Document:

Unassociated Document

    
      EXHIBIT
        10.6

      

      INVESTMENT
        MANAGEMENT TRUST AGREEMENT

       

      This
        Agreement is made as of _____________, 2007 by and between China Fortune
        Acquisition Corp. (the “Company”) and Continental Stock Transfer & Trust
        Company (“Trustee”).

      

      WHEREAS,
        the Company’s registration statement on Form F-1, No. 333-137797
        (“Registration Statement”), for its initial public offering of securities
        (“IPO”) has been declared effective as of the date hereof (“Effective Date”) by
        the Securities and Exchange Commission (capitalized terms used herein and
        not
        otherwise defined shall have the meanings set forth in the Registration
        Statement); and 

      

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

      

      WHEREAS,
        as described in the Registra-tion Statement, and in accordance with the
        Company’s Memorandum and Articles of Association, $61,760,000 of the gross
        proceeds of the IPO and sale of the Insider Units (as defined in the
        Registration Statement) ($71,072,000 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 con-di-tions 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; 

      

      (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 180 days or
        less,
        and/or
        in any open ended investment company registered under the Investment Company
        Act
        of 1940 that holds itself out as a money market fund selected by the Company
        meeting the conditions of paragraphs (c)(2), (c)(3) and (c)(4) of Rule 2a-7
        promulgated under the Investment Company Act of 1940, as determined by the
        Company;

      

      (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 docu-ments as may be requested by the Company
        in
        connection with the Com-pany’s preparation of its returns;

      

      (g) Participate
        in any plan or proceeding for protect-ing 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 and promptly 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 hereto, signed on behalf of the Company by its President or
        Chairman of the Board and Secre-tary or Assistant Secretary and affirmed
        by
        counsel for the Company, 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; provided,
        however,
        that in
        the event that a Termination Letter has not been received by the Trustee
        by the
        24-month anniversary of the consummation of the IPO (“Last Date”), the
        Trust Account shall be liquidated in accordance with the procedures set forth
        in
        the Termination Letter attached as Exhibit B hereto and distributed to the
        stockholders of record on the Last Date. In all cases, the Trustee shall
        provide
        EBC with a copy of any Termination Letters and/or any other correspondence
        that
        it receives with respect to any proposed withdrawal from the Trust Account
        promptly after it receives same. The provisions of this Section 1(i) may
        not be
        modified, amended or deleted under any circumstances.

      

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

      

      (a) Give
        all
        instructions to the Trustee here-under in writing, signed by the Company’s
        Chairman of the Board or President. In addi-tion, 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;

      
        
          
          

        

        
          -2-

          
            

          

        

        
          
          

        

      

      (b) Hold
        the
        Trustee harmless and indemnify the Trustee from and against, any and all
        expenses, includ-ing reason-able counsel fees and disbursements, or loss
        suf-fered by the Trustee in connection with any action, suit or other
        pro-ceeding 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
        indemnifica-tion 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 coun-sel, 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 unless such settlement includes a full
        release of the Company with respect to such Indemnified Claim. The Company
        may
        participate in such action with its own counsel; 

      

      (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);

      

      (d) Provide
        to the Trustee any letter of intent, agreement in principle or definitive
        agreement for a Business Combination that is executed on or prior to the
        First
        Date; and

      

      (e) In
        connection with any vote of the Company’s stockholders regarding a Business
        Combination, provide to the Trustee an affidavit or certificate of a firm
        regularly engaged in the business of soliciting proxies and/or tabulating
        stockholder votes (which firm may be the Trustee) verifying the vote of the
        Company’s stockholders regarding such Business Combination.

      

      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 Prop-erty unless and until it shall have received instructions from
        the
        Company given as provided here-in 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

      
        
          
          

        

        
          -3-

          
            

          

        

        
          
          

        

      

      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
        here-under shall not be continuing unless provided otherwise in such
        designa-tion, 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 suffer-ed 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 con-clusively and shall be protected in acting upon
        any
        order, notice, demand, certificate, opinion or advice of counsel (including
        counsel chosen by the Trustee), statement, instru-ment, 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 con-tained) 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 rescis-sion 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 par-ties and, if the duties or rights of the Trustee are affected,
        unless it shall give its prior written consent thereto;

      

      (g) Verify
        the correctness of the information set forth in the Registra-tion 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 any court in the State of
        New
        York or 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; or 

      

      (b) At
        such
        time that the Trustee has completed the liquidation of the Trust Account
        in
        accordance with the provi-sions of paragraph 1(i) hereof, and dis-tributed
        the
        Property in accordance with the provisions of the Termination Letter, this
        Agreement shall terminate except

      
        
          
          

        

        
          -4-

          
            

          

        

        
          
          

        

      

      with
        respect to Paragraph 2(b).

      

      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.

      

      (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 original or facsimile
        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. Except for Section 1(i) (which
        may
        not be amended under any circumstances), this Agreement or any provision
        here-of
        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 con-nection with any of the terms
        or
        provisions of this Agree-ment 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:

      
        
          
          

        

        
          -5-

          
            

          

        

        
          
          

        

      

      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:

       

      
        	 	 	 	
                China
                  Fortune Acquisition Corp.

              

      

      Jinmao
        Tower

      88
        Century Boulevard, Suite 4403

      Pudong,
        Shanghai

      People’s
        Republic of China 200121

      Attn: Chief
        Executive Officer

      Fax
        No.:
(___)
        ___-____

      

      in
        either
        case with a copy to:

      

      EarlyBirdCapital,
        Inc. 

      275
        Madison Avenue, Suite 1203

      New
        York,
        New York 10016

      Attn: David
        M.
        Nussbaum

      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-

          
            

          

        

        
          
          

        

      

      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:
        

      

      

      

      CHINA
        FORTUNE ACQUISITION CORP.

      

      

      By:
        ____________________________

      Name:
        

      Title:  

      
        
          
          

        

        
          -7-

          
            

          

        

        
          
          

        

      

       

      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 China
        Fortune Acquisition Corp. (“Company”) and Continental Stock Transfer & Trust
        Company (“Trustee”), dated as of __________, 2007 (“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 (a) [an affidavit] [a
        certificate] of __________________, which verifies the vote of the Company’s
        stockholders in connection with the Business Combination and (b) written
        instructions with respect to the trans-fer 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.

       

      
        
          
          

        

        
          -8-

          
            

          

        

        
          
          

        

      

       

      Very
        truly yours,

      CHINA
        FORTUNE ACQUISITION CORP.

      

      

      By:________________________________

      Bo
        Yu,
        Chairman of the Board

      

      

      By:________________________________

      Yufeng Zhang,
        Secretary

       

      cc:
        EarlyBirdCapital, Inc.

      
        
          
          

        

        
          -9-

          
            

          

        

        
          
          

        

      

      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 China
        Fortune Acquisition Corp. (“Company”) and Continental Stock Transfer & Trust
        Company (“Trustee”), dated as of ___________, 2007 (“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
        Memorandum and Articles of Association, as described in the Company’s prospectus
        relating to its IPO.

      

      In
        accordance with the terms of the Trust Agree-ment, 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 as promptly as practicable to stockholders of record on the
        Last
        Date (as defined in the Trust Agreement). You will notify the Company in
        writing
        as to when all of the funds in the Trust Account will be available for immediate
        transfer (“Transfer Date”) in accordance with the terms of the Trust Agreement
        and the Memorandum and Articles of Association of the Company. You shall
        commence distribution of such funds directly
        to the Company’s shareholders (other than with respect to the Initial Shares, as
        defined in the Company’s Prospectus dated ___________, 2007) in
        accordance with the terms of the Trust Agreement and the Memorandum and Articles
        of Association of the Company and you shall oversee the distribution of the
        funds. Upon the distribution of all the funds in the Trust Account, your
        obligations under the Trust Agreement shall be terminated.

      

      Very
        truly yours,

      

      CHINA
        FORTUNE ACQUISITION CORP.

      

      

      By:________________________________

      Bo
        Yu,
        Chairman of the Board

      

      

      By:________________________________

      Yufeng
        Zhang, Secretary

      

      cc:
        EarlyBirdCapital, Inc. 

      
        
          
          

        

        
          -10-

          
            

          

        

        
          
          

        

      

      EXHIBIT
        C

      

      

      

      

      
        	
                AUTHORIZED
                  INDIVIDUAL(S)

              	 	
                AUTHORIZED

              
	
                FOR
                  TELEPHONE CALL BACK 

              	 	
                TELEPHONE
                  NUMBER(S)

              
	 	 	 
	 	 	 
	
                Company:

              	 	 
	 	 	 
	
                China
                  Fortune Acquisition Corp.

              	 	 
	
                Jinmao
                  Tower

              	 	 
	
                88
                  Century Boulevard, Suite 4403

              	 	 
	
                Pudong,
                  Shanghai

              	 	 
	
                People’s
                  Republic of China 200121

              	 	 
	
                Attn:
                  Bo Yu

              	 	
                (___)
                  ___-____

              
	 	 	 
	
                Trustee:

              	 	 
	 	 	 
	
                Continental
                  Stock Transfer 

              	 	 
	
                &
                  Trust Company

              	 	 
	
                17
                  Battery Place

              	 	 
	
                New
                  York, New York 10004

              	 	 
	
                Attn:
                  Steven G. Nelson, Chairman

              	 	
                (212)
                  845-3200

              

      

       

      
        
          
          

        

        -11-Unassociated Document

    EXHIBIT
      10.7

     

    STOCK
      ESCROW AGREEMENT

    

    STOCK
      ESCROW AGREEMENT, dated as of _____________, 2007 (“Agreement”), by and among
      CHINA FORTUNE ACQUISITION CORP., a Cayman Islands corporation (“Company”), BO
      YU, YUFENG ZHANG, 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 __________, 2007
      (“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 _________, 2007
      (“Prospectus”) com-prising part of the Company’s Registration Statement on Form
      F-1 (File No. 333-137797) under the Securities Act of 1933, as amended
      (“Registration Statement”), declared effective on ________, 2007 (“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; provided,
      however, that if the Company consummates a Business Combination in which holders
      of more than 20% of the shares sold in the IPO exercise their conversion rights
      (as described more fully in the Prospectus), the Initial Shareholders agree
      that
      the Escrow Agent shall return to the Company for cancellation a number of Escrow
      Shares held by them so that the Initial Shareholders will collectively own
      no
      more than 23.81% of the Company's
      outstanding Ordinary Shares upon consummation of such Business Combination
      (without giving effect to any shares that may be issued in the Business
      Combination). 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

    

     

    ___________________________

    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

            	 	
              1,620,000

            	 	
              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

            
	 	 	 	 	 	 	 
	
              Aidan
                Stretch

              1700
                Seventh Avenue, Suite 2100

              Seattle,
                Washington 98101

            	 	
              100,000

            	 	
              3

            	 	
              September
                26, 2006

            
	 	 	 	 	 	 	 
	
              James
                Walsh

              1700
                Seventh Avenue, Suite 2100

              Seattle,
                Washington 98101

            	 	
              100,000

            	 	
              4

            	 	
              September
                26, 2006

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