EXHIBIT 10.4

GUARANTEE

This
Guarantee (this Guarantee) is delivered by Escalon Medical Corp., a
Pennsylvania corporation (Parent) for the benefit of Vascular
Solutions, Inc., a Minnesota corporation (Vascular) and its respective officers,
directors, employees, agents and shareholders.

WHEREAS,
Vascular is entering into that certain Asset Purchase Agreement, dated as of
the date hereof, with Escalon Vascular Access, Inc., a Delaware corporation and
wholly-owned subsidiary of Parent (Escalon Vascular Access), pursuant to
which Vascular is purchasing certain assets of Escalon Vascular Access (the Assets APA);

WHEREAS,
Vascular is entering into that certain Asset Purchase Agreement, dated as of
the date hereof, with Escalon Vascular IP Holdings, Inc., a Delaware
corporation and wholly-owned subsidiary of Parent (Escalon Vascular IP Holdings),
pursuant to which Vascular is purchasing certain intellectual property of
Escalon Vascular IP Holdings (the IP APA);

WHEREAS,
it is a condition to the obligation of Vascular to consummate the transactions
contemplated by the Assets APA and IP APA that Parent deliver this Guarantee.

NOW,
THEREFORE, in consideration of the foregoing and as a material inducement to
Vascular entering into the Assets APA and the IP APA, and intending to be
legally bound hereby, Parent hereby agrees as follows:

1.       Parent
unconditionally guarantees to Vascular the full and complete performance by
Escalon Vascular Access of Escalon Vascular Access obligations under Article
IX of the Assets APA and Parent shall be liable to the same extent as Escalon
Vascular Access, or any permitted transferee of Escalon Vascular Access under
the Assets APA for any breach of any such obligation. Parent hereby waives
diligence, presentment, demand of performance, filing of any claim, protest, or
notice in connection with the performance of its obligations set forth herein.

2.       Parent
unconditionally guarantees to Vascular the full and complete performance by
Escalon Vascular IP Holdings of Escalon Vascular IP Holdings obligations under
Article IX of the IP APA and Parent shall be liable to the same extent as
Escalon Vascular IP Holdings, or any permitted transferee of Escalon Vascular
IP Holdings under the IP APA for any breach of any such obligation. Parent
hereby waives diligence, presentment, demand of performance, filing of any
claim, protest, or notice in connection with the performance of its obligations
set forth herein.

3.       Parents
maximum liability under Sections 1 and 2 hereof will not exceed $5,750,000; provided, however,
that the limitations set forth in this Section 3 shall not apply to claims by
Vascular brought on the basis of fraud or willful misconduct (it being
understand, that Parent shall be liable to the full extent of Escalon Vascular
Access and Escalon Vascular IP Holdings liability with respect to any such
claims).

4.       Parent
hereby represents and warrants that the intellectual property delivered to
Vascular pursuant to the Assets APA and the IP APA includes all processes,
methods, techniques, procedures, trade secrets and know-how used or necessary
to manufacture the products of the Business (as defined in the Assets APA).
Parent indemnifies Vascular for all Losses (as defined in the Assets APA) with
respect to any breach of the foregoing representation and warranty.

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5.       Noncompetition.

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (a)
 For three (3) years after the date hereof (the Restricted Period), Parent
 shall not and shall cause Parents affiliates not to, directly or indirectly,
 engage in, and shall use its best efforts to ensure that none of its
 officers, employees or directors directly or indirectly engage in, any
 Competitive Business (as defined below), whether in existence now or at any
 time in the future, in any manner or capacity (e.g., as an advisor,
 principal, agent, partner, officer, director, stockholder, consultant, member
 of any association or otherwise). A Competitive
 Business shall mean any business or venture that researches,
 designs, develops, creates, markets, distributes, or licenses or sells
 accessories, devices, systems, software, products, or services that compete,
 directly or indirectly, with either the Business as defined in the Assets APA
 or the Business as defined in the IP APA.
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | (b)
 Parent will not, directly or indirectly, assist or encourage any other person
 or entity in carrying out, directly or indirectly, any activity that would be
 prohibited by the above provisions of Sections 5 or 6 if such activity
 were carried out by Parent, either directly or indirectly. In particular, Parent
 agrees that it will not, directly or indirectly, induce any employee of
 Parent or Vascular to carry out, directly or indirectly, any such activity.                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | (c)
 Parent agrees that the restrictions and agreements contained in
 Sections 5 and 6 are reasonable and necessary to protect the legitimate
 interests of Vascular and that any violation of Sections 5 or 6 will
 cause substantial and irreparable harm to Vascular that would not be
 quantifiable and for which no adequate remedy would exist at law and
 accordingly injunctive relief shall be available for any violation of
 Sections 5 or 6.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | (d)
 If the duration or extent of business activities covered by Sections 5
 or 6 are in excess of what is valid and enforceable under applicable law,
 then such provisions shall be construed to cover only the greatest duration
 or activities that are valid and enforceable. Parent acknowledges the
 uncertainty of the law in this respect and expressly stipulates that this
 Guarantee be given the construction which renders its provisions valid and
 enforceable to the maximum extent (not exceeding its express terms) possible
 under applicable law. The parties intend these provisions to be deemed to be
 a series of separate covenants, one for each and every state of the United
 States of America, and each and every political subdivision of each and every
 country outside the United States of America where these provisions is
 intended to be in effect.                                                    
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | (e)
 Ownership, as a passive investment, in the aggregate of less than 1% of the
 outstanding shares of capital stock of any corporation listed on a national
 securities exchange or publicly traded on any nationally recognized
 over-the-counter market shall not constitute a breach of Section 5(a).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

6.       Agreement
Not to Solicit. Excepting Roger Edens, during the Restricted Period, Parent
shall not (i) directly or indirectly attempt to hire away any then-current
employee of Vascular or any of its affiliates or to persuade any such employee
to leave employment with Vascular or any of its affiliates or
(ii) directly or indirectly solicit, divert, or take away, or attempt to
solicit, divert or take away, the business of any person with whom Vascular or
the Business has established or is actively seeking to establish a business or
customer relationship.

7.       Parent
acknowledges and agrees that the covenants and agreements of Parent contained
in this Guarantee are an integral and essential part of the transactions
contemplated by the Assets APA and the IP APA and Vascular would not have
entered into the Assets APA and the IP APA without the benefit of such
covenants and agreements.

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8.       This
Guarantee, the Assets APA and the IP APA and the other documents referred to
herein contain the complete agreement between the parties and supersede any
prior understandings, agreements or representations by or between the parties,
written or oral, which may have related to the subject matter hereof in any
way.

9.       The
internal law, without regard to conflicts of laws principles, of the State of
Delaware shall govern all questions concerning the construction, validity and
interpretation of this Guarantee and the performance of the obligations imposed
by this Guarantee.

10.       Parent
submits to the exclusive jurisdiction of any state or federal court sitting in
Wilmington, Delaware, in any action or proceeding arising out of or relating to
this Guarantee and agrees that all claims in respect of the action or
proceeding may be heard and determined in any such court. Parent agrees not to
bring any action or proceeding arising out of or relating to this Guarantee in
any other court. Parent waives any defense of inconvenient forum to the
maintenance of any action or proceeding so brought and waives any bond, surety
or other security that might be required of any other party with respect to any
such action or proceeding. Parent agrees that any party may file a
copy of this paragraph with any court as written evidence of the knowing,
voluntary and bargained agreement of Parent irrevocably to waive any objections
to venue or to convenience of forum.

11.       PARENT
ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY THAT MAY ARISE UNDER THIS
GUARANTEE IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE
IT IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS GUARANTEE. PARENT CERTIFIES AND ACKNOWLEDGES THAT (I) NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER, (II) IT UNDERSTANDS AND HAS CONSIDERED THE
IMPLICATIONS OF SUCH WAIVER AND (III) IT MAKES SUCH WAIVER VOLUNTARILY.

IN
WITNESS WHEREOF, Parent has executed this Guarantee as of April 30, 2010.

| |                                   |                             
| | --------------------------------- | ----------------------------
| | PARENT:                          
| |                                   |                             
| | ESCALON MEDICAL CORP.            
| |                                   |                             
| | By:                               | /s/
 Richard J. DePiano, Jr.
| | Richard J. DePiano, Jr.,
 Esquire
| | President &
 General Counsel     

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