Document:

Exhibit 10.41

 

GUARANTY

(Continuing Debt - Unlimited)

 

DATE
AND PARTIES. The date of this Guaranty is October 10, 2007. The parties
and 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:

JAMES L DAVIS

6446 FLYING CLOUD DRIVE

EDEN PRAIRIE, Minnesota 55344

 

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

 

A.  Pronouns. The pronouns “I”, “me” and ‘my”
refer to all 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’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 the
Note, 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 the
Borrower from time to time, I absolutely and unconditionally agree to all terms
of and guaranty to you the payment and performance of each and every Debt, of
every 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 in
the future owe you, including, but not limited to the following described Debt(s) including
without limitation, all principal, accrued interest, attorneys’ fees and
collection costs, when allowed by law, that may become due from the Borrower to
you in collecting and enforcing the Debt and all other agreements with respect
to the Borrower.

 

A
promissory 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.

 

In
addition, Debt refers to debts, liabilities, and obligations of the Borrower
including, but not limited to, amounts agreed to be paid under the terms of any
notes or agreements securing the payment of any debt, loan, liability or
obligation, overdrafts, letters of credit, guaranties, advances for taxes,
insurance, repairs and storage, and all extensions, renewals, refinancings and
modifications of these debts whether now existing or created or incurred in the
future, due or to become due, or absolute or contingent, including obligations
and duties arising from the terms of all documents prepared or submitted for
the transaction such as applications, security agreements, disclosures, and the
Note.

 

My
liability will not exceed $1,000,000.00 of the principal amount outstanding at
default, plus accrued interest, attorneys’ fees and collection costs, when
allowed by law, and all other costs, fees and expenses agreed to be paid under
all agreements evidencing the Debt and securing the payment of the Debt. You
may, without notice, apply this Guaranty to such Debt of the Borrower as you
may select from time to time.

 

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

 

4.  UNCONDITIONAL LIABILITY. I am unconditionally liable under this Guaranty,
regardless of whether or not you pursue any of your remedies against the
Borrower, against any other maker, surety, guarantor or endorser of the Debt or
against any Property. You may sue me alone, or anyone else who is obligated 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 other person and
further is not subject to any condition not expressly set forth in this
Guaranty or any instrument executed in connection with the Debt. My obligation
to pay according to the terms of this Guaranty shall not be affected by the
illegality, invalidity or unenforceability of any notes or agreements
evidencing the Debt, the violation of any applicable usury laws, forgery, or
any other circumstances which make the indebtedness unenforceable against the
Borrower. I will remain obligated to pay 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 bankruptcy petition should at any time be filed by or
against 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. I acknowledge and agree that this Guaranty, and the Debt secured hereby,
will remain in full force and effect at all times, notwithstanding any action
or undertakings by, or against, you or against any Property, in connection with
any obligation in any proceeding in the United States Bankruptcy Courts. Such
action or undertaking includes, without limitation, valuation of Property,
election of remedies or imposition of secured or unsecured claim status upon
claims by you, pursuant to the United States Bankruptcy Code, as amended. In
the event that any payment of principal or interest received and paid by any
other guarantor, borrower, surety, endorser or co-maker is deemed, by final
order of a court of competent jurisdiction, to have been a voidable preference
under the bankruptcy or insolvency laws of the United States or otherwise, then
my obligation will remain as an obligation to you and will not be considered as
having 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 are
any Debts outstanding, until you have actually received written notice of my
revocation or written notice of my death or incompetence. Notice of revocation
or notice of my death or incompetence will not affect my obligations under this
Guaranty with respect to any Debts incurred by or for which you have made a
commitment to Borrower before you actually receive such notice, and all
renewals, extensions, refinancings, and modifications of such Debts. I agree
that if any other person signing this Guaranty provides a notice of revocation
to you, I will still be obligated under this Guaranty until I provide such a
notice of revocation to you. if any other person signing this Guaranty dies or
is declared incompetent, such fact will not affect my obligations under this
Guaranty.

 

7.  PROPERTY. I agree that any Property may be assigned, exchanged, released
in whole or in part or substituted without notice to me end without defeating,
discharging or diminishing my liability. My obligation is absolute and your
failure to perfect any security interest or any act or omission by you which
impairs 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 in actual
or constructive possession. For purposes of this paragraph, you will only be in
“actual” possession when you have physical, immediate and exclusive control
over the Property and have accepted such control in writing, Further, you will
only be deemed to be in “constructive” possession when you have both the power
and intent to exercise control over the Property.

 

8.  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.

  

 

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

 

A.    Additional Waivers. In addition, to the extent
permitted by law, I consent to certain actions you may take, and generally
waive defenses that may be available based on these actions or based, on the
status 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 any
Property.

 

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

 

 

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

 

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

 

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

 

(8)   I agree to consent to any waiver granted the
Borrower, and agree that any delay or lack of diligence in the enforcement of
the 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 any
anti-deficiency statutes, through subrogation or otherwise, and such statutes
In no way affect or impair my liability. In addition, until the obligations of
the Borrower to Lender have been paid in full, I waive any right of
subrogation, contribution, reimbursement, indemnification, exoneration, and any
other right I may have to enforce any remedy which you now have or in the
future may have against the Borrower or another guarantor or as to any
Property.

 

Any Guarantor who is an “insider,” as contemplated by the United States
Bankruptcy Code, 11 U.S.C. 101, as emended, makes these waivers permanently. (An
insider includes, among others, a director, officer, partner, or other person
in control of the Borrower, a person or an entity that is a copartner with the
Borrower, 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 other
persons.) Any Guarantor who is not an insider makes these waivers until all
Debt is fully repaid.

 

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

 

C. Waiver of Claims. I waive all claims for loss or damage caused by
your 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 or
more of the following.

 

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

 

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

 

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

 

D. Payments Made on the Borrower’s Behalf. Amounts advanced on the
Borrower’s behalf will be immediately due and may be added to the balance owing
under 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-off
any 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 account
balance I have with you any money owed to me on an item presented to you or in
your possession for collection or exchange; and any repurchase agreement or
other non-deposit obligation. “Any amount due and payable under the terms of
this Guaranty” means the total amount to which you are entitled to demand
payment under the terms of this Guaranty at the time you set-off.

 

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

 

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

 

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

 

G. Waiver. Except as otherwise required by law, by choosing any one or
more 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 not
to use any remedy, you do not waive your right to later consider the event a
default and to use any remedies if the default continues or occurs again.

 

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

 

12.
WARRANTIES AND REPRESENTATIONS. I have the right and authority to enter into
this Guaranty. The execution anc4 delivery of this Guaranty will not violate
any agreement governing me or to which I am a party.

 

In
addition, I represent and warrant that this Guaranty was entered into at the
request of the Borrower, and that I am satisfied regarding the Borrower’s
financial condition and existing indebtedness, authority to borrow and the use
and intended use of all Debt proceeds. I further represent and warrant that I
have not relied on any representations or omissions from you or any information
provided by you respecting the Borrower, the Borrower’s financial condition and
existing indebtedness, the Borrower’s authority to borrow or the Borrower’s use
and intended use of all Debt proceeds.

 

13.
RELIANCE. I acknowledge that you are relying on this Guaranty in extending
credit to the Borrower, and I have signed this Guaranty to induce you to extend
such credit. I represent and warrant to you that I have a direct and
substantial economic interest in the Borrower and expect to derive substantial
benefits from any loans and financial accommodations resulting in the creation
of indebtedness guarantied hereby. I agree to rely exclusively on the right to
revoke this Guaranty prospectively as to future transactions in the manner as
previously described in this Guaranty if at any time, in my opinion, the
benefits then being received by me in connection with this Guaranty are not
sufficient to warrant the continuance of this Guaranty. You may rely
conclusively on a continuing warranty that I continue to be benefited by this
Guaranty and you will have no duty to inquire into or confirm the receipt of
any such benefits, and this Guaranty will be effective and enforceable by you
without regard to the receipt, nature or value of any such benefits.

 

14.
APPLICABLE LAW, This Guaranty is governed by the laws of Minnesota, the United
States of America, and to the extent required, by the laws of the jurisdiction
where the Property is located, except to the extent such state laws are
preempted by federal law.

 

15.
AMENDMENT, INTEGRATION AND SEVERABILITY. This Guaranty may not be amended or
modified by oral agreement. No amendment or modification of this Guaranty is
effective unless made in writing and executed by you and me. This Guaranty is
the complete and final expression of the agreement. If any provision of this
Guaranty is unenforceable, then the unenforceable provision will be severed and
the remaining provisions will still be enforceable.

 

16. ASSIGNMENT. If you assign any of the Debts, you may assign
all or any part of this Guaranty without notice to me or my consent, and this
Guaranty will inure to the benefit of your assignee to the extent of such
assignment. You will continue to have the unimpaired right to enforce this
Guaranty as to any of the Debts that are not assigned. This Guaranty shall
inure to the benefit of and be enforceable by you and your successors and
assigns and any other person to whom you may grant an interest in the Debts and
shall be binding upon and enforceable against me and my personal representatives,
successors, heirs and assigns.

 

17.
INTERPRETATION. Whenever used, the singular includes the plural and the plural
includes the singular. The Section headings are for convenience only and
are not to be used to interpret or define the terms of this Guaranty.

 

18.
NOTICE. FINANCIAL REPORTS AND ADDITIONAL DOCUMENTS. Unless otherwise required
by law, any notice will be given by delivering it or mailing it by first class
mail 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 be
deemed to be notice to all Guarantors. I will inform you in writing of any
change in my name, address or other application information, I will provide you
any financial statement or information you request. All financial statements
and information I give you will be correct and complete. I agree to sign,
deliver, and file any additional documents or certifications that you may
consider necessary to perfect, continue, and preserve my obligations under this
Guaranty and to confirm your lien status on any Property. Time is of the
essence,

 

19.
CREDIT INFORMATION. I agree that from time to time you may obtain credit
information about me from others, including other lenders and credit reporting
agencies, and report to others (such as a credit reporting agency) your credit
experience with me. I agree that you will not be liable for any claim arising
from the use of information provided to you by others or for providing such
information to others.

 

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

 

 

	
  GUARANTOR:

  
	
   

  
	
  /s/ JAMES L DAVIS

  	
   

  
	
  Individually

  
	
  JAMES L DAVISExhibit 10.42

 

GUARANTY

(Continuing Debt - Unlimited)

 

DATE
AND PARTIES. The date of this Guaranty is October 10, 2007. The parties
and 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 this
Guaranty, the terms have the following meanings:

 

A. Pronouns. The pronouns “I”, “me” and ‘my” refer to
all 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’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 the Note, 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 the Borrower from time to time, I
absolutely and unconditionally agree to all terms of and guaranty to you the
payment and performance of each and every Debt, of every 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 in the future owe you,
including, but not limited to the following described Debt(s) including
without limitation, all principal, accrued interest, attorneys’ fees and
collection costs, when allowed by law, that may become due from the Borrower to
you in collecting and enforcing the Debt and all other agreements with respect
to the Borrower.

 

A
promissory 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.

 

In
addition, Debt refers to debts, liabilities, and obligations of the Borrower
including, but not limited to, amounts agreed to be paid under the terms of any
notes or agreements securing the payment of any debt, loan, liability or
obligation, overdrafts, letters of credit, guaranties, advances for taxes,
insurance, repairs and storage, and all extensions, renewals, refinancings and
modifications of these debts whether now existing or created or incurred in the
future, due or to become due, or absolute or contingent, including obligations
and duties arising from the terms of all documents prepared or submitted for
the transaction such as applications, security agreements, disclosures, and the
Note.

 

My
liability will not exceed $1,000,000.00 of the principal amount outstanding at
default, plus accrued interest, attorneys’ fees and collection costs, when
allowed by law, and all other costs, fees and expenses agreed to be paid under
all agreements evidencing the Debt and securing the payment of the Debt. You
may, without notice, apply this Guaranty to such Debt of the Borrower as you
may select from time to time.

 

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

 

4.  UNCONDITIONAL LIABILITY. I am
unconditionally liable under this Guaranty, regardless of whether or not you
pursue any of your remedies against the Borrower, against any other maker,
surety, guarantor or endorser of the Debt or against any Property. You may sue
me alone, or anyone else who is obligated 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 other person and further is not subject to any
condition not expressly set forth in this Guaranty or any instrument executed
in connection with the Debt. My obligation to pay according to the terms of
this Guaranty shall not be affected by the illegality, invalidity or
unenforceability of any notes or agreements evidencing the Debt, the violation
of any applicable usury laws, forgery, or any other circumstances which make
the indebtedness unenforceable against the Borrower. I will remain obligated to
pay 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 bankruptcy
petition should at any time be filed by or against 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. I acknowledge and agree that this
Guaranty, and the Debt secured hereby, will remain in full force and effect at
all times, notwithstanding any action or undertakings by, or against, you or
against any Property, in connection with any obligation in any proceeding in
the United States Bankruptcy Courts. Such action or undertaking includes,
without limitation, valuation of Property, election of remedies or imposition
of secured or unsecured claim status upon claims by you, pursuant to the United
States Bankruptcy Code, as amended. In the event that any payment of principal
or interest received and paid by any other guarantor, borrower, surety,
endorser or co-maker is deemed, by final order of a court of competent
jurisdiction, to have been a voidable preference under the bankruptcy or
insolvency laws of the United States or otherwise, then my obligation will
remain as an obligation to you and will not be considered as having 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 are any Debts outstanding, until you
have actually received written notice of my revocation or written notice of my death
or incompetence. Notice of revocation or notice of my death or incompetence
will not affect my obligations under this Guaranty with respect to any Debts
incurred by or for which you have made a commitment to Borrower before you
actually receive such notice, and all renewals, extensions, refinancings, and
modifications of such Debts. I agree that if any other person signing this
Guaranty provides a notice of revocation to you, I will still be obligated
under this Guaranty until I provide such a notice of revocation to you. if any
other person signing this Guaranty dies or is declared incompetent, such fact
will not affect my obligations under this Guaranty.

 

7.  PROPERTY. I agree that any
Property may be assigned, exchanged, released in whole or in part or
substituted without notice to me end without defeating, discharging or
diminishing my liability. My obligation is absolute and your failure to perfect
any security interest or any act or omission by you which impairs 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 in actual or constructive
possession. For purposes of this paragraph, you will only be in “actual”
possession when you have physical, immediate and exclusive control over the
Property and have accepted such control in writing, Further, you will only be
deemed to be in “constructive” possession when you have both the power and
intent to exercise control over the Property.

 

8.  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.

  

 

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

 

A.    Additional
Waivers. In addition, to the extent permitted by law, I consent to certain
actions you may take, and generally waive defenses that may be available based
on these actions or based, on the status 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 any Property.

 

 

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

 

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

 

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

 

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

 

(8)   I agree to
consent to any waiver granted the Borrower, and agree that any delay or lack of
diligence in the enforcement of the 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 any anti-deficiency statutes, through subrogation or otherwise, and
such statutes In no way affect or impair my liability. In addition, until the
obligations of the Borrower to Lender have been paid in full, I waive any right
of subrogation, contribution, reimbursement, indemnification, exoneration, and
any other right I may have to enforce any remedy which you now have or in the
future may have against the Borrower or another guarantor or as to any
Property.

 

Any Guarantor who is an “insider,” as contemplated by the United States
Bankruptcy Code, 11 U.S.C. 101, as emended, makes these waivers permanently. (An
insider includes, among others, a director, officer, partner, or other person
in control of the Borrower, a person or an entity that is a copartner with the
Borrower, 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 other
persons.) Any Guarantor who is not an insider makes these waivers until all
Debt is fully repaid.

 

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

 

C. Waiver of Claims. I waive all claims for loss or damage caused by
your 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 or
more of the following.

 

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

 

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

 

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

 

D. Payments Made on the Borrower’s Behalf. Amounts advanced on the
Borrower’s behalf will be immediately due and may be added to the balance owing
under 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-off
any 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 account
balance I have with you any money owed to me on an item presented to you or in
your possession for collection or exchange; and any repurchase agreement or
other non-deposit obligation. “Any amount due and payable under the terms of
this Guaranty” means the total amount to which you are entitled to demand
payment under the terms of this Guaranty at the time you set-off.

 

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

 

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

 

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

 

G. Waiver. Except as otherwise required by law, by choosing any one or
more 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 not
to use any remedy, you do not waive your right to later consider the event a
default and to use any remedies if the default continues or occurs again.

 

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

 

12.
WARRANTIES AND REPRESENTATIONS. I have the right and authority to enter into
this Guaranty. The execution anc4 delivery of this Guaranty will not violate
any agreement governing me or to which I am a party.

 

In
addition, I represent and warrant that this Guaranty was entered into at the
request of the Borrower, and that I am satisfied regarding the Borrower’s
financial condition and existing indebtedness, authority to borrow and the use
and intended use of all Debt proceeds. I further represent and warrant that I
have not relied on any representations or omissions from you or any information
provided by you respecting the Borrower, the Borrower’s financial condition and
existing indebtedness, the Borrower’s authority to borrow or the Borrower’s use
and intended use of all Debt proceeds.

 

13.
RELIANCE. I acknowledge that you are relying on this Guaranty in extending
credit to the Borrower, and I have signed this Guaranty to induce you to extend
such credit. I represent and warrant to you that I have a direct and
substantial economic interest in the Borrower and expect to derive substantial
benefits from any loans and financial accommodations resulting in the creation
of indebtedness guarantied hereby. I agree to rely exclusively on the right to
revoke this Guaranty prospectively as to future transactions in the manner as
previously described in this Guaranty if at any time, in my opinion, the
benefits then being received by me in connection with this Guaranty are not
sufficient to warrant the continuance of this Guaranty. You may rely
conclusively on a continuing warranty that I continue to be benefited by this
Guaranty and you will have no duty to inquire into or confirm the receipt of
any such benefits, and this Guaranty will be effective and enforceable by you
without regard to the receipt, nature or value of any such benefits.

 

14.
APPLICABLE LAW, This Guaranty is governed by the laws of Minnesota, the United
States of America, and to the extent required, by the laws of the jurisdiction
where the Property is located, except to the extent such state laws are preempted
by federal law.

 

15.
AMENDMENT, INTEGRATION AND SEVERABILITY. This Guaranty may not be amended or
modified by oral agreement. No amendment or modification of this Guaranty is
effective unless made in writing and executed by you and me. This Guaranty is
the complete and final expression of the agreement. If any provision of this
Guaranty is unenforceable, then the unenforceable provision will be severed and
the remaining provisions will still be enforceable.

 

16. ASSIGNMENT. If you assign any of the
Debts, you may assign all or any part of this Guaranty without notice to me or
my consent, and this Guaranty will inure to the benefit of your assignee to the
extent of such assignment. You will continue to have the unimpaired right to
enforce this Guaranty as to any of the Debts that are not assigned. This
Guaranty shall inure to the benefit of and be enforceable by you and your
successors and assigns and any other person to whom you may grant an interest
in the Debts and shall be binding upon and enforceable against me and my
personal representatives, successors, heirs and assigns.

 

17.
INTERPRETATION. Whenever used, the singular includes the plural and the plural
includes the singular. The Section headings are for convenience only and
are not to be used to interpret or define the terms of this Guaranty.

 

18.
NOTICE. FINANCIAL REPORTS AND ADDITIONAL DOCUMENTS. Unless otherwise required
by law, any notice will be given by delivering it or mailing it by first class
mail 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 be
deemed to be notice to all Guarantors. I will inform you in writing of any
change in my name, address or other application information, I will provide you
any financial statement or information you request. All financial statements
and information I give you will be correct and complete. I agree to sign,
deliver, and file any additional documents or certifications that you may
consider necessary to perfect, continue, and preserve my obligations under this
Guaranty and to confirm your lien status on any Property. Time is of the
essence,

 

19.
CREDIT INFORMATION. I agree that from time to time you may obtain credit
information about me from others, including other lenders and credit reporting
agencies, and report to others (such as a credit reporting agency) your credit
experience with me. I agree that you will not be liable for any claim arising
from the use of information provided to you by others or for providing such
information to others.

 

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

 

 

	
  GUARANTOR:

  
	
   

  
	
  /s/ WILLIAM S. REILING

  	
   

  
	
  Individually

  
	
  WILLIAM S. REILING

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