condition.  Guarantor agrees to keep adequately informed
from such means of any facts, events, or circumstances which might in any way
affect Guarantor’s risks under this Guaranty, and Guarantor further agrees
that, absent a request for information, Lender shall have no obligation to
disclose to Guarantor any information or documents acquired by Lender in the
course of its relationship with Borrower.


GUARANTOR’S WAIVERS.  Except as prohibited by applicable law,
Guarantor waives any right to require Lender (A) to continue lending money or
to extend other credit to Borrower; (B) to make any presentment, protest,
demand, or notice of any kind, including notice of any nonpayment of the
Indebtedness or of any nonpayment related to any collateral, or notice of any
action or nonaction on the part of Borrower, Lender, any surety, endorser, or
other guarantor in connection with the Indebtedness or in connection with the
creation of new or additional loans or obligations; (C) to resort for payment
or to proceed directly or at once against any person, including Borrower or any
other guarantor; (D) to proceed directly against or exhaust any collateral held
by Lender from Borrower, any other guarantor, or any other person; (E) to give
notice of the terms, time, and place of any public or private sale of personal
property security held by Lender from Borrower or to comply with any other
applicable provisions of the Uniform Commercial Code; (F) to pursue any other
remedy within Lender’s power; or (G) to commit any act or omission of any kind,
or at any time, with respect to any matter whatsoever.


In
addition to the waivers set forth herein, if now or hereafter Borrower is or
shall become insolvent and the Indebtedness shall not at all times until paid
be fully secured by collateral pledged by Borrower, Guarantor hereby forever
waives and gives up in favor of Lender and Borrower, and Lender’s and
Borrower’s respective successors, any claim or right to payment Guarantor may
now have or hereafter have or acquire against Borrower, by subrogation or
otherwise, so that at no time shall Guarantor be or become a “creditor” of Borrower
within the meaning of 11 U.S.C. section 547(b), or any successor provision of
the Federal bankruptcy laws.


Guarantor
also waives any and all rights or defenses arising by reason of (A) any “one
action” or “anti-deficiency” law or any other law which may prevent Lender from
bringing any action, including a claim for deficiency, against Guarantor,
before or after Lender’s commencement or completion of any foreclosure action,
either judicially or by exercise of a power of sale; (B) any election of remedies
by Lender which destroys or otherwise adversely affects Guarantor’s subrogation
rights or Guarantor’s rights 


 


 

















 


to
proceed against Borrower for reimbursement, including without limitation, any
loss of rights Guarantor may suffer by reason of any law limiting, qualifying,
or discharging the Indebtedness; (C) any disability or other defense of
Borrower, of any other guarantor, or of any other person, or by reason of the
cessation of Borrower’s liability from any cause whatsoever, other than payment
in full in legal tender, of the Indebtedness; (D) any right to claim discharge
of the Indebtedness on the basis of unjustified impairment of any collateral
for the Indebtedness; (E) any statute of limitations, if at any time any action
or suit brought by Lender against Guarantor is commenced, there is outstanding
Indebtedness of Borrower to Lender which is not barred by any applicable
statute of limitations; or (F) any defenses given to guarantors at law or in
equity other than actual payment and performance of the Indebtedness.  If payment is made by Borrower, whether
voluntarily or otherwise, or by any third party, on the Indebtedness and
thereafter Lender is forced to remit the amount of that payment to Borrower’s
trustee in bankruptcy or to any similar person under any federal or state
bankruptcy law or law for the relief of debtors, the Indebtedness shall be
considered unpaid for the purpose of the enforcement of this Guaranty.


Guarantor
further waives and agrees not to assert or claim at any time any deductions to
the amount guaranteed under this Guaranty for any claim of setoff,
counterclaim, counter demand, recoupment or similar right, whether such claim,
demand or right may be asserted by the Borrower, the Guarantor, or both.


GUARANTOR’S UNDERSTANDING WITH
RESPECT TO WAIVER.  Guarantor
warrants and agrees that each of the waivers set forth above is made with
Guarantor’s full knowledge of its significance and consequences and that, under
the circumstances, the waivers are reasonable and not contrary to public policy
or law.  If any such waiver is
determined to be contrary to any applicable law or public policy, such waiver
shall be effective only to the extent permitted by law or public policy.


RIGHT OF SETOFF.  To the extent permitted by applicable law,
Lender reserves a right of setoff in all Guarantor’s accounts with Lender
(whether checking, savings, or some other account).  This includes all accounts Guarantor holds jointly with someone
else and all accounts Guarantor may open in the future.  However, this does not include any IRA or
Keogh accounts, or any trust accounts for which setoff would be prohibited by
law.  Guarantor authorizes Lender, to
the extent permitted by applicable law, to hold these funds if there is a
default, and Lender may apply the funds in these accounts to pay what Guarantor
owes under the terms of this Guaranty.


SUBORDINATION OF BORROWER’S DEBTS
TO GUARANTOR.  Guarantor
agrees that the Indebtedness of Borrower to Lender, whether now existing or
hereafter created, shall be superior to any claim that Guarantor may now have
or hereafter acquire against Borrower, whether or not Borrower becomes
insolvent.  Guarantor hereby expressly
subordinates any claim Guarantor may have against Borrower, upon any account
whatsoever, to any claim that Lender may now or hereafter have against
Borrower.  In the event of insolvency
and consequent liquidation of the assets of Borrower, through bankruptcy, by an
assignment for the benefit of creditors, by voluntary liquidation, or
otherwise, the assets of Borrower applicable to the payment of the claims of
both Lender and Guarantor shall be paid to Lender and shall be first applied by
Lender to the Indebtedness of Borrower to Lender.  Guarantor does hereby assign to Lender all claims which it may
have or acquire against Borrower or against any assignee or trustee in
bankruptcy of Borrower; provided however, that such assignment shall be
effective only for the purpose of assuring to Lender full payment in legal
tender of the Indebtedness.  If Lender
so requests, any notes or credit agreements now or hereafter evidencing any
debts or obligations of Borrower to Guarantor shall be marked with a legend
that the same are subject to this Guaranty and shall be delivered to
Lender.  Guarantor agrees, and Lender is
hereby authorized, in the name of Guarantor, from time to time to execute and
file financing statements and continuation statements and to execute such other
documents and to take such other actions as Lender deems necessary or
appropriate to perfect, preserve and enforce its rights under this Guaranty.


 


 

















 


MISCELLANEOUS PROVISIONS.  The following miscellaneous provisions are a
part of this Guaranty:


Amendments.  This Guaranty, together with any Related
Documents, constitutes the entire understanding and agreement of the parties as
to the matters set forth in this Guaranty. 
No alteration of or amendment to this Guaranty shall be effective unless
given in writing and signed by the party or parties sought to be charged or
bound by the alteration or amendment.


Attorneys’ Fees; Expenses.  Guarantor agrees to pay upon demand all of
Lender’s costs and expenses, including Lender’s reasonable attorneys’ fees and
Lender’s legal expenses, incurred in connection with the enforcement of this
Guaranty.  Lender may hire or pay
someone else to help enforce this Guaranty, and Guarantor shall pay the costs
and expenses of such enforcement.  Costs
and expenses include Lender’s reasonable attorneys’ fees and legal expenses
whether or not there is a lawsuit, including reasonable attorneys’ fees and
legal expenses for bankruptcy proceedings (including efforts to modify or
vacate any automatic stay or injunction), appeals, and any anticipated
post-judgment collection services. 
Guarantor also shall pay all court costs and such additional fees as may
be directed by the court.


Caption Headings.  Caption headings in this Guaranty are for
convenience purposes only and are not to be used to interpret or define the
provisions of this Guaranty.


Governing Law.  This Guaranty will be governed by, construed
and enforced in accordance with federal law and the laws of the State of
Minnesota.  This Guaranty has been
accepted by Lender in the State of Minnesota.


Integration.  Guarantor further agrees that Guarantor has
read and fully understands the terms of this Guaranty; Guarantor has had the
opportunity to be advised by Guarantor’s attorney with respect to this
Guaranty; the Guaranty fully reflects Guarantor’s intentions and parol evidence
is not required to interpret the terms of this Guaranty.  Guarantor hereby indemnifies and holds
Lender harmless from all losses, claims, damages, and costs (including Lender’s
attorneys’ fees) suffered or incurred by Lender as a result of any breach by
Guarantor of the warranties, representations and agreements of this paragraph.


Interpretation.  In all cases where there is more than one
Borrower or Guarantor, then all words used in this Guaranty in the singular
shall be deemed to have been used in the plural where the context and
construction so require; and where there is more than one Borrower named in
this Guaranty or when this Guaranty is executed by more than one Guarantor, the
words “Borrower” and “Guarantor” respectively shall mean all and any one or
more of them.  The words “Guarantor,”
“Borrower,” and “Lender” include the heirs, successors, assigns, and
transferees of each of them.  If a court
finds that any provision of this Guaranty is not valid or should not be
enforced, that fact by itself will not mean that the rest of this Guaranty will
not be valid or enforced.  Therefore, a
court will enforce the rest of the provisions of this Guaranty even if a
provision of this Guaranty may be found to be invalid or unenforceable.  If any one or more of Borrower or Guarantor
are corporations, partnerships, limited liability companies, or similar
entities, it is not necessary for Lender to inquire into the powers of Borrower
or Guarantor or of the officers, directors, partners, managers, or other agents
acting or purporting to act on their behalf, and any Loan indebtedness made or
created in reliance upon the professional exercise of such powers shall be
guaranteed under this Guaranty.


 


 

















 


Notices.  Any notice required to be given under this
Guaranty shall be given in writing, and except for revocation notices by Guarantor,
shall be effective when actually delivered, when actually received by
telefacsimile (unless otherwise required by law), when deposited with a
nationally recognized overnight courier, or, if mailed, when deposited in the
United States mail, as first class, certified or registered mail postage
prepaid, directed to the addresses shown near the beginning of this
Guaranty.  All revocation notices by
Guarantor shall be in writing and shall be effective upon delivery to Lender as
provided in the section of this Guaranty entitled “DURATION OF GUARANTY.”  Any party may change its address for notices
under this Guaranty by giving formal written notice to the other parties,
specifying that the purpose of the notice is to change the party’s
address.  For notice purposes, Guarantor
agrees to keep Lender informed at all times of Guarantor’s current
address.  Unless otherwise provided or
required by law, if there is more than one Guarantor, any notice given by
Lender to any Guarantor is deemed to be notice given to all Guarantors.


No Waiver by Lender.  Lender shall not be deemed to have waived
any rights under this Guaranty unless such waiver is given in writing and
signed by Lender.  No delay or omission
on the part of Lender in exercising any right shall operate as a waiver of such
right or any other right.  A waiver by
Lender of a provision of this Guaranty shall not prejudice or constitute a
waiver of Lender’s right otherwise to demand strict compliance with that
provision or any other provision of this Guaranty.  No prior waiver by Lender, nor any course of dealing between
Lender and Guarantor, shall constitute a waiver of any Lender’s rights or of
any of Guarantor’s obligations as to any future transactions.  Whenever the consent of Lender is required
under this Guaranty, the granting of such consent by Lender in any instance
shall not constitute continuing consent to subsequent instances where such
consent is required and in all cases such consent may be granted or withheld in
the sole discretion of Lender.


Successors and Assigns.  Subject to any limitations stated in this
Guaranty on transfer of Guarantor’s interest, this Guaranty shall be binding
upon and inure to the benefit of the parties, their successors and assigns.


Waive Jury.  Lender and Guarantor hereby waive the right
to any jury trial in any action, proceeding, or counterclaim brought by either
Lender or Borrower against the other.


DEFINITIONS.  The following capitalized words and terms
shall have the following meanings when used in this Guaranty.  Unless specifically stated to the contrary,
all references to dollar amounts shall mean amounts in lawful money of the
United States of America.  Words and
terms used in the singular shall include the plural, and the plural shall
include the singular, as the context may require.  Words and terms not otherwise defined in this Guaranty shall have
the meanings attributed to such terms in the Uniform Commercial Code.


Borrower.  The word “Borrower” means MEDICAL CV, INC.,
and all other persons and entities signing the Note in whatever capacity.


Guarantor.  The word “Guarantor” means each and every
person or entity signing this Guaranty, including without limitation PAUL
MILLER.


Guaranty.  The word “Guaranty” means the guaranty from
Guarantor to Lender, including without limitation a guaranty of all or part of
the Note.


Indebtedness.  The word “Indebtedness” means Borrower’s
indebtedness to Lender as more particularly described in this Guaranty.


 


 

















 


Lender.  The word “Lender” means ASSOCIATED BANK
MINNESOTA, NATIONAL ASSOCIATION, its successors and assigns.


Note.  The word “Note” means the promissory note dated November 23,
2002, in
the original principal amount of $2,500,000.00 from Borrower to
Lender, together with all renewals of, extensions of, modifications of,
refinancings of, consolidations of, and substitutions for the promissory note
or agreement.


Related Documents.  The words “Related Documents” mean all
promissory notes, credit agreements, loan agreements, environmental agreements,
guaranties, security agreements, mortgages, deeds of trust, security deeds,
collateral mortgages, and all other instruments, agreements and documents,
whether now or hereafter existing, executed in connection with the
Indebtedness.


EACH UNDERSIGNED GUARANTOR
ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS GUARANTY AND AGREES TO ITS
TERMS.  IN ADDITION, EACH GUARANTOR
UNDERSTANDS THAT THIS GUARANTY IS EFFECTIVE UPON GUARANTOR’S EXECUTION AND
DELIVERY OF THIS GUARANTY TO LENDER AND THAT THE GUARANTY WILL CONTINUE UNTIL
TERMINATED IN THE MANNER SET FORTH IN THE SECTION TITLED “DURATION OF
GUARANTY”.  NO FORMAL ACCEPTANCE BY
LENDER IS NECESSARY TO MAKE THIS GUARANTY EFFECTIVE.  THIS GUARANTY IS DATED NOVEMBER 23, 2002.


GUARANTOR:


 


	
  x

  	
  /s/
  Paul K. Miller

  
	
    PAUL MILLER,
  Individually