Exhibit
10.7

      ESCROW
AGREEMENT

       

      This
Agreement is dated as of the ___ day of May, 2010 among China Yongxin
Pharmaceuticals Inc., a Delaware corporation (the "Company"), the
subscriberslisted on Schedule I hereto
(“Subscribers”), and Grushko & Mittman, P.C. (the "Escrow
Agent"):

       

      WITNESSETH:

       

      WHEREAS,
the Company and Subscribers have entered into a Subscription Agreement calling
for the sale by the Company to the Subscribers of secured convertible Notes for
an aggregate purchase price of up to $250,000, in a third closing (“Third
Closing”) of the Company’s note and warrant financing; and

       

      WHEREAS,
the parties hereto require the Company to deliver the Notes against payment
therefor, with such Notes and the Escrowed Funds to be delivered to the Escrow
Agent, along with the other documents, instruments and payments hereinafter
described, to be held in escrow and released by the Escrow Agent in accordance
with the terms and conditions of this Agreement; and

       

                 WHEREAS,
the Escrow Agent is willing to serve as escrow agent pursuant to the terms and
conditions of this Agreement;

       

                 NOW
THEREFORE, the parties agree as follows:

       

      ARTICLE
I

       

      INTERPRETATION

       

                 1.1.           Definitions.  Capitalized
terms used and not otherwise defined herein that are defined in the Subscription
Agreement shall have the meanings given to such terms in the Subscription
Agreement.  Whenever used in this Agreement, the following terms shall
have the following respective meanings:

       

      §           "Agreement"
means this Agreement and all amendments made hereto and thereto by written
agreement between the parties;

       

      §           “Amended
and Restated Subsidiary Guaranty” shall have the meaning set forth in
Section 3 of the Modification and Consent Agreement;

       

      §           “Broker” shall
mean StreetCapital Corp.;

       

      §           “Broker’s
Fee” shall have the meaning set forth in Section 8(a) and on Schedule
8(a) of the Subscription Agreement;

       

      §           “Closing
Date” shall have the meaning set forth in Section 1 of the
Subscription Agreement;

       

      §            "Escrowed
Payment" means an aggregate cash payment of up
to $250,000;

       

      §           “Legal
Opinion” means the original signed legal opinion referred to in Section 6
of the Subscription Agreement;

       

      §           “Modification
and Consent Agreement” shall mean the Modification and Consent Agreement
among the Subscribers and the Copmany dated of even date with this Escrow
Agreement.

       

      §           “Note” shall
have the meaning set forth in the second recital to the Subscription
Agreement for the Third Closing;


      
        
           


        

        
           


          
            

          

        

        
           


        

      

       

      §           “Principal
Amount” shall mean an aggregate of up to $250,000;

       

      §            “Subscriber
Legal Fees” shall have the meaning set forth in Section 14 of
the Modification and Consent Agreement;

       

      §           "Subscription
Agreement" means the Subscription Agreement (and the exhibits and schedules
thereto including fully executed Amended and Restated Lockup
Agreements referred to in Section 3 of the Modification and
Consent Agreement and Section 9(u) of the Subscription Agreement)
entered into or to be entered into by the Company and Subscribers in
reference to the sale and purchase of the Notes in the Third
Closing;

       

      §           “Warrants” shall
have the meaning set forth in Section 2(b) of the Subscription
Agreement for the Third Closing;

       

      §           Collectively, the Legal
Opinion, Notes, Amended and
Restated Subsidiary Guaranty, Amended and Restated Lockup
Agreements,Warrants, the executed Subscription Agreement, the
executed Modification and Consent Agreement, Broker’s
Fee and Subscriber Legal Fees are referred to as“Company
Documents”; and

       

      §           Collectively,
the Escrowed Payment and the Subscribers’ executed Subscription Agreements
for the Third Closing, and the executed Modification and Consent
Agreement are referred to as “Subscriber Documents”.

       

                 1.2.           Entire
Agreement.  This Agreement along with the Company Documents and
the Subscriber Documents to which the Subscriber and the Companyor
Subsidiary are a party constitute the entire agreement between the
parties hereto pertaining to the Company Documents and Subscriber Documents and
supersedes all prior agreements, understandings, negotiations and discussions,
whether oral or written, of the parties.  There are no warranties,
representations and other agreements made by the parties in connection with the
subject matter hereof, except as specifically set forth in this Agreement,
the Company Documents and the Subscriber Documents.

       

                 1.3.           Extended
Meanings.  In this Agreement words importing the
singular number include the plural and vice versa; words importing the
masculine gender include the feminine and neuter genders.  The word
"person" includes an individual, body corporate, partnership, trustee or trust
or unincorporated association, executor, administrator or legal
representative.

       

                 1.4.           Waivers and
Amendments.  This Agreement may be amended, modified,
superseded, cancelled, renewed or extended, and the terms and conditions hereof
may be waived, only by a written instrument signed by all parties, or, in
the case of a waiver, by the party waiving compliance.  Except as
expressly stated herein, no delay on the part of any party in exercising any
right, power or privilege hereunder shall operate as a waiver thereof, nor shall
any waiver on the part of any party of any right, power or privilege
hereunder preclude any other or future exercise of any other right, power or
privilege hereunder.

       

                  1.5.          Headings.  The
division of this Agreement into articles, sections, subsections and paragraphs
and the insertion of headings are for convenience of reference only and
shall not affect the construction or interpretation of this
Agreement.

       

                 1.6.           Law Governing this
Agreement.  This Agreement shall be governed by and construed
in accordance with the laws of the State of New York without regard
to conflicts of laws principles that would result in the application
of the substantive laws of another jurisdiction.  Any action brought
by either party against the other concerning the transactions contemplated by
this Agreement shall be brought only in the state courts of New York or in the
federal courts located in the state of New York.  Both parties and the
individuals executing this Agreement and other agreements on behalf of the
Company agree to submit to the jurisdiction of such courts and waive trial
by jury.  The prevailing party (which shall be the party which
receives an award most closely resembling the remedy or action sought)
shall be entitled to recover from the other party its reasonable attorney's fees
and costs.  In the event that any provision of this Agreement or any
other agreement delivered in connection herewith is invalid or unenforceable
under any applicable statute or rule of law, then such provision shall be deemed
inoperative to the extent that it may conflict therewith and shall be deemed
modified to conform with such statute or rule of law.  Any such
provision which may prove invalid or unenforceable under any law shall not
affect the validity or enforceability of any other provision of any
agreement.


      
        
           


        

        
           


          
            

          

        

        
           


        

      

       

                 1.7.           Specific Enforcement,
Consent to Jurisdiction.  The Company and
Subscribers acknowledge and agree that irreparable damage would occur in
the event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise
breached.  It is accordingly agreed that the parties shall be entitled
to an injuction or injunctions to prevent or cure breaches of the provisions of
this Agreement and to enforce specifically the terms and provisions hereof or
thereof, this being in addition to any other remedy to which any of them may be
entitled by law or equity.  Subject to Section
1.6 hereof, each of the Company and Subscribers hereby waives,
and agrees not to assert in any such suit, action or proceeding, any claim that
it is not personally subject to the jurisdiction of such court, that the suit,
action or proceeding is brought in an inconvenient forum or that the venue of
the suit, action or proceeding is improper.  Nothing in this Section
shall affect or limit any right to serve process in any other manner
permitted by law.

       

      ARTICLE
II

       

      DELIVERIES
TO THE ESCROW AGENT

       

                 2.1.           Company
Deliveries.  On or before the Closing Date, the Company
shall execute and deliver the Company Documents to the Escrow
Agent.

       

      2.2.           Subscriber Deliveries.  On
or before the Closing Date, Subscribers shall execute and deliver
the Subscriber Documents, and shall deliver the Escrowed Payment in cash,
to the Escrow Agent.  The Escrowed Payment will be delivered pursuant
to the following wire transfer instructions:

      


      Citibank,
N.A.

      1155
6th Avenue

      New York,
NY 10036

      ABA
Number: 0210-00089

      For
Credit to: Grushko & Mittman, IOLA Trust Account

      Account
Number: 45208884

       

                  2.3.           Intention to Create Escrow
Over Company Documents and Subscriber Documents.  The
Subscribers and Company intend that the Company Documents and Subscriber
Documents shall be held in escrow by the Escrow Agent pursuant to this Agreement
for their benefit as set forth herein.

       

                 2.4.           Escrow Agent to Deliver
Company Documents and Subscriber
Documents.  The Escrow Agent shall hold and release the Company
Documents and Subscriber Documents only in accordance with the terms and
conditions of this Agreement.

       

      ARTICLE
III

       

      RELEASE
OF COMPANY DOCUMENTS AND SUBSCRIBER DOCUMENTS

       

                 3.1.           Release of
Escrow.  Subject to the provisions of Section 4.2, the Escrow
Agent shall release the Company Documents and Subscriber Documents as
follows:

       

                            (a)           On
the Closing Date, the Escrow Agent will simultaneously release the Company
Documents to the Subscribers and release the Subscriber Documents to the
Company, except that: (i) the Broker’s Fee will be released to the Broker; and
(ii) Subscriber Legal Fees will be released directly to the Subscriber’s
attorneys,

       

      (b)           Notwithstanding
the above, upon receipt by the Escrow Agent of joint written instructions
("Joint Instructions") signed by the Company and the Subscribers, it shall
deliver the Company Documents and Subscriber Documents in accordance with the
terms of the Joint Instructions.


      
        
           


        

        
           


          
            

          

        

        
           


        

      

       

                            (c)           Anything
herein to the contrary notwithstanding, upon receipt by the
Escrow Agent of a final and non-appealable judgment, order, decree or award of a
court of competent jurisdiction (a "Court Order"), the Escrow Agent shall
deliver the Company Documents and Subscriber Documents in accordance with the
Court Order.  Any Court Order shall be accompanied by an opinion of
counsel for the party presenting the Court Order to the Escrow Agent (which
opinion shall be satisfactory to the Escrow Agent) to the effect that the court
issuing the Court Order has competent jurisdiction and that the Court Order
is final and non-appealable.

       

                 3.2.           If
a Closing does not take place on or before May 15, 2010, the Escrow
Agent will promptly return the applicable Company Documents to the
Company and return the Subscriber Documents to the Subscriber.

      


      3.3.           Acknowledgement of Company
and Subscriber; Disputes.  The Company and the Subscribers
acknowledge that the only terms and conditions upon which the Company Documents
and Subscriber Documents are to be released are set forth in Sections 3 and 4 of
this Agreement.  The Company and the Subscribers reaffirm their
agreement to abide by the terms and conditions of this Agreement with
respect to the release of the Company Documents and Subscriber
Documents.  Any dispute with respect to the release of the Company
Documents and Subscriber Documents shall be resolved pursuant to Section 4.2 or
by agreement between the Company and Subscribers.

      


       ARTICLE IV

       

      CONCERNING
THE ESCROW AGENT

      


      4.1.           Duties and Responsibilities
of the Escrow Agent.  The Escrow Agent's duties and
responsibilities shall be subject to the following terms and
conditions:

       

                            (a)           The
Subscribers and Company acknowledge and agree that the Escrow Agent (i)
shall not be responsible for or bound by, and shall not be required to
inquire into whether either the Subscribers or Company is entitled to
receipt of the Company Documents and Subscriber Documents pursuant
to any other agreement or otherwise; (ii) shall be obligated only for the
performance of such duties as are specifically assumed by the Escrow Agent
pursuant to this Agreement; (iii) may rely on and shall be protected in acting
or refraining from acting upon any written notice, instruction, instrument,
statement, request or document furnished to it hereunder and believed by the
Escrow Agent in good faith to be genuine and to have been signed or
presented by the proper person or party, without being required to determine the
authenticity or correctness of any fact stated therein or the propriety or
validity or the service thereof; (iv) may assume that any person believed
by the Escrow Agent in good faith to be authorized to give notice or make
any statement or execute any document in connection with the provisions hereof
is so authorized; (v) shall not be under any duty to give the property held
by Escrow Agent hereunder any greater degree of care than Escrow Agent
gives its own similar property; and (vi) may consult counsel satisfactory to
Escrow Agent, the opinion of such counsel to be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by Escrow Agent hereunder in good faith and in accordance
with the opinion of such counsel.

       

      (b)           The
Subscribers and Company acknowledge that the Escrow Agent is acting solely
as a stakeholder at their request and that the Escrow Agent shall not be liable
for any action taken by Escrow Agent in good faith and believed by Escrow Agent
to be authorized or within the rights or powers conferred upon Escrow Agent by
this Agreement.  The Subscribers and Company, jointly and
severally, agree to indemnify and hold harmless the Escrow Agent and any of
Escrow Agent's partners, employees, agents and representatives for any action
taken or omitted to be taken by Escrow Agent or any of them hereunder, including
the fees of outside counsel and other costs and expenses of defending itself
against any claim or liability under this Agreement, except in the case of gross
negligence or willful misconduct on Escrow Agent's part committed in its
capacity as Escrow Agent under this Agreement.  The Escrow
Agent shall owe a duty only to the Subscribers and Company under this
Agreement and to no other person.

       

                            (c)           The
Subscribers and Company jointly and severally agree to reimburse the Escrow
Agent for outside counsel fees, to the extent authorized hereunder and incurred
in connection with the performance of its duties and responsibilities
hereunder.


      
        
           


        

        
           


          
            

          

        

        
           


        

      

      


                            (d)           The
Escrow Agent may at any time resign as Escrow Agent hereunder by giving five (5)
days prior written notice of resignation to the Subscribers and the
Company.  Prior to the effective date of the resignation as specified
in such notice, the Subscribers and Company will issue to the Escrow Agent
a Joint Instruction authorizing delivery of the Company Documents and Subscriber
Documents to a substitute Escrow Agent selected by the Subscribers and
Company.  If no successor Escrow Agent is named by the
Subscribers and Company, the Escrow Agent may apply to a court of competent
jurisdiction in the State of New York for appointment of a successor
Escrow Agent, and to deposit the Company Documents and Subscriber Documents with
the clerk of any such court.

       

                            (e)           Other
than in connection with the Subscriber Legal Fees, the Escrow Agent does
not have and will not have any interest in the Company Documents and Subscriber
Documents, but is serving only as escrow agent, having only possession
thereof.  The Escrow Agent shall not be liable for any loss resulting
from the making or retention of any investment in accordance with this
Escrow Agreement.

       

                            (f)           This
Agreement sets forth exclusively the duties of the Escrow Agent with respect to
any and all matters pertinent thereto and no implied duties or obligations shall
be read into this Agreement.

       

                            (g)          The
Escrow Agent shall be permitted to act as counsel for
the Subscribers in any dispute as to the disposition of the Company
Documents and Subscriber Documents, in any other dispute between the
Subscribers and Company, whether or not the Escrow Agent is then holding
the Company Documents and Subscriber Documents and continues to act as the
Escrow Agent hereunder.

       

                            (h)          The
provisions of this Section 4.1 shall
survive the resignation of the Escrow Agent or the termination of this
Agreement.

       

                 4.2.           Dispute Resolution:
Judgments.  Resolution of disputes arising under this Agreement
shall be subject to the following terms and conditions:

       

                            (a)           If
any dispute shall arise with respect to the delivery, ownership, right of
possession or disposition of the Company Documents and Subscriber Documents, or
if the Escrow Agent shall in good faith be uncertain as to its duties or rights
hereunder, the Escrow Agent shall be authorized, without liability to anyone, to
(i) refrain from taking any action other than to continue to hold the
Company Documents and Subscriber Documents pending receipt of a Joint
Instruction from the Subscribers and Company, or (ii) deposit the Company
Documents and Subscriber Documents with any court of competent jurisdiction in
the State of New York, in which event the Escrow Agent shall give written
notice thereof to the Subscribers and the Company and shall thereupon be
relieved and discharged from all further obligations pursuant to this
Agreement.  The Escrow Agent may, but shall be under no duty to,
institute or defend any legal proceedings which relate to the Company Documents
and Subscriber Documents.  The Escrow Agent shall have the right to
retain counsel if it becomes involved in any disagreement, dispute or litigation
on account of this Agreement or otherwise determines that it is necessary
to consult counsel.

       

                            (b)           The
Escrow Agent is hereby expressly authorized to comply with and obey any Court
Order.  In case the Escrow Agent obeys or complies with a Court Order,
the Escrow Agent shall not be liable to the Subscribers and Company or to
any other person, firm, corporation or entity by reason of such
compliance.

       

      ARTICLE
V

       

      GENERAL
MATTERS

       

                 5.1.           Termination.  This
escrow shall terminate upon the release of all of the Company Documents and
Subscriber Documents or at any time upon the agreement in writing of the
Subscribers and Company.


      
        
           


        

        
           


          
            

          

        

        
           


        

      


                 5.2.           Notices.   All
notices, demands, requests, consents, approvals, and other communications
required or permitted hereunder shall be in writing and, unless otherwise
specified herein, shall be (i) personally served, (ii) deposited in the mail,
registered or certified, return receipt requested, postage prepaid, (iii)
delivered by reputable air courier service with charges prepaid, or (iv)
transmitted by hand delivery, telegram, or facsimile, addressed as set
forth below or to such other address as such party shall have specified most
recently by written notice.  Any notice or other communication
required or permitted to be given hereunder shall be deemed effective (a) upon
hand delivery or delivery by facsimile, with accurate confirmation generated by
the transmitting facsimile machine, at the address or number designated below
(if delivered on a business day during normal business hours where such notice
is to be received), or the first business day following such delivery (if
delivered other than on a business day during normal business hours where such
notice is to be received) or (b) on the second business day following the date
of mailing by express courier service, fully prepaid, addressed to
such address, or upon actual receipt of such mailing, whichever shall first
occur.  The addresses for such communications shall be:

       

      (a)           If
to the Company, to:

       

      China Yongxin Pharmaceuticals,
Inc.

      927
Canada Court

      City of
Industry, CA 91748

      Attn: Yongxin Liu,
CEO

      Fax:
(626) 581-9138

      


      With a
copy by facsimile only to:

      


      Richardson
& Patel, LLP

      10900
Wilshire Blvd., Suite 500

      Los
Angeles, CA 90024

      Attn:
Ryan Hong, Esq.

      Fax:
(310) 208-1154

      


      (b)           If
to the Subscribers: to the addresses set forth on Schedule I

      


      With a
copy by facsimile only to:

       

      Grushko
& Mittman, P.C.

      551 Fifth
Avenue, Suite 1601

      New York,
New York 10176

      Fax:
212-697-3575

      


      (c)           If
to the Broker, to:

      


      StreetCapital
Corp.

      300
Colonial Center Parkway, Suite 260

      Roswell,
GA 30076

      Attn:
Vince Sbarra

      Fax:
(678) 353-2188

       

      (d)           If
to the Escrow Agent, to:

       

      Grushko
& Mittman, P.C.

      551 Fifth
Avenue, Suite 1601

      New York,
New York 10176

      Fax:
212-697-3575

       

      or to
such other address as any of them shall give to the others by notice made
pursuant to this Section
5.2.

       

                 5.3.           Interest.  The
Escrowed Payment shall not be held in an interest bearing account nor will
interest be payable in connection therewith.  In the event the
Escrowed Payment is deposited in an interest bearing account, the Subscribers
shall be entitled to receive any accrued interest thereon, but only if the
Escrow Agent receives from the Subscriber the Subscribers’ United States
taxpayer identification number and other requested information and
forms.


      
        
           


        

        
           


          
            

          

        

        
           


        

      

       

                 5.4.           Assignment; Binding
Agreement.  Neither this Agreement nor any right or obligation
hereunder shall be assignable by any party without the prior written consent of
the other parties hereto.  This Agreement shall enure to the benefit
of and be binding upon the parties hereto and their respective legal
representatives, successors and assigns.

       

                  5.5.           Invalidity.  In
the event that any one or more of the provisions contained herein, or the
application thereof in any circumstance, is held invalid, illegal, or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be in any way impaired thereby, it being
intended that all of the rights and privileges of the parties hereto shall be
enforceable to the fullest extent permitted by law.

       

                 5.6.           Counterparts/Execution.  This
Agreement may be executed in any number of counterparts and by different
signatories hereto on separate counterparts, each of which, when so executed,
shall be deemed an original, but all such counterparts shall constitute but one
and the same instrument.  This Agreement may be executed by facsimile
transmission and delivered by facsimile transmission.

       

                 5.7.           Agreement.  Each
of the undersigned states that he has read the foregoing Escrow Agreement and
understands and agrees to it.

      


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      IN WITNESS WHEREOF, the
udersigned have executed and delivered this Escrow Agreement, as of the date
first written above.

      


      
        
          
            
              	 
      	
                      “COMPANY”

                      CHINA
      YONGXIN

                      PHARMACEUTICALS
      INC.

                      a Delaware corporation

                    	 
      
	 
      	 
      	 
      	 
      
	 
      	
                      By:

                    	 
      	 
      
	 
      	 
      	
                      Yongxin
      Liu

                    	 
      
	 
      	 
      	
                      Chief
      Executive Officer

                    	 
      


            

          

        

      

       

      
        
          
            
              
                	 
      	
                        ESCROW
      AGENT:

                         

                        GRUSHKO
      & MITTMAN, P.C.

                      	 
      
	 
      	 
      	 
      	 
      
	 
      	
                        By:

                      	 
      	 
      
	 
      	 
      	
                        Name:

                      	 
      


              

            

          

        

      

       

      
        
          
            
              
                
                  	 
      	
                          SUBSCRIBERS:

                        	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                          Pring
      Name of Subscriber

                        	 
      
	 
      	 
      	 
      	 
      
	 
      	
                          By:

                        	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	
                          Name:

                        	
                            

                        	 
      
	 
      	 
      	 
      	 
      
	 
      	
                          Title:

                        	
                            

                        	 
      


                

              

            

          

        

      

       

      
        
           


        

        
           


          
            

          

        

        
           


        

      


      Schedule

       

      Schedule
prepared in accordance with Instruction 2 to Item 601 of Regulation
S-K

       

      The
Escrow Agreements dated May 3, 2010 are substantially identical in all material
respects except as to the subscribers.

       

      
        
          
            	
                    Subscribers

                  
	
                    Excalibur
      Special Opportunities LP

                  
	
                    Dana
      Katzenmeier

                  
	
                    Fourth
      Street Holdings, LP

                  
	
                    Robert
      B. Prag

                  
	
                    Peter
      B. Tentler

                  
	
                    Paul
      T. Mannion Jr.

                  


          

        

      

      


      The text
of the Escrow Agreements is incorporated by reference from Exhibit 10.7 to the
Company’s Current Report on Form 8-K filed with the Securities and Exchange
Commission on May 4, 2010.