**Exhibit 10.40**

 

**GUARANTY**

(Continuing Debt - Unlimited)

 

DATEAND PARTIES. The date of this Guaranty 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

 

GUARANTOR:

BRUCE R CULVER

1856 DAWN MEADOW ST

WESTLAK E VILLAGE, California 91362

 

1.   DEFINITIONS. As used in this Guaranty, the terms have the followingmeanings:

 

A.      Pronouns. The pronouns “I”, “me” and ‘my”refer to all persons or entities signing this Guaranty, individually andtogether. “You” and “your” refer to the Lender.

 

B.        Note. “Note” refers to the document thatevidences the Borrower’s indebtedness, and any extensions, renewals,modifications and substitutions of the Note.

 

C.   Property. “Property” means any property, real,personal or intangible, that secures performance of the obligations of theNote, Debt, or this Guaranty.

 

2.   SPECIFIC AND FUTURE DEBT GUARANTY. For good and valuable consideration,the receipt and sufficiency of which is hereby acknowledged, and to induce you,at your option, to make loans or engage in any other transactions with theBorrower from time to time, I absolutely and unconditionally agree to all termsof and guaranty to you the payment and performance of each and every Debt, ofevery type, purpose and description that the Borrower either individually,among all or a portion of themselves, or with others. may now or at any time inthe future owe you, including, but not limited to the following described Debt(s) includingwithout limitation, all principal, accrued interest, attorneys’ fees andcollection costs, when allowed by law, that may become due from the Borrower toyou in collecting and enforcing the Debt and all other agreements with respectto the Borrower.

 

Apromissory note or other agreement, No. 4060307, dated October 10,2007, from PROUROCARE MEDICAL, INC (Borrower) to you, in the amount of $400,000.00.

 

Inaddition, Debt refers to debts, liabilities, and obligations of the Borrowerincluding, but not limited to, amounts agreed to be paid under the terms of anynotes or agreements securing the payment of any debt, loan, liability orobligation, overdrafts, letters of credit, guaranties, advances for taxes,insurance, repairs and storage, and all extensions, renewals, refinancings andmodifications of these debts whether now existing or created or incurred in thefuture, due or to become due, or absolute or contingent, including obligationsand duties arising from the terms of all documents prepared or submitted forthe transaction such as applications, security agreements, disclosures, and theNote.

 

Youmay, without notice, apply this Guaranty to such Debt of the Borrower as youmay select from time to time.

 

3.   EXTENSIONS. I consent to all renewals, extensions, modifications andsubstitutions of the Debt which may be made by you upon such terms andconditions as you may see fit from time to time without further notice to meand without limitation as to the number of renewals, extensions, modificationsor substitutions.

 

A.  Future Advances. I waive notice of and consentto any and all future advances made to the Borrower by you.

 

4.   UNCONDITIONAL LIABILITY. I am unconditionally liable under thisGuaranty, regardless of whether or not you pursue any of your remedies againstthe Borrower, against any other maker, surety, guarantor or endorser of theDebt or against any Property. You may sue me alone, or anyone else who isobligated on this Guaranty, or any number of us together, to collect the Debt.My liability is not conditioned on the signing of this Guaranty by any otherperson and further is not subject to any condition not expressly set forth inthis Guaranty or any instrument executed in connection with the Debt. Myobligation to pay according to the terms of this Guaranty shall not be affectedby the illegality, invalidity or unenforceability of any notes or agreementsevidencing the Debt, the violation of any applicable usury laws, forgery, orany other circumstances which make the indebtedness unenforceable against theBorrower. I will remain obligated to pay on this Guaranty even if any otherperson who is obligated to pay the Debt, including the Borrower, has suchobligation discharged in bankruptcy, foreclosure, or otherwise discharged bylaw.

 

5.   BANKRUPTCY. If a bankruptcy petition should at any time be filed by oragainst the Borrower, the maturity of the Debt, so far as my liability is concerned,shall be accelerated and the Debt shall be immediately payable by me. Iacknowledge and agree that this Guaranty, and the Debt secured hereby, willremain in full force and effect at all times, notwithstanding any action orundertakings by, or against, you or against any Property, in connection withany obligation in any proceeding in the United States Bankruptcy Courts. Suchaction or undertaking includes, without limitation, valuation of Property,election of remedies or imposition of secured or unsecured claim status uponclaims by you, pursuant to the United States Bankruptcy Code, as amended. Inthe event that any payment of principal or interest received and paid by anyother guarantor, borrower, surety, endorser or co-maker is deemed, by finalorder of a court of competent jurisdiction, to have been a voidable preferenceunder the bankruptcy or insolvency laws of the United States or otherwise, thenmy obligation will remain as an obligation to you and will not be considered ashaving been extinguished.

 

6.   REVOCATION. I agree that this is an absolute and unconditional Guaranty.I agree that this Guaranty will remain binding on me, whether or not there areany Debts outstanding, until you have actually received written notice of myrevocation or written notice of my death or incompetence. Notice of revocationor notice of my death or incompetence will not affect my obligations under thisGuaranty with respect to any Debts incurred by or for which you have made acommitment to Borrower before you actually receive such notice, and allrenewals, extensions, refinancings, and modifications of such Debts. I agreethat if any other person signing this Guaranty provides a notice of revocationto you, I will still be obligated under this Guaranty until I provide such anotice of revocation to you. if any other person signing this Guaranty dies oris declared incompetent, such fact will not affect my obligations under thisGuaranty.

 

7.   SECURITY. This Guaranty is secured by Property described in these securityinstruments or agreements: ASSIGNMENT OF INVESTMENT PROPERTY/SECURITIES DATEDOCTOBER 10, 2007.

 

8.   PROPERTY. I agree that any Property may be assigned, exchanged, releasedin whole or in part or substituted without notice to me end without defeating,discharging or diminishing my liability. My obligation is absolute and yourfailure to perfect any security interest or any act or omission by you whichimpairs the Property will not relieve me or my liability under this Guaranty.You are under no duty to preserve or protect any Property until you are inactual or constructive possession. For purposes of this paragraph, you willonly be in “actual” possession when you have physical, immediate and exclusivecontrol over the Property and have accepted such control in writing, Further,you will only be deemed to be in “constructive” possession when you have boththe power and intent to exercise control over the Property.

 

9.   DEFAULT. I will be in default if any of the following occur:

 
| A.                                                                                                                                                                                                                                                                                                                                                                                                                             | Payments. I fail to make a  payment in full when due.                                                                           |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                           |                                                                                                                            |
| B.                                                                                                                                                                                                                                                                                                                                                                                                                             | Insolvency or Bankruptcy.  The death, dissolution or insolvency of, appointment of a receiver by or on  behalf of, application  |
| of any debtor relief law,  the assignment for the benefit of creditors by or on behalf of, the voluntary  or involuntary termination of existence by, or the commencement of any  proceeding under any present or future federal or state insolvency,  bankruptcy, reorganization, composition or debtor relief law by or against  me, Borrower, or any cosigner, endorser, surety or guarantor of this Guaranty  or any Debt. |
|                                                                                                                                                                                                                                                                                                                                                                                                                           |
| C.                                                                                                                                                                                                                                                                                                                                                                                                                             | Death or Incompetency. I  die or am declared legally incompetent.                                                               |
|                                                                                                                                                                                                                                                                                                                                                                                                                           |                                                                                                                            |
| D.                                                                                                                                                                                                                                                                                                                                                                                                                             | Failure to Perform. I fail  to perform any condition or to keep any promise or covenant of this Guaranty.                       |
|                                                                                                                                                                                                                                                                                                                                                                                                                           |                                                                                                                            |
| E.                                                                                                                                                                                                                                                                                                                                                                                                                             | Other Documents. A default  occurs under the terms of any other document relating to the Debt.                                  |
|                                                                                                                                                                                                                                                                                                                                                                                                                           |                                                                                                                            |
| F.                                                                                                                                                                                                                                                                                                                                                                                                                             | Other Agreements. I am in  default on any other debt or agreement I have with you.                                              |
|                                                                                                                                                                                                                                                                                                                                                                                                                           |                                                                                                                            |
| G                                                                                                                                                                                                                                                                                                                                                                                                                              | Misrepresentation. I make  any verbal or written statement or provide any financial information that is  untrue, inaccurate, or |
| conceals a material fact at  the time it is made or provided.                                                                                                                                                                                                                                                                                                                                                                  |
|                                                                                                                                                                                                                                                                                                                                                                                                                           |                                                                                                                            |
| H.                                                                                                                                                                                                                                                                                                                                                                                                                             | Judgment. I fail to satisfy  or appeal any judgment against me.                                                                 |
|                                                                                                                                                                                                                                                                                                                                                                                                                           |                                                                                                                            |
| I.                                                                                                                                                                                                                                                                                                                                                                                                                             | Forfeiture. The Property is  used in a manner or for a purpose that threatens confiscation by a legal  authority.               |
|                                                                                                                                                                                                                                                                                                                                                                                                                           |                                                                                                                            |
| J.                                                                                                                                                                                                                                                                                                                                                                                                                             | Name Change. I change my  name or assume an additional name without notifying you before making such a  change.                 |
|                                                                                                                                                                                                                                                                                                                                                                                                                           |                                                                                                                            |
| K.                                                                                                                                                                                                                                                                                                                                                                                                                             | Property Transfer. I  transfer all or a substantial part of my money or property.                                               |
|                                                                                                                                                                                                                                                                                                                                                                                                                           |                                                                                                                            |
| L.                                                                                                                                                                                                                                                                                                                                                                                                                             | Property Value. You  determine in good faith that the value of the Property has declined or is  impaired.                       |
|                                                                                                                                                                                                                                                                                                                                                                                                                           |                                                                                                                            |
| M.                                                                                                                                                                                                                                                                                                                                                                                                                             | Insecurity. You determine  in good faith that a material adverse change has occurred in my financial  condition from the        |
| conditions set forth in my  most recent financial statement before the date of this Guaranty or that the  prospect for payment or performance of the Debt is impaired for any reason.                                                                                                                                                                                                                                          |

 

10.WAIVERS AND CONSENT. To the extent not prohibited by law, I waiveprotest, presentment for payment, demand, notice of acceleration, notice ofintent to accelerate and notice of dishonor.

 

A.      Additional Waivers. In addition, to the extentpermitted by law, I consent to certain actions you may take, and generallywaive defenses that may be available based on these actions or based, on thestatus of a party to the Debt or this Guaranty.

 

(1)   You may renew or extend payments on the Debt,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 anyProperty.

 

(4)          You, or any institution participating in theDebt, may invoke your right of set-off.

 

(5)          You may enter into any sales, repurchases orparticipations of the Debt to any person in any amounts and I waive notice ofsuch sales, repurchases or participations.

 

(6)          I agree that the Borrower is authorized tomodify the terms of the Debt or any instrument securing, guarantying orrelating to the Debt.

 

(7)          You may undertake a valuation of any Propertyin connection with any proceedings under the United States Bankruptcy Codeconcerning the Borrower or me, regardless of any such valuation, or actualamounts received by you arising from the sale of such Property.

 

(8)          I agree to consent to any waiver granted theBorrower, and agree that any delay or lack of diligence in the enforcement ofthe Debt, or any failure to file a claim or otherwise protect any of the Debt,in no way affects or impairs my liability.

 

(9)          I agree to waive reliance on anyanti-deficiency statutes, through subrogation or otherwise, and such statutesIn no way affect or impair my liability. In addition, until the obligations ofthe Borrower to Lender have been paid in full, I waive any right ofsubrogation, contribution, reimbursement, indemnification, exoneration, and anyother right I may have to enforce any remedy which you now have or in thefuture may have against the Borrower or another guarantor or as to any Property.

 

Any Guarantor who is an “insider,” as contemplated by the United StatesBankruptcy Code, 11 U.S.C. 101, as emended, makes these waivers permanently. (Aninsider includes, among others, a director, officer, partner, or other personin control of the Borrower, a person or an entity that is a copartner with theBorrower, an entity in which the Borrower is a general partner, director,officer or other person in control or a close relative of any of these otherpersons.) Any Guarantor who is not an insider makes these waivers until allDebt is fully repaid.

 

B. No Waiver By Lender. Your course of dealing, or your forbearancefrom, or delay in, the exercise of any of your rights, remedies, privileges orright to insist upon my strict performance of any provisions contained in theDebt instruments, shall not be construed as a waiver by you, unless any suchwaiver is in writing and is signed by you.

 

C. Waiver of Claims. I waive all claims for loss or damage caused byyour acts or omissions where you acted reasonably and in good faith.

 

11.REMEDIES. After the Borrower or) default, you may at your option do any one ormore of the following.

 

A. Acceleration. You may make all or any part of the amount owing by theterms of this Guaranty immediately due.

 

B. Sources. You may use any and all remedies you have under state orfederal law or In any documents relating to the Debt.

 

C. Insurance Benefits. You may make a claim for any and all insurancebenefits or refunds that may be available on default.

 

D. Payments Made on the Borrower’s Behalf. Amounts advanced on theBorrower’s behalf will be immediately due and may be added to the balance owingunder the Debt.

 

E. Attachment. You may attach or garnish my wages or earnings.

 

F. Set-Off. You may use the right of set-off. This means you may set-offany amount due and payable under the terms of this Guaranty against any right **I**have to receive money from you.

 

My right to receive money from you includes any deposit or share accountbalance I have with you any money owed to me on an item presented to you or inyour possession for collection or exchange; and any repurchase agreement orother non-deposit obligation. “Any amount due and payable under the terms ofthis Guaranty” means the total amount to which you are entitled to demandpayment under the terms of this Guaranty at the time you set-off.

 

Subject to any other written contract, if my right to receive money fromyou is also owned by someone who has not agreed to pay the Debt, your right ofset- off will apply to my interest in the obligation and to any other amounts Icould withdraw on my sole request or endorsement.

 

Your right of set-off does not apply to en account or other obligationwhere my rights arise only in a representative capacity. It also does not applyto any Individual Retirement Account or other tax-deferred retirement account.

 

You will not be liable for the dishonor of any check when the dishonoroccurs because you set-off against any of my accounts. I agree to hold youharmless from any such claims arising as a result of your exercise of yourright of set-off.

 

G. Waiver. Except as otherwise required by law, by choosing any one ormore of these remedies you do not give up your right to use any other remedy.You do not waive a default If you choose not to use a remedy. By electing notto use any remedy, you do not waive your right to later consider the event adefault and to use any remedies if the default continues or occurs again.

 

12. COLLECTION EXPENSES AND ATTORNEYS’ FEES. On or after Default, to the extent permittedby law, I agree to pay all expenses of collection, enforcement or protection ofyour rights and remedies under this Guaranty or any other document relating tothe Debt. To the extent permitted by law, expenses include, but are not limitedto, reasonable attorneys’ fees, court costs and other legal expenses. All feesand expenses will be secured by the Property I have granted to you, if any. Inaddition, to the extent permitted by the United States Bankruptcy Code, I agreeto pay the reasonable attorneys’ fees incurred by you to protect your rightsand interests in connection with any bankruptcy proceedings initiated by oragainst me.

 

13.WARRANTIES AND REPRESENTATIONS. I have the right and authority to enter intothis Guaranty. The execution anc4 delivery of this Guaranty will not violateany agreement governing me or to which I am a party.

 

Inaddition, I represent and warrant that this Guaranty was entered into at therequest of the Borrower, and that I am satisfied regarding the Borrower’sfinancial condition and existing indebtedness, authority to borrow and the useand intended use of all Debt proceeds. I further represent and warrant that Ihave not relied on any representations or omissions from you or any informationprovided by you respecting the Borrower, the Borrower’s financial condition andexisting indebtedness, the Borrower’s authority to borrow or the Borrower’s useand intended use of all Debt proceeds.

 

14.RELIANCE. I acknowledge that you are relying on this Guaranty in extendingcredit to the Borrower, and I have signed this Guaranty to induce you to extendsuch credit. I represent and warrant to you that I have a direct andsubstantial economic interest in the Borrower and expect to derive substantialbenefits from any loans and financial accommodations resulting in the creationof indebtedness guarantied hereby. I agree to rely exclusively on the right torevoke this Guaranty prospectively as to future transactions in the manner aspreviously described in this Guaranty if at any time, in my opinion, thebenefits then being received by me in connection with this Guaranty are notsufficient to warrant the continuance of this Guaranty. You may relyconclusively on a continuing warranty that I continue to be benefited by this Guarantyand you will have no duty to inquire into or confirm the receipt of any suchbenefits, and this Guaranty will be effective and enforceable by you withoutregard to the receipt, nature or value of any such benefits.

 

15.APPLICABLE LAW, This Guaranty is governed by the laws of Minnesota, the UnitedStates of America, and to the extent required, by the laws of the jurisdictionwhere the Property is located, except to the extent such state laws arepreempted by federal law.

 

16.AMENDMENT, INTEGRATION AND SEVERABILITY. This Guaranty may not be amended ormodified by oral agreement. No amendment or modification of this Guaranty iseffective unless made in writing and executed by you and me. This Guaranty isthe complete and final expression of the agreement. If any provision of thisGuaranty is unenforceable, then the unenforceable provision will be severed andthe remaining provisions will still be enforceable.

 

17. ASSIGNMENT. If you assign any of the Debts, you may assignall or any part of this Guaranty without notice to me or my consent, and thisGuaranty will inure to the benefit of your assignee to the extent of suchassignment. You will continue to have the unimpaired right to enforce thisGuaranty as to any of the Debts that are not assigned. This Guaranty shallinure to the benefit of and be enforceable by you and your successors andassigns and any other person to whom you may grant an interest in the Debts andshall be binding upon and enforceable against me and my personalrepresentatives, successors, heirs and assigns.

 

18.INTERPRETATION. Whenever used, the singular includes the plural and the pluralincludes the singular. The Section headings are for convenience only andare not to be used to interpret or define the terms of this Guaranty.

 

19.NOTICE. FINANCIAL REPORTS AND ADDITIONAL DOCUMENTS. Unless otherwise requiredby law, any notice will be given by delivering it or mailing it by first classmail to the appropriate party’s address listed in the DATE AND PARTIES section,or to any other address designated in writing. Notice to one Guarantor will bedeemed to be notice to all Guarantors. I will inform you in writing of anychange in my name, address or other application information, I will provide youany financial statement or information you request. All financial statementsand information I give you will be correct and complete. I agree to sign,deliver, and file any additional documents or certifications that you mayconsider necessary to perfect, continue, and preserve my obligations under thisGuaranty and to confirm your lien status on any Property. Time is of theessence,

 

20.CREDIT INFORMATION. I agree that from time to time you may obtain creditinformation about me from others, including other lenders and credit reportingagencies, and report to others (such as a credit reporting agency) your creditexperience with me. I agree that you will not be liable for any claim arisingfrom the use of information provided to you by others or for providing suchinformation to others.

 

21.SIGNATURES. By signing, I agree to the terms contained in this Guaranty. I alsoacknowledge receipt of a copy of this Guaranty.

 

 
| **GUARANTOR:**     |
|--------------------|
| ** **         |
| /s/ BRUCE R CULVER |   |
| Individually       |
| BRUCE R CULVER     |

 

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