**Exhibit 10.42**

 

**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:

WILLIAM S REILING

C/O SUNRISE COMMUNITY BANK

200 UNIVERSITY AVENUE WEST #200

ST PAUL, Minnesota 55103

 

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

 

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

 

B. Note. “Note” refers to the document that evidences the Borrower’sindebtedness, and any extensions, renewals, modifications and substitutions ofthe Note.

 

C. Property. “Property” means any property, real, personal orintangible, that secures performance of the obligations of the Note, Debt, orthis Guaranty.

 

2.  SPECIFIC AND FUTURE DEBTGUARANTY. For good and valuable consideration, the receipt and sufficiency ofwhich is hereby acknowledged, and to induce you, at your option, to make loansor engage in any other transactions with the Borrower from time to time, Iabsolutely and unconditionally agree to all terms of and guaranty to you thepayment and performance of each and every Debt, of every type, purpose anddescription that the Borrower either individually, among all or a portion ofthemselves, or with others. may now or at any time in the 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. 4060026, dated October 10,2007, from PROUROCARE MEDICAL, INC (Borrower) to you, in the amount of $1,200,000.00.

 

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.

 

Myliability will not exceed $1,000,000.00 of the principal amount outstanding atdefault, plus accrued interest, attorneys’ fees and collection costs, whenallowed by law, and all other costs, fees and expenses agreed to be paid underall agreements evidencing the Debt and securing the payment of the Debt. Youmay, without notice, apply this Guaranty to such Debt of the Borrower as youmay select from time to time.

 

3.EXTENSIONS. I consent to allrenewals, extensions, modifications and substitutions of the Debt which may bemade by you upon such terms and conditions as you may see fit from time to timewithout further notice to me and without limitation as to the number ofrenewals, extensions, modifications or substitutions.

 

4.  UNCONDITIONAL LIABILITY. I amunconditionally liable under this Guaranty, regardless of whether or not youpursue any of your remedies against the Borrower, against any other maker,surety, guarantor or endorser of the Debt or against any Property. You may sueme alone, or anyone else who is obligated on this Guaranty, or any number of ustogether, to collect the Debt. My liability is not conditioned on the signingof this Guaranty by any other person and further is not subject to anycondition not expressly set forth in this Guaranty or any instrument executedin connection with the Debt. My obligation to pay according to the terms ofthis Guaranty shall not be affected by the illegality, invalidity orunenforceability of any notes or agreements evidencing the Debt, the violationof any applicable usury laws, forgery, or any other circumstances which makethe indebtedness unenforceable against the Borrower. I will remain obligated topay on this Guaranty even if any other person who is obligated to pay the Debt,including the Borrower, has such obligation discharged in bankruptcy,foreclosure, or otherwise discharged by law.

 

5.  BANKRUPTCY. If a bankruptcypetition should at any time be filed by or against the Borrower, the maturityof the Debt, so far as my liability is concerned, shall be accelerated and theDebt shall be immediately payable by me. I acknowledge and agree that thisGuaranty, and the Debt secured hereby, will remain in full force and effect atall times, notwithstanding any action or undertakings by, or against, you oragainst any Property, in connection with any obligation in any proceeding inthe United States Bankruptcy Courts. Such action or undertaking includes,without limitation, valuation of Property, election of remedies or impositionof secured or unsecured claim status upon claims by you, pursuant to the UnitedStates Bankruptcy Code, as amended. In the event that any payment of principalor interest received and paid by any other guarantor, borrower, surety,endorser or co-maker is deemed, by final order of a court of competentjurisdiction, to have been a voidable preference under the bankruptcy orinsolvency laws of the United States or otherwise, then my obligation willremain as an obligation to you and will not be considered as having beenextinguished.

 

6.  REVOCATION. I agree that thisis an absolute and unconditional Guaranty. I agree that this Guaranty willremain binding on me, whether or not there are any Debts outstanding, until youhave actually received written notice of my revocation or written notice of my deathor incompetence. Notice of revocation or notice of my death or incompetencewill not affect my obligations under this Guaranty with respect to any Debtsincurred by or for which you have made a commitment to Borrower before youactually receive such notice, and all renewals, extensions, refinancings, andmodifications of such Debts. I agree that if any other person signing thisGuaranty provides a notice of revocation to you, I will still be obligatedunder this Guaranty until I provide such a notice of revocation to you. if anyother person signing this Guaranty dies or is declared incompetent, such factwill not affect my obligations under this Guaranty.

 

7.  PROPERTY. I agree that anyProperty may be assigned, exchanged, released in whole or in part orsubstituted without notice to me end without defeating, discharging ordiminishing my liability. My obligation is absolute and your failure to perfectany security interest or any act or omission by you which impairs the Propertywill not relieve me or my liability under this Guaranty. You are under no dutyto preserve or protect any Property until you are in actual or constructivepossession. For purposes of this paragraph, you will only be in “actual”possession when you have physical, immediate and exclusive control over theProperty and have accepted such control in writing, Further, you will only bedeemed to be in “constructive” possession when you have both the power andintent to exercise control over the Property.

 

8.  DEFAULT. I will be in defaultif 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.                                                                                                                                                                                                                                                  |

 

9.  WAIVERS AND CONSENT. To theextent not prohibited by law, I waive protest, presentment for payment, demand,notice of acceleration, notice of intent to accelerate and notice of dishonor.

 

A.    AdditionalWaivers. In addition, to the extent permitted by law, I consent to certainactions you may take, and generally waive defenses that may be available basedon these actions or based, on the status of a party to the Debt or thisGuaranty.

 

(1)   You may renew orextend payments on the Debt, regardless of the number of such renewals or extensions.

 

(2)   You may releaseany Borrower, endorser, guarantor, surety, accommodation maker or any otherco-signer.

 

(3)   You may release,substitute or impair any Property.

 

----

 

(4)   You, or anyinstitution participating in the Debt, may invoke your right of set-off.

 

(5)   You may enter intoany sales, repurchases or participations of the Debt to any person in anyamounts and I waive notice of such sales, repurchases or participations.

 

(6)   I agree that theBorrower is authorized to modify the terms of the Debt or any instrumentsecuring, guarantying or relating to the Debt.

 

(7)   You mayundertake a valuation of any Property in connection with any proceedings underthe United States Bankruptcy Code concerning the Borrower or me, regardless ofany such valuation, or actual amounts received by you arising from the sale ofsuch Property.

 

(8)   I agree toconsent to any waiver granted the Borrower, and agree that any delay or lack ofdiligence in the enforcement of the Debt, or any failure to file a claim orotherwise protect any of the Debt, in no way affects or impairs my liability.

 

(9)   I agree to waivereliance on any anti-deficiency statutes, through subrogation or otherwise, andsuch statutes In no way affect or impair my liability. In addition, until theobligations of the Borrower to Lender have been paid in full, I waive any rightof subrogation, contribution, reimbursement, indemnification, exoneration, andany other 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 anyProperty.

 

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.

 

10.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.

 

11. COLLECTION EXPENSES AND ATTORNEYS’ FEES. On or afterDefault, to the extent permitted by law, I agree to pay all expenses ofcollection, enforcement or protection of your rights and remedies under thisGuaranty or any other document relating to the Debt. To the extent permitted bylaw, expenses include, but are not limited to, reasonable attorneys’ fees,court costs and other legal expenses. All fees and expenses will be secured bythe Property I have granted to you, if any. In addition, to the extentpermitted by the United States Bankruptcy Code, I agree to pay the reasonableattorneys’ fees incurred by you to protect your rights and interests inconnection with any bankruptcy proceedings initiated by or against me.

 

12.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.

 

13.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 thisGuaranty and you will have no duty to inquire into or confirm the receipt ofany such benefits, and this Guaranty will be effective and enforceable by youwithout regard to the receipt, nature or value of any such benefits.

 

14.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 are preemptedby federal law.

 

15.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.

 

16. ASSIGNMENT. If you assign any of theDebts, you may assign all or any part of this Guaranty without notice to me ormy consent, and this Guaranty will inure to the benefit of your assignee to theextent of such assignment. You will continue to have the unimpaired right toenforce this Guaranty as to any of the Debts that are not assigned. ThisGuaranty shall inure to the benefit of and be enforceable by you and yoursuccessors and assigns and any other person to whom you may grant an interestin the Debts and shall be binding upon and enforceable against me and mypersonal representatives, successors, heirs and assigns.

 

17.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.

 

18.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,

 

19.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.

 

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

 

 
| **GUARANTOR:**         |
|------------------------|
|                   |
| /s/ WILLIAM S. REILING |   |
| Individually           |
| WILLIAM S. REILING     |
|                   |

 

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