Unassociated Document


 

    EXHIBIT
10.42

     


    BIODRAIN
MEDICAL, INC.

    699
Minnetonka Highlands Lane

    Orono,
Minnesota 55356-9728.

    (612)
850-9460

    


    


    June 9,
2008

    


    


    To:
Current BioDrain Medical, Inc. equityholders

    


    RE: 510(K) APPROVAL AND STOCK
ISSUANCE

    


    Dear
Current Equityholder:

    


    As you may know, BioDrain Medical,
Inc., a Minnesota corporation (“BioDrain” or the “Company”), will be closing an
equity financing of more than $800,000 and no less than $1.2 million this week
(“Offering”) with certain investors (“Investors”).  With a portion of
the proceeds of this financing, BioDrain will complete preparation and submit
its 510(K) filing with the Food and Drug Administration for its primary product,
the Fluid Management Systems, as a Class II product.

    


    Management and the Investors expect
that the FDA will approve this application within 12 months.  However,
upon the earlier to occur of the FDA (i) rejects the application or (ii) does
not approve the application within 12 months, then the Investors holding a
majority of common stock (“Majority-in-Interest Investors”) sold during that
Offering shall at any time be able to cause the Company to take the following
events to occur upon their election.

    


    1.           All
Company assets shall be distributed to a wholly-owned subsidiary
(“Privco”).  Privco will have the identical number of common shares
outstanding as the Company.

    


    2.           Current
Equityholders, including you, will cancel all Company stock, options, and
warrants you hold and no longer own any Company equity.

    


    3.           In
consideration of such cancellation, you will receive Privco stock and options so
that you have the same percentage ownership of Privco that you had in the
Company.  Company will retain the rest of Privco equity.

    


    4.           All
your Company stock options, warrants, convertible debt (if any) will be
cancelled and replaced with Privco stock options, warrants and convertible debt
at substantially same terms of the Company securities.

    


    5.           Company
will have new directors and officers selected by Investors.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Current Equityholders of
BioDrain

    June 9, 2008

    Page 2

     

    Your stock certificate will be required
to include a separate legend until this restriction lapses in 12
months.  The legend shall state the stock certificate may not be sold
or otherwise transferred until the restriction has terminated.  The
Majority-in-Interest Investors are a third party beneficiary to this
acknowledgement and this letter agreement may not be amended without their
consent.

    
    

     

    
      	 	

              Very
      truly yours,

              


              BIODRAIN
      MEDICAL

              


              
 

              By:/s/ Kevin
      Davidson                                 

                    Kevin
      Davidson, President

            


    

     

    


    On behalf
of the holder of BioDrain common stock, options, warrants or convertible debt, I
have read the above letter and agree to its terms.

     

     

    
      	Date:   	 
	 	 
	Shareholder
      Name:      	 
	 	 
	Shareholder
      Signature:             	 
	 	 
	Title:   	 
	(if shareholder is
      an entity, such as a partnership, corporation or
  trust)