FORM OF GUARANTEE AND PLEDGE AGREEMENT

Exhibit 10.2

FORM OF GUARANTEE AND PLEDGE AGREEMENT

THIS GUARANTEE AND PLEDGE AGREEMENT (this “ Agreement ”), made as of June __, 2009, is between SIU LING CHAN (the “ Pledgor ”) and the secured parties identified on the signature pages hereto (each a “ Secured Party ” and, collectively, the “ Secured Parties ”).

RECITALS

A.

This Agreement is being delivered pursuant to the Securities Purchase Agreement, dated June 5, 2009, among China Biologic Products, Inc. (the “ Company ”), the Pledgor and the Secured Parties (the “ Purchase Agreement ”).  Capitalized terms used herein but defined shall have the meaning given to such terms in the Purchase Agreement.

B.

The Pledgor is the legal and beneficial owner of the shares of common stock of the Company described on Exhibit A hereto, as may be amended by any Pledge Amendment (the “ Pledged Shares ”).

C.

In order to secure the obligations of the Company under the Transaction Documents (as defined below), the Pledgor has agreed to pledge to the Secured Parties all her present and future rights, title and interest in, to and under the Pledged Shares in accordance with the term of this Agreement.

D.

Contemporaneously with the execution and delivery of this Agreement, the Company will be entering into with and/or delivering to the Secured Parties the (i) Notes; (ii) Warrants; and (iii) Registration Rights Agreement (each as defined below). This Agreement, the Purchase Agreement, Notes, Warrants, Registration Rights Agreement and other Security Documents are sometimes hereinafter collectively referred to as the “ Transaction Documents .”

AGREEMENT

NOW, THEREFORE, in consideration of the premises contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Pledgor hereby agrees with the Secured Parties as follows:

1.

Defined Terms .  Terms defined in the UCC (defined below) that are not otherwise defined in this Agreement or in the Purchase Agreement are used in this Agreement as defined in the UCC.  The following terms shall have the meanings specified below:

“ Affiliate ” means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person, as such terms are used in and construed under Rule 144 promulgated by the United States Securities and Exchange Commission pursuant to the Securities Act of 1933.

“ Agent ” has the meaning ascribed to the term in Section 11.

“ Agreement ” has the meaning ascribed to the term in the in introductory paragraph of this Agreement.

“ Business Day ” means any day except Saturday, Sunday and any day which shall be (a) a United States federal legal holiday, (ii) a day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close, or (iii) a PRC legal holiday.

“ Cash Distributions ” has the meaning ascribed to such term in Section 5(b).

“ Closing Date ” has the meaning ascribed to such term defined in Section 2.1 of the Purchase Agreement.

“ Code ” means the 2000 Official Text of the Uniform Commercial Code or, with respect to any Collateral outside of the United States, the equivalent body of laws in such non-U.S. jurisdiction that provides rights substantially comparable to the terms contained herein regarding the perfection of the Secured Parties’ Liens on the Collateral in the U.S.

“ Collateral ” means the (i) Pledged Shares and (ii) all dividends, interest and other sums which are or may become payable in respect of the Pledged Shares to any Person in its capacity as shareholder of, or holder of any equity interest in, such shares, including without limitation the right to receive any and all such sums and all claims in respect of any default in paying such sums, and all forms of remittance of such sums.

“ Company ” has the meaning set forth in paragraph A of the recitals herein.

“ Enforcement Action ” has the meaning ascribed to such term in Section 11(a).

“ Enforcement Event ” means an Event of Default or any failure by the Company or Pledgor to fully pay or perform any Guaranteed Obligation when due.

“ Escrow Account ” has the meaning ascribed to such term in Section 5(b).

“ Event of Default ” has the meaning ascribed to the term defined in Section 15(a) of the Notes.

“ GAAP ” means U.S. generally accepted accounting principles.

“ Guarantee ” means the Pledgor’s guarantee of the Guaranteed Obligations under Section 2 hereof.

“ Guaranteed Obligations ” has the meaning ascribed to such term in Section 2.

“ Holder ” has the meaning ascribed to such term in Section 9(c).

“ Lien ” means any lien, charge, encumbrance, security interest, right of first refusal or other restrictions of any kind.

 “ Majority Secured Parties ” has the meaning ascribed to the term in Section 11.

“ Material Adverse Effect ” means a material adverse effect on (a) the financial condition of Pledgor (b) the ability of Pledgor to perform her obligations under this Agreement, (c) the ability of the Secured Parties to enforce any material obligations of Pledgor under this Agreement; or (d) the validity or priority of the Secured Parties' security interests in and Liens on the Collateral and the continued effectiveness and enforceability thereof.

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“ New York Courts ” has the meaning ascribed to such term in Section 12(g).

 “ Notes ” means the 3.8% Convertible Notes Due 2011 issued to the Secured Parties pursuant to the Purchase Agreement.

 “ Person ” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

“ Pledge Amendment ” has the meaning ascribed to such term in Section 5(a).

“ Pledge Shares ” has the meaning set forth in paragraph B of the recitals herein.

“ Pledgor ”“” has the meaning ascribed to the term in the in introductory paragraph of this Agreement.

 “ Power of Attorney ” has the meaning ascribed to such term in Section 10(j).

 “ Proceeding ” means an action, claim, suit, investigation or proceeding (including, without limitation, an investigation or partial proceeding, such as a deposition), whether commenced or threatened.

“ Purchase Agreement ” has the meaning set forth in paragraph A of the recitals herein.

“ Registration Rights Agreement ” means the Registration Rights Agreement entered into among the Company and the Secured Parties pursuant to the Purchase Agreement.

“ Representatives ” has the meaning ascribed to such term in Section 11.

“ Secured Party ” and “ Secured Parties ” have the meanings ascribed to such terms in the introductory paragraph of this Agreement.

“ Securities Distributions ” has the meaning ascribed to such term in Section 5(a).

“ Transaction Documents ” has the meaning set forth in paragraph D of the recitals herein.

“ UCC ” means the Uniform Commercial Code as in effect from time to time in the state of New York or in any other jurisdiction as the context may require.

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“ Warrants ” means the common stock purchase warrants issued to the Secured Parties, pursuant to the Purchase Agreement.

2.

Guarantee .

(a)

The Pledgor unconditionally and irrevocably guarantees to the Secured Parties the full and prompt payment and performance when due, whether at maturity or earlier (by reason of acceleration, redemption, default or otherwise) and at all times thereafter, of all of the obligations of the Company and the Pledgor under the Transaction Documents, including (i) any interest or expenses accruing or arising after the commencement of any case with respect to the Company under the United States Bankruptcy Code or any other bankruptcy or insolvency law (whether or not such interest or expenses are allowed or allowable as a claim in whole or in part in such case) and (ii) the due and punctual payment and performance by the Pledgor of her obligations and liabilities under, arising out of, or in connection with this Agreement including, without limitation, any expenses payable pursuant to Section 9 hereof (all of the foregoing being hereinafter referred to collectively as the “ Guaranteed Obligations ”).

(b)

The Guarantee shall be unconditional and absolute and, without limiting the generality of the foregoing, shall not be released, discharged or otherwise affected by:

(i)

(ii)

(iii)

(iv)

(v)

(vi)

(vii)

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(c)

The Pledgor irrevocably waives acceptance hereof, presentment, demand, protest and any notice not provided for herein, as well as any requirement that at any time any action be taken by any Person against the Company.

(d)

If acceleration of the time for payment by the Company of any obligation under any Transaction Document is stayed by reason of the insolvency or receivership of the Company or otherwise, all obligations otherwise subject to acceleration under the terms of any Transaction Document shall nonetheless be payable by the Pledgor hereunder forthwith on demand by the Secured Parties.

(e)

If any Guaranteed Obligation is not paid promptly when due, the Secured Parties and their Affiliates are authorized, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other obligations at any time owing by the Secured Parties or their Affiliates to or for the credit or the account of the Pledgor against the obligations of the Pledgor under this Agreement, irrespective of whether or not the Secured Parties shall have made any demand thereunder and although such obligations may be unmatured. The rights of the Secured Parties under this subsection are in addition to all other rights and remedies (including other rights of set-off) that the Secured Parties may have.

(f)

The Guarantee is a continuing guarantee, shall be binding on the Pledgor and her successors and assigns, and shall be enforceable by the Secured Parties. If all or part of the Secured Parties’ interest in any Guaranteed Obligation is assigned or otherwise transferred, the transferor’s rights under the Guarantee, to the extent applicable to the Guaranteed Obligation so transferred, shall automatically be transferred with such Guaranteed Obligation.

(g)

The liability of the Pledgor under the Guarantee shall be limited to an aggregate amount equal to the largest amount that would not render the Guarantee subject to avoidance under Section 548 of the United States Bankruptcy Code or any comparable provisions of applicable law.

3.

Pledge .  As collateral security for the prompt and complete payment and performance when due of all of the Guaranteed Obligations, the Pledgor hereby pledges, assigns, hypothecates, transfers, delivers and grants to the Secured Parties a lien on and security interest in all of her present and future rights, title and interest in and to, whether now existing or hereafter coming into existence, the Collateral provided that with any reduction in the outstanding principal amount of the Notes (whether due to repayment or conversion of any portion of the Notes), (a) the number of Pledged Shares in the Collateral shall be reduced proportionately, and (b) the amount of cash dividends (if any) in the Collateral shall be reduced proportionately and the excess amount shall be released to the Pledgor, but in no event shall the sum of the amount of cash dividends (if any) and the market value of the Pledged Shares held in the Escrow Account be reduced to below the sum of the outstanding principal amount of the Notes and any accrued but unpaid interest.

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4.

Representations and Warranties of the Pledgors .  The Pledgor represents and warrants jointly and severally to the Secured Parties that:

(a)

The Pledgor is the record and beneficial owner of, and has good and marketable title to, the Pledged Shares and such interests are and will remain free and clear of all pledges, liens, security interests and other encumbrances and restrictions whatsoever, except Liens created by this Agreement.

(b)

The Pledgor (i) has all requisite power and authority (A) to own her property and assets unless the absence of such would not result in a Material Adverse Effect and (B) to execute this Agreement and to pledge the Collateral to the Secured Parties; and (ii) has duly executed and delivered this Agreement.

(c)

This Agreement is a legal, valid and binding obligation of the Pledgor enforceable against the Pledgor in accordance with its terms, except as limited by applicable bankruptcy, insolvency, moratorium, reorganization and other similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles (whether enforcement is sought by proceedings at law or in equity).

(d)

The Pledgor is the legal and beneficial owner of the Collateral pledged by it hereunder, free of any and all Liens in favor of any other Person, except the Liens created by this Agreement.

(e)

The Pledgor holds no options, warrants or other agreements with respect to the Pledged Shares and there are no outstanding options, warrants or other agreements with respect to the Pledged Shares other than as provided in the Transaction Documents.

(f)

No consent, approval or authorization of or designation or filing with any federal, state or other governmental authority or regulatory body on the part of the Pledgor is required in connection with the execution, delivery and performance of this Agreement or the granting of Liens in the Collateral by the Pledgor, for the benefit of the Secured Parties, or for the exercise by the Secured Parties of the rights provided for in this Agreement.

(g)

The execution, delivery and performance of this Agreement by the Pledgor will not violate any material provision of (i) any applicable law or regulation binding on the Pledgor, (ii) any order, judgment, writ, award or decree of any court, arbitrator or governmental authority, domestic or foreign binding on the Pledgor, (iii) the organizational documents of the Company, (iv) any securities issued by the Company, or (v) any mortgage, indenture, lease, contract, or other agreement, instrument or undertaking to which the Pledgor is a party or that purports to be binding upon the Pledgor or upon any of her  assets, and will not result in the creation or imposition of any material Lien on any of the assets of the Pledgor except as contemplated by this Agreement.

(h)

The pledge, assignment and delivery of the Collateral pursuant to this Agreement creates a valid Lien on the Collateral in favor of the Secured Parties, subject to no other Liens nor to any agreement purporting to grant to any third party any Liens in the property or assets of the Pledgor that would include the Collateral.  The Pledgor covenants and agrees that she  will defend all of the right, title and interest of the Secured Parties in and to the Collateral, for the benefit of the Secured Parties, against the claims and demands of all Persons whomsoever.

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5.

Dividends, Distributions, etc .  

(a)

If, while this Agreement is in effect, the Pledgor shall become entitled to receive or shall receive any certificate representing the Pledged Shares (including, without limitation, any certificate representing a distribution in connection with any reclassification, increase or reduction of capital, or issued in connection with any reorganization, merger or consolidation), or any warrants, options or rights, whether as an addition to, in substitution for, or in exchange for the Pledged Shares (the “ Securities Distributions ”), the Pledgor agrees to accept the same as the Secured Parties’ agent and to hold the same in trust for the Secured Parties, and to deliver the same forthwith to the Secured Parties in the exact form received, with the endorsement of the Pledgor when necessary, to be held by the Secured Parties as additional collateral security for the Guaranteed Obligations.  The Pledgor shall promptly deliver to the Secured Parties (i) a pledge amendment, duly executed by the Pledgors, in substantially the form of Exhibit B hereto (a “ Pledge Amendment ”) with respect to any Securities Distributions, and (ii) any financing statements and control agreements (or amendments thereto) as reasonably requested by the Secured Parties.  The Pledgor hereby authorizes the Secured Parties to attach each Pledge Amendment to this Agreement.

(b)

All sums of money and property so paid or distributed in respect of the Pledged Shares (the “ Cash Distributions ”) that are received by the Pledgor shall, until paid or delivered to the Escrow Account (defined below) or the Secured Parties directly, be held by the Pledgor in trust as additional collateral security for the Guaranteed Obligations.

(c)

The Pledgor shall promptly deposit such Cash Distributions into an escrow account (the “ Escrow Account ”) pursuant to the terms of an escrow agreement to be entered into among the Pledgor, the Secured Parties and an escrow agent.

6.

Voting Rights in the Pledged Shares .  

(a)

The Pledgor shall be entitled, subject to the other provisions hereof, so long as no Enforcement Event has occurred and is continuing, to vote or consent with respect to the Pledged Shares and to otherwise exercise the incidents of ownership thereof in any manner not inconsistent with this Agreement or the Transaction Documents.

(b)

Subject to Section 12(e) hereof, any or all of the Collateral held by the Secured Parties hereunder may, if an Enforcement Event has occurred and is continuing, be registered in the name of the Secured Parties or their nominee, and the Secured Parties or their nominee may during the continuation of such Enforcement Event and without notice exercise all voting and corporate rights at any meeting with respect to the Pledged Shares and exercise any and all rights of conversion, exchange, subscription or any other rights, privileges or options pertaining to any of the Pledged Shares, for the benefit of the Secured Parties, as if the Secured Parties or their nominee were the absolute owner thereof, including, without limitation the right (i) to vote in favor of, and to exchange at their reasonable discretion any and all of the Collateral upon the merger, consolidation, reorganization, recapitalization or other readjustment with respect to the Company or (ii) upon the exercise by the Company or the Secured Parties, of any right, privilege or option pertaining to any of the Collateral, and in connection therewith, to deposit and deliver any and all of the Collateral with any committee, depositary, transfer agent, registrar or other designated agency upon such terms and conditions as the Secured Parties may determine, all without liability except to account for property actually received by the Secured Parties, but the Secured Parties shall have no duty to exercise any of the aforesaid rights, privileges or options and shall not be responsible for any failure to do so or delay in so doing unless due to their gross negligence or willful misconduct.

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(c)

In furtherance of the foregoing, in connection with the delivery of the certificates evidencing the Pledged Shares, the Pledgor shall execute and deliver to the Secured Parties an executed irrevocable stock power in the form of Exhibit C hereto with respect to such certificates which stock power shall be exercisable immediately upon the occurrence and during the continuance of an Enforcement Event.  After the occurrence and during the continuance of an Enforcement Event and upon the reasonable request of the Secured Parties, the Pledgor agrees to deliver to the Secured Parties such further evidence of such irrevocable proxy or such further irrevocable proxies to vote the Pledged Shares as the Secured Parties may reasonably request.

7.

Remedies .

(a)

Upon the occurrence and during the continuance of an Enforcement Event, provided that the Secured Parties shall have given the Pledgor advance notice of at least 15 days, the Secured Parties, without demand of performance or other demand or advertisement of any kind (except the notice specified below of time and place of public or private sale and except as otherwise required by applicable law) to or upon the Pledgor or any other Person (all and each of which demands and/or advertisements are hereby expressly waived), may take one or more of the following actions:

(i)

collect, receive, appropriate and realize upon the Collateral, or any part thereof;

(ii)

demand, sue for, collect or receive any money or property at any time payable to or receivable by the Pledgor on account of all or any part of the Collateral;

(iii)

cause any action at law or suit in equity or other proceeding to be instituted and prosecuted to collect or enforce any Guaranteed Obligations or rights hereunder or included in the Collateral, including specific enforcement of any covenant or agreement contained herein or in the Transaction Documents, or foreclose or enforce the security interest in all or any part of the Collateral granted herein, or to enforce any other legal or equitable right vested in it by this Agreement or by law, and/or may forthwith incur expenses, including reasonable attorneys’ fees, consultants’ fees, and other costs appropriate to the exercise of any right or power under this Agreement;

(iv)

sell, assign, give an option or options to purchase, contract to sell or otherwise dispose of and deliver the Collateral, or any part thereof, in one or more portions at public or private sale or sales or transactions, at any exchange, broker’s board or at any of the Secured Parties’ offices or elsewhere upon such terms and conditions as the Secured Parties may reasonably deem advisable and at such prices as it may reasonably deem best, for any combination of cash and/or securities or other property or on credit or for future delivery without assumption of any credit risk, with the right to the Secured Parties upon any such sale or sales, public or private, to purchase, the whole or any part of the Collateral so sold free of any claim or right of any kind whatsoever.

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(b)

The Secured Parties shall apply