Document:

EXHIBIT
      10.7

     

    STOCK
      ESCROW AGREEMENT

    

    STOCK
      ESCROW AGREEMENT, dated as of _____________, 2006 (“Agreement”), by and among
      CHINA FORTUNE ACQUISITION CORP., a Cayman Islands corporation (“Company”), BO
      YU, YUFENG ZHANG, GANG CHEN, AIDAN STRETCH and JAMES WALSH (collectively
“Initial Shareholders”) and CONTINENTAL STOCK TRANSFER & TRUST COMPANY,
a
      New
      York corporation (“Escrow
      Agent”).

    

    WHEREAS,
      the Company has entered into an Underwriting Agreement, dated __________, 2006
      (“Underwriting Agree-ment”), with EarlyBirdCapital, Inc. (“EBC”) acting as
      representative of the several underwriters (collectively, the “Underwriters”),
      pur-suant to which, among other matters, the Underwriters have agreed to
      purchase 8,000,000 units (“Units”) of the Company. Each Unit consists of one
      ordinary share of the Company, par value $.0001 per share (“Ordinary Shares”),
      and one Warrant, each Warrant to purchase one Ordinary Share, all as more fully
      described in the Company’s final Prospectus, dated _________, 2006
      (“Prospectus”) com-prising part of the Company’s Registration Statement on Form
      F-1 (File No. 333-_______) under the Securities Act of 1933, as
      amended (“Registration Statement”), declared effective on ________, 2006
      (“Effective Date”).

    

    WHEREAS,
      the Initial Shareholders have agreed as a condition of the sale of the Units
      to
      deposit their Ordinary Shares of the Company, as set forth opposite their
      respective names in Exhibit A attached hereto (collec-tively “Escrow Shares”),
      in escrow as hereinafter provided.

    

    WHEREAS,
      the Company and the Initial Shareholders desire that the Escrow Agent accept
      the
      Escrow Shares, in escrow, to be held and disbursed as hereinafter
      provided.

    

    IT
      IS
      AGREED:

     

    1. Appointment
      of Escrow Agent.
      The
      Company and the Initial Shareholders 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 Escrow Shares.
      On or
      before the Effective Date, each of the Initial Shareholders shall deliver to
      the
      Escrow Agent certificates representing his respective Escrow Shares, to be
      held
      and disbursed subject to the terms and conditions of this Agree-ment. Each
      Initial Shareholder acknowledges that the certi-ficate representing his Escrow
      Shares is legended to reflect the deposit of such Escrow Shares under this
      Agreement.

    

    3. Disbursement
      of the Escrow Shares.
      The
      Escrow Agent shall hold the Escrow Shares as follows: (i)
      with
      respect to half of the Escrow Shares, until nine months after the consummation
      of a business combination and (ii) with respect to the remainder of the Escrow
      Shares, one year after the consummation of a business combination (collectively,
      the “Escrow Period”). On each of such dates, upon written instructions from each
      Initial Shareholder, the Escrow Agent shall disburse such amount of each of
      the
      Initial Shareholder’s Escrow Shares (and any applicable stock power) to such
      Initial Shareholder; pro-vided, however, that if the Escrow Agent is notified
      by
      the Company pursuant to Section 6.7 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 Escrow Shares; provided further,
      however, that if, after the Company

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    consummates
      a Business Combination (as such term is defined in the Registration Statement),
      it (or the surviving entity) subsequently consummates a liquidation, merger,
      stock exchange or other similar transaction which results in all of the
      shareholders of such entity having the right to exchange their Ordinary Shares
      for cash, securities or other property, then the Escrow Agent will, upon receipt
      of a certificate, executed by the Chief Executive Officer of the Company, in
      form reasonably acceptable to the Escrow Agent, that such transaction is then
      being consummated, release the Escrow Shares to the Initial Shareholders upon
      consummation of the transaction so that they can similarly participate. The
      Escrow Agent shall have no further duties hereunder after the disbursement
      or
      destruction of the Escrow Shares in accordance with this
      Section 3.

    

    4. Rights
      of Initial Shareholders in Escrow Shares.
      

    

    4.1 Voting
      Rights as a Shareholder.
      Subject
      to the terms of the Insider Letter described in Section 4.4 hereof and except
      as
      herein provided, the Initial Shareholders shall retain all of their rights
      as
      shareholders of the Company during the Escrow Period, includ-ing, without
      limitation, the right to vote such shares.

    

    4.2 Dividends
      and Other Distributions in Respect of the Escrow Shares.
      During
      the Escrow Period, all dividends payable in cash with respect to the Escrow
      Shares shall be paid to the Initial Shareholders, but all dividends payable
      in
      stock or other non-cash property (“Non-Cash Dividends”) shall be delivered to
      the Escrow Agent to hold in accordance with the terms hereof. As used herein,
      the term “Escrow Shares” shall be deemed to include the Non-Cash Dividends
      distributed thereon, if any.

    

    4.3 Restrictions
      on Transfer.
      During
      the Escrow Period, no sale, transfer or other disposition may be made of any
      or
      all of the Escrow Shares except (i) by gift to a member of Initial Shareholder’s
      immediate family or to a trust, the beneficiary of which is an Initial
      Shareholder or a member of an Initial Shareholder’s immediate family, (ii) by
      virtue of the laws of descent and distribution upon death of any Initial
      Shareholder, or (iii) pursuant to a qualified domestic relations order;
provided,
      however,
      that
      such permissive transfers may be implemented only upon the respective
      transferee’s written agreement to be bound by the terms and conditions of this
      Agreement and of the Insider Letter signed by the Initial Shareholder
      transferring the Escrow Shares. During the Escrow Period, the Initial
      Stockholders shall not pledge or grant a security interest in the Escrow Shares
      or grant a security interest in their rights under this Agreement.

    

    4.4 Insider
      Letters.
      Each of
      the Initial Shareholders has executed a letter agreement with EBC and the
      Company, dated as indicated on Exhibit A hereto, and which is filed as an
      exhibit to the Registration Statement (“Insider Letter”), respecting the rights
      and obligations of such Initial Shareholder in certain events, including but
      not
      limited to the liquidation 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 pro-tected in acting upon any order, notice, demand, certifi-cate,
      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

    
      
         

      

      
        -2-

        
          

        

      

      
         

      

    

    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, termina-tion or rescission
      of this Agree-ment 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 it 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 coun-sel fees and disbursements, or loss
      suffered by the Escrow Agent in connection with any action, suit or other
      proceeding involving any claim which in any way, directly or indirectly, arises
      out of or relates to this Agreement, the services of the Escrow Agent hereunder,
      or the Escrow Shares 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
      com-mence-ment of any action, suit or proceeding, the Escrow Agent shall notify
      the other parties hereto in writing. In the event of the receipt of such notice,
      the Escrow Agent, in its sole discre-tion, may commence an action in the nature
      of interpleader in an appropriate court to determine ownership or disposition
      of
      the Escrow Shares or it may deposit the Escrow Shares with the clerk of any
      appropriate court or it may retain the Escrow Shares 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 circum-stances the Escrow Shares 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 reason-able compensation from the Company
      for
      all services rendered by it hereunder. The Escrow Agent shall also be entitled
      to reimburse-ment from the Company for all expenses paid or incurred by it
      in
      the administration of its duties hereunder including, but not limited to, all
      counsel, advisors’ and agents’ fees and disburse-ments 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 Initial
      Shareholders shall deliver or cause to be delivered to the Escrow Agent such
      further documents and instru-ments 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 Agree-ment, to evidence compliance herewith
      or to assure itself that it is protected in acting hereunder.

    

    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 and such
      resignation shall become effective as herein-after provided. Such resignation
      shall become effective at such time that the Escrow Agent shall turn over to
      a
      suc-cessor escrow agent appointed by the Company, the Escrow Shares held
      hereunder. If no new escrow agent is so appointed within the 60 day period
      follow-ing the giv-ing of such notice of resignation, the Escrow Agent may
      deposit the Escrow Shares 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, pro-vided, however, that such resignation shall become effec-tive
      only
      upon acceptance of appointment by a successor escrow agent as provided in
      Section 5.5.

    
      
         

      

      
        -3-

        
          

        

      

      
         

      

    

    

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

    

    6. Miscellaneous.

    

    6.1 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.

    

    6.2 Third
      Party Beneficiaries.
      Each of
      the Initial Shareholders hereby acknowledges that the Underwriters are third
      party beneficiaries of this Agreement and this Agreement may not be modified
      or
      changed without the prior written consent of EBC. 

    

    6.3 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
      to
      the charged. 

    

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

    

    6.5 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.

    

    6.6 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:

            

    

    

    
      	 	 	 	
              China
                Fortune Acquisition Corp.

            

    

    Jinmao
      Tower

    88
      Century Boulevard, Suite 4403

    Pudong,
      Shanghai

    People’s
      Republic of China 200121

    Attn: Chairman

    

    If
      to a
      Shareholder, 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

    Attn: Chairman

     

    
      
         

      

      
        -4-

        
          

        

      

      
         

      

    

    

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

     

    and:

    

    EarlyBirdCapital,
      Inc.

    275
      Madison Avenue, Suite 1203

    New
      York,
      New York 10016

    Attn: David
      M.
      Nussbaum, Chairman

    

    and:

    

    Graubard
      Miller

    The
      Chrysler Building

    405
      Lexington Avenue

    New
      York,
      New York 10174

    Attn: David
      Alan Miller, Esq.

    

    and:

    

    Blank
      Rome LLP

    The
      Chrysler Building

    405
      Lexington Avenue

    New
      York,
      New York 10174

    Attn: Robert
      J.
      Mittman, Esq.

     

    
      
         

      

      
        -5-

        
          

        

      

      
         

      

       

    

    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.

    

     6.7 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 within the time period(s) specified in the
      Prospectus.

     

    
      
         

      

      
        -6-

        
          

        

      

      
         

      

    

    

    WITNESS
      the execution of this Agreement as of the date first above written.

    

    CHINA
      FORTUNE ACQUISITION CORP.

    

    

    By:
       ______________________________  

     

     

    INITIAL
      SHAREHOLDERS:

     

    ___________________________

    Bo
      Yu

    

    

    ___________________________

    Yufeng
      Zhang

    

    

    ___________________________

    Gang
      Chen

    

    

    ___________________________

    Aidan
      Stretch

     

    

    ___________________________

    James
      Walsh

    

    

    

    CONTINENTAL
      STOCK TRANSFER

    &
      TRUST COMPANY

    

    

    By:________________________________

    Name:
      

    Title:
      

    
      
         

      

      
        -7-

        
          

        

      

      
         

      

    

     

    EXHIBIT
      A

    

    
      	
              Name
                and Address of 

              Initial
                Shareholder 

            	 	
              Number
                

              of
                Shares

            	 	
              Stock
                

              Certificate
                Number

            	 	
              Date
                of 

              Insider
                Letter

            
	 	 	 	 	 	 	 
	
              Bo
                Yu

              China
                Fortune Acquisition Corp.

              Jinmao
                Tower

              88
                Century Boulevard, Suite 4403

              Pudong,
                Shanghai

              People’s
                Republic of China 200121

            	 	
              1,440,000

            	 	
              1

            	 	
              September
                26, 2006

            
	 	 	 	 	 	 	 
	
              Yufeng
                Zhang

              China
                Fortune Acquisition Corp.

              Jinmao
                Tower

              88
                Century Boulevard, Suite 4403

              Pudong,
                Shanghai

              People’s
                Republic of China 200121

            	 	
              180,000

            	 	
              2

            	 	
              September
                26, 2006

            
	 	 	 	 	 	 	 
	
              Gang
                Chen

              China
                Fortune Acquisition Corp.

              Jinmao
                Tower

              88
                Century Boulevard, Suite 4403

              Pudong,
                Shanghai

              People’s
                Republic of China 200121

            	 	
              180,000

            	 	
              3

            	 	
              September
                26, 2006

            
	 	 	 	 	 	 	 
	
              Aidan
                Stretch

              1700 Seventh Avenue, Suite 2100

              Seattle,
                Washington 98101

            	 	
              100,000

            	 	
              4

            	 	
              September
                26, 2006

            
	 	 	 	 	 	 	 
	
              James
                Walsh

              1700 Seventh Avenue, Suite 2100

              Seattle,
                Washington 98101

            	 	
              100,000

            	 	
              4

            	 	
              September
                26, 2006EXHIBIT
        10.8

      

      CHINA
        FORTUNE ACQUISITION CORP.

      

       

      

      _____________
        ___, 2006

      

      Cathay
        Fortune Corp.

      Jinmao
        Tower

      88
        Century Boulevard, Suite 4403

      Pudong,
        Shanghai

      People’s
        Republic of China 200121

      

      

      Gentlemen:

      

      This
        letter will confirm our agreement that, commencing on the effective date
        (“Effective Date”) of the registration statement for the initial public offering
        (“IPO”) of the securities of China Fortune Acquisition Corp. (“CFAC”) and
        continuing until the earlier of the consummation by CFAC of a “Business
        Combination” (as described in CFAC’s IPO prospectus) or CFAC’s liquidation (the
“Termination Date”), Cathay Fortune Corp. shall make available to CFAC certain
        office and secretarial services as may be required by CFAC from time to time,
        situated at Jinmao Tower, 88 Century Boulevard, Suite 4403, Pudong, Shanghai,
        People’s Republic of China 200121. In exchange therefore, CFAC shall pay Cathay
        Fortune Corp. the sum of $7,500 per month on the Effective Date and continuing
        monthly thereafter until the Termination Date.

      

      

      Very
        truly yours,

       

       

      CHINA
        FORTUNE ACQUISITION CORP.

       

       

      By: ________________________________

      Name:

      
        	 	
                Title:
                  

              	
                 

              

      

      

      AGREED
        TO
        AND ACCEPTED BY:

      

      CATHAY
        FORTUNE CORP.

      

      

      By: _________________

      Name:

      Title:

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