Exhibit 10.27 to Biodrain Medical, Inc. Form S-1



Exhibit 10.27 


	
 

	
 


	
 

	
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN
 REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD,
 PLEDGED, OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF
 UNDER SUCH ACT OR AN OPINION OF COUNSEL, SATISFACTORY TO THE CORPORATION AND
 ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.





BioDrain
Medical, Inc.


ADVISORY
WARRANT AGREEMENT


          This
Warrant Agreement is made and entered as of the 20th day of December, 2006 (the
Agreement Date”) by and between BioDrain Medical, Inc., a Minnesota corporation
(“Company”) and Nancy A. Kolb (the “Warrantee”) as consideration for
referrals and advisory work.


1. Warrant Grant. The
Company hereby grants to the Warrantee a warrant (the “Warrant”) to purchase
5,000 shares (“Warrant Shares”, with each being a “Warrant Share”) of its $0.01
par value common stock (“Share”), under the terms and conditions set forth
below.


2. Nonstatutory
Option. The Warrant is granted to purchase up to the number of
shares of authorized but unissued common stock of the Company specified in
Section 1 (the “Shares”). The Warrant will expire, and all rights to exercise
it will terminate on the earliest of: (a) the date provided below in Sections 8
and 9, and (b) the Expiration Date.


3. Exercise Price. The
exercise price of each Warrant Share of the Company as of any exercise date is
$1.00 per Share.


4. Period of
Exercise. The Warrant will expire at 5:00 p.m. on the fifth anniversary of the
Agreement Date (“the Expiration Date”).


5. Vesting of Options.
Warrantee will have the right to exercise the Warrant in accordance
with the following schedule:


               (a)
The Shares subject to Warrant will vest in 90 days from the Agreement Date.


6. Transferability. The
Warrant is not transferable except by will or the laws of descent and
distribution and may be exercised during the lifetime of the Warrantee only by
the Warrantee, and if exercised following the Warrantee’s death, by the
Warrantee’s legal representative upon presenting evidence of authority to act
on behalf of the Warrantee’s estate acceptable to the Company.


7. Change in
Control. If the Company enters into a binding agreement during the
time that Warrantee is an Advisor to the Company that results in a change in
control (as defined in the following sentence), then 100% of the Shares will
vest. For purposes of this Warrant Agreement, “change in control” means that:


               (a)
any individual, partnership, firm, corporation, association, trust,
unincorporated organization or other entity or person, or any syndicate or
group deemed to be a person under Section 14(d)(2) of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”), is or becomes the “beneficial
owner” (as defined in Rule 13d-3 of the General Rules and Regulations under the
Exchange Act), directly or indirectly, of securities of the Corporation
representing fifty percent (50%) or more of the combined voting power of the
Company’s then outstanding securities entitled to vote in the election of
directors of the Company; or


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               (b)
there occurs a reorganization, merger, consolidation or other corporate
transaction involving the Company (“Transaction”), in each case, with respect
to which the stockholders of the Company immediately prior to such Transaction
do not, immediately after the Transaction, own more than fifty percent (50%) of
the combined voting power of the Company or other corporation resulting from
such Transaction; or


               (c)
all or substantially all of the assets of the Company are sold, liquidated or
distributed.


8. Warrant Lapse. The
Warrant will lapse and becomes unexercisable in full on the earliest of the
following events:


               (a)
three (3) months following the Warrantee’s death, as provided below in Section
9;


               (b)
the date otherwise provided below in Section 9, unless the Board of Directors
otherwise extends such period before the applicable expiration date.


9. Death of
Warrantee.  If Warrantee
dies during the period while he or she could have exercised a Warrant under the
preceding sub-Sections, the Warrant granted to the Warrantee may be exercised,
to the extent it has vested at the time of death at any time within ninety (90)
days after the Warrantee’s death, by the executors or administrators of his or
her estate or by any person or persons who acquire the Warrant by will or the
laws of descent and distribution, but not beyond the otherwise applicable term
of the Warrant.


10. Adjustment in
Capitalization. If there is any change in the Outstanding common
stock of the Company by reason of a stock dividend or split, recapitalization,
reclassification, or other similar capital change, the aggregate number of
Warrant Shares subject to the Warrant will be appropriately adjusted by the
Company, as directed by the Board of Directors of the Company whose
determination is final and conclusive, except that fractional Shares will be
rounded to the nearest whole Share. In any such case, the number and kind of
Shares that are subject to the Warrant and the Warrant exercise price per Share
will be proportionately adjusted without any change in the aggregate Warrant
price to be paid upon exercise of the Warrant.


11. Amendment,
Modification and Termination of Agreement. The Board of Directors of
the Company may at any time terminate, and from time to time may amend or
modify Agreement; provided, however, that no amendment, modification, or
termination of this Agreement may in any manner adversely affect the Warrant
without the consent of the Warrantee.


12. Lock up Period. The
Warrantee understands that the Company at a future
date may file a registration or
offering statement (the “Registration Statement”) with the Securities and
Exchange Commission to facilitate an initial public offering of its securities.
The Warrantee agrees, for the benefit of the Company, that should such an
initial public offering be made and should the managing underwriter of such
offering require, the Warrantee will not, without the prior written consent of
the Company and such underwriter, during the Lock Up Period as defined herein:
(i) sell, transfer or otherwise dispose of, or agree to sell, transfer or
otherwise dispose of any Shares beneficially held by the Warrantee during the
Lock Up Period; (ii) sell, transfer or otherwise dispose of, or agree to sell,
transfer or otherwise dispose of any options, rights or warrants to purchase
any Shares beneficially held by the Warrantee during the Lock Up Period; or
(iii) sell or grant, or agree to sell or grant, options, rights or warrants
with respect to any Shares. The foregoing does not prohibit gifts to donees or
transfers by will or the laws of descent to heirs or beneficiaries provided
that such donees, heirs and beneficiaries are bound by the restrictions set
forth herein. The term “Lock Up Period” means the lesser of (a) 180 days or (b)
the period during which Company officers and directors are restricted by the
managing underwriter from effecting any sales or transfers of the Company’s
common stock. The Lock Up Period will commence on the effective of the
Registration Statement.


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13. Securities
Matters.


          (1)
Registration. If the
Company deems it necessary or desirable to register or qualify the Warrant or
any Shares with respect to which the Warrant has been granted or exercised
under the Securities Act of 1933, as amended, or any other applicable statute
or regulation, the Warrantee will cooperate with the Company and take such
action as is necessary to permit registration or qualification of the Warrant
or the Shares. The foregoing notwithstanding, the Company has no obligation to
register the Warrant or any Shares.


          (2)
Investment Intent. Unless the
Company has determined that the following representation is unnecessary, each
person exercising any portion of the Warrant will be required, as a condition to
the issuance of Shares pursuant to exercise of the Warrant, to make a
representation in writing (a) that he or she is acquiring the Shares for his or
her own account for investment and not with a view to, or for sale in
connection with, the distribution of any part thereof, (b) that before any
transfer in connection with the resale of the Shares, he or she will obtain the
written opinion of counsel for the Company, or other counsel acceptable to the
Company, that the Shares may be transferred. The Company may also place a stop
transfer order with its transfer agent with respect to the Shares and require
that certificates representing the Shares contain legends reflecting the
foregoing.


14. Miscellaneous.


          (1)
Requirements of Law. The
granting of the Warrant and the issuance of Shares are subject to all
applicable laws, rules and regulations, and to such approvals by any
governmental agencies or national securities exchanges as may be required.


          (2)
Choice of Law and Venue. This Agreement is made under
and must be governed by the laws of the State of Minnesota, and each of the
parties hereto consents to venue any suit or action under or with regard to
this Agreement in an appropriate court with jurisdiction in Hennepin County,
Minnesota.


          (3)
Notices. All notices, requests and
other communications from either party to the other hereunder must be given in
writing and will be deemed to have been duly given if personally delivered, or
sent by first class, certified mail, return receipt requested, postage prepaid,
to the party may at the address as provided below, or to such other address as
such party may hereafter designate by written notice to the other party:


                    (a)
If the Company, to the address of its then principal office; and


                    (b)
If to the Warrantee, to the residence address last shown in the records of the
Company, which as of the date of this Agreement is as follows:


                              Nancy
A. Kolb

                              4744
Drew Ave. So.

                              Minneapolis,
MN 55410


          (4)
No obligation to Exercise. The
granting of the Warrant imposes no obligation upon the holder thereof to
exercise the Warrant.


          (5)
Amendments; Final Agreement. This
Agreement contains the complete and final understanding of the parties with
respect to the subject matter hereof and supersedes all prior understanding and
statements, written and oral. This Agreement may not be amended except in a
written instrument signed by the party against whom enforcement is sought.


          (6)
Headings. Headings and captions
used in this Agreement are for convenience and do not affect the meaning
hereof.


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15. Share Issuance. The
Company will not be under any obligation to issue any Shares upon the exercise
of this Warrant unless and until the Company has determined that:


               (a)
it and Warrantee have taken all actions required to register such Shares under
the Securities Act, or to perfect an exemption from the registration
requirements thereof;


               (b)
any applicable listing requirement of any stock exchange on which such Shares
are listed has been satisfied; and


               (c)
all other applicable provisions of state and federal law have been satisfied.


16. Tax Effect. Warrantee
acknowledges that the tax effect of the exercise of this Warrant and the sale
of the underlying Shares is complicated, that Warrantee has consulted with his
or her own professional advisor which respect to all tax matters relating to
this Warrant and the exercise and sale of the Shares and has not relied on any
assurances or representations of the Company as to such matters.


17. The Shares have not been registered and,
therefore, they may not be sold, pledged, hypothecated, or otherwise
transferred unless they are registered under the Securities Act of 1933, as
amended, and applicable state securities laws or an exemption from such
registration is available.


18. Stock Legend. A
legend will be placed on any certificate evidencing the Shares in substantially
the following form:


	
 

	
 


	
 

	
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
 NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
 STATE SECURITIES LAWS OF ANY STATE. WITHOUT SUCH REGISTRATION, SUCH
 SECURITIES MAY NOT BE SOLD, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED
 AT ANY TIME WHATSOEVER, EXCEPT UPON DELIVERY TO THE COMPANY OF AN OPINION OF
 COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED FOR
 SUCH TRANSFER AND/OR THE SUBMISSION TO THE COMPANY OF SUCH OTHER EVIDENCE AS
 MAY BE SATISFACTORY TO THE COMPANY TO THE EFFECT THAT ANY SUCH TRANSFER WILL
 NOT BE IN VIOLATION OF THE SECURITIES ACT OF 1933, AS AMENDED, AND/OR
 APPLICABLE STATE SECURITIES LAWS AND/OR ANY RULE OR REGULATION PROMULGATED
 THEREUNDER.





          IN WITNESS WHEREOF, each of the parties hereto has
executed this Warrant Agreement, in the case of the Corporation by its duly
authorized officer, as of the date and year written above.


	
 

	
 

	
 


	 


	
OPTIONEE

	
BIODRAIN MEDICAL, Inc.,


	
 

	
a Minnesota corporation


	
 

	
 

	
 


	

	
By:

	
12/20/06


	
 



	
 

	 


	
Nancy A. Kolb

	
 

	
Kevin R. Davidson


	
 

	
Its:

	
President & CEO


	
 

	
 

	
 


	
 

	
 

	



	
 

	
 

	
President & CEO


	
 

	
 

	
12/27/06





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