**Exhibit 10.38**

 
| **LOAN NUMBER** | ** ** | **LOAN NAME**           | ** ** | **ACCT. NUMBER** | ** ** | **NOTE DATE** | ** ** | **INITIALS** | ** ** |
|-----------------|------------|-------------------------|------------|------------------|------------|---------------|------------|--------------|------------|
| 4060026         |       | PROUROCARE MEDICAL, INC |       |             |       | 10/10/07      |       | KRH          |       |

 
| **NOTE AMOUNT** | ** **   | **INDEX (w/Margin)** | ** **                             | **RATE** | ** ** | **MATURITY DATE** | ** ** | **LOAN PURPOSE** | ** ** |
|----------------------|--------------|---------------------------|----------------------------------------|----------|------------|------------------------|------------|-----------------------|------------|
| $                    | 1,200,000.00 |                      | Wall Street  Journal Prime plus 1.000% |     | 8.750      | %                      | 02/28/09   |                  | Commercial |   |
|                      |              |                           |                                        |          |            |                        |            |                       |            |  |

 

Creditor Use Only

 

**PROMISSORY NOTE**

(Commercial - Single Advance)

 

**DATE AND PARTIES.**The date of this Promissory Note (Note) is October 10, 2007. The partiesand 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            |
| 5500 WAYZATA BLVD SUITE 310     |
| GOLDEN VALLEY, Minnesota  55416 |

 

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

 

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

 

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

 

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

 

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

 

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

 

F.Percent. Rates and rate change limitations are expressed as annualizedpercentages.

 

2. PROMISE TO PAY. For valuereceived, I promise to pay you or your order, at your address, or at such otherlocation as you may designate, the principal sum of $1,200,000.00 (Principal)plus interest from October 10, 2007 on the unpaid Principal balance untilthis Note matures or this obligation is accelerated.

 

3. INTEREST. Interest will accrueon the unpaid Principal balance of this Note at the rate of 8.750 percent (InterestRate) until October 11, 2007, after which time it may change as describedin 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 InterestRate otherwise payable as described in this section. In such event, interestwill accrue on the unpaid Principal balance of this Note at a rate equal to therate 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 theterms of this Note will be limited to the maximum lawful amount of interestallowed by state or federal law, whichever is greater. Amounts collected inexcess of the maximum lawful amount will be applied first to the unpaidPrincipal balance. Any remainder will be refunded to me.

 

C.Statutory Authority. The amount assessed or collected on this Note isauthorized 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 thistransaction,

 

(1) Index.Beginning with the first Change Date, the Interest Rate will be based on thefollowing index: the base rate on corporate loans posted by at least 75% of the30 largest U.S. banks known as the Wall Street Journal U.S. Prime Rate.

 

TheCurrent 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 InterestRate on this Note will be the same rate you charge on any other loans or classof loans you make to me or other borrowers, If this Index is no longeravailable, you will substitute a similar index. You will give me notice of yourchoice.

 

(2) ChangeDate. Each date on which the Interest Rate may change is called a Change Date.The Interest Rate may change October 11, 2007 and daily thereafter.

 

(3) CalculationOf Change. On each Change Date you will calculate the Interest Rate, which willbe the Current Index plus 1.000 percent. The result of this calculation will berounded up to the nearest .001 percent. Subject to any limitations, this willbe the Interest Rate until the next Change Date. The new Interest Rate will becomeeffective on each Change Date. The Interest Rate and other charges on this Notewill 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 6.500 percent.

 

(5) EffectOf Variable Rate. A change in the Interest Rate will have the following effecton the payments: The amount of scheduled payments and the amount of the finalpayment will change.

 

4. REMEDIAL CHARGES. In addition tointerest or other finance charges, I agree that I will pay these additionalfees based on my method and pattern of payment. Additional remedial charges maybe described elsewhere in this Note.

 

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

 

5. GOVERNING AGREEMENT. This Noteis further governed by the Commercial Loan Agreement executed between you andme as a part of this Loan, as modified, amended or supplemented. The CommercialLoan Agreement states the terms and conditions of this Note, including theterms 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 incompliance with the terms contained in the Commercial Loan Agreement.

 

6. PAYMENT. I agree to pay thisNote in installments of accrued interest beginning November 28, 2007, andthen on the 28th day of each month thereafter, I agree to pay the entire unpaidPrincipal and any accrued but unpaid interest on February 28, 2009.

 

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

 

Each payment I make on this Notewill 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 youand I agree to a different application of payments, we will describe ouragreement on this Note. You may change how payments are applied in your solediscretion without notice to me. The actual amount of my final payment will dependon my payment record.

 

7. PREPAYMENT. I may prepay thisLoan in full or in part at any time, Any partial prepayment will not excuse anylater scheduled payments until I pay in full,

 

8. LOAN PURPOSE. The purpose ofthis Loan is WORKING CAPITAL.

 

9. ADDITIONAL TERMS. THIS NOTE ISSECURED BY A SEPERATE SECURTY AGREEMENT DATED JANUARY 11, 2006.

 

THE TERMS AND CONDITIONS OF THISNOTE DATED OCTOBER 10, 2007 SHALL NOT BE EFFECTIVE UNTIL AN INTEREST RESERVE ISFUNDED EQUAIVALENT TO FOUR MONTHS INTEREST PAYMENT.

 
| **Document Name**                                                | ** ** | **Parties  to Document** |
|------------------------------------------------------------------|------------|--------------------------|
|                                                             |       |                     |
| Commercial Loan And  Security Agreement. PROUROCARE MEDICAL, INC |       | PROUROCARE MEDICAL, INC. |

 

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

 

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

 

A.Additional Waivers By Borrower. In addition, I, and any party to this Note andLoan, 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 orbased on the status of a party to this Note.

 

(1) Youmay renew or extend payments on this Note, regardless of the number of suchrenewals or extensions.

 

(2) Youmay release any Borrower, endorser, guarantor, surety, accommodation maker orany other co-signer.

 

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

 

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

 

(5) Youmay enter into any sales, repurchases or participations of this Note to anyperson in any amounts and I waive notice of such sales, repurchases orparticipations.

 

(6) Iagree that any of us signing this Note as a Borrower is authorized to modifythe terms of this Note or any instrument securing, guarantying or relating tothis Note.

 

(7) Iagree that you may inform any party who guarantees this Loan of any Loanaccommodations, renewals, extensions, modifications, substitutions or futureadvances.

 

B. No Waiver By Lender. Your courseof dealing, or your forbearance from, or delay in, the exercise of any of yourrights, remedies, privileges or right to insist upon my strict performance ofany provisions contained in this Note, or any other Loan Document, shall not beconstrued as a waiver by you, unless any such waiver is in writing and issigned by you.

 

13. COMMISSIONS. I understand andagree that you or your affiliate will earn commissions or fees on any insuranceproducts, and may earn such fees on other services that I buy through you oryour affiliate.

 

14. APPLICABLE LAW. This Note isgoverned by the laws of Minnesota, the United States of America, and to theextent 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 eventof a dispute, the exclusive forum, venue and place of jurisdiction will be inMinnesota, unless otherwise required by law.

 

15. JOINT AND INDIVIDUAL LIABILITYAND SUCCESSORS. My obligation to pay the Loan is independent of the obligationof any other person who has also agreed to pay it, You may sue me alone, oranyone else who is obligated on the Loan, or any number of us together, tocollect the Loan. Extending the Loan or new obligations under the Loan, will notaffect 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 yoursuccessors and assigns and shall be binding upon and enforceable against me andmy personal representatives, successors, heirs and assigns.

 

16. AMENDMENT, INTEGRATION ANDSEVERABILITY. This Note may not be amended or modified by oral agreement. Noamendment or modification of this Note is effective unless made in writing andexecuted by you and me. This Note and the other Loan Documents are the completeand final expression of the agreement. If any provision of this Note isunenforceable, then the unenforceable provision will be severed and theremaining provisions will still be enforceable.

 

17. INTERPRETATION. Whenever used,the singular includes the plural and the plural includes the singular. Thesection headings are for convenience only and are not to be used to interpretor define the terms of this Note.

 

18. NOTICE, FINANCIAL REPORTS ANDADDITIONAL DOCUMENTS. Unless otherwise required by law, any notice will begiven by delivering it or mailing it by first class mail to the appropriateparty’s address listed in the DATE AND PARTIES section, or to any other addressdesignated in writing. Notice to one Borrower will be deemed to be notice toall Borrowers. I will inform you in writing of any change in my name, addressor other application information. I agree to sign, deliver, and file anyadditional documents or certifications that you may consider necessary toperfect, continue, and preserve my obligations under this Loan and to confirmyour lien status on any Property. Time is of the essence.

 

19. CREDIT INFORMATION. I agree tosupply you with whatever information you reasonably request. You will make requestsfor this information without undue frequency, and will give me reasonable timein which to supply the information.

 

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

 

21. SIGNATURES. By signing, I agreeto the terms contained in this Note. I also acknowledge receipt of a copy ofthis Note.

 

**BORROWER:**

 
| /s/ RICK CARLSON        |   |
|-------------------------|--------|
| RICK CARLSON, CEO       |
| PROUROCARE MEDICAL, INC |

 

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