Unassociated Document


    PRIVATE
      PLACEMENT WARRANT ESCROW AGREEMENT

    


    This
      PRIVATE
      PLACEMENT WARRANT ESCROW AGREEMENT,
      dated
      as of _____, 2008 (this “Agreement”),
      by
      and among Chardan 2008 China Acquisition Corp., a British Virgin Islands
      business company of limited liability (the “Company”),
      the
      private placement warrant holders listed as “Purchasers” on the signature page
      hereto (collectively, the “Purchasers”),
      and
      Continental Stock Transfer & Trust Company, a
      New
      York corporation, as escrow agent (the
      “Escrow
      Agent”).

    


    WHEREAS,
      the
      Company has entered into an Underwriting Agreement, dated _____,
      2008
      (the “Underwriting
      Agreement”),
      with
Brean
      Murray, Carret & Co., LLC, Maxim
      Group, LLC and Roth Capital Partners, LLC, acting as representatives (the
“Representatives”)
      of the
      several underwriters (collectively, the “Underwriters”),
      pursuant to which, among other matters, the underwriters have agreed to purchase
      a total of 6,875,000 units (the “Units”)
      of the
      Company.
      Each
      Unit consists of one of the Company’s ordinary shares, par value $0.0001 per
      share (each an “Ordinary
      Share”),
      and
      one warrant, each warrant to purchase one Ordinary Share (the “Warrant”),
      all
      as more fully described in the Company’s definitive prospectus, dated ______,
      2008 (the “Prospectus”)
      comprising part of the Company’s Registration Statement on Form F-1 (File No.
      333-152623) under the Securities Act of 1933, as amended (the “Registration
      Statement”),
      declared effective on _______, 2008 (the “Effective
      Date”);

    


    WHEREAS,
      the
      Purchasers have
      agreed to purchase, in a private placement that will occur prior to the
      effective date of the offering (the “Offering”),
      2,000,000 warrants (collectively, the “Private
      Placement Warrants”)
      at a
      purchase price of $0.50 per warrant pursuant to the terms of that certain
      Warrant Purchase Agreement, dated the date hereof, and entered into by and
      among
      the Company and the Purchasers;

    


    WHEREAS,
      each
      Purchaser has agreed to deposit the Private Placement Warrants, as set forth
      opposite their respective names in Exhibit
      A
      attached
      hereto, in escrow as hereinafter provided; and

    


    WHEREAS,
      the
      Company and the Purchasers desire that the Escrow Agent accept the Private
      Placement Warrants, in escrow, to be held and disbursed as hereinafter
      provided.

    


    NOW,
      THEREFORE,
      in
      consideration of the premises and the mutual covenants, representations and
      warranties contained herein and intending to be legally bound hereby, the
      parties agree as follows:

    


    1. Appointment
      of Escrow Agent.
      The
      Company and Purchasers hereby appoint the Escrow Agent to act in accordance
      with
      and subject to the terms of this Agreement, and the Escrow Agent hereby accepts
      such appointment and agrees to act in accordance with and subject to such
      terms.

    


    2. Deposit
      of Private Placement Warrants.
      On or
      before the Effective Date, each Purchaser shall deliver to the Escrow Agent
      certificates representing his respective Private Placement Warrants, to be
      held
      and disbursed subject to the terms and conditions of this Agreement. Each
      Purchaser acknowledges that the certificates representing his Private Placement
      Warrants bear a legend reflecting the deposit of such Private Placement Warrants
      pursuant to the terms of this Agreement.

    


    3. Disbursement
      of the Private Placement Warrants.
      The
      Escrow Agent shall hold the Private Placement Warrants until the consummation
      of the Company’s initial business combination
      (as
      described in the Prospectus, the “Escrow
      Period”),
      on
      which date it shall, upon joint written instructions from the Purchasers and
      the
      Company, disburse the Private Placement Warrants (and any applicable instrument
      of transfer) to each Purchaser or its Permitted Transferees, as defined below;
      provided,
      however,
      that
      if the Escrow Agent is notified by the Company pursuant to Section 6.8 hereof
      that the Company is being liquidated at any time during the Escrow Period,
      then
      the Escrow Agent shall promptly destroy the certificates representing the
      Private Placement Warrants, provided further,
      that if,
      after
      the Company consummates a Business Combination, it (or the surviving entity)
      subsequently
      consummates a liquidation, merger, share exchange or other similar transaction
      which results in all of its shareholders having the right to exchange their
      Ordinary Shares or Warrants for cash, securities or other property, then the
      Escrow Agent will, upon receipt of a notice, executed by the Chairman, Chief
      Executive Officer or Chief Financial Officer of the Company, in a form
      reasonably acceptable to the Escrow Agent, certifying that such transaction
      is then being consummated, release the Private Placement Warrants to the
      Purchasers so that they can similarly participate.
      The
      Escrow Agent shall have no further duties hereunder after the disbursement
      or
      destruction of the Private Placement Warrants in accordance with this Section
      3.

     

    
      
        
        

      

      
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    4. Restrictions
      on Transfer of the Private Placement Warrants.
      During
      the Escrow Period, the
      Purchasers will be permitted to transfer all or a portion of the Private
      Placement Warrants to their permitted assigns. Prior to their release from
      escrow, the Private Placement Warrants may only be transferred or assigned:
      (i)
      to the Company or any of its officers, directors and employees or any affiliates
      or family members of such individuals, (ii) by gift to an affiliate or a member
      of Purchaser’s immediate family or to a trust or other entity, the beneficiary
      of which is one of its officers or directors or a member of their respective
      immediate families, (iii) by virtue of the laws of descent and distribution
      upon
      death of any Purchaser, (iv) pursuant to a qualified domestic relations order,
      or (v) with respect to limited liability companies and partnerships, to their
      respective members or partners (the “Permitted
      Transferees”);
      provided,
      however,
      that
      such transfers may be implemented only upon the respective Permitted
      Transferee’s written agreement to be bound by the terms and conditions of this
      Agreement. During the Escrow Period, neither the Purchasers nor any Permitted
      Transferee shall pledge or grant any security interest in the Private Placement
      Warrants or grant any security interest in their rights under this Agreement
      without the prior written consent of the Company.

    


    5. Concerning
      the Escrow Agent.

    


    5.1 Good
      Faith Reliance.
      The
      Escrow Agent shall not be liable for any action taken or omitted by it in good
      faith and in the exercise of its own best judgment, and may rely conclusively
      and shall be protected in acting upon any order, notice, demand, certificate,
      opinion or advice of counsel (including counsel chosen by the 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
      believed by the Escrow Agent to be genuine and to be signed or presented by
      the
      proper person or persons. The Escrow Agent shall not be bound by any notice
      or
      demand, or any waiver, modification, termination or rescission of this
      Agreement, unless evidenced by a writing delivered to the Escrow Agent signed
      by
      the proper party or parties and, if the duties or rights of the Escrow Agent
      are
      affected, unless the Escrow Agent shall have given its prior written consent
      thereto. 

    


     5.2 Indemnification.
      The
      Escrow Agent shall be indemnified and held harmless by the Company from and
      against any expenses, including counsel fees and disbursements, or loss suffered
      by the Escrow Agent in connection with any action, suit or other proceeding
      involving any claim that, in any way, directly or indirectly, arises out of
      or
      relates to this Agreement, the services of the Escrow Agent hereunder, or the
      Private Placement Warrants held by it hereunder, other than expenses or losses
      arising from the gross negligence or willful misconduct of the Escrow Agent.
      Promptly after the receipt by the Escrow Agent of notice of any demand or claim
      or the commencement of any action, suit or proceeding, the Escrow Agent shall
      notify the other parties hereto in writing. In the event of the receipt by
      the
      Escrow Agent of such notice, the Escrow Agent, in its sole discretion, may
      commence an action in the nature of interpleader in an appropriate court to
      determine ownership or disposition of the Private Placement Warrants or it
      may
      deposit the Private Placement Warrants with the clerk of any appropriate court
      or it may retain the Private Placement Warrants pending receipt of a final,
      non-appealable order of a court having jurisdiction over all of the parties
      hereto directing to whom and under what circumstances the Private Placement
      Warrants are to be disbursed and delivered. The provisions of this Section
      5.2
      shall survive in the event the Escrow Agent resigns or is discharged pursuant
      to
      Sections 5.5 or 5.6 below.

    


    5.3 Compensation.
      The
      Escrow Agent shall be entitled to the fees set forth on Schedule
      A
      hereto
      for all services rendered by it hereunder. The Escrow Agent shall also be
      entitled to reimbursement from the Company for all expenses paid or incurred
      by
      it in the administration of its duties hereunder including, but not limited
      to,
      all reasonable counsel, advisors’ and agents’ fees and disbursements and all
      taxes or other governmental charges.

    


    5.4 Further
      Assurances.
      From
      time to time on and after the date hereof, the Company and the Purchasers shall
      deliver or cause to be delivered to the Escrow Agent such further documents
      and
      instruments and shall do or cause to be done such further acts as the Escrow
      Agent shall reasonably request to carry out more effectively the provisions and
      purposes of this Agreement, to evidence compliance herewith or to assure the
      Escrow Agent that it is protected in acting hereunder.

     

    
      
        
        

      

      
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    5.5 Resignation.
      The
      Escrow Agent may resign at any time and be discharged from its duties as Escrow
      Agent hereunder by its giving the other parties hereto written notice thereof
      and such resignation shall become effective as hereinafter provided. Such
      resignation shall become effective at such time that the Escrow Agent shall
      turn
      over to a successor escrow agent appointed by the Company, the Private Placement
      Warrants held hereunder. If no new escrow agent is appointed by the Company
      within the 60-day period following the giving of such notice of resignation,
      the
      Escrow Agent may deposit the Private Placement Warrants with any court it
      reasonably deems appropriate.

    


    5.6 Discharge
      of Escrow Agent.
      The
      Escrow Agent shall resign and be discharged from its duties as escrow agent
      hereunder if so requested in writing at any time by the other parties hereto,
      jointly, provided, however, that such resignation shall become effective only
      upon acceptance of appointment by a successor escrow agent subject to all of
      the
      terms of this Agreement and the delivery, by the Escrow Agent, of the Private
      Placement Warrants to such successor escrow agent.

    


    5.7 Liability.
      Notwithstanding anything herein to the contrary, the Escrow Agent shall not
      be
      relieved from liability hereunder for its own gross negligence or its own
      willful misconduct.

    


    6. Miscellaneous.

    


    6.1 Waiver
      of Claims against Trust Account.
      Notwithstanding any other provision of this Agreement, the Escrow Agent confirms
      its understanding that the Company has established the trust account (as defined
      in the Prospectus, the “Trust
      Account”)
      relating to the securities being sold pursuant to the Prospectus. The Escrow
      Agent acknowledges that the Trust Account will exist for the benefit of the
      Company’s public shareholders and the monies from the Trust Account may only be
      disbursed upon the occurrence of certain events as more fully described in
      the
      Prospectus. The Escrow Agent agrees that neither it nor any of its affiliates
      have or will have any right, title, interest or claim in or to the monies in
      the
      Trust Account, and the Escrow Agent hereby waives any and all right, title,
      interest of claim of any kind in or to any distribution of any property held
      in
      the Trust Account that it or its affiliates may have now or in the future and
      hereby agrees not to seek recourse, reimbursement, payment or satisfaction
      for
      any claim of any kind against the Trust Account for any reason whatsoever,
      including in respect of the Company’s indemnification obligations set forth in
      this Agreement.

    


    6.2 Governing
      Law.
      This
      Agreement shall, for all purposes, be deemed to be made under and shall be
      construed in accordance with the laws of the State of New York, without giving
      effect to conflicts of law principles that would result in the application
      of
      the substantive laws of another jurisdiction (whether of the State of New York
      or any other jurisdiction that would cause the application of the laws of any
      jurisdiction other than the State of New York). Each of the Company, the
      Purchasers and the Escrow Agent hereby agrees that any action, proceeding or
      claim against it arising out of or relating in any way to this Agreement shall
      be brought and enforced in the courts of the State of New York or the United
      States District Court for the Southern District of New York, and irrevocably
      submits to such jurisdiction, which jurisdiction shall be exclusive. Each of
      the
      Company, the Purchasers and the Escrow Agent hereby waives any objection to
      such
      exclusive jurisdiction and that such courts represent an inconvenient forum.
      Any
      such process or summons to be served upon each of the Company, the Purchasers
      and the Escrow Agent may be served by transmitting a copy thereof by registered
      or certified mail, return receipt requested, postage prepaid, addressed to
      it at
      the address set forth in Section 6.7 hereof. Such mailing shall be deemed
      personal service and shall be legal and binding upon each of the Company, the
      Purchasers and the Escrow Agent in any action, proceeding or claim.

    


    6.3 Third
      Party Beneficiaries.
      The
      Purchasers hereby acknowledge that each of the Underwriters
      is an
      intended third party beneficiary of this Agreement and this Agreement may not
      be
      modified or changed without the prior written consent of the
      Representatives.

    


    6.4 Entire
      Agreement.
      This
      Agreement contains the entire agreement of the parties hereto with respect
      to
      the subject matter hereof and, except as expressly provided herein, may not
      be
      changed or modified except by an instrument in writing signed by the party
      against whom such change or modification is to be enforced. This Agreement
      and
      any amendment may be executed in several original or facsimile counterparts,
      each one of which shall constitute an original, and together shall constitute
      but one instrument.

     

    
      
        
        

      

      
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    6.5 Headings.
      The
      headings contained in this Agreement are for reference purposes only and shall
      not affect in any way the meaning or interpretation thereof.

    


    6.6 Binding
      Effect.
      This
      Agreement shall be binding upon and inure to the benefit of the respective
      parties hereto and their legal representatives, successors and
      assigns.

    


    6.7 Notices.
      Any
      notice or other communication required or which may be given hereunder shall
      be
      in writing and either be delivered personally or be mailed, certified or
      registered mail, or by private national courier service, return receipt
      requested, postage prepaid, and shall be deemed given when so delivered
      personally or, if mailed, two days after the date of mailing, as
      follows:

    


    
      	 	 	
              If
                to the Company, to:

            


    

    


    Chardan
      2008 China Acqusition Corp.

    Suite
      18E, Tower A

    Oriental
      Kenzo Plaza

    48
      Dongzhimenwai Street

    Beijing,
      100027, China

    Fax
      No.:
      86-10-84477246

    Attn:
      Xiaosong Zhong

    


    If
      to a
      Purchaser, to his address set forth in Exhibit
      A;

    


    and
      if to
      the Escrow Agent, to:

    


    Continental
      Stock Transfer & Trust Company

    17
      Battery Place

    New
      York,
      New York 10004

    Fax
      No.:
      (212) 509-5150

    Attn:
      Steven G. Nelson and & Di Paolo

    


    A
      copy of
      any notice sent hereunder shall be sent to:

    


    Ellenoff
      Grossman & Schole, LLP

    150
      East
      42nd Street, 11th Floor

    New
      York,
      New York 10017

    Fax
      No.:
      (212) 370-7889

    Attn:
      Lawrence A. Rosenbloom, Esq. 

    


    and:

    


    Brean
      Murray, Carret & Co., LLC

    570
      Lexington Avenue

    New
      York,
      New York 10022

    Fax
      No.:
      (212) 702-6505

    Attn:
      William McCluskey

    


    and:

    


    Maxim
      Group LLC

    405
      Lexington Avenue, 2nd Floor

    New
      York,
      New York 10174

    Fax
      No.:
      (212) 895-3783

    Attn:
      Clifford Teller

     

    
      
        
        

      

      
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    and

    


    Roth
      Capital Partners, LLC

    24
      Corporate Plaza

    Newport
      Beach, California 92660

    Fax
      No.:
      (949) 720-7215

    Attn.:
      Renny Chavanikamannil

    


    and:

    


    Richardson
      & Patel LLP

    405
      Lexington Avenue

    New
      York,
      New York 10174

    Fax
      No.:
      (212) 907-6687

    Attn:
      Jody R. Samuels, Esq.

    


    The
      parties may change the persons and addresses to which the notices or other
      communications are to be sent by giving written notice to any such change in
      the
      manner provided herein for giving notice.

    


     6.8 Liquidation
      of the Company.
      The
      Company shall give the Escrow Agent written notification of the liquidation
      and
      dissolution of the Company in the event that the Company fails to consummate
      a
      Business Combination, as described in the Prospectus, within the time period(s)
      specified in the Prospectus.

     

    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK]

     

    
      
        
        

      

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

     

    
      	 	 	
              CHARDAN 2008 CHINA ACQUISITION CORP.

            
	 	 	 
	 	 	 
	 	
              By: 

            	 
	 	 	
              Kerry Propper, Chief Executive Officer

            


    

     

    THE
      PURCHASERS:

    
       

      
        	 	 	
                 

              
	 	 	 
	 	 	 
	 	
                 

              	 
	 	 	
                 

              


      

    

     

     

    
       

      
        	 	 	
                
                  CONTINENTAL
                    STOCK TRANSFER
                    
                    &
                      TRUST
                      COMPANY

                  

                

              
	 	 	 
	 	 	 
	 	
                By: 

              	 
	 	 	
                
                  Steven
                    G. Nelson,
                    Chairman

                

              


      

       

    

    


    
      
        
        

      

      
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    EXHIBIT
      A

    


    
      	
              Purchaser Name and Address 1

            	 	
              Private Placement Warrant

              Certificate Number

            	 	
              Number of Shares Subject to

              Private Placement Warrants

            
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 


    

     

    1
      All
      addresses c/o Chardan
      2008 China Acquisition Corp., 18E, Tower A Oriental Kenzo Plaza 48 Dongzhimenwai
      Street Beijing, 100027, China.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
      A

    


    ESCROW
      AGENT FEES