Exhibit 10.22 to Biodrain Medical, Inc. Form S-1




Exhibit 10.22 


	
 

	
 


	
 

	
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.


MEDICAL ADVISORY BOARD WARRANT AGREEMENT


          This
Advisory Board Warrant Agreement is made and entered as of the 31 day of
August, 2005 (the Agreement Date”) by and between BioDrain Medical, Inc., a
Minnesota corporation (“Company”) and Medical Advisory Board member Debbie
Heitzman (the “Warrantee”) as consideration for Board membership.. 


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 a Medical Advisory Board member of 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. Medical
Advisory Board Resignation. If Warrantee ceases to be a Medical
Advisory Board member for any reason other than that described in this Section
9, Warrantee will have the right, subject to the other provisions of this
Agreement, to exercise the Warrant for up to ninety (90) days following the
date of termination, but only to the extent that on the date of termination the
Warrantee’s right to exercise such Warrant had vested, and at the end of such
period the Warrant will expire, and all rights to exercise it will terminate. 


                    (a)
If Warrantee dies while a Medical Advisory Board member, or after ceasing to be
a Medical Advisory Board member but during the period while he or she could
have exercised an 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, 


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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. 


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:


	
 

	
 


	
 

	
Debbie
 Heitzman 


	
 

	
2325 Log
 Cabin Drive, Suite 108


	
 

	
Smyrna, GA
 30080





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


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          (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.


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 Stock Option
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


	
 

	
 

	
 


	
 

	
 

	
 


	
 


	
/s/ Debbie
 Heitzman

	
By:

	 
/s/ Lawrence
 W. Gadbaw


	
Debbie
 Heitzman

	
 

	
Lawrence
 W. Gadbaw


	
 

	
Its:

	
President
 & CEO





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