Exhibit 10.33 to Biodrain Medical, Inc. Form S-1



Exhibit 10.33 


ESCROW AGREEMENT



                    THIS
ESCROW AGREEMENT (this “Agreement”) is made as of ___________, 2008, by and
among BioDrain Medical, Inc., a corporation incorporated under the laws of
Minnesota (the “Company”), the Purchasers signatory hereto and set forth on
Schedule A (each a “Purchaser” and together the “Purchasers”), Richardson &
Patel LLP, with an address at 10900 Wilshire Boulevard, Suite 500, Los Angeles,
California 90024 (the “Escrow Agent”). Capitalized terms used but not defined
herein shall have the meanings set forth in the Subscription Agreement referred
to in the first recital.  


W I T N E S S E T H:


                    WHEREAS,
the Purchasers will be purchasing from the Company, at least $800,000 and at
most $1,700,000, in the aggregate, of the Common Stock and Warrants on one or
more Closing Dates as set forth in the Subscription Agreement (the
“Subscription Agreement”) dated the date hereof between the Purchasers and the
Company, which securities will be issued under the terms contained herein, in
the Subscription Agreement, and in the Registration Rights Agreement between
the Purchasers and the Company dated the date hereof (the “Registration Rights
Agreement”); and 


                    WHEREAS,
it is intended that the purchase of the securities be consummated in accordance
with the requirements set forth in Regulation D promulgated under the
Securities Act of 1933, as amended; and 


                    WHEREAS,
the Company and the Purchasers have requested that the Escrow Agent hold the
Purchase Price in escrow until the Escrow Agent has received the Transaction
Documents (as defined below) at each Closing; 


                    NOW,
THEREFORE, in consideration of the covenants and mutual promises contained
herein and other good and valuable consideration, the receipt and legal
sufficiency of which are hereby acknowledged and intending to be legally bound
hereby, the parties agree as follows: 


ARTICLE 1 

TERMS OF THE ESCROW


          1.1. The parties hereby agree to
establish an escrow account with the Escrow Agent whereby the Escrow Agent
shall hold the funds for the purchase of at least $800,000 and up to
$1,700,000, in the aggregate, of Common Stock and Warrants as contemplated by
the Subscription Agreement. The amount of subscription funds for the initial
closing shall be at least $800,000. The amount of subscription funds for
subsequent closings shall be at the discretion of the Company. 


          1.2. Upon the Escrow Agent’s receipt of
the aggregate Purchase Price for the applicable Closing into its master escrow
account, together with executed counterparts of this Agreement and the
Subscription Agreement and the Release Notice (a form of which is attached
hereto as Exhibit A) it shall telephonically advise the Company, or the Company’s
designated attorney or agent, of the amount of funds it has received into its
master escrow account. 


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          1.3. Wire transfers to the Escrow Agent
shall be made as follows: 


	
 

	
 

	
 

	
 


	
 

	
RICHARDSON
 & PATEL LLP 

 CLIENT TRUST ACCT.

	
 


	
 

	
 

	
 

	
 


	
 

	
BANK NAME:

	
COMERICA
 BANK OF CALIFORNIA


	
 

	
 

	
WESTWOOD
 OFFICE


	
 

	
 

	
10900
 WILSHIRE BLVD.


	
 

	
 

	
LOS ANGELES,
 CALIF. 90024


	
 

	
 

	
PHONE
 NUMBER:

	
800-888-3595


	
 

	
 

	
ABA NUMBER:

	
121137522


	
 

	
 

	
ACCT.
 NUMBER:

	
1891937581 


	
 

	
 

	
 

	
 


	
 

	
BENEFICIARY:

	
RICHARDSON
 & PATEL LLP 

 CLIENT TRUST ACCT.


	
 

	
 

	
 

	
 


	
 

	
Re: BIODRAIN
 TRUST ACCOUNT





          1.4 The Company, promptly following
being advised by the Escrow Agent that the Escrow Agent has received the
Purchase Price for the applicable Closing along with facsimile copies of or
actual counterpart signature pages of the Subscription Agreement, the
Registration Rights Agreement, and this Agreement (collectively, “Transaction
Documents”) from each Purchaser, shall deliver to the Escrow Agent the
certificates representing the certificates evidencing the Securities to be
issued to each Purchaser at the Closing together with: 


	
 

	
 

	
 


	
 

	
(a) the
 Company’s executed counterpart of the Subscription Agreement; 


	
 

	
 

	
 


	
 

	
(b) the
 Company’s executed counterpart of the Registration Rights Agreement; and 


	
 

	
 

	
 


	
 

	
(c) the
 Company’s original executed counterpart of this Escrow Agreement. 





          1.5 In the event that the foregoing
items are not in the Escrow Agent’s possession within twenty (20) Trading Days
of the Escrow Agent, then each Purchaser shall have the right to demand the
return of their portion of the Purchase Price and any accrued interest of their
portion of the Purchase Price, if any (it being understood that Escrow Agent
has no obligation to place the funds into an interest-bearing account). 


          1.6 Once the Escrow Agent receives the
documents and funds set forth in Section 1.3 and Section 1.4, it shall (a)
disburse amounts owed to Richardson & Patel LLP for legal fees incurred by
Company and at the Company’s direction, pay any other expenses incurred by the
Company, and (b) wire the balance of the funds to the Company’s account listed
in Section 1.7 below. 


          1.7 Wire transfers to the Company shall
be made as follows: 


	
 

	
 


	
 

	
Bank:
 Citizens Independent Bank 


	
 

	
Routing
 Number: 091016566 


	
 

	
Beneficiary:
 BioDrain Medical, Inc. 


	
 

	
Account
 Number: 0169466 





                    Once
the funds (as set forth above) have been sent per the Company’s instructions,
the Escrow Agent shall then arrange to have the Common Stock and Warrants, the
Subscription Agreement, 


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the Registration Rights Agreement, and the Escrow Agreement delivered
to the appropriate parties within ten (10) Business Days of the receipt of the
Release Notice. 


ARTICLE II


MISCELLANEOUS


          2.1 No waiver or any breach of any
covenant or provision herein contained shall be deemed a waiver of any
preceding or succeeding breach thereof, or of any other covenant or provision
herein contained. No extension of time for performance of any obligation or act
shall be deemed an extension of the time for performance of any other
obligation or act. 


          2.2 All notices or other communications
required or permitted hereunder shall be in writing, and shall be sent as set
forth in the Subscription Agreement. 


          2.3 This Escrow Agreement shall be
binding upon and shall inure to the benefit of the permitted successors and
permitted assigns of the parties hereto. 


          2.4 This Escrow Agreement is the final
expression of, and contains the entire agreement between, the parties with
respect to the subject matter hereof and supersedes all prior understandings
with respect thereto. This Escrow Agreement may not be modified, changed,
supplemented, or terminated, nor may any obligations hereunder be waived,
except by written instrument signed by the parties to be charged or by its
agent duly authorized in writing or as otherwise expressly permitted herein. 


          2.5 Whenever required by the context of
this Escrow Agreement, the singular shall include the plural and the masculine
shall include the feminine. This Escrow Agreement shall not be construed as if
it had been prepared by one of the parties, but rather as if all parties had
prepared the same. 


          2.6 The parties hereto expressly agree
that this Escrow Agreement shall be governed by, interpreted under and
construed and enforced in accordance with the laws of the State of California.
Any action to enforce, arising out of, or relating in any way to, any
provisions of this Escrow Agreement shall only be brought in a state or Federal
court sitting in the City of Los Angeles. 


          2.7 The
Escrow Agent’s duties hereunder may be altered, amended, modified, or revoked
only by a writing signed by the Company, each Purchaser, and the Escrow Agent. 


          2.8 The
Escrow Agent shall be obligated only for the performance of such duties as are
specifically set forth herein and may rely and shall be protected in relying or
refraining from acting on any instrument reasonably believed by the Escrow
Agent to be genuine and to have been signed or presented by the proper party or
parties. The Escrow Agent shall not be personally liable for any act the Escrow
Agent may do or omit to do hereunder as the Escrow Agent while acting in good
faith and in the absence of gross negligence, fraud and willful misconduct, and
any act done or omitted by the Escrow Agent pursuant to the advice of the
Escrow Agent’s attorneys-at-law shall be conclusive evidence of such good
faith, in the absence of gross negligence, fraud, and willful misconduct. 


          2.9 The Escrow Agent is hereby expressly
authorized to disregard any and all warnings given by any of the parties hereto
or by any other person or corporation, excepting only orders or process of
courts of law and is hereby expressly authorized to comply with and obey orders,
judgments, or decrees of any court. In case the Escrow Agent obeys or complies
with any such order, judgment, or decree, the Escrow Agent shall not be liable
to any of the parties hereto or to any other person, firm, or 


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corporation by reason of such decree being subsequently reversed,
modified, annulled, set aside, vacated, or found to have been entered without
jurisdiction. 


          2.10 The Escrow Agent shall not be liable
in any respect on account of the identity, authorization, or rights of the
parties executing or delivering or purporting to execute or deliver the
Subscription Agreement or any documents or papers deposited or called for
thereunder in the absence of gross negligence, fraud, and willful misconduct. 


          2.11 The Escrow Agent shall be entitled
to employ such legal counsel and other experts as the Escrow Agent may deem
necessary properly to advise the Escrow Agent in connection with the Escrow
Agent’s duties hereunder, may rely upon the advice of such counsel, and may pay
such counsel reasonable compensation; provided that the costs of such
compensation shall be borne by the Escrow Agent. The Escrow Agent has acted as legal counsel for the Company, and may
continue to act as legal counsel for the Company from time to time, notwithstanding
its duties as the Escrow Agent hereunder. The Purchasers and all other parties
to this Agreement consent to the Escrow Agent in such capacity as legal counsel
for the Company and waives any claim that such representation represents a
conflict of interest on the part of the Escrow Agent. The Purchasers understand
that the Company and the Escrow Agent are relying explicitly on the foregoing
provision in entering into this Escrow Agreement. 


          2.12 The Escrow Agent’s responsibilities
as escrow agent hereunder shall terminate if the Escrow Agent shall resign by
giving written notice to the Company and the Purchasers. In the event of any
such resignation, the Purchasers and the Company shall appoint a successor
Escrow Agent. and the Escrow Agent shall deliver to such successor Escrow Agent
any escrow funds and other documents held by the Escrow Agent. 


          2.13 If the Escrow Agent reasonably
requires other or further instruments in connection with this Escrow Agreement
or obligations in respect hereto, the necessary parties hereto shall join in
furnishing such instruments. 


          2.14 It is understood and agreed that
should any dispute arise with respect to the delivery and/or ownership or right
of possession of the documents or the escrow funds held by the Escrow Agent
hereunder, the Escrow Agent is authorized and directed in the Escrow Agent’s
sole discretion (1) to retain in the Escrow Agent’s possession without
liability to anyone all or any part of said documents or the escrow funds until
such disputes shall have been settled either by mutual written agreement of the
parties concerned by a final order, decree, or judgment or a court of competent
jurisdiction after the time for appeal has expired and no appeal has been
perfected, but the Escrow Agent shall be under no duty whatsoever to institute
or defend any such proceedings or (2) to deliver the escrow funds and any other
property and documents held by the Escrow Agent hereunder to a state or Federal
court having competent subject matter jurisdiction and located in the City of
Los Angeles in accordance with the applicable procedure therefore. 


          2.15 The Company and each Purchaser agree
jointly and severally to indemnify and hold harmless the Escrow Agent and its
partners, employees, agents, and representatives from any and all claims,
liabilities, costs, or expenses in any way arising from or relating to the
duties or performance of the Escrow Agent hereunder or the transactions
contemplated hereby or by the Subscription Agreement other than any such claim,
liability, cost, or expense to the extent the same shall have been determined
by final, unappealable judgment of a court of competent jurisdiction to have
resulted from the gross negligence, fraud, or willful misconduct of the Escrow
Agent. 


************************


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                    IN
WITNESS WHEREOF, the parties hereto have executed this Escrow Agreement as of
date first written above. 


	
 

	
 

	
 

	
 

	
 


	
 

	
BIODRAIN MEDICAL, INC.


	
 

	
 

	
 

	
 

	
 


	
 

	
By:

	
 

	
 


	
 

	
 

	 

	
 


	
 

	
 

	
     Name:
 Kevin Davidson

	
 


	
 

	
 

	
     Title:
 Chief Executive Officer

	
 


	
 

	
 

	
 

	
 

	
 


	
 

	
ESCROW
 AGENT:


	
 

	
 

	
 

	
 

	
 


	
 

	
RICHARDSON & PATEL LLP


	
 

	
 

	
 

	
 

	
 


	
 

	
By:

	
 

	
 

	
 


	
 

	
 

	 

	
 


	
 

	
 

	
     Name:

	
 

	
 


	
 

	
 

	
 

	 

	
 


	
 

	
 

	
     Title:
 Partner

	
 








	
 

	
 

	
 

	
 

	
 


	
 

	
Purchaser
 Name:

	
 

	
 

	
 


	
 

	
 

	 

	
 


	
 

	
 

	
 

	
 

	
 


	
 

	
 

	
By:

	
 

	
 


	
 

	
 

	
 

	



	
 


	
 

	
 

	
 

	
Name:

	
 


	
 

	
 

	
 

	
Title:

	
 





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RELEASE NOTICE


                    The
UNDERSIGNED, pursuant to the Escrow Agreement, dated as of ________ ___, 2008,
among BioDrain Medical, Inc., the Purchaser signatory, and Richardson &
Patel LLP, as Escrow Agent (the “Escrow Agreement”; capitalized terms used
herein and not defined shall have the meaning ascribed to such terms in the
Escrow Agreement), hereby notifies the Escrow Agent that each of the conditions
precedent to the purchase and sale of the Securities set forth in the
Subscription Agreement have been satisfied. 


                    The
Purchaser has received and has had ample opportunity to review the Company’s
audited financial statements for the 12-month period ended December 31, 2006
and 2005 and the Company’s unaudited financial statements for the six month
period ended June 30, 2007 and hereby reaffirms the subscription to purchase
the Securities. 


                    The
Purchaser hereby confirms that all of the applicable representations and
warranties contained in the Subscription Agreement remain true and correct and
authorizes the release by the Escrow Agent of the funds and documents to be
released at the Closing as described in the Escrow Agreement. The Purchaser
reaffirms the purchase of the Securities. 


                    IN
WITNESS WHEREOF, the undersigned have caused this Release Notice to be duly
executed and delivered as of this __ day of ___________, 2008. 


	
 

	
 

	
 


	
 

	
PURCHASER:


	
 

	
 

	
 


	
 

	
 

	
 


	
 

	 


	
 

	
(Print name
 of Purchaser)


	
 

	
 

	
 


	
 

	
By:

	
 


	
 

	
 

	




	
 

	
 

	
Name:


	
 

	
 

	
Title: