Document:

Unassociated Document

     

    

    
      	 	
              January
                31, 2007

            

    

    

    

    China
      Discovery Acquisition Corp.

    2666
      East
      Bayshore Road, Suite B

    Palo
      Alto, California 94303

     

    EarlyBirdCapital,
      Inc.

    275
      Madison Avenue

    Suite
      1203

    New
      York,
      New York 10016

    

    
      	 	 	
              Re:

            	
              Initial
                Public Offering

            

    

    

    Gentlemen:

    

    The
      undersigned shareholder, officer and director of China Discovery Acquisition
      Corp. (“Company”), in consideration of EarlyBirdCapital, Inc. (“EBC”) entering
      into a letter of intent (“Letter of Intent”) to underwrite an initial public
      offering of the securities of the Company (“IPO”) and embarking on the IPO
      process, hereby agrees as follows (certain capitalized terms used herein are
      defined in paragraph 14 hereof):

    

    1. If
      the
      Company solicits approval of its shareholders of a Business Combination, the
      undersigned will vote all Insider Shares owned by him (including those included
      within the Insider Units) in accordance with the majority of the votes cast
      by
      the holders of the IPO Shares. 

    

    2. In
      the
      event that the Company fails to consummate a Business Combination within 24
      months from the effective date (“Effective Date”) of the registration statement
      relating to the IPO, the undersigned will (i) cause the Trust Fund (as defined
      in the Letter of Intent) to be liquidated and distributed to the holders of
      IPO
      Shares and (ii) take all reasonable actions within his power to cause the
      Company to liquidate as soon as reasonably practicable. The undersigned hereby
      waives any and all right, title, interest or claim of any kind in or to any
      distribution of the Trust Fund and any remaining net assets of the Company
      as a
      result of such liquidation with respect to his Insider Shares and shares
      underlying the Insider Units (“Claim”) and hereby waives any Claim the
      undersigned may have in the future as a result of, or arising out of, any
      contracts or agreements with the Company and will not seek recourse against
      the
      Trust Fund for any reason whatsoever. In the event of the liquidation of the
      Trust Fund, the undersigned agrees to indemnify and hold harmless the Company
      against any and all loss, liability, claims, damage and expense whatsoever
      (including, but not limited to, any and all legal or other expenses reasonably
      incurred in investigating, preparing or defending against any litigation,
      whether pending or threatened, or any claim whatsoever) which the Company may
      become subject as a result of any claim by any vendor or other person who is
      owed money by the Company for services rendered or products sold or contracted
      for, or by any target business, but only to the extent necessary to ensure
      that
      such loss, liability, claim, damage or expense does not reduce the amount in
      the
      Trust Fund.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

      
        China
          Discovery Acquisition Corp.

        EarlyBirdCapital,
          Inc.

        January
          31, 2007

        Page
          2

      

       

    

    3. In
      order
      to minimize potential conflicts of inter-est which may arise from multiple
      affiliations, the undersigned agrees to present to the Company for its
      consideration, prior to presentation to any other person or entity, any suitable
      opportunity to acquire an operating business, until the earlier of the
      consummation by the Company of a Business Combination, the liquidation of the
      Company or until such time as the undersigned ceases to be an officer or
      director of the Company, subject to any pre-existing fiduciary and contractual
      obligations the undersigned might have.

    

    4. The
      undersigned acknowledges and agrees that the Company will not consummate any
      Business Combination which involves a company which is affiliated with any
      of
      the Insiders unless
      the Company obtains an opinion from an independent investment banking firm
      reasonably acceptable to EBC that the business combination is fair to the
      Company’s shareholders from a financial perspective.

     

    5. Neither
      the undersigned, any member of the family of the undersigned, nor any affiliate
      (“Affiliate”) of the undersigned will be entitled to receive and will not accept
      any compensation for services rendered to the Company prior to or in connection
      with the consummation of the Business Combination; provided that the undersigned
      shall be entitled to reimbursement from the Company for his out-of-pocket
      expenses incurred in connection with seeking and consummating a Business
      Combination.  

     

    6. Neither
      the undersigned, any member of the family of the undersigned, nor any Affiliate
      of the undersigned will be entitled to receive or accept a finder’s fee or any
      other compensation in the event the undersigned, any member of the family of
      the
      undersigned or any Affiliate of the undersigned originates a Business
      Combination. 

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

      
        China
          Discovery Acquisition Corp.

        EarlyBirdCapital,
          Inc.

        January
          31, 2007

        Page
          3

      

       

    

    7. On
      the
      Effective Date, the undersigned will escrow his Insider Shares until one year
      after the Company consummates a Business Combination subject to the terms of
      a
      Stock Escrow Agreement which the Company will enter into with the undersigned
      and an escrow agent acceptable to the Company.

    

    8. The
      undersigned agrees to be the Chief Executive Officer and Director of the Company
      until the earlier of the consummation by the Company of a Business Combination
      or the liquidation of the Company. The undersigned’s biographical information
      furnished to the Company and EBC and attached hereto as Exhibit A is true and
      accurate in all respects, does not omit any material information with respect
      to
      the undersigned’s background and contains all of the information required to be
      disclosed pursuant to Item 401 of Regulation S-K, promulgated under the
      Securities Act of 1933. The undersigned’s Questionnaire furnished to the Company
      and EBC and annexed as Exhibit B hereto is true and accurate in all
      respects. The undersigned represents and warrants that:

    

    (a) he
      is not
      subject to, or a respondent in, any legal action for, any injunction,
      cease-and-desist order or order or stipulation to desist or refrain from any
      act
      or practice relating to the offering of securities in any
      jurisdiction;

    

    (b) he
      has
      never been convicted of or pleaded guilty to any crime (i) involving any fraud
      or (ii) relating to any financial transaction or handling of funds of another
      person, or (iii) pertaining to any dealings in any securities and he is not
      currently a defendant in any such criminal proceeding; and

    

    (c) he
      has
      never been suspended or expelled from membership in any securities or
      commodities exchange or association or had a securities or commodities license
      or registration denied, suspended or revoked.

    

    9. The
      undersigned has full right and power, without violating any agreement by which
      he is bound, to enter into this letter agreement and to serve as Chief Executive
      Officer and Director of the Company.

    

    10. The
      undersigned hereby waives his right to exercise conversion rights or appraisal
      rights with respect to any Ordinary Shares of the Company owned or to be owned
      by the undersigned, directly or indirectly, and agrees that he will not seek
      conversion or appraisal with respect to such shares in connection with any
      vote
      to approve a Business Combination.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

      
        China
          Discovery Acquisition Corp.

        EarlyBirdCapital,
          Inc.

        January
          31, 2007

        Page
          4

      

       

    

    11. The
      undersigned hereby agrees to not propose, or vote in favor of, an amendment
      to
      the Company’s Memorandum and Articles of Association to extend the period of
      time in which the Company must consummate a Business Combination prior to its
      liquidation. Should such a proposal be put before shareholders other than
      through actions by the undersigned, the undersigned hereby agrees to vote
      against such proposal. This paragraph may not be modified or amended under
      any
      circumstances.

    

    12. In
      the
      event that the Company does not consummate a Business Combination and must
      liquidate and its remaining net assets are insufficient to complete such
      liquidation, the undersigned agrees to advance such funds necessary to complete
      such liquidation and agrees not to seek repayment for such
      expenses.

    

    13. The
      undersigned authorizes any employer, financial institution, or consumer credit
      reporting agency to release to EBC and its legal representatives or agents
      (including any investigative search firm retained by EBC) any information they
      may have about the undersigned’s background and finances (“Information”).
      Neither EBC nor its agents shall be violating the undersigned’s right of privacy
      in any manner in requesting and obtaining the Information and the undersigned
      hereby releases them from liability for any damage whatsoever in that
      connection.

    

    14. This
      letter agreement shall be governed by and construed and enforced in accor-dance
      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.
      The
      undersigned hereby (i) agrees that any action, proceeding or claim against
      him
      arising out of or relating in any way to this letter agreement (a “Proceeding”)
      shall be brought and enforced in the courts of the State of New York of the
      United States of America for the Southern District of New York, and irrevocably
      submits to such jurisdiction, which jurisdiction shall be exclu-sive, (ii)
      waives any objection to such exclusive jurisdiction and that such courts
      represent an inconvenient forum and (iii) irrevocably agrees to appoint Graubard
      Miller as agent for the service of process in the State of New York to receive,
      for the undersigned and on his behalf, service of process in any Proceeding.
      If
      for any reason such agent is unable to act as such, the undersigned will
      promptly notify the Company and EBC and appoint a substitute agent acceptable
      to
      each of the Company and EBC within 30 days and nothing in this letter will
      affect the right of either party to serve process in any other manner permitted
      by law.  

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

      
        China
          Discovery Acquisition Corp.

        EarlyBirdCapital,
          Inc.

        January
          31, 2007

        Page
          5

      

       

    

    15. As
      used
      herein, (i) a “Business Combination” shall mean the acquisition, through a stock
      exchange, asset acquisition or other similar business combination, of an
      operating business, or control of such operating business, through contractual
      arrangements, that has its principal operations located in the People’s Republic
      of China; (ii) “Insiders” shall mean all officers, directors and shareholders of
      the Company immediately prior to the IPO; (iii) “Insider Shares” shall mean all
      of the shares of Common Stock of the Company acquired by an Insider prior to
      the
      IPO; (iv) “Insider Units” means the Units being sold privately by the Company to
      certain of the Insiders; and (v) “IPO Shares” shall mean the shares of Common
      Stock issued in the Company’s IPO.

     

     

    
      	 	
              Michael
                Hsu

              Print
                Name of Insider

              

              

              

              /s/
                Michael Hsu

              Signature

            

    

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Exhibit
      A

     

    
      
        Michael
          Hsu
          has been
          our chief executive officer and a member of our board of directors since
          our
          inception. Since April 2004, Mr. Hsu has been the chief executive officer
          of
          eWings Technologies, Inc., a worldwide provider of products and technology
          for
          Speech / Data / Voice convergent applications. Since June 1995, Mr. Hsu
          has also
          been the president of Sky Capital Partners, Inc., an investment management
          and
          advisory services firm. From 1989 to June 1995, Mr. Hsu was the founder
          and
          executive vice president of First Taiwan Investment Banking Group, a private
          investment firm. Mr. Hsu received a B.S. from Tung Hai University in Taiwan
          and
          a M.S. from the National Chiao Tung University in Taiwan.Unassociated Document

    January
      31, 2007

    

    

    China
      Discovery Acquisition Corp.

    2666
      East
      Bayshore Road, Suite B

    Palo
      Alto, California 94303

     

    EarlyBirdCapital,
      Inc.

    275
      Madison Avenue

    Suite
      1203

    New
      York,
      New York 10016

    

    
      	 	 	
              Re:

            	
              Initial
                Public Offering

            

    

    

    Gentlemen:

    

    The
      undersigned shareholder of China Discovery Acquisition Corp. (“Company”), in
      consideration of EarlyBirdCapital, Inc. (“EBC”) entering into a letter of intent
      (“Letter of Intent”) to underwrite an initial public offering of the securities
      of the Company (“IPO”) and embarking on the IPO process, hereby agrees as
      follows (certain capitalized terms used herein are defined in paragraph 13
      hereof):

    

    1. If
      the
      Company solicits approval of its shareholders of a Business Combination, the
      undersigned will vote all Insider Shares owned by him (including those included
      within the Insider Units) in accordance with the majority of the votes cast
      by
      the holders of the IPO Shares. 

    

    2. The
      undersigned hereby waives any and all right, title, interest or claim of any
      kind in or to any distribution of the Trust Fund and any remaining net assets
      of
      the Company as a result of such liquidation with respect to his Insider Shares
      and shares underlying the Insider Units (“Claim”) and hereby waives any Claim
      the undersigned may have in the future as a result of, or arising out of, any
      contracts or agreements with the Company and will not seek recourse against
      the
      Trust Fund for any reason whatsoever. 

    

    3. The
      undersigned acknowledges and agrees that the Company will not consummate any
      Business Combination which involves a company which is affiliated with any
      of
      the Insiders unless
      the Company obtains an opinion from an independent investment banking firm
      reasonably acceptable to EBC that the business combination is fair to the
      Company’s shareholders from a financial perspective.

     

    
      
         

      

      
         

        
          

        

      

      
         
China
        Discovery Acquisition Corp.

      
        EarlyBirdCapital,
          Inc.

        January
          31, 2007

        Page
          2

      

       

    

    4. Neither
      the undersigned, any member of the family of the undersigned, nor any affiliate
      (“Affiliate”) of the undersigned will be entitled to receive and will not accept
      any compensation for services rendered to the Company prior to or in connection
      with the consummation of the Business Combination; provided that the undersigned
      shall be entitled to reimbursement from the Company for his out-of-pocket
      expenses incurred in connection with seeking and consummating a Business
      Combination.  

     

    5. Neither
      the undersigned, any member of the family of the undersigned, nor any Affiliate
      of the undersigned will be entitled to receive or accept a finder’s fee or any
      other compensation in the event the undersigned, any member of the family of
      the
      undersigned or any Affiliate of the undersigned originates a Business
      Combination. 

    

    6. On
      the
      Effective Date, the undersigned will escrow his Insider Shares until one year
      after the Company consummates a Business Combination subject to the terms of
      a
      Stock Escrow Agreement which the Company will enter into with the undersigned
      and an escrow agent acceptable to the Company.

    

    7. The
      undersigned’s biographical information furnished to the Company and EBC and
      attached hereto as Exhibit A is true and accurate in all respects, does not
      omit
      any material information with respect to the undersigned’s background and
      contains all of the information required to be disclosed pursuant to Item 401
      of
      Regulation S-K, promulgated under the Securities Act of 1933. The undersigned’s
      Questionnaire furnished to the Company and EBC and annexed as Exhibit B
      hereto is true and accurate in all respects. The undersigned represents and
      warrants that:

    

    (a)  he
      is not
      subject to, or a respondent in, any legal action for, any injunction,
      cease-and-desist order or order or stipulation to desist or refrain from any
      act
      or practice relating to the offering of securities in any
      jurisdiction;

    

    (b)  he
      has
      never been convicted of or pleaded guilty to any crime (i) involving any fraud
      or (ii) relating to any financial transaction or handling of funds of another
      person, or (iii) pertaining to any dealings in any securities and he is not
      currently a defendant in any such criminal proceeding; and

    

    
      
         

      

      
         

        
          

        

      

      
         

      

      
        China
          Discovery Acquisition Corp.

        EarlyBirdCapital,
          Inc.

        January
          31, 2007

        Page
          3

      

       

    

    (c)  he
      has
      never been suspended or expelled from membership in any securities or
      commodities exchange or association or had a securities or commodities license
      or registration denied, suspended or revoked.

    

    8. The
      undersigned has full right and power, without violating any agreement by which
      he is bound, to enter into this letter agreement.

    

    9. The
      undersigned hereby waives his right to exercise conversion rights or appraisal
      rights with respect to any Ordinary Shares of the Company owned or to be owned
      by the undersigned, directly or indirectly, and agrees that he will not seek
      conversion or appraisal with respect to such shares in connection with any
      vote
      to approve a Business Combination.

    

    10. The
      undersigned hereby agrees to not propose, or vote in favor of, an amendment
      to
      the Company’s Memorandum and Articles of Association to extend the period of
      time in which the Company must consummate a Business Combination prior to its
      liquidation. Should such a proposal be put before shareholders other than
      through actions by the undersigned, the undersigned hereby agrees to vote
      against such proposal. This paragraph may not be modified or amended under
      any
      circumstances.

    

    11. The
      undersigned authorizes any employer, financial institution, or consumer credit
      reporting agency to release to EBC and its legal representatives or agents
      (including any investigative search firm retained by EBC) any information they
      may have about the undersigned’s background and finances (“Information”).
      Neither EBC nor its agents shall be violating the undersigned’s right of privacy
      in any manner in requesting and obtaining the Information and the undersigned
      hereby releases them from liability for any damage whatsoever in that
      connection.

    

    12. This
      letter agreement shall be governed by and construed and enforced in accor-dance
      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.
      The
      undersigned hereby (i) agrees that any action, proceeding or claim against
      him
      arising out of or relating in any way to this letter agreement (a “Proceeding”)
      shall be brought and enforced in the courts of the State of New York of the
      United States of America for the Southern District of New York, and irrevocably
      submits to such jurisdiction, which jurisdiction shall be exclu-sive, (ii)
      waives any objection to such exclusive jurisdiction and that such courts
      represent an inconvenient forum and (iii) irrevocably agrees to appoint Graubard
      Miller as agent for the service of process in the State of New York to receive,
      for the undersigned and on his behalf, service of process in any Proceeding.
      If
      for any reason such agent is unable to act as such, the undersigned will
      promptly notify the Company and EBC and appoint a substitute agent acceptable
      to
      each of the Company and EBC within 30 days and nothing in this letter will
      affect the right of either party to serve process in any other manner permitted
      by law.  

    

    
      
         

      

      
         

        
          

        

      

      
         

      

      
        
          China
            Discovery Acquisition Corp.

          EarlyBirdCapital,
            Inc.

          January
            31, 2007

          Page
            4

        

      

    

    13. As
      used
      herein, (i) a “Business Combination” shall mean the acquisition, through a stock
      exchange, asset acquisition or other similar business combination, of an
      operating business, or control of such operating business, through contractual
      arrangements, that has its principal operations located in the People’s Republic
      of China; (ii) “Insiders” shall mean all officers, directors and shareholders of
      the Company immediately prior to the IPO; (iii) “Insider Shares” shall mean all
      of the shares of Common Stock of the Company acquired by an Insider prior to
      the
      IPO; (iv) “Insider Units” means the Units being sold privately by the Company to
      certain of the Insiders; and (v) “IPO Shares” shall mean the shares of Common
      Stock issued in the Company’s IPO.

    

    Francois
      Shih

    Print
      Name of Insider

    

    

    

    /s/
      Francois Shih

    Signature

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Exhibit
      A

     

    
      Francois
        Shih
        has been
        the president and chief executive officer of Sharpland Investments Ltd, a
        private equity firm making investments in China, since 1980. Mr. Shih has
        been
        invited to serve as economic advisor to a variety of provinces in China
        including Shadong and Guizhou as well as the Tianjin Municipal Tovernment,
        the
        Guiyang Municipal Government and the Jinan Municipal Government. He was also
        invited by the Prince of Wales Business Leaders Forum, a group formed to
        promote
        world-wide social welfare, education, medical care, training and development
        and
        agricultural techniques, to be a council member. Mr. Shih has also been a
        council member of the International Advisory Council of The Friendship
        Force.

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