INVESTMENT MANAGEMENT TRUST AGREEMENT
                  -------------------------------------


            This  Agreement  is made as of  _____________,  2005 by and  between
Chardan  North  China  Acquisition  Corporation (the "Company")  and Continental
Stock Transfer & Trust Company ("Trustee").

            WHEREAS,  the  Company's  registration  statement  on Form S-1,  No.
333-125016  ("Registration  Statement"),  for  its  initial  public  offering of
securities  ("IPO")  has been  declared  effective  as of the date hereof by the
Securities and Exchange Commission ("Effective Date"); and

            WHEREAS,   EarlyBirdCapital,   Inc.   ("EBC")   is   acting  as  the
representative of the underwriters in the IPO; and

            WHEREAS,  as  described  in  the  Registration  Statement,   and  in
accordance with the Company's  Certificate of Incorporation,  $25,835,000 of the
gross proceeds of the IPO ($29,835,000 if the underwriters over-allotment option
is exercised in full) will be delivered to the Trustee to be deposited  and held
in a trust  account  for the  benefit  of the  Company  and the  holders  of the
Company's  common  stock,  par  value  $.0001  per  share,  issued in the IPO as
hereinafter  provided  and in the event the Units are  registered  in  Colorado,
pursuant to Section 11-51-302(6) of the Colorado Revised Statutes. A copy of the
Colorado  Statute is  attached  hereto and made a part  hereof (the amount to be
delivered  to the  Trustee  will be referred  to herein as the  "Property";  the
stockholders  for whose  benefit the  Trustee  shall hold the  Property  will be
referred to as the "Public  Stockholders,"  and the Public  Stockholders and the
Company will be referred to together as the "Beneficiaries"); and

            WHEREAS,  the  Company  and the  Trustee  desire to enter  into this
Agreement  to set forth the terms and  conditions  pursuant to which the Trustee
shall hold the Property;

            IT IS AGREED:

1.    Agreements  and  Covenants  of  Trustee.  The  Trustee  hereby  agrees and
covenants to:

            (a) Hold the Property in trust for the  Beneficiaries  in accordance
with the terms of this Agreement, including the terms of Section 11-51-302(6) of
the  Colorado   Statute,   in  a  segregated  trust  account  ("Trust  Account")
established by the Trustee at Lehman Brothers Inc.;

            (b) Manage,  supervise and administer  the Trust Account  subject to
the terms and conditions set forth herein;

            (c) In a timely  manner,  upon the  instruction  of the Company,  to
invest and reinvest the Property in United States "Government Securities" within
the meaning of Section 2(a)(16) of the Investment  Company Act of 1940, having a
maturity of one hundred and eighty days or less;

<PAGE>

            (d) Collect and receive,  when due, all principal and income arising
from the Property,  which shall become part of the  "Property,"  as such term is
used herein;

            (e) Notify the  Company of all  communications  received  by it with
respect to any Property requiring action by the Company;

            (f)  Supply  any  necessary  information  or  documents  as  may  be
requested by the Company in connection with the Company's preparation of the tax
returns for the Trust Account;

            (g)  Participate  in  any  plan  or  proceeding  for  protecting  or
enforcing  any  right or  interest  arising  from the  Property  if, as and when
instructed by the Company to do so;

            (h) Render to the  Company and to EBC,  and to such other  person as
the Company may instruct,  monthly  written  statements of the activities of and
amounts in the Trust Account  reflecting all receipts and  disbursements  of the
Trust Account; and

            (i) Commence  liquidation of the Trust Account only after receipt of
and only in accordance with the terms of a letter ("Termination  Letter"),  in a
form  substantially  similar  to that  attached  hereto as  either  Exhibit A or
Exhibit B, signed on behalf of the Company by its  President  or Chairman of the
Board and Secretary or Assistant Secretary,  and complete the liquidation of the
Trust Account and  distribute the Property in the Trust Account only as directed
in the Termination Letter and the other documents referred to therein.

2.    Agreements  and  Covenants of the Company.  The Company  hereby agrees and
covenants to:

            (a) Give all  instructions  to the  Trustee  hereunder  in  writing,
signed by the Company's President or Chairman of the Board. In addition,  except
with  respect to its duties under  paragraph  1(i) above,  the Trustee  shall be
entitled  to rely on,  and shall be  protected  in  relying  on,  any  verbal or
telephonic  advice or instruction which it in good faith believes to be given by
any one of the persons authorized above to give written  instructions,  provided
that the Company shall promptly confirm such instructions in writing;

            (b) Hold the Trustee  harmless  and  indemnify  the Trustee from and
against,   any  and  all  expenses,   including   reasonable  counsel  fees  and
disbursements,  or loss suffered by the Trustee in  connection  with any action,
suit or other proceeding  brought against the Trustee involving any claim, or in
connection with any claim or demand which in any way arises out of or relates to
this Agreement,  the services of the Trustee  hereunder,  or the Property or any
income earned from  investment  of the Property,  except for expenses and losses
resulting from the Trustee's gross  negligence or willful  misconduct.  Promptly
after  the  receipt  by  the  Trustee  of  notice  of  demand  or  claim  or the
commencement  of any action,  suit or proceeding,  pursuant to which the Trustee
intends  to seek  indemnification  under  this  paragraph,  it shall  notify the
Company in writing of such claim  (hereinafter  referred to as the  "Indemnified
Claim").  The  Trustee  shall have the right to conduct  and manage the  defense
against such  Indemnified  Claim,  provided,  that the Trustee  shall obtain the
consent of the Company with respect to the  selection of counsel,  which consent
shall not be  unreasonably  withheld.  The  Trustee  may not agree to settle any
Indemnified Claim without the prior written consent of the Company.  The Company
may participate in such action with its own counsel; and

                                       2
<PAGE>

            (c) Pay the  Trustee  an  initial  acceptance  fee of $1,000  and an
annual fee of $3,000 (it being expressly  understood that the Property shall not
be used to pay  such  fee).  The  Company  shall  pay the  Trustee  the  initial
acceptance  fee  and  first  year's  fee at the  consummation  of  the  IPO  and
thereafter on the anniversary of the Effective Date. The Trustee shall refund to
the Company the fee (on a pro rata basis) with  respect to any period  after the
liquidation  of the Trust Fund.  The Company  shall not be  responsible  for any
other fees or charges of the Trustee except as may be provided in paragraph 2(b)
hereof (it being  expressly  understood  that the Property  shall not be used to
make any payments to the Trustee under such paragraph).

3.    Limitations  of  Liability.  The Trustee shall have no  responsibility  or
liability to:

            (a) Take any  action  with  respect to the  Property,  other than as
directed in  paragraph 1 hereof and the Trustee  shall have no  liability to any
party except for  liability  arising out of its own gross  negligence or willful
misconduct;

            (b) Institute any proceeding for the collection of any principal and
income  arising from, or  institute,  appear in or defend any  proceeding of any
kind with  respect  to,  any of the  Property  unless  and  until it shall  have
received instructions from the Company given as provided herein to do so and the
Company  shall have  advanced or  guaranteed  to it funds  sufficient to pay any
expenses incident thereto;

            (c) Change the investment of any Property,  other than in compliance
with paragraph 1(c);

            (d) Refund any depreciation in principal of any Property;

            (e)  Assume  that the  authority  of any  person  designated  by the
Company to give  instructions  hereunder shall not be continuing unless provided
otherwise  in such  designation,  or unless the Company  shall have  delivered a
written revocation of such authority to the Trustee;

            (f) The other parties  hereto or to anyone else 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,  except  for its  gross
negligence or willful misconduct. The Trustee 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  Trustee),  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
Trustee,  in good  faith,  to be genuine  and to be signed or  presented  by the
proper  person or  persons.  The  Trustee  shall  not be bound by any  notice or
demand, or any waiver, modification, termination or rescission of this agreement
or any of the terms hereof,  unless evidenced by a written instrument  delivered
to the  Trustee  signed by the  proper  party or parties  and,  if the duties or
rights of the  Trustee  are  affected,  unless it shall  give its prior  written
consent thereto;

                                       3
<PAGE>

            (g)  Verify  the  correctness  of the  information  set forth in the
Registration  Statement or to confirm or assure that any acquisition made by the
Company or any other action taken by it is as contemplated  by the  Registration
Statement; and

            (h) Pay any taxes on behalf of the Trust Account (it being expressly
understood  that the  Property  shall not be used to pay any such taxes and that
such  taxes,  if any,  shall be paid by the  Company  from funds not held in the
Trust Account).

4.    Termination. This Agreement shall terminate as follows:

            (a) If the  Trustee  gives  written  notice to the  Company  that it
desires to resign under this  Agreement,  the Company  shall use its  reasonable
efforts to locate a successor  trustee.  At such time that the Company  notifies
the Trustee that a successor  trustee has been  appointed by the Company and has
agreed to become  subject  to the terms of this  Agreement,  the  Trustee  shall
transfer the management of the Trust Account to the successor trustee, including
but not limited to the transfer of copies of the reports and statements relating
to the Trust  Account,  whereupon  this  Agreement  shall  terminate;  provided,
however, that, in the event that the Company does not locate a successor trustee
within ninety days of receipt of the  resignation  notice from the Trustee,  the
Trustee may submit an application to have the Property deposited with the United
States  District  Court  for the  Southern  District  of New York and upon  such
deposit, the Trustee shall be immune from any liability whatsoever;

            (b) At such time that the Trustee has completed the  liquidation  of
the Trust Account in accordance  with the  provisions of paragraph  1(i) hereof,
and   distributed  the  Property  in  accordance  with  the  provisions  of  the
Termination  Letter,  this  Agreement  shall  terminate  except with  respect to
Paragraph 2(b); or

            (c) On such date after _____________, 2007 when the Trustee deposits
the Property with the United States District Court for the Southern  District of
New York in the event that,  prior to such date,  the Trustee has not received a
Termination Letter from the Company pursuant to paragraph 1(i).

5.    Miscellaneous.

            (a) The Company and the Trustee  each  acknowledge  that the Trustee
will  follow the  security  procedures  set forth  below  with  respect to funds
transferred from the Trust Account.  Upon receipt of written  instructions,  the
Trustee will confirm  such  instructions  with an  Authorized  Individual  at an
Authorized  Telephone  Number listed on the attached  Exhibit C. The Company and
the Trustee will each restrict  access to confidential  information  relating to
such security procedures to authorized persons. Each party must notify the other
party  immediately  if it has reason to believe  unauthorized  persons  may have
obtained  access  to  such  information,  or of any  change  in  its  authorized
personnel.  In  executing  funds  transfers,  the Trustee will rely upon account
numbers or other  identifying  numbers of a beneficiary,  beneficiary's  bank or
intermediary  bank,  rather than names.  The Trustee shall not be liable for any
loss,  liability  or expense  resulting  from any error in an account  number or
other  identifying  number,  provided it has accurately  transmitted the numbers
provided.

                                       4
<PAGE>

            (b) This  Agreement  shall be governed by and construed and enforced
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.  It may  be  executed  in  several
counterparts, each one of which shall constitute an original, and together shall
constitute but one instrument.

            (c) This Agreement  contains the entire agreement and  understanding
of the parties hereto with respect to the subject matter hereof.  This Agreement
or any  provision  hereof may only be changed,  amended or modified by a writing
signed by each of the parties hereto;  provided,  however,  that no such change,
amendment or modification  may be made without the prior written consent of EBC.
As to any  claim,  cross-claim  or  counterclaim  in any  way  relating  to this
Agreement, each party waives the right to trial by jury.

            (d) The parties hereto consent to the  jurisdiction and venue of any
state or federal  court  located in the City of New York,  Borough of Manhattan,
for purposes of resolving any disputes hereunder.

            (e) Any notice,  consent or request to be given in  connection  with
any of the terms or provisions of this  Agreement  shall be in writing and shall
be sent by express mail or similar  private courier  service,  by certified mail
(return receipt requested), by hand delivery or by facsimile transmission:

            if to the Trustee, to:

                  Continental Stock Transfer
                    & Trust Company
                  17 Battery Place
                  New York, New York 10004
                  Attn: Steven G. Nelson
                  Fax No.:  (212) 509-5150

            if to the Company, to:

                  Chardan North China Acquisition Corporation
                  625 Broadway
                  Suite 1111
                  San Diego, California 92101
                  Attn: Dr. Richard D. Propper, Chairman
                  Fax No.:  (858) 847-9090

            in either case with a copy to:

                                       5
<PAGE>

                  EarlyBirdCapital, Inc.
                  275 Madison Avenue, Suite 1203
                  New York, New York 10016
                  Attn: David M. Nussbaum, Chairman
                  Fax No.:  (212) 269-3796

            (f) This  Agreement  may not be assigned by the Trustee  without the
prior consent of the Company.

            (g) Each of the Trustee and the Company  hereby  represents  that it
has the full  right and power and has been duly  authorized  to enter  into this
Agreement and to perform its respective  obligations as contemplated  hereunder.
The Trustee acknowledges and agrees that it shall not make any claims or proceed
against  the  Trust  Account,  including  by way of  set-off,  and  shall not be
entitled to any funds in the Trust Account under any circumstance.

            (h) Each of the Company and the Trustee hereby  acknowledge that EBC
is a third party beneficiary of this Agreement.

                                       6
<PAGE>

            IN WITNESS  WHEREOF,  the parties have duly executed this Investment
Management Trust Agreement as of the date first written above.

                                     CONTINENTAL STOCK TRANSFER & TRUST COMPANY,
                                     as Trustee


                                     By:
                                         ------------------------------------
                                          Name:
                                          Title:



                                     CHARDAN NORTH CHINA ACQUISITION CORPORATION


                                     By:
                                         ------------------------------------
                                         Name:  Dr. Richard D. Propper
                                         Title: Chairman


                                       7
<PAGE>

                                                                       EXHIBIT A

                             [Letterhead of Company]

                                       [Insert date]

Continental Stock Transfer
  & Trust Company
17 Battery Place
New York, New York 10004
Attn:  Steven Nelson

            Re:   Trust Account No. 530-        Termination Letter
                  ------------------------------------------------------

Gentlemen:

            Pursuant  to  paragraph  1(i)  of the  Investment  Management  Trust
Agreement  between Chardan North China Acquisition  Corporation  ("Company") and
Continental Stock Transfer & Trust Company ("Trustee"),  dated as of __________,
2005  ("Trust  Agreement"),  this is to advise you that the  Company has entered
into  an  agreement  ("Business  Agreement")  with  __________________  ("Target
Business") to consummate a business  combination with Target Business ("Business
Combination")  on or about [insert date].  The Company shall notify you at least
48 hours in advance  of the  actual  date of the  consummation  of the  Business
Combination ("Consummation Date").

            In  accordance  with the  terms of the  Trust  Agreement,  we hereby
authorize you to commence  liquidation  of the Trust Account to the effect that,
on the  Consummation  Date,  all of  funds  held in the  Trust  Account  will be
immediately  available  for transfer to the account or accounts that the Company
shall direct on the Consummation Date.

            On the  Consummation  Date (i) counsel for the Company shall deliver
to  you  written  notification  that  (a)  the  Business  Combination  has  been
consummated  and (b) the provisions of Section  11-51-302(6)  and Rule 51-3.4 of
the Colorado  Statute have been met, and (ii) the Company  shall  deliver to you
written instructions with respect to the transfer of the funds held in the Trust
Account  ("Instruction  Letter").  You are hereby  directed  and  authorized  to
transfer the funds held in the Trust  Account  immediately  upon your receipt of
the counsel's letter and the Instruction Letter, in accordance with the terms of
the  Instruction  Letter.  In the event that certain  deposits held in the Trust
Account may not be liquidated by the Consummation Date without penalty, you will
notify the  Company of the same and the Company  shall  direct you as to whether
such  funds  should  remain  in the  Trust  Account  and  distributed  after the
Consummation Date to the Company.  Upon the distribution of all the funds in the
Trust  Account  pursuant  to the  terms  hereof,  the Trust  Agreement  shall be
terminated.

            In the event that the Business Combination is not consummated on the
Consummation  Date  described in the notice thereof and we have not notified you
on or before the original Consummation Date of a new Consummation Date, then the
funds held in the Trust  Account  shall be  reinvested  as provided in the Trust
Agreement on the business day immediately following the Consummation Date as set
forth in the notice.


                              Very truly yours,

                              CHARDAN NORTH CHINA ACQUISITION CORPORATION


                                       8
<PAGE>

                              By:
                                  ----------------------------------
                                   Dr. Richard D. Propper, Chairman


                              By:
                                  ----------------------------------
                                   Kerry Propper, Secretary
cc: EarlyBirdCapital, Inc.


                                       9
<PAGE>

                                                                       EXHIBIT B


                             [Letterhead of Company]

                                       [Insert date]
Continental Stock Transfer
  & Trust Company
17 Battery Place
New York, New York 10004
Attn:


            Re:   Trust Account No. 530-        Termination Letter
                  ------------------------------------------------------

Gentlemen:

            Pursuant to paragraph 1(i) of the Investment Management Trust
Agreement  between Chardan North China Acquisition  Corporation  ("Company") and
Continental Stock Transfer & Trust Company ("Trustee"), dated as of ___________,
2005 ("Trust Agreement"), this is to advise you that the Company has been unable
to effect a Business  Combination  with a Target  Company  within the time frame
specified in the Company's prospectus relating to its IPO.

            In accordance with the terms of the Trust  Agreement,  we hereby (a)
certify to you that the  provisions of Section  11-51-302(6)  and Rule 51-3.4 of
the  Colorado  Statute  have  been  met  and  (b)  authorize  you,  to  commence
liquidation  of the Trust  Account.  You will  notify the Company and the paying
agent holding the Trust  Account  ("Designated  Paying  Agent") in writing as to
when all of the funds in the  Trust  Account  will be  available  for  immediate
transfer  ("Transfer Date"). The Designated Paying Agent shall thereafter notify
you as to the account or accounts of the Designated  Paying Agent that the funds
in the Trust Account  should be  transferred to on the Transfer Date so that the
Designated  Paying Agent may commence  distribution  of such funds in accordance
with the  Company's  instructions.  You shall have no  obligation to oversee the
Designated  Paying Agent's  distribution  of the funds.  Upon the payment to the
Designated  Paying  Agent  of all the  funds in the  Trust  Account,  the  Trust
Agreement shall be terminated.

                              Very truly yours,

                              CHARDAN NORTH CHINA ACQUISITION CORPORATION


                              By:
                                  ----------------------------------
                                  Dr. Richard D. Propper, Chairman


                              By:
                                  ----------------------------------
                                  Kerry Propper, Secretary
cc: EarlyBirdCapital, Inc.
     Marlene Krauss, M.D., Secretary
     ______________, Secretary

                                       10
<PAGE>

                                    EXHIBIT C




AUTHORIZED INDIVIDUAL(S)                        AUTHORIZED
FOR TELEPHONE CALL BACK                         TELEPHONE NUMBER(S)
-----------------------                         -------------------


Company:

Chardan North China Acquisition Corporation
625 Broadway
Suite 1111
San Diego, California 92101
Attn:  Dr. Richard D. Propper, Chairman           (858) 847-9000

Trustee:

Continental Stock Transfer
  & Trust Company
17 Battery Place
New York, New York 10004
Attn:  Steven G. Nelson, Chairman                 (212) 845-3200