Document:

Exhibit 10.11 to Biodrain Medical, Inc. Form S-1

Exhibit 10.11 

CONSULTING
AGREEMENT

This Consulting Agreement (the “Agreement”) is entered
into, effective as of
June _____, 2008 (the “Effective Date”), by and among BioDrain Medical, Inc., a Minnesota
corporation, having an address at 699 Minnetonka Highlands Lane, Orono, MN,
55356-9728 (hereinafter “BioDrain”) on the one hand, and, on the other hand, Marshall C. Ryan (hereinafter
“Ryan”), individually, and Mid-State Stainless, Inc., (hereinafter “Mid-State”), a Wisconsin
corporation,
having an address at 330 West Benson Avenue, P.O. Box 228, Grantsburg, WI 54840
(Ryan and Mid-State are hereinafter collectively referred to as “Consultant”).
BioDrain and Consultant may be referred to in this Agreement, individually, as
a “Party”, and jointly, as “Parties.”

RECITALS

          WHEREAS, BioDrain desires to retain Consultant, and
Consultant desires to be so retained, to consult with and assist BioDrain in
developing and commercializing an apparatus for the disposal of liquid surgical
waste.

          NOW, THEREFORE, in furtherance of the above
recitals and subject to the terms and conditions set forth herein, the Parties
agree as follows:

1. Definitions.
In this Agreement, the terms defined parenthetically elsewhere and the
following terms shall have the meanings there or here supplied. Terms may be
used in the singular or the plural.

	
 

	
 

	
 

	
1.1. Change in Control.
 “Change in Control” as used herein shall mean an occurrence after the
 Effective Date of this Agreement, where any one person or entity (other than
 the current officers and directors of BioDrain and their affiliates) becomes
 the owner of fifty percent (50%) or more of the combined voting power of
 BioDrain’s outstanding securities ordinarily having the right to vote at
 elections of directors, not including shares issuable pursuant to options,
 warrants, convertible debt or similar instruments.

	
 

	
 

	
 

	
1.2 Customer.
 “Customer” as used herein shall mean any individual or entity other than a
 Party.

	
 

	
 

	
 

	
1.3. Developments.
 “Developments” as used herein shall mean any invention, discovery, concept,
 improvement, innovation, or idea, whether or not patentable and whether or
 not reduced to practice, of Consultant (whether alone or jointly with
 BioDrain personnel) that relies upon or builds upon the disclosure or
 teachings of the Patents or that otherwise relates to the Technology.

	
 

	
 

	
 

	
1.4. IP Rights.
 “IP Rights” as used herein shall mean all patents, copyrights, trade secrets,
 trademarks, service marks, trade dress, mask works, and all other
 intellectual property or proprietary rights of every kind or nature, however
 designated, throughout the world, including all rights to file for
 applications therefore with any governmental agencies and to receive
 registrations, renewals, reissues and/or reexaminations thereon, together with all world wide rights to
 income, royalties, damages and payments due or 

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payable with respect
 thereto, and to all causes of action (either in law or in equity) associated
 therewith, including all rights to sue, counterclaim, and recover for
 infringement thereof.

	
 

	
 

	
 

	
1.5. Net Sales.
 “Net Sales” as used herein shall mean the total invoiced amount of any
 Product Sold to Customers by BioDrain and/or its licensees, less all
 discounts and allowances actually shown on the invoice, and less any bona
 fide returns actually made or allowed as supported by credit memoranda
 actually issued to Customers, and excluding all shipping charges, duties,
 sales taxes and excise taxes.

	
 

	
 

	
 

	
1.6. Patents.
 “Patents” as used herein shall mean United States Patent Application No. 10/524,086
 having a filing date of February 9, 2005 and entitled “Method and Apparatus
 For Disposing of Liquid Surgical Waste For Protection of Healthcare Workers”
 and European Patent No. EP1539580 issued April 4, 2007 entitled “Method and
 Apparatus For Disposing of Liquid Surgical Waste For Protection of Healthcare
 Workers” and any patents or patent applications of the United States, foreign
 country or international patent authority which relate or claim priority
 thereto, including, but not limited, to all
 continuations, continuations-in-part, divisionals, reexaminations and
 reissues thereof.

	
 

	
 

	
 

	
1.7. Products.
 “Products” as used herein shall mean all current and all future commercial
 embodiments of any device within the scope of any claims of the Patents.

	
 

	
 

	
 

	
1.8.
 Services.
 “Services” as used herein shall have the meaning as ascribed in Section 2.

	
 

	
 

	
 

	
1.9. Sold or Sale.
 “Sold” or “Sale” as used herein shall mean the date when a Customer is
 invoiced for the Products.

	
 

	
 

	
 

	
1.10. Technology.
 “Technology” as used herein shall mean the collection and/or disposal of
 liquid surgical waste.

	
 

	
 

	
 

	
1.11. Term.
 “Term” as used herein shall mean the period commencing on the Effective Date
 and ending when there are no Patents which remain in force anywhere in the
 world, unless sooner terminated pursuant to Section 7 (Termination). 

	
 

	
 

	
 

	
1.12. Work Product.
 “Work Product” shall mean any work of authorship (within the purview of the
 copyright laws of the United States of America), any invention, discovery,
 concept, improvement, innovation, or idea, (whether or not patentable,
 whether or not put into writing, and whether or not put into practice),
 whether conceived, produced or developed solely by efforts of Consultant or
 jointly with BioDrain personnel, in connection with Consultant’s performance
 of the Services, including, but not limited to, all data, files, records,
 reports, compilations, methods, processes, procedures, systems, operations,
 techniques, formulas, designs, drawings, diagrams, models, samples, flow
 charts, algorithms, data, plans, lists, contracts, and computer programs,
 including any source code, object code, enhancements and modifications, all
 databases, all files, including input and output materials, all documentation
 related to such computer programs, databases and files, all media upon which
 any such computer program, database, files and documentation are located
 (including tapes, disks and other storage 

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devices) and all related material used by, developed
 for, or paid for by Consultant in connection with the performance of the
 Services.

	
 

	
 

	
 

	
2. 

	
Obligations of Consultant 

	
 

	
 

	
 

	
2.1 Duties of Consultant.
 During the Term, Consultant will assist BioDrain in developing Products,
 serve as an advisor on current and future Products, assist BioDrain in securing
 any government or regulatory approvals or certifications, and upon request by
 BioDrain, respond to questions about the Products from third parties
 (collectively, the “Services”). All requests for such Services shall be made
 in writing by BioDrain. Consultant shall provide competent, professional
 services, using its own appropriate independent skill and judgment, and the
 manner and means that appears best suitable to it to perform the Services.
 Consultant shall, at all times, use best efforts to provide the Services.
 Consultant shall choose its own place and time of performance of work.

	
 

	
 

	
 

	
2.2 Other Obligations.
 In the performance of the Services, Consultant:

	
 

	
 

	
 

	
(a) shall conduct all of its business in a
 businesslike and professional manner. 

	
 

	
 

	
 

	
(b) shall not, without BioDrain’s prior written
 approval, make representations, warranties or guarantees concerning the
 Products.

	
 

	
 

	
 

	
(c) shall abide by BioDrain’s policies as provided
 by BioDrain in writing.

	
 

	
 

	
 

	
2.3 Non-Competition.
 Consultant shall not, at any time during the Term, on its own behalf, or on
 behalf of any person, directly or indirectly, in any capacity whatsoever,
 including, without limitation, as an employer, employee, principal, agent,
 joint venturer, partner, shareholder or other equity holder, independent
 contractor, licensor, licensee, franchisor, franchisee, distributor,
 consultant, supplier, trustee or by, through or in connection with any
 person, carry on or be engaged in or have any financial or other interest in
 or be otherwise commercially involved in any endeavor, activity or business
 that is in direct or indirect competition with the Products or the commercial
 activities of BioDrain.

	
 

	
 

	
 

	
2.4 Compliance with Laws and
 Standards. Consultant shall perform its obligations under
 this Agreement in compliance with all applicable laws.

	
 

	
 

	
 

	
2.5 Disclosure of Developments.
 Consultant shall promptly disclose in writing to BioDrain any and all
 Developments during the Term and for a period of one (1) year thereafter.
 Additionally, within thirty (30) days of the Effective Date, Consultant shall
 deliver to BioDrain a copy of any and all drawings and technical information
 within the possession or control of Consultant together with any other
 information which would be helpful to BioDrain in the understanding of the
 Technology, including any information relevant to the manufacture or use of
 devices based on the Technology.

3. Compensation.

	
 

	
 

	
 

	
3.1 R & D Payment.
 Biodrain shall pay to Consultant a one time payment of One 

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Hundred Thousand Dollars ($100,000) as full
 compensation for all research and development fees and costs incurred by
 Consultant toward the development of the Technology (the “R&D Payment”).
 The R&D Payment shall be due and payable within twelve (12) months of the
 Effective Date. Notwithstanding the foregoing, if the current round of
 financing for BioDrain (to be completed no later than August 31, 2008)
 results in gross proceeds of at least 1.5 Million Dollars ($1,500,000),
 BioDrain shall pay to Consultant at least Fifty Thousand Dollars ($50,000) of
 the R&D Payment, within five (5) business days of receipt of the $1.5
 Million in financing.

	
 

	
 

	
 

	
3.2 IP Payment.
 Upon execution of this Agreement, and subject to Consultant executing the
 assignment agreement related to the Patents for recordation with the United
 States Patent and Trademark Office, BioDrain shall pay to Consultant Seventy
 Five Thousand Dollars ($75,000) for such assignment of ownership of the
 Patents and all other Developments.

	
 

	
 

	
 

	
3.3 Consulting Fees.
 As full compensation for the performance of the Services requested by
 BioDrain pursuant to Section 2.1, the sufficiency of which is hereby
 acknowledged, BioDrain shall pay to Consultant a rate of Ninety Five Dollars
 per hour ($95/hour). Consultant shall invoice BioDrain monthly for the
 Services rendered during the previous month. The invoice shall identify the
 number of hours worked in that month by Consultant in the performance of the
 Services. The invoices shall be due and payable by BioDrain within thirty
 (30) days of the invoice date.

	
 

	
 

	
 

	
3.4 On-Going Royalties.
 Subject to Section 3.6, BioDrain shall pay to Consultant, throughout the
 Term, a royalty of four percent (4%) of the Net Sales of each Product Sold.
 BioDrain shall render to Consultant on a calendar quarterly basis, within
 fifteen (15) days after the end of each calendar quarter during which the
 Products are Sold, a written statement of the royalties due to Consultant
 with respect to such Sold Products. Such statement shall be accompanied by a
 remittance of the royalty amount shown to be due. Consultant shall have the
 right, upon reasonable request, to review those records of BioDrain necessary
 to verify the royalties paid. Any such audit will be conducted at
 Consultant’s expense and at such times and in such a manner as to not
 unreasonably interfere with BioDrain’s normal operations. If a deficiency is
 shown by such audit, BioDrain shall immediately pay that deficiency.

	
 

	
 

	
 

	
3.5 Stock-Purchase Warrant.
 For a period up to and including the fifth (5th) year anniversary of the
 Effective Date, Consultant is entitled to subscribe for and purchase up to
 One Hundred Fifty Thousand (150,000) shares of BioDrain common stock at a
 price of Thirty-Five Cents ($0.35) per share.

	
 

	
 

	
 

	
3.6 Minimum Royalties.
 If there is a Change in Control within the time periods set forth in Section
 3.6.1, 3.6.2 or 3.6.3 below, the respective minimum royalty payments shall be
 owed as follows:

	
 

	
 

	
 

	
3.6.1 Change In Control Within 12
 Months of the First Sale. If there is a Change in Control
 up to and including the first twelve (12) month period after the first Sale
 of any Products, Consultant shall be paid a minimum of Two Million 

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Dollars ($2,000,000) in royalties (the “$2MM Minimum
 Royalty Payment”) payable in increments of Five Thousand Dollars ($5,000) per
 calendar month throughout the remainder of the Term. If the $2MM Minimum
 Royalty Payment is not met by the end of the Term, the remaining unpaid
 balance of the $2MM Minimum Royalty Payment shall be due and payable in one
 lump sum within thirty (30) days of the end of the Term.

	
 

	
 

	
 

	
3.6.2 Change In Control Between 12
 - 24 Months of the First Sale. If there is a Change in
 Control after the first twelve (12) month period but up to and including the
 first twenty four (24) month period after the first Sale of any Products,
 Consultant shall be paid a minimum of One Million Dollars ($1,000,000) in
 royalties (the “$1MM Minimum Royalty Payment”) payable in increments of Five
 Thousand Dollars ($5,000) per calendar month throughout the remainder of the
 Term. If the $1MM Minimum Royalty Payment is not met by the end of the Term,
 the remaining unpaid balance of the $1MM Minimum Royalty Payment shall be due
 and payable in one lump sum within thirty (30) days of the end of the Term.

	
 

	
 

	
 

	
3.6.3 Between 24 - 36 Months of the
 First Sale. If there is a Change in Control of BioDrain
 after the first twenty four (24) month period but up to and including the
 first thirty six (36) month period after the first Sale of any Products,
 Consultant shall be paid a minimum of Five Hundred Thousand Dollars
 ($500,000) in royalties (the “$500M Minimum Royalty Payment”) payable in
 increments of Five Thousand Dollars ($5,000) per calendar month throughout
 the remainder of the Term. If the $500M Minimum Royalty Payment is not met by
 the end of the Term, the remaining unpaid balance of the $500M Minimum
 Royalty Payment shall be due and payable in one lump sum within thirty (30)
 days of the end of the Term.

4. Ownership
of Developments. All Developments shall be the sole and
exclusive property of BioDrain, and all rights, title and interest in and to
such Developments including any and all IP Rights therein, are hereby expressly
assigned automatically to BioDrain without further consideration. Consultant will, at BioDrain’s request and expense,
execute any documents that BioDrain deems necessary or appropriate to perfect,
protect, enforce, register, or transfer ownership of the Developments including
any and all IP Rights therein to BioDrain. BioDrain may, in its sole discretion
and without Consultant’s prior approval, transfer, sell, assign, or license the
Developments and any and all IP Rights therein to any third party.

5. Confidentiality.

	
 

	
 

	
 

	
5.1. Non-Use and Non-Disclosure by
 Consultant. Consultant acknowledges and agrees that by
 entering into this Agreement it is entering into a relationship of trust and
 confidence with BioDrain. Consultant will not use or disclose to any third
 party any non-public information about BioDrain or any of BioDrain’s products,
 customers, or clients, learned as a result of this Agreement or in the course
 of performing any of the Services. During the Term, Consultant will maintain
 all Work Product strictly confidential and will 

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not disclose any such Work Product to any third
 party, in whole or in part, without first obtaining BioDrain’s prior written
 consent. 

	
 

	
 

	
 

	
5.2 Return of information,
 documents and things. At any time upon BioDrain’s request
 and in any event, upon termination of this Agreement pursuant to Sections 7,
 Consultant will deliver to BioDrain all originals and copies of all Work
 Product in Consultant’s possession or control.

	
 

	
 

	
 

	
5.3. Injunctive Relief.
 Consultant acknowledges and agrees that it would be difficult to fully
 compensate BioDrain for damages resulting from the breach or threatened
 breach of Section 5.1 and, accordingly, that BioDrain will be entitled to
 temporary and permanent injunctive relief, including temporary restraining
 orders, preliminary injunctions and permanent injunctions, to enforce
 Sections 5.1 and 5.2. This Section 5.3 will not, diminish BioDrain’s right to
 claim and recover damages, attorneys fees or costs incurred to enforce this
 Section 5.3 or for breach or threatened breach of Sections 5.1 and/or 5.2.

	
 

	
 

	
 

	
5.4 Disclosure Required by Law.
 Notwithstanding anything to the contrary in this Agreement, the Consultant
 may disclose such information otherwise precluded under Sections 5.1 and 5.2
 to the extent required to be disclosed pursuant to a judicial or
 administrative process, provided that Consultant provides prompt written
 notice to BioDrain and allows BioDrain a reasonable time to oppose the
 judicial order or administrative process.

6.
Specific Enforcement. The Parties acknowledge and agree that
if a Party hereto should breach or fail to perform any of such Party’s
obligations under this Agreement, the other Party would suffer irreparable
damage. Accordingly, it is expressly understood and agreed to by the Parties
that, except for termination pursuant to Section 7.1 (Immediate Termination),
the only remedy available against a Party for breach of any term or condition
or for failure to perform any of its obligation under this Agreement, is the
specific enforcement of such terms, conditions or obligations against such
breaching Party and that the non-breaching Party shall be entitled, upon
application to a court of competent jurisdiction, to specific performance of
the terms of this Agreement.

	
 

	
 

	
 

	
7. Termination.

	
 

	
 

	
 

	
7.1 Immediate Termination for
 Breach of Sections 2.3, 2.5 or 5. BioDrain may terminate
 this Agreement immediately upon written notice to Consultant if it is found
 by a court of competent jurisdiction that Consultant has breached Section 2.3
 (Non-Compete), Section 2.5 (Disclosure of Developments) or Section 5 (Confidentiality).

	
 

	
 

	
7.2 Effect of Termination.
 The Parties understand and agree that, except for the obligations that
 survive termination of this Agreement pursuant to Section 7.3 below,
 termination of this Agreement will forever discharge and excuse completion of
 or performance of any liability or obligation herein undertaken or occurring
 prior to the effective date of such termination.

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7.3 Survival.
 In the event this Agreement is terminated pursuant to Section 7.1, the
 provisions of Sections 2.3, 2.5, 4, 5, 6, 7.2, 7.3 and 8 of this Agreement
 will survive such termination.

	
 

	
 

	
8. Miscellaneous.

	
 

	
 

	
 

	
8.1 Modification.
 No alteration, amendment, waiver, cancellation or any other change in any
 term or condition of this Agreement shall be valid or binding on either Party
 unless the same shall have been mutually assented to in writing by both
 Parties.

	
 

	
 

	
 

	
8.2 Severability.
 If any provision of this Agreement is held to be unenforceable for any
 reason, such provision shall be reformed only to the extent necessary to make
 it enforceable, and such holding shall not impair the validity, legality or
 enforceability of the remaining provisions.

	
 

	
 

	
 

	
8.3 Waiver. The
 failure of any Party to enforce at any time the provisions of this Agreement,
 or the failure to require at any time performance by any other Party of any
 of the provisions of this Agreement, shall in no way constitute a present or
 future waiver of such provisions, nor in any way affect the ability of any
 Party to enforce each and every such provision thereafter. No waiver shall be
 binding unless in writing and signed by the Party waiving the breach.

	
 

	
 

	
 

	
8.4 Effect of Headings.
 This Agreement shall be construed without reference to headings. Headings to
 sections and paragraphs are to facilitate reference only and do not form a
 part of this Agreement.

	
 

	
 

	
 

	
8.5 Assignability.
 The duties and obligations under this Agreement are personal to Consultant
 and may not be assigned or delegated by Consultant without the express
 written consent of BioDrain. Any prohibited assignment or delegation will be
 null and void. BioDrain may assign this Agreement and its rights and
 obligations under this Agreement upon written notice to Consultant. This
 Agreement will be binding upon and will inure to the benefit of the Parties
 and their respective, permitted successors and assigns. 

	
 

	
 

	
 

	
8.6 Relationship.
 The Parties are separate and independent legal entities. Nothing contained in
 this Agreement should be deemed to constitute either Party being an agent,
 representative, partner, joint venturer or employee of the other Party for
 any purpose. Neither Party has the authority to bind the other or to incur
 any liability on behalf of the other, nor to direct the employees of the
 other.

	
 

	
 

	
 

	
8.7 Notices. For
 purposes of all notices and other communications required or permitted to be
 given hereunder, the addresses of the Parties will be as identified above.
 All notices will be in writing and will be deemed to have been duly given if
 sent by facsimile, the receipt of which is confirmed by transmittal receipt,
 or by a nationally recognized courier, addressed to the Parties at their
 addresses set forth above. Any Party may change the address to which
 subsequent notices are to be sent by written notice to the other Party as
 provided herein.

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8.8 Counterparts.
 This Agreement may be executed in multiple counterparts, with each such
 counterpart deemed to be an original instrument. Counterparts of this
 Agreement may also be exchanged via electronic facsimile machines, and any
 electronic facsimile of any Party’s signature shall be deemed to be an
 original signature for all purposes.

	
 

	
 

	
 

	
8.9 Governing Law; Venue and
 Jurisdiction. This Agreement shall be governed by the laws
 of the state of Minnesota. For the purpose of resolving conflicts related to
 or arising out of this Agreement, the Parties expressly agree that venue
 shall be exclusively in the state of Minnesota, county of Hennepin. The
 Parties hereby consent to the exclusive jurisdiction of the federal and state
 courts of the state of Minnesota, county of Hennepin, and expressly waive any
 objection to personal jurisdiction, improper venue and/or convenience of such
 forums.

	
 

	
 

	
 

	
8.10 Integration.
 Except for the Manufacturing Agreement having an effective date of May 4,
 2006 and the Supply Agreement having an effective date of December 13, 2006,
 upon execution of this Agreement, all other prior agreements between the
 Parties are hereby null and void, such that this Agreement shall constitute
 the exclusive and entire agreement between the Parties with respect to the
 Patents, the Technology and their relationship and business dealings, and as
 of its date shall supersede all prior or contemporaneous agreements, letters,
 negotiations, representations and proposals, written or oral, relating
 thereto. The Parties hereby acknowledge and agree that promptly after
 execution of this Agreement, the above referenced Manufacturing Agreement and
 Supply Agreement will be redrafted or otherwise restated or amended with
 mutually agreeable terms and conditions.

BY EXECUTING THIS AGREEMENT, EACH PARTY ACKNOWLEDGES
THAT IT HAS READ AND UNDERSTANDS THIS AGREEMENT AND AGREES TO BE BOUND BY ITS
TERMS AND PROVISIONS.

BioDrain, Inc.

	
 

	
 

	
Signature: 

	
            /s/ Kevin R. Davidson

	
 

	 

	
 

	
 

	
Name: 

	
                  President and Chief Executive Officer

	
 

	 

	
 

	
 

	
Title: 

	
 

	
 

	 

	
 

	
 

	
Date: 

	
 

	
 

	 

	
 

	
 

	
Consultant, Marshall C. Ryan, individually

	
 

	
 

	
Signature 

	
            /s/ Marshall C. Ryan

	
 

	 

	
 

	
 

	
Date: 

	
 

	
 

	 

	
 

	
 

	
Consultant, Mid-State Stainless, Inc.

	
 

	
Signature: 

	
 

	
 

	 

	
 

	
 

	
Name: 

	
                  Marshall C. Ryan

	
 

	 

	
 

	
 

	
Title: 

	
 

	
 

	 

	
 

	
 

	
Date:

	
 

	
 

	 

8 of 8Exhibit 10.12 to Biodrain Medical, Inc. Form S-1

Exhibit 10.12 

INVESTOR RELATIONS
AGREEMENT

This
Agreement is made as of this 15th day of April 2008, by and between BioDrain
Medical, Inc., a Minnesota corporation (the “Company”), a corporation duly organized and existing under
the laws of the State of Minnesota, having its principal place of business at 699 Minnetonka Lane, Orono, Minnesota
55356, and Kulman JR, LLC (the “Consultant”), a limited liability company duly organized and existing under the laws of the State of Florida, with
offices at 18851 N. E. 29th Avenue, Suite 700, Aventura, Florida 33180.

WHEREAS, the Company is a
medical device company;

WHEREAS,
the Consultant is experienced in providing consulting and investor relations
advice to publicly-traded companies and;

WHEREAS,
the Company wishes to retain the services of the Consultant on a non-exclusive
basis on the following terms and conditions:

1. The Company hereby retains the services of the
Consultant for a period of twelve months, commencing with the completion
of the Company’s financing.

2.
In exchange for the Consulting Services (as that term is defined below)
rendered during the Initial Term, the Consultant shall receive a monthly cash fee of $5,000 per month paid on the
15th of every month. The first cash fee is due upon completion of the Company’s financing. The Consultant shall
also receive a certificate for 250,000 shares of restricted common stock
(herein after “Shares”) of the Company. These certificates are to be delivered within 10 days of the completion of the
Company’s financing. These shares are irrevocable and the Company shall take no action to cause such securities to be
voided or revoked or the issuance to be otherwise terminated. The Company acknowledges that the
Consultant intends to transfer or assign some of the Shares to certain
of its members, directors, consultants and employees and will instruct the
Company accordingly.

The
Consultant shall be reimbursed the actual cost of obtaining the requisite legal
opinion for the purpose of registering the Consultant’s Shares. The
Company agrees to provide the name and
contact information of the legal counsel that will render the legal opinion.
The Company also agrees that if for any reason that legal counsel is not providing said legal opinion
in a timely manner, the Company will accept a third party legal opinion
in its stead.

The
Consultant shall be reimbursed actual reasonable travel and other out of pocket
expenses which will be billed in
arrears and are due payable within (15) days of the Company’s receipt of the
subject bill(s). All travel and out-of-pocket expenses are to be
pre-approved by the Company.

3. The Consultant shall utilize its best efforts to
provide the following services to the Company: (a) assist the Company in making presentations to interested
brokerage firms, ledge funds and institutional investors that buy and follow the medical device businesses
(b) coordinate meetings with analysis to cover the Company’s stock and help disseminate the
Company’s investment profile to these analysis, as well as brokerage
firms, ledge fund managers and institutional investors through a variety of
electronic and manual sources, (c) a review of public relations and marketing materials that have been, or may be
distributed to the U.S. financial community and make appropriate suggestions as to how these materials can or
should be changed, (d) advise the Company on symposium presentations, as well as investor conferences, (e) assist
the Company through Consultant’s existing and future relationships in areas relating to future financings, mergers, acquisitions and potential buyouts; the
parties agree that any such transaction will be subject to a separate fee agreement between the parties and
limited to transactions generated by the Consultant, excluding any transactions generated by other
parties for which the Consultant will not be entitled to compensation, (f) at the appropriate time, have the
Company deliver presentations to the staff of the

Consultant, as well as the
offices of other brokerage firms with whom the Consultant maintains a relationship, and (g) through media contacts,
attempt to initiate interviews for the Company on news shows such, as CNBC,
CNN and Bloomberg. The services referred to in this paragraph shall be known as
the “Consulting Services”.

4.
The Consultant shall be an independent contractor and shall have no right or authority to assume or create any
obligations or responsibility, express or implied, on behalf of or in the name of the Company, unless specifically authorized in writing by the Company.
No provision of this Agreement shall he construed to preclude the Consultant,
or any officer, director, agent, assistant, affiliate or employee of the Consultant from engaging in any activity whatsoever,
including, without limitation receiving compensation for managing investments,
or acting as an advisor, broker-dealer to, or participate in, any corporation, partnership, trust or other business entity or
from receiving compensation or profit therefore. The Consultant shall
have no obligation to present any business combination to the Company and shall
incur no liability for its failure to do so.

5. The Consultant (including any person or entity
acting for or on behalf of the Consultant) shall not be liable for any mistakes of fact, errors of
judgment, for losses sustained by the Company or any subsidiary or for any acts or omissions of any kind, unless
caused by the gross negligence or intentional misconduct of the Consultant
or any person or entity acting for or on behalf of the Consultant.

6. (a) The Company and its present and future subsidiaries, jointly and
severally, agree to indemnify and hold harmless the Consultant and its
present and future members as well as its and their officers, directors, affiliates, associates, employees, members,
attorneys and agents (“Indemnified Parties” or ”“Indemnified party”) against any loss, claim, damage or
liability whatsoever (including reasonable attorneys’ fees and expenses), to
which such Indemnified Party may become subject as a result of performing any act (or omitting to perform any act) contemplated to be
performed by the Consultant pursuant to this Agreement if such act or omission
did not violate the provisions of Section 4 of this Agreement. So long as the
Company has not provided counsel to
the Indemnified Party in accordance with the terms of this Agreement, the Company and its subsidiaries agree to reimburse
the defense of any action or investigation (including reasonable attorneys’ fees and expenses) subject
to an understanding from such Indemnified Party to repay the Company or its subsidiaries if it is
ultimately determined that such Indemnified Party is not entitled to such indemnity. In case any action, suit or
proceeding shall be brought or threatened, in writing, against any Indemnified Party, it shall notify the Company within twenty (20)
days after the
Indemnified Party receives notice of
such action, suit or such threat. The Company shall have the right to appoint
the Company’s counsel to defend such
action, suit or proceeding, provided that such Indemnified Party consents to
such representation by such counsel,
which consent shall not be unreasonably withheld. In the event any counsel appointed by the Company shall not be acceptable
to such Indemnified Party, then the Company shall have the right to appoint alternative counsel for such
Indemnified Party reasonably acceptable to such Indemnified Party, until such time as acceptable counsel can be
appointed. In any event, the Company shall, at its sole cost and expense, be entitled to appoint counsel to appear
and participate as co-counsel in the defense
thereof. The Indemnified Party, or its co-counsel, shall promptly supply the
Company’s counsel with copies of all
documents, pleadings and notices that are filed, served or submitted in any of
the aforementioned. No Indemnified
Party shall enter into any settlement without the prior written consent of the
Company, which consent shall not be unreasonably withheld.

2

(b.) The Consultant and its
present and future subsidiaries, jointly and severally, agree to indemnify and hold harmless the Company and its present and
future members as well as its and their officers, directors, affiliates, associates, employees, members, attorneys and
agents (“Indemnified Parties’” or ““Indemnified party”)
against any loss, claim, damage or liability whatsoever (including reasonable
attorneys’ fees and expenses), to
which such Indemnified Party may become subject as a result of performing any
act (or omitting to perform any act)
contemplated to be performed by the Company. So long as the Consultant has not
provided counsel to the Indemnified Party in accordance with the terms of this
Agreement, the Consultant and its
subsidiaries agree to reimburse
the defense of any action or investigation (including reasonable
attorneys fees and expenses) subject to an understanding from such Indemnified
Party to repay the Consultant or its
subsidiaries if it is ultimately determined that such Indemnified Party is not
entitled to such indemnity. In case any action,
suit or proceeding shall be brought or threatened, in writing, against any Indemnified Party, it shall notify the Consultant within
twenty (20) days after the
Indemnified Party receives notice of
such action, suit or such threat. The Consultant shall have the right to appoint the Consultant’s counsel to defend such action, suit
or proceeding,
provided that such Indemnified Party consents to such representation by such counsel, which consent
shall not be unreasonably withheld. In the event any counsel appointed by the Consultant shall not be
acceptable to such Indemnified Party, then the Consultant shall have the right to appoint alternative counsel for
such Indemnified Party reasonably acceptable to such Indemnified Party, until such time as acceptable
counsel can be appointed. In any event, the Consultant shall, at its sole cost
and expense, be entitled to appoint counsel to appear and participate as
co-counsel in the defense thereof.
The Indemnified Party, or its co-counsel shall promptly supply the Consultant’s
counsel with copies of all documents, pleadings and notices that are
filed, served or submitted in any of the aforementioned.
No Indemnified Party shall enter into any settlement without the prior written
consent of the Consultant, which consent shall not be unreasonably withheld.

7. This Agreement shall be
binding upon the Company and the Consultant and their respective successors and
assigns.

8. If any provision or
provisions of this Agreement shall be held to be invalid, illegal or
unenforceable for any reason whatsoever; (i) the validity, legality and
enforceability of the remaining provisions of this Agreement (including, without limitation, each portion of any section of this
Agreement containing any such provision held to be invalid, illegal or
unenforceable) shall not in any way be affected or impaired thereby; and
(ii) to the fullest extent possible, the provisions of this Agreement
(including, without limitation, each
portion of any section of this Agreement containing any such provision held to
be invalid, illegal or
unenforceable) shall be construed so as to give effect to the intent manifested
by the provision held, invalid illegal or unenforceable.

9. No supplement, modification
or amendment of this Agreement shall be binding unless executed in writing by both parties hereto. No waiver of any
other provisions hereof (whether or not similar) shall be binding unless executed in writing by both
parties hereto nor shall such waiver constitute a continuing waiver.

10. This Agreement may be executed in one or more
counterparts each of which shall for all purposes be deemed to be an original but all of which shall constitute one and the same
Agreement.

11. This Agreement shall be governed by the laws of
the State of Minnesota. The parties agree that, should any dispute arise in the administration of this Agreement, the dispute
shall be resolved through arbitration under the rules of the American
Arbitration Association.

12. This Agreement contains the entire agreement
between the parties with respect to the services to be provided to the Company
by the Consultant and supersedes any and all prior understandings, agreement or
correspondence between the parties.

IN WITNESS WHEREOF, the Company and the Consultant
have caused this Agreement to be signed by their duly authorized representatives
as of the day and year first above written.

	
 

	
 

	
 

	
 

	
 

	
 

	
BioDrain Medical, Inc

	
 

	
Kulman IR. LLC

	
 

	
 

	
 

	
 

	
 

	
By:

	

	
 

	
By:

	

	
 

	
 

	 

	
 

	
 

	 

	
 

	
 

	
Name: Kevin Davidson

	
 

	
 

	
Name: Craig M. Kulman

	
 

	
 

	
Title: President & CEO

	
 

	
 

	
Title: managing member

	
 

4

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