Document:

Unassociated Document

    EXHIBIT
      4.5

     

    SHARE
      ESCROW AGREEMENT

     

    This
      Escrow Agreement (the “Agreement”),
      dated
      July 19, 2006, is entered into by and among GRC Holdings, Inc., a Texas
      corporation (the “Company”),
      Lane
      Capital Markets, LLC, as representative of the Investors (the “Investor
      Representative”),
      Ms. LI
      Lin Ling and Ms. CHAN Siu Ling (collectively, the “Stockholders”),
      and
      Securities Transfer Corporation (hereinafter referred to as “Escrow
      Agent”).
      All
      capitalized terms used but not defined herein shall have the meanings assigned
      them in that certain Securities Purchase Agreement, dated July 18, 2006
      (“Purchase
      Agreement”),
      between the Company, the Stockholders and each Investor in the offering the
      subject of the Purchase Agreement (each an “Investor”
and
      collectively, the “Investors”).

    

    BACKGROUND

     

    As
      an
      inducement to the Investors to enter into the Purchase Agreement, the
      Stockholders agreed that the Stockholders would place the “Escrow Shares” (as
      hereinafter defined) into escrow for the benefit of the Investors in the event
      the Company failed to satisfy the “Performance Thresholds” (as hereinafter
      defined). Pursuant to the requirements of the Purchase Agreement, the Company,
      the Stockholders and the Investor Representative have agreed to establish an
      escrow on the terms and conditions set forth in this Agreement and the Escrow
      Agent has agreed to act as escrow agent pursuant to the terms and conditions
      of
      this Agreement.

     

    AGREEMENT

     

    NOW,
      THEREFORE, in consideration of the mutual promises of the parties and the terms
      and conditions hereof, the parties hereby agree as follows:

     

    1. Appointment
      of Escrow Agent.
      The
      Investor Representative (on behalf of the Investors), the Stockholders and
      the
      Company hereby appoint Securities Transfer Corporation as Escrow Agent to act
      in
      accordance with the terms and conditions set forth in this Agreement, and Escrow
      Agent hereby accepts such appointment and agrees to act in accordance with
      such
      terms and conditions.

     

    2. Establishment
      of Escrow.
      Upon the
      execution of this Agreement, the Stockholders shall deliver to the Escrow Agent
      two sets of stock certificates evidencing in the aggregate 4,280,000 shares
      of
      the Company’s common stock, par value $0.0001 per share (collectively, the
“Escrow
      Shares”),
      along with stock powers executed in blank. The first set of certificates (from
      each Stockholder in the amounts set forth on Exhibit
      A
      hereto)
      shall represent 2,140,000 Escrow Shares (the “2006
      Escrow Shares”)
      and
      the second set of certificates (from each Stockholder in the amounts set forth
      on Exhibit
      A
      hereto)
      shall evidence 2,140,000 Escrow Shares (the “2007
      Escrow Shares”).

     

    3. Representations
      of the Stockholders.
      The
      Stockholders hereby represent and warrant to the Investors and the Investor
      Representative as follows:

     

    
      
        
        

      

      
        -1-

        
          

        

      

      
        
        

      

       

    

    (i) 
      The
      Escrow Shares are validly issued, fully paid and nonassessable shares of the
      Company, and free and clear of all pledges, liens and encumbrances.

     

    (ii) Performance
      of this Agreement and compliance with the provisions hereof will not violate
      any
      provision of any applicable law and will not conflict with or result in any
      breach of any of the terms, conditions or provisions of, or constitute a default
      under, or result in the creation or imposition of any lien, charge or
      encumbrance upon, any of the properties or assets of the Stockholders pursuant
      to the terms of any indenture, mortgage, deed of trust or other agreement or
      instrument binding upon the Stockholders, other than such breaches, defaults
      or
      liens which would not have a material adverse effect taken as a whole.

     

    4. Disbursement
      of Escrow Shares. The
      Stockholders covenanted to the Investors that the Company would attain the
      following financial performance thresholds (the “Performance
      Thresholds”):
      $4,819,500
      of
      after-tax net income or $5,823,465 of after-tax net income before the minority
      interest for the fiscal year ending December 31, 2006 (the “2006
      Threshold”)
      and
      $8,302,000 of after-tax net income or $10,031,416 of after-tax net income before
      the minority interest for the fiscal year ending December 31, 2007 (the
“2007
      Threshold”).
      The
      Company will provide the Investor Representative with (a) its audited financial
      statements, prepared in accordance with United States generally accepted
      accounting principles, on or before March 31, 2007 so as to allow the Investor
      Representative the opportunity to evaluate whether the 2006 Threshold was
      attained and (b) its audited financial statements, prepared in accordance with
      United States generally accepted accounting principles, on or before March
      31,
      2008 so as to allow the Investor Representative the opportunity to evaluate
      whether the 2007 Threshold was attained. If such audited financial statements
      do
      not evidence that the 2006 Threshold has been achieved, the Investor
      Representative shall request that the Company cause its counsel, Loeb & Loeb
      LLP, to provide written instruction to the Escrow Agent instructing the Escrow
      Agent to issue and deliver within ten business days following delivery of such
      request of the Investor Representative certificates registered in the name
      of
      each Investor evidencing the Investor’s pro rata portion of the 2006 Escrow
      Shares based on such Investor’s original Investment Amount. If such audited
      financial statements do not evidence that the 2007 Threshold has been achieved,
      the Investor Representative shall request that the Company shall cause its
      counsel, Loeb & Loeb LLP, to provide written instruction to the Escrow Agent
      to issue and deliver within ten business days following delivery of the fiscal
      year 2007 financial statements to the Investor Representative certificates
      registered in the name of each Investor evidencing the Investor’s pro rata
      portion of the 2007 Escrow Shares based on such Investor’s original Investment
      Amount. The Investor Representative shall thereafter promptly deliver to the
      Investors such certificates. The Escrow Agent need only rely on the letter
      of
      instruction from Loeb & Loeb LLP in this regard. If the Investor
      Representative has not requested that the Company cause its counsel Loeb &
Loeb LLP to so instruct the Escrow Agent to release such Escrow Shares to the
      Investor Representative by the 10th
      business
      day following the delivery of the relevant audited financial statements of
      the
      Company referred to above to the Investor Representative, then the Company
      shall
      cause Loeb & Loeb LLP to provide written instruction to the Escrow Agent,
      for the release of the 2006 Escrow Shares or 2007 Escrow Shares, respectively,
      as applicable, to the Stockholders. 

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

       

    

    5. Duration.
      This
      Agreement shall terminate on the distribution of all the Escrow Shares in
      accordance with Section 4 above. 

     

    6. Interpleader.
      Should
      any controversy arise among the parties hereto with respect to this Agreement
      or
      with respect to the right to receive the Escrow Shares, Escrow Agent shall
      have
      the right to consult counsel and/or to institute an appropriate interpleader
      action to determine the rights of the parties. Escrow Agent is also hereby
      authorized to institute an appropriate interpleader action upon receipt of
      a
      written letter of direction executed by the parties so directing Escrow Agent.
      If Escrow Agent is directed to institute an appropriate interpleader action,
      it
      shall institute such action not prior to thirty (30) days after receipt of
      such
      letter of direction and not later than sixty (60) days after such date. Any
      interpleader action instituted in accordance with this Section 6 shall be filed
      in any court of competent jurisdiction in Dallas County, Texas, and the Escrow
      Shares in dispute shall be deposited with the court and in such event Escrow
      Agent shall be relieved of and discharged from any and all obligations and
      liabilities under and pursuant to this Agreement with respect to the Escrow
      Shares.

     

    7. Exculpation
      and Indemnification of Escrow Agent.

     

    (a) Escrow
      Agent is not a party to, and is not bound by or charged with notice of any
      agreement out of which this escrow may arise. Escrow Agent acts under this
      Agreement as a depositary only and is not responsible or liable in any manner
      whatsoever for the sufficiency, correctness, genuineness or validity of the
      subject matter of the escrow, or any part thereof, or for the form or execution
      of any notice given by any other party hereunder, or for the identity or
      authority of any person executing any such notice. Escrow Agent will have no
      duties or responsibilities other than those expressly set forth herein. Escrow
      Agent will be under no liability to anyone by reason of any failure on the
      part
      of any party hereto (other than Escrow Agent) or any maker, endorser or other
      signatory of any document to perform such person’s or entity’s obligations
      hereunder or under any such document. Except for this Agreement and instructions
      to Escrow Agent pursuant to the terms of this Agreement, Escrow Agent will
      not
      be obligated to recognize any agreement between or among any or all of the
      persons or entities referred to herein, notwithstanding its knowledge
      thereof.

     

    (b) Escrow
      Agent will not be liable for any action taken or omitted by it, or any action
      suffered by it to be taken or omitted, in good faith and in the exercise of
      its
      own best judgment, and may rely conclusively on, and will be protected in acting
      upon, any order, notice, demand, certificate, or opinion or advice of counsel
      (including counsel chosen by Escrow Agent), statement, instrument, report or
      other paper or document (not only as to its due execution and the validity
      and
      effectiveness of its provisions, but also as to the truth and acceptability
      of
      any information therein contained) which is reasonably believed by Escrow Agent
      to be genuine and to be signed or presented by the proper person or persons.
      The
      duties and responsibilities of the Escrow Agent hereunder shall be determined
      solely by the express provisions of this Agreement and no other or further
      duties or responsibilities shall be implied, including, but not limited to,
      any
      obligation under or imposed by any laws of the State of Texas upon
      fiduciaries.

     

    (c) Escrow
      Agent will be indemnified and held harmless, jointly and severally, by the
      Company and the Stockholders from and against any expenses, including reasonable
      attorneys’ fees and disbursements, damages or losses suffered by Escrow Agent
      in

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

     

    connection
      with any claim or demand, which, in any way, directly or indirectly, arises
      out
      of or relates to this Agreement or the services of Escrow Agent hereunder;
      except, that if Escrow Agent is guilty of willful misconduct, fraud or gross
      negligence under this Agreement, then Escrow Agent will bear all losses, damages
      and expenses arising as a result of such willful misconduct, fraud or gross
      negligence. Promptly after the receipt by Escrow Agent of notice of any such
      demand or claim or the commencement of any action, suit or proceeding relating
      to such demand or claim, Escrow Agent will notify the other parties hereto
      in
      writing. For the purposes hereof, the terms “expense”
and
      “loss”
will
      include all amounts paid or payable to satisfy any such claim or demand, or
      in
      settlement of any such claim, demand, action, suit or proceeding settled with
      the express written consent of the parties hereto, and all costs and expenses,
      including, but not limited to, reasonable attorneys’ fees and disbursements,
      paid or incurred in investigating or defending against any such claim, demand,
      action, suit or proceeding. The provisions of this Section 7 shall survive
      the
      termination of this Agreement.

     

    8. Compensation
      of Escrow Agent.
      The
      Company will pay Escrow Agent $1,000 for all services rendered by Escrow Agent
      hereunder.

     

    9. Resignation
      of Escrow Agent.
      At any
      time, upon ten (10) days’ written notice to the Company, Escrow Agent may resign
      and be discharged from its duties as Escrow Agent hereunder. As soon as
      practicable after its resignation, Escrow Agent will promptly turn over to
      a
      successor escrow agent appointed by the Company the Escrow Shares held hereunder
      upon presentation of a document appointing the new escrow agent and evidencing
      its acceptance thereof. If, by the end of the 10-day period following the giving
      of notice of resignation by Escrow Agent, the Company shall have failed to
      appoint a successor escrow agent, Escrow Agent may interplead the Escrow Shares
      into the registry of any court having jurisdiction.

     

    10. Records.
      Escrow
      Agent shall maintain accurate records of all transactions hereunder. Promptly
      after the termination of this Agreement or as may reasonably be requested by
      the
      parties hereto from time to time before such termination, Escrow Agent shall
      provide the parties hereto, as the case may be, with a complete copy of such
      records, certified by Escrow Agent to be a complete and accurate account of
      all
      such transactions. The authorized representatives of each of the parties hereto
      shall have access to such books and records at all reasonable times during
      normal business hours upon reasonable notice to Escrow Agent.

     

    11. Notice.
      All
      notices, communications and instructions required or desired to be given under
      this Agreement must be in writing and shall be deemed to be duly given if sent
      by registered or certified mail, return receipt requested, or overnight courier
      to the following addresses:

     

    If
      to
      Escrow Agent:

    Securities
      Transfer Corporation

    2591
      Dallas Parkway, Suite 102

    Frisco,
      Texas 75034

    Attention:
      Kevin Halter

    If
      to the
      Company:

    China
      Biologic Products, Inc.

    No.
      14
      East Hushan Road

    Ta’ian
      City, Shandong Province

    P.C.
      271000, China

    Attention:
      Michael Li

     

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

     

    With
      a
      copy to:

    Loeb
      & Loeb LLP

    345
      Park
      Avenue

    New
      York,
      NY 10154

    Facsimile:
      (212) 504-3013

    Attention:
      Mitchell S. Nussbaum, Esq.

    

    If
      to the
      Investor Representative:

    Lane
      Capital Markets, LLC

    120
      Broadway, Suite 1019

    New
      York,
      NY 10271

    Facsimile:
      (212) 608-3307

    Attention:
      Ryan M. Lane

    

    If
      to an
      Investor:

    To
      the
      address set forth on such Investor’s signature page
      to
      the Purchase Agreement

    

    If
      to a
      Stockholder:

    To
      the
      address set forth on such Stockholder’s signature
      page to the Purchase Agreement 

     

    or
      to
      such other address and to the attention of such other person as any of the
      above
      may have furnished to the other parties in writing and delivered in accordance
      with the provisions set forth above.

     

    12. Execution
      in Counterparts.
      This
      Agreement may be executed in counterparts, each of which shall be deemed an
      original, but all of which together shall constitute one and the same
      instrument. Facsimile execution and delivery of this Agreement is legal, valid
      and binding for all purposes.

     

    13. Assignment
      and Modification.
      This
      Agreement and the rights and obligations hereunder of any of the parties hereto
      may not be assigned without the prior written consent of the other parties
      hereto. Subject to the foregoing, this Agreement will be binding upon and inure
      to the benefit of each of the parties hereto and their respective successors
      and
      permitted assigns. No other person will acquire or have any rights under, or
      by
      virtue of, this Agreement. No portion of the Escrow Shares shall be subject
      to
      interference or control by any creditor of any party hereto, or be subject
      to
      being taken or reached by any legal or equitable process in satisfaction of
      any
      debt or other liability of any such party hereto prior to the disbursement
      thereof to such party hereto in accordance with the provisions of this
      Agreement. This Agreement may be changed or modified only in writing signed
      by
      all of the parties hereto.

     

    14. APPLICABLE
      LAW.
      THIS
      AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
      THE
      STATE OF TEXAS APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED THEREIN, EXCEPT
      THAT THE PORTIONS OF THE TEXAS TRUST CODE, SECTION 111.001, ET SEQ. OF THE
      TEXAS
      PROPERTY CODE, CONCERNING FIDUCIARY DUTIES AND LIABILITIES

     

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

     

    OF
      TRUSTEES SHALL NOT APPLY TO THIS AGREEMENT. THE PARTIES EXPRESSLY WAIVE SUCH
      DUTIES AND LIABILITIES, IT BEING THEIR INTENT TO CREATE SOLELY AN AGENCY
      RELATIONSHIP AND HOLD THE ESCROW AGENT LIABLE ONLY IN THE EVENT OF ITS WILLFUL
      MISCONDUCT, FRAUD, OR GROSS NEGLIGENCE. ANY LITIGATION CONCERNING THE SUBJECT
      MATTER OF THIS AGREEMENT SHALL BE EXCLUSIVELY PROSECUTED IN THE COURTS OF DALLAS
      COUNTY, TEXAS, AND ALL PARTIES CONSENT TO THE EXCLUSIVE JURISDICTION AND VENUE
      OF THOSE COURTS.

     

    15. Headings.
      The
      headings contained in this Agreement are for convenience of reference only
      and
      shall not affect the construction of this Agreement. 

     

    16. Attorneys’
      Fees.
      If any
      action at law or in equity, including an action for declaratory relief, is
      brought to enforce or interpret the provisions of this Agreement, the prevailing
      party shall be entitled to recover reasonable attorneys’ fees from the other
      party (unless such other party is the Escrow Agent), which fees may be set
      by
      the court in the trial of such action or may be enforced in a separate action
      brought for that purpose, and which fees shall be in addition to any other
      relief that may be awarded.

     

    17. Registration
      Rights. If
      any
      Escrow Shares are distributed to the Investors hereunder, then the Company
      shall
      use commercially reasonable efforts to file a registration statement relating
      to
      the resale by the Investors of the Escrow Shares so distributed within 30 days
      following the date that the Company is obligated hereunder to deliver any such
      Escrow Shares to the Investors and the Company shall thereafter use commercially
      reasonable efforts to cause such registration statement to become effective.
      The
      Investors shall provide such information to the Company as the Company may
      reasonably request in order to prepare such registration statement, including,
      without limitation, delivery to the Company of selling stockholder
      questionnaires. The Company shall cause such registration statement to remain
      effective until each Investor has sold all Escrow Shares received by it
      thereunder or until each Investor is permitted to resell all of the Escrow
      Shares received hereunder at one time pursuant to Rule 144(k) of the Securities
      Act of 1933, as amended.

     

    [Signature
      Page Follows]

     

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF, the parties have duly executed this Agreement as of the date
      first indicated above.

     

    GRC
      HOLDINGS, INC.

     

    By:    /s/ Michael Li         

    Its:    CEO                         

    Dated:
               7-12-06                      

    
 

     

    Ms.
      LI
      Lin Ling

     

    By:    /s/ Li Lin Ling         

     

     

    Ms.
      CHAN
      Siu Ling

     

    By:    /s/ Chan Siu Ling         

     

     

    SECURITIES
      TRANSFER CORPORATION

     

     By:    /s/
           Kevin Halter         

               Kevin
          Halter         

                           President             

     

     

    LANE
      CAPITAL MARKETS, LLC

    As
      representative of the Investors

     

    By:    /s/ Ryan M. Lane         

              Ryan M.
          Lane         

                          Partner               

     

    
      
        
        

      

      -7-EXHIBIT
      4.6

     

    ESCROW
      AGREEMENT

     

    This
      Escrow Agreement (the “Agreement”), entered into as of this 19th day of July,
      2006, is by and among GRC Holdings, Inc., a Texas corporation (the “Company”),
      each of the purchasers of shares of the Company’s common stock (the “Shares”)
      identified below (collectively, the “Purchasers”), the selling stockholders
      identified on the signature pages hereto (each, a “Selling Stockholder,” and
      collectively, the “Selling Stockholders”) and Securities Transfer Corporation
      (hereinafter referred to as “Escrow Agent”).

     

    WHEREAS,
      the Company, the Selling Stockholders and the Purchasers have entered into
      a
      Securities Purchase Agreement (the “Purchase Agreement”) pursuant to which each
      Purchaser has agreed to purchase from the Company and the Selling Stockholders,
      and the Company and each Selling Stockholder has agreed to sell to each
      Purchaser, the number of Shares identified therein; 

     

    WHEREAS,
      pursuant to the Purchase Agreement, the Company, the Selling Stockholders and
      the Purchasers have agreed to establish an escrow on the terms and conditions
      set forth in this Agreement; 

     

    WHEREAS,
      the Escrow Agent has agreed to act as escrow agent pursuant to the terms and
      conditions of this Agreement; and

     

    WHEREAS,
      all capitalized terms used but not defined herein shall have the meanings
      assigned them in the Purchase Agreement. 

     

    NOW,
      THEREFORE, in consideration of the promises of the parties and the terms and
      conditions hereof, the parties hereby agree as follows:

     

    1. Appointment
      of Escrow Agent.
      Each
      Purchaser, Selling Stockholder and the Company hereby appoints Securities
      Transfer Corporation as Escrow Agent to act in accordance with the Purchase
      Agreement and the terms and conditions set forth in this Agreement, and Escrow
      Agent hereby accepts such appointment and agrees to act in accordance with
      such
      terms and conditions.

     

    2. Establishment
      of Escrow.
      $4
      million of the aggregate Investment Amount provided by the Purchasers in
      connection with their acquisitions of the Securities as set forth in the
      Purchase Agreement shall be deposited in an account maintained by the Escrow
      Agent with Wells Fargo Bank, N.A. in immediately available funds by federal
      wire
      transfer, such funds being referred to herein as the “Escrow Funds”. The wire
      transfer details relating to such account are:

     

    Wells
      Fargo Bank, N.A. 420 Montgomery Street

    
      	
              City/State 
                San Francisco, CA 94104

              ABA
                NO: 121000248

              Credit
                to : Securities Transfer Corporation Trust account

              Account
                Number: 3101032101

            

    

    

    
      
         

      

      
        -1-

        
          

        

      

      
         

      

    

     

    3. Segregation
      of Escrow Funds.
      The
      Escrow Funds shall be segregated from the assets of Escrow Agent and held in
      trust for the benefit of the Company, the Selling Stockholders and the
      Purchasers in accordance herewith. It is hereby acknowledged and understood
      by
      all parties hereto (including, without limitation, the Purchasers who shall
      have
      provided funds in respect of their Investment Amount) that the Escrow Funds
      represent funds deposited into the account referred to in Section 2 above by
      only one of the Purchasers, but that the deposit shall have been made by such
      Purchaser by and on behalf of the other Purchasers to the extent of their
      percentage interest in the total Investment Amount, as more fully described
      in
      Exhibit B hereto

     

    4. Receipt
      and Investment of Funds.

     

    (a) Escrow
      Agent agrees that the Escrow Funds shall at all times be maintained in a
      non-interest bearing and federally insured depository account. Subject to
      Section 7(c) hereof, Escrow Agent shall have no liability for any loss resulting
      from the deposit of the Escrow Funds.

     

    (b) The
      Escrow Agent shall cause to be prepared all income and other tax returns and
      reports the Escrow Agent, in its sole discretion, deems necessary or advisable
      in order to comply with all tax and other laws, rules and regulations applicable
      to the Escrow Funds.

     

    5. Disbursement
      of the Escrow Funds.

     

    Upon
      receipt by the Escrow Agent of a certificate in the form of Exhibit A, duly
      signed by both the Company and Pinnacle China Fund, L.P., the Escrow Funds
      shall
      be disbursed in accordance with Exhibit A. 

     

    This
      Agreement shall terminate upon the earlier of (a) disbursement of all Escrow
      Funds in accordance with Exhibit A, or (b) July 31, 2006 (each such event being
      referred to herein as the “Termination Date”). The Termination Date may be
      extended by joint written instructions to Escrow Agent by the Company and
      Pinnacle China Fund, L.P., on behalf of the Purchasers.

     

    Upon
      the
      Termination Date, Escrow Agent shall release the Escrow Funds in the Escrow
      Account to the Purchasers in accordance with Exhibit B if the certificate
      referred to in the first paragraph of this Section 5 shall not have been
      delivered to it by such date. Immediately following any such disbursement to
      the
      Purchasers in accordance with Exhibit B, each such Purchaser shall return to
      the
      Company that amount of Securities purchased by it under the Purchase Agreement
      equal to the amount of such disbursement received by it, divided by the Per
      Unit
      Purchase Price. 

     

    6. Interpleader.
      Should
      any controversy arise among the parties hereto with respect to this Agreement
      or
      with respect to the right to receive the Escrow Funds, Escrow Agent shall have
      the right to consult counsel and/or to institute an appropriate interpleader
      action to determine the rights of the parties. Escrow Agent is also hereby
      authorized to institute an appropriate interpleader action upon receipt of
      a
      written letter of direction executed by the parties so directing Escrow Agent.
      If Escrow Agent is directed to institute an appropriate
      interpleader

     

    
      
         

      

      
        -2-

        
          

        

      

      
         

      

    

     

    action,
      it shall institute such action not prior to thirty (30) days after receipt
      of
      such letter of direction and not later than sixty (60) days after such date.
      Any
      interpleader action instituted in accordance with this Section 6 shall be filed
      in any court of competent jurisdiction in Dallas, Texas, and the portion of
      the
      Escrow Funds in dispute shall be deposited with the court and in such event
      Escrow Agent shall be relieved of and discharged from any and all obligations
      and liabilities under and pursuant to this Agreement with respect to that
      portion of the Escrow Funds.

     

    7. Exculpation
      and Indemnification of Escrow Agent.

     

    (a) Escrow
      Agent is not a party to, and is not bound by or charged with notice of any
      agreement (other than the Purchase Agreement) out of which this escrow may
      arise. Escrow Agent acts under this Agreement as a depositary only and is not
      responsible or liable in any manner whatsoever for the sufficiency, correctness,
      genuineness or validity of the subject matter of the escrow, or any part
      thereof, or for the form or execution of any notice given by any other party
      hereunder, or for the identity or authority of any person executing any such
      notice or depositing the Escrow Funds. Escrow Agent will have no duties or
      responsibilities other than those expressly set forth herein. Escrow Agent
      will
      be under no liability to anyone by reason of any failure on the part of any
      party hereto (other than Escrow Agent) or any maker, endorser or other signatory
      of any document to perform such person’s or entity’s obligations hereunder or
      under any such document. Except for this Agreement and instructions to Escrow
      Agent pursuant to the terms of this Agreement, Escrow Agent will not be
      obligated to recognize any agreement between or among any or all of the persons
      or entities referred to herein, notwithstanding its knowledge
      thereof.

     

    (b) Escrow
      Agent will not be liable for any action taken or omitted by it, or any action
      suffered by it to be taken or omitted, in good faith and in the exercise of
      its
      own best judgment, and may rely conclusively on, and will be protected in acting
      upon, any order, notice, demand, certificate, or opinion or advice of counsel
      (including counsel chosen by Escrow Agent), statement, instrument, report or
      other paper or document (not only as to its due execution and the validity
      and
      effectiveness of its provisions, but also as to the truth and acceptability
      of
      any information therein contained) which is reasonably believed by Escrow Agent
      to be genuine and to be signed or presented by the proper person or persons.
      The
      duties and responsibilities of the Escrow Agent hereunder shall be determined
      solely by the express provisions of this Agreement and no other or further
      duties or responsibilities shall be implied, including, but not limited to,
      any
      obligation under or imposed by any laws of the State of Texas upon
      fiduciaries.

     

    (c) Escrow
      Agent will be indemnified and held harmless, jointly and severally, by the
      Company and the Selling Stockholders from and against any expenses, including
      reasonable attorneys’ fees and disbursements, damages or losses suffered by
      Escrow Agent in connection with any claim or demand, which, in any way, directly
      or indirectly, arises out of or relates to this Agreement or the services of
      Escrow Agent hereunder; except, that if Escrow Agent is guilty of willful
      misconduct, fraud or gross negligence under this Agreement, then Escrow Agent
      will bear all losses, damages and expenses arising as a result of such willful
      misconduct, fraud or gross negligence. Promptly after the receipt by Escrow
      Agent of notice of any such demand or claim or the commencement of any action,
      suit or proceeding relating to such demand or claim, Escrow Agent will notify
      the other parties hereto in writing. For the purposes hereof, the terms
“expense” and “loss” will include all amounts paid or payable to

     

    
      
         

      

      
        -3-

        
          

        

      

      
         

      

    

     

    satisfy
      any such claim or demand, or in settlement of any such claim, demand, action,
      suit or proceeding settled with the express written consent of the parties
      hereto, and all costs and expenses, including, but not limited to, reasonable
      attorneys’ fees and disbursements, paid or incurred in investigating or
      defending against any such claim, demand, action, suit or proceeding. The
      provisions of this Section 7 shall survive the termination of this
      Agreement.

     

    8. Compensation
      of Escrow Agent.
      The
      Selling Stockholders will pay Escrow Agent $1,500 for all services rendered
      by
      Escrow Agent hereunder.

     

    9. Resignation
      of Escrow Agent.
      At any
      time, upon ten (10) days’ written notice to the Company, Escrow Agent may resign
      and be discharged from its duties as Escrow Agent hereunder. As soon as
      practicable after its resignation, Escrow Agent will promptly turn over to
      a
      successor escrow agent appointed by the Company all monies and property held
      hereunder upon presentation of a document appointing the new escrow agent and
      evidencing its acceptance thereof. If, by the end of the 10-day period following
      the giving of notice of resignation by Escrow Agent, the Company shall have
      failed to appoint a successor escrow agent, Escrow Agent may interplead the
      Escrow Funds into the registry of any court having jurisdiction.

     

    10. Method
      of Distribution by Escrow Agent.
      All
      disbursements by Escrow Agent to a party to this Agreement will be made by
      wire
      transfer of immediately available funds to an account designated in writing
      by
      the party (it being understood that the Exhibits hereto constitute such
      writings) to receive any such payment.

     

    11. Records.
      Escrow
      Agent shall maintain accurate records of all transactions hereunder. Promptly
      after the termination of this Agreement or as may reasonably be requested by
      the
      parties hereto from time to time before such termination, Escrow Agent shall
      provide the parties hereto, as the case may be, with a complete copy of such
      records, certified by Escrow Agent to be a complete and accurate account of
      all
      such transactions. The authorized representatives of each of the parties hereto
      shall have access to such books and records at all reasonable times during
      normal business hours upon reasonable notice to Escrow Agent.

     

    12. Notice.
      All
      notices, communications and instructions required or desired to be given under
      this Agreement must be in writing and shall be deemed to be duly given if sent
      by registered or certified mail, return receipt requested, or overnight courier
      to the following addresses:

     

    If
      to
      Escrow Agent:

    Securities
      Transfer Corporation

    2591
      Dallas Parkway, Suite 102

    Frisco,
      Texas 75034

    Attention:
      Kevin Halter

    

    If
      to the
      Company:

    China
      Biologic Products, Inc.

    No.
      14
      East Hushan Road

    Ta’ian
      City, Shandong Province

    P.C.
      271000, China

    Attention:
      Michael Li

     

    
      
         

      

      
        -4-

        
          

        

      

      
         

      

    

    

    With
      a
      copy to:

    Loeb
      & Loeb LLP

    345
      Park
      Avenue

    New
      York,
      NY 10154

    Facsimile:
      (212) 504-3013

    Attention:
      Mitchell S. Nussbaum, Esq.

    

    If
      to a
      Purchaser:

    To
      the
      address set forth on such Purchaser’s signature
      page to the Purchase Agreement

    

    If
      to a
      Selling Stockholder:

    To
      the
      address set forth on such Selling Stockholder’s
      signature page to the Purchase Agreement

     

    or
      to
      such other address and to the attention of such other person as any of the
      above
      may have furnished to the other parties in writing and delivered in accordance
      with the provisions set forth above.

     

    13. Execution
      in Counterparts.
      This
      Agreement may be executed in counterparts, each of which shall be deemed an
      original, but all of which together shall constitute one and the same
      instrument. In the event that any signature is delivered by facsimile
      transmission, such signature shall create a valid and binding obligation of
      the
      party executing (or on whose behalf such signature is executed) with the same
      force and effect as if such facsimile signature page were an original
      thereof.

     

    14. Assignment
      and Modification.
      This
      Agreement and the rights and obligations hereunder of any of the parties hereto
      may not be assigned without the prior written consent of the other parties
      hereto. Subject to the foregoing, this Agreement will be binding upon and inure
      to the benefit of each of the parties hereto and their respective successors
      and
      permitted assigns. No other person will acquire or have any rights under, or
      by
      virtue of, this Agreement. No portion of the Escrow Funds shall be subject
      to
      interference or control by any creditor of any party hereto, or be subject
      to
      being taken or reached by any legal or equitable process in satisfaction of
      any
      debt or other liability of any such party hereto prior to the disbursement
      thereof to such party hereto in accordance with the provisions of this
      Agreement. This Agreement may be changed or modified only in writing signed
      by
      all of the parties hereto.

     

    15. APPLICABLE
      LAW.
      THIS
      AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
      THE
      STATE OF TEXAS, USA APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED THEREIN.
      THE PARTIES EXPRESSLY WAIVE SUCH DUTIES AND LIABILITIES, IT BEING THEIR INTENT
      TO CREATE SOLELY AN AGENCY RELATIONSHIP AND HOLD THE ESCROW AGENT LIABLE ONLY
      IN
      THE EVENT OF ITS WILLFUL MISCONDUCT, FRAUD, OR GROSS NEGLIGENCE. ANY LITIGATION
      CONCERNING THE SUBJECT MATTER OF THIS AGREEMENT SHALL BE EXCLUSIVELY PROSECUTED
      IN THE COURTS OF DALLAS, TEXAS, USA, AND ALL PARTIES CONSENT TO THE EXCLUSIVE
      JURISDICTION AND VENUE OF THOSE COURTS.

     

    
      
         

      

      
        -5-

        
          

        

      

      
         

      

       

    

    16. Headings.
      The
      headings contained in this Agreement are for convenience of reference only
      and
      shall not affect the construction of this Agreement. 

     

    17. Attorneys’
      Fees.
      If any
      action at law or in equity, including an action for declaratory relief, is
      brought to enforce or interpret the provisions of this Agreement, the prevailing
      party shall be entitled to recover reasonable attorneys’ fees from the other
      party (unless such other party is the Escrow Agent), which fees may be set
      by
      the court in the trial of such action or may be enforced in a separate action
      brought for that purpose, and which fees shall be in addition to any other
      relief that may be awarded.

     

    
      
         

      

      
        -6-

        
          

        

      

      
         

      

       

    

    IN
      WITNESS WHEREOF, the parties have duly executed this Agreement as of the date
      set forth opposite their respective names.

     

    GRC
      HOLDINGS, INC.

     

     

    By:    /s/ Michael Li          

             CEO                      

     

    

     

    SECURITIES
      TRANSFER CORPORATION

     

     

    By:    /s/ Kevin Halter          

              Kevin Halter          

                          President          

     

    
      
         

      

      
        -7-

        
          

        

      

      
         

      

       

    

    IN
      WITNESS WHEREOF, the parties have duly executed this Agreement as of the date
      set forth opposite their respective names.

     

    PURCHASER:

     

       Pinnacle China Fund, LP          

     

     

    By:   /s/ Barry M. Kitt          

    Name:  Barry M. Kitt

    Title:    General Partner

     

    
      
         

      

      
        -8-

        
          

        

      

      
         

      

    

     

    IN
      WITNESS WHEREOF, the parties have duly executed this Agreement as of the date
      set forth opposite their respective names.

     

    SELLING
      STOCKHOLDER:

     

       /s/ Chan Siu Ling          

    Name: Chan,
      Siu
      Ling

     

     

    SELLING
      STOCKHOLDER:

     

       /s/ Li Lin Ling          

    Name: Li,
      Lin
      Ling

     

    
      
         

      

      
        -9-

        
          

        

      

      
         

      

    

     

    EXHIBIT
      A

     

     

    July
      __,
      2006

     

    

    Securities
      Transfer Corporation

    2591
      Dallas Parkway, suite 102

    Frisco,
      Texas 75034

    Attn:
      Kevin Halter

     

    Ladies
      and Gentlemen:

     

    Reference
      is hereby made to the Escrow Agreement dated July 18, 2006 between and among
      GRC
      Holdings, Inc., a Texas corporation (the “Company”), each of the purchasers of
      shares of the Company’s common stock (collectively, the “Purchasers”) and the
      selling stockholders (each, a “Selling Stockholder,” and collectively, the
“Selling Stockholders”), in each case identified on the signature pages thereto
      and Securities Transfer Corporation (hereinafter referred to as “Escrow Agent”).
      Each term used, but not defined, herein has the meaning assigned to it in the
      Escrow Agreement.

     

    We
      hereby
      confirm that the covenant contained in Section 4.14 of the Securities Purchase
      Agreement has been complied with and you are hereby instructed to release the
      Escrow Funds as follows:

     

    
      	
              1.
                LANE
                CAPITAL MARKETS US$ 817,046

            
	
              Financial
                Institution:

            	
                  PEOPLES
                BANK

            
	 	
                  1800
                Post Farm Rd. & Buckley Ave.

            
	 	
                  Green
                Farms, CT 06838

            
	
              Phone
                #:

            	
                  (203)
                338-7171

            
	
              ABA#:

            	
                  221-1-72186

            
	
              For
                the Benefit of:

            	
                  Lane
                Capital Markets LLC

            
	
              Account
                #:

            	
                  010
                7009533 

            

    

     

    
      	
              2.
                LOGIC EXPRESS US$
                3,100,000

            
	
              For
                Crediting:

            	
                  BANK
                of
                CHINA (Hong Kong) Limited

            
	
              Phone
                #:

            	
                   Fax
                #:  

            
	
              SWIFT
                Code:

            	
                  BKCH
                HK
                HH XXX

            
	
              The
                Payee:

            	
                  Logic
                Express Limited

            
	
              US$
                Account:

            	
                  012-875-92325463

            

    

    

    3.
      $82,954 to the account of GRC Holdings, Inc. as follows:

    

    HSBC

    NY,
      NY

    ABA#
      021-0-01088

    Account
      Name: GRC Holding Inc.

    Account
      #
      619 760354

     

    
      
         

      

      
        -10-

        
          

        

      

      
         

      

    

    GRC
      HOLDINGS, INC.

     

     

    By:_____________________

    Name:

    Title:

    

     

    PINNACLE
      CHINA FUND, L.P.

     

     

    By:______________________

    Name:

    Title:

     

    
      
         

      

      
        -11-

        
          

        

      

      
         

      

    

    

    EXHIBIT
      B

     

    

     

    PINNACLE
      CHINA FUND, L.P.

    Beneficiary
      Bank:

    Bank
      of
      America NA

    100
      West
      33rd
      Street,
      NY, NY 10001

    ABA
      Number:

    0260
      0959
      3

    CHIPS
      Address:

    0959

    SWIFT
      Address:

    BOFA
      US
      3N

    Beneficiary:

    Banc
      of
      America Securities LLC

    600
      Montgomery Street, SF, CA 94111

    Account
      Number:

    00
      12339
      32118

    

    For
      Further Credit:

    Client
      Account Number & Name

    118-01855

    The
      Pinnacle China Fund, L.P.

    

    $4,000,000
      Investment Amount out of aggregate Investment Amount of $8,110,600 = 49.32%
      of
      Escrow Funds.

    

    JAYHAWK
      CHINA FUND (CAYMAN) LTD.

    Bank
      of
      New York

    ABA
      No.:

    021
      000
      018

    BIC
      Code:

    IRVTUS3N

    First
      Beneficiary:

    CSFB
      (Europe) Ltd.

    Account
      Number:

    890-0361-158

    BIC
      Code:

    CSFBG2L

    Second
      Beneficiary:

    Jayhawk
      China Fund

    Account
      Number:

    0ZD4

    

    $3,000,000
      Investment Amount out of aggregate Investment Amount of $8,110,600 = 36.99%
      of
      Escrow Funds.

    

    CAPITAL
      VENTURES INTERNATIONAL, BY HEIGHTS CAPITAL MANAGEMENT, INC., IT’S AUTHORIZED
      AGENT

    Chase
      Manhattan Bank, NY

    

    Swift:
      CHASUS33

    ABA:
      021 000 021

    A/C
      Merrill Lynch International EFG

    A/C
      number: 066612489

    

    $610,600
      Investment Amount out of aggregate Investment Amount of $8,110,600 = 7.53%
      of
      Escrow Funds.

     

    
      
         

      

      
        -12-

        
          

        

      

      
         

      

    

    

    HUDSON
      BAY FUND LP

    

    JPMorgan
      Chase Bank, NY

    ABA
      #
      021000021

    F/B/O
      ML
      PRO

    A/C
      # 066
      024 390

    Further
      Credit - Hudson Bay Fund LP

    A/C
      #
      510-53703-D4

    

    $375,000
      Investment Amount out of aggregate Investment Amount of $8,110,600 = 4.62%
      of
      Escrow Funds.

    

    HUDSON
      BAY OVERSEAS FUND LTD.

    JPMorgan
      Chase Bank, NY

    ABA
      #
      021000021

    F/B/O
      ML
      PRO

    A/C
      # 066
      024 390

    Further
      Credit - Hudson Bay Overseas Fund LTD

    A/C
      #
      507-52316-D1

     

     $125,000
      Investment Amount out of aggregate Investment Amount of $8,110,600 = 1.54%
      of
      Escrow Funds

     

    
      
         

      

        -13-

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