Exhibit 10.29 to Biodrain Medical, Inc. Form S-1



Exhibit 10.29 


	
 

	
 


	
 

	
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.


WARRANT AGREEMENT


          This
Warrant Agreement is made and entered as of the 1st day of December, 2006 (the
Agreement Date”) by and between BioDrain Medical, Inc., a Minnesota corporation
(“Company”) and Wisconsin Rural Enterprise Fund, LLC (the “Warrantee”)
in conjunction with the Stock Sale and Purchase Agreement dated December 1,
2006 between the Company and Warrantee.


1. Warrant
Grant. The Company hereby grants to the Warrantee a warrant (the
“Warrant”) to purchase 35,000 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 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 December 31, 2011,
or thirty (30) days following the fifth anniversary of the Agreement Date (“the
Expiration Date”).


5. Vesting of
Options. Warrantee will have the right to exercise the Warrant in
whole or in part and at any time or from time to time following the Agreement
Date.


6. Issuance of Shares. The Company agrees
that the shares purchased hereby shall be and are deemed to be issued to the
record holder hereof as of the close of business on the date or dates on which
this Warrant is exercised and the payment made for such shares as aforesaid.
Certificates for the shares of stock so purchased shall be delivered to the
holder hereof within a reasonable time, not exceeding ten (10) days after the
rights represented by this Warrant shall have been so exercised.


7. Covenants of Company. The Company
covenants and agrees that all shares which may be issued upon the exercise of
this Warrant will, upon issuance, be duly authorized and issued, fully paid,
nonassessable and free from all taxes, liens and charges with respect to the
issue thereof, and without limiting the generability of the foregoing, the
Company covenants and agrees that at all times during the period within which
the rights represented by this Warrant may be exercised, the Company will have
authorized, and reserved for the purpose of issue or transfer upon exercise of the
subscription rights evidenced by this Warrant, a sufficient number of shares of
its common stock to provide for the exercise of the rights represented by this
Warrant.


8. Transferability.
The rights and obligations incident to this Warrant shall be binding upon and
inure to the benefit of subsidiaries of the parties and their successors, but
such rights and obligations shall otherwise not be subject to transfer or
assignment. 


8. 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 


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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.


9. Amendment,
Modification and Termination of Agreement. The Agreement may not be
amended, modified or terminated without the written consent of both parties. 


10. 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. 


11. 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. 


12. 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:


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


	
 

	
 


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








	
 

	
 


	
 

	
Wisconsin
 Rural Enterprise Fund, LLC


	
 

	
1400 So.
 River Street


	
 

	
Spooner, WI
 54801





          (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.


13. 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. 


14. 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 its 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. 


15. 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. 


16. 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. 





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          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.



	
 

	
 

	
 

	
 

	
 


	 

	 

	 

	 

	 


	
Wisconsin Rural Enterprise Fund, LLC

	
 

	
BIODRAIN MEDICAL, INC.,


	
 

	
 

	
 

	
a Minnesota
 corporation


	
 

	
 

	
 

	
 


	
By

	
 

	
 

	
By:

	
 


	
 

	
 

	
 

	
 

	
 


	
 

	 

	
 

	
 

	 


	
 

	
 

	
 

	
 

	
Kevin
 R. Davidson


	
Its

	
 

	
 

	
Its:

	
President
 & CEO





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