Document:

Unassociated Document

    INVESTMENT
      MANAGEMENT TRUST AGREEMENT

    

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

    

    WHEREAS,
      the Company’s registration statement on Form S-1, No. 333-140516
      (“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 Registration Statement, and in accordance with the Company’s
      Memorandum and Articles of Association, $28,475,000.40 of the gross proceeds
      of
      the IPO and sale of the Insider Units and Insider Warrants (as defined in the
      Registration Statement) ($32,772,500.40 if the underwriters over-allotment
      option is exercised in full) will be delivered to the Trustee to be deposited
      and held in a trust account for the benefit of the Company and the holders
      of
      the Company’s common stock, par value $.0001 per share, issued in the IPO as
      hereinafter provided and in the event the Units are registered in Colorado,
      pursuant to Section 11-51-302(6) of the Colorado Revised Statutes. A copy of
      the
      Colorado Statute is attached hereto and made a part hereof (the amount to be
      delivered to the Trustee will be referred to herein as the “Property”; the
      stockholders for whose benefit the Trustee shall hold the Property will be
      referred to as the “Public Stockholders,” and the Public Stockholders and the
      Company will be referred to together as the “Beneficiaries”); and 

    

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

    

    IT
      IS
      AGREED:

    

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

    

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

    

    (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 documents as may be requested by the Company in
      connection with the Company’s preparation of its returns;

    

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

    

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

    

    (i) Commence
      liquidation of the Trust Account only after 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 Secretary 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 effective date of the Registration Statement (“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.

    

      (j) Upon
        written request from the Company, which may be given from time to time at
        any
        time after _____________, 2008 in a form substantially similar to that attached
        hereto as Exhibit C, the Trustee shall distribute to the Company the amount
        requested by the Company to
        cover
        expenses related to investigating and selecting a target business, income
        and
        other taxes and other working capital requirements; provided, however, that
        (i)
        such distribution shall be only from income collected on the Property and
        (ii)
        the aggregate amount of all such distributions shall not exceed $350,000.

    

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

    

    (a) Give
      all
      instructions to the Trustee hereunder in writing, signed by the Company’s
      Chairman of the Board or President. In addition, except with respect to its
      duties under paragraphs 1(i) and 1(j) 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, including reasonable counsel fees and disbursements, or loss suffered
      by the Trustee in connection with any action, suit or other proceeding brought
      against the Trustee involving any claim, or in connection with any claim or
      demand which in any way arises out of or relates to this Agreement, the services
      of the Trustee hereunder, or the Property or any income earned from investment
      of the Property, except for expenses and losses resulting from the Trustee's
      gross negligence or willful misconduct. Promptly after the receipt by the
      Trustee of notice of demand or claim or the commencement of any action, suit
      or
      proceeding, pursuant to which the Trustee intends to seek indemnification under
      this paragraph, it shall notify the Company in writing of such claim
      (hereinafter referred to as the “Indemnified Claim”). The Trustee shall have the
      right to conduct and manage the defense against such Indemnified Claim,
      provided, that the Trustee shall obtain the consent of the Company with respect
      to the selection of counsel, which consent shall not be unreasonably withheld.
      The Trustee may not agree to settle any Indemnified Claim without the prior
      written consent of the Company 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 Property unless and until it shall have received instructions from the
      Company given as provided herein to do so and the Company shall have advanced
      or
      guaranteed to it funds sufficient to pay any expenses incident
      thereto;

    

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

       

    

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

    

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

    

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

    

    (f) The
      other
      parties hereto or to anyone else for any action taken or omitted by it, or
      any
      action suffered by it to be taken or omitted, in good faith and in the exercise
      of its own best judgment, except for its gross negligence or willful misconduct.
      The Trustee may rely conclusively and shall be protected in acting upon any
      order, notice, demand, certificate, opinion or advice of counsel (including
      counsel chosen by the Trustee), statement, instrument, report or other paper
      or
      document (not only as to its due execution and the validity and effectiveness
      of
      its provisions, but also as to the truth and acceptability of any information
      therein contained) which is believed by the Trustee, in good faith, to be
      genuine and to be signed or presented by the proper person or persons. The
      Trustee shall not be bound by any notice or demand, or any waiver, modification,
      termination or rescission of this Agreement or any of the terms hereof, unless
      evidenced by a written instrument delivered to the Trustee signed by the proper
      party or parties and, if the duties or rights of the Trustee are affected,
      unless it shall give its prior written consent thereto;

    

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

    

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

    

    4. Termination.
      This
      Agreement shall terminate as follows:

    

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

    

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

       

    

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

    

    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 D. 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 hereof
      may only be changed, amended or modified by a writing signed by each of the
      parties hereto; provided, however, that no such change, amendment or
      modification may be made without the prior written consent of EBC. As to any
      claim, cross-claim or counterclaim in any way relating to this Agreement, each
      party waives the right to trial by jury.

    

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

    

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

    

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

       

    

    if
      to the
      Trustee, to:

    

    Continental
      Stock Transfer 

    &
      Trust Company

    17
      Battery Place 

    New
      York,
      New York 10004

    Attn: Steven
      G.
      Nelson

    Fax
      No.:
      (212) 509-5150

    

    if
      to the
      Company, to:

     

    
      	 	 	 	
              China
                Discovery Acquisition Corp.

            

    

    2666
      East
      Bayshore Road, Suite B

    Palo
      Alto, California 94303

    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
                DISCOVERY 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
      Discovery 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 transfer of the funds held in the Trust Account
      (“Instruction Letter”). You are hereby directed and authorized to transfer the
      funds held in the Trust Account immediately upon your receipt of the counsel's
      letter and the Instruction Letter, in accordance with the terms of the
      Instruction Letter. In the event that certain deposits held in the Trust Account
      may not be liquidated by the Consummation Date without penalty, you will notify
      the Company of the same and the Company shall direct you as to whether such
      funds should remain in the Trust Account and distributed after the Consummation
      Date to the Company. Upon the distribution of all the funds in the Trust Account
      pursuant to the terms hereof, the Trust Agreement shall be
      terminated.

    

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

    

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    
      	 	
              Very
                truly yours,

              

              CHINA
                DISCOVERY ACQUISITION CORP.

              

              

              By:________________________________

              Li
                Wen Shi, Chairman of the Board

              

              

              By:________________________________

              Wing
                Yip, 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
      Discovery 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 Agreement, we hereby (a) certify to
      you
      that the provisions of Section 11-51-302(6) and Rule 51-3.4 of the Colorado
      Statute have been met and (b) authorize you, to commence liquidation of the
      Trust Account 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 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
                  DISCOVERY ACQUISITION CORP.

              

              

              By:________________________________

              Li
                Wen Shi, Chairman of the Board

              

              

              By:________________________________

              Wing
                Yip, Secretary

            

    

    

    cc:
      EarlyBirdCapital, Inc.

    
       

      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    
      EXHIBIT
        C

       

      [Letterhead
        of Company]

       

      [Insert
        date]

    

     

    
      Continental
        Stock Transfer 

      &
        Trust Company

      17
        Battery Place

      New
        York,
        New York 10004

      Attn:
        

       

      Re:
        Trust
        Account No. 530- 

       

      Gentlemen:

       

      Pursuant
        to paragraph 1(j) of the Investment Management Trust Agreement between China
        Discovery Acquisition Corp. (“Company”) and Continental Stock Transfer &
Trust Company (“Trustee”), dated as of ___________, 2007 (“Trust Agreement”),
this
        is
        to advise you that the Company hereby requests that you deliver to the Company
        $_______ of the income earned on the Property as of the date hereof. The
        Company
        needs such funds to cover its expenses relating to investigating and selecting
        a
        target business and other working capital requirements. In accordance with
        the
        terms of the Trust Agreement, you are hereby directed and authorized to transfer
        (via wire transfer) such funds promptly upon your receipt of this letter
        to the
        Company’s operating account at:

       

      [WIRE
        INSTRUCTION INFORMATION]

       

      Very
        truly yours,

       

      CHINA
        DISCOVERY ACQUISITION CORP.

       

      By:________________________________

      Li
        Wen
        Shi, Chairman of the Board

       

       

      By:________________________________

      Wing
        Yip,
        Secretary

       

       

      cc:
        EarlyBirdCapital, Inc.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    EXHIBIT
      D

    

    

    

    

    
      	
              AUTHORIZED
                INDIVIDUAL(S)

            	
              AUTHORIZED

            
	
              FOR
                TELEPHONE CALL BACK

            	
              TELEPHONE
                NUMBER(S)

            

    

    

    Company:

    

    
      	
              China
                Discovery Acquisition Corp.

            	 
	
              2666
                East Bayshore Road, Suite B

            	 
	
              Palo
                Alto, California 94303

            	 
	
              Attn:
                Chief Executive Officer

            	
              (___)
                ___-____

            

    

    

    Trustee:

    

    
      	
              Continental
                Stock Transfer 

            	 
	
              &
                Trust Company

            	 
	
              17
                Battery Place

            	 
	
              New
                York, New York 10004

            	 
	
              Attn:
                Steven G. Nelson, Chairman

            	
              (212)
                845-3200

            

    

    

    

     

    
      
        
        

      

      
        12Unassociated Document

    STOCK
      ESCROW AGREEMENT

    

    STOCK
      ESCROW AGREEMENT, dated as of _____________, 2007 (“Agreement”), by and among
      CHINA DISCOVERY ACQUISITION CORP., a Delaware corporation (“Company”), BEATRICE
      HOM, WING YIP, MICHAEL HSU, VINCENT SHEN, FRANCOIS SHIH, LI WEN SHI and XIONG
      YIN (collectively “Initial Stockholders”) and CONTINENTAL STOCK TRANSFER &
TRUST COMPANY, a
      New
      York corporation (“Escrow
      Agent”).

    

    WHEREAS,
      the Company has entered into an Underwriting Agreement, dated __________, 2007
      (“Underwriting Agreement”), with EarlyBirdCapital, Inc. (“EBC”) acting as
      representative of the several underwriters (collectively, the “Underwriters”),
      pursuant to which, among other matters, the Underwriters have agreed to purchase
      5,000,000 units (“Units”) of the Company. Each Unit consists of one share of the
      Company’s common stock, par value $.0001 per share (“Common Stock”), and two
      Warrants, each Warrant to purchase one share of Common Stock, all as more fully
      described in the Company’s final Prospectus, dated _________, 2007
      (“Prospectus”) comprising part of the Company’s Registration Statement on Form
      S-1 (File No. 333-140516) under the Securities Act of 1933, as amended
      (“Registration Statement”), declared effective on ________, 2007 (“Effective
      Date”).

    

    WHEREAS,
      the Initial Stockholders have agreed as a condition of the sale of the Units
      to
      deposit their shares of Common Stock of the Company, as set forth opposite
      their
      respective names in Exhibit A attached hereto (collectively “Escrow Shares”), in
      escrow as hereinafter provided.

    

    WHEREAS,
      the Company and the Initial Stockholders 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 Stockholders 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 Stockholders 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 Agreement. Each
      Initial Stockholder acknowledges that the certificate 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 until one year after the consummation
      of a Business Combination (as defined in the Registration Statement) (“Escrow
      Period”), on which date it shall, upon written instructions from each Initial
      Stockholder, disburse each of the Initial Stockholder’s Escrow Shares (and any
      applicable stock power) to such Initial Stockholder; 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 Stockholders agree that
      the
      Escrow Agent shall return to the Company for cancellation a number of Escrow
      Shares held by them so that the Initial Stockholders will collectively own
      no
      more than 23.8% of the Company's outstanding Common Stock upon consummation
      of
      such Business Combination (without giving effect to any shares included within
      the Insider Units (defined in the Prospectus) and 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 stockholders of such entity having the right to
      exchange their shares of Common Stock 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 Stockholders 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 Stockholders in Escrow Shares.
      

    

    4.1 Voting
      Rights as a Stockholder.
      Subject
      to the terms of the Insider Letter described in Section 4.4 hereof and except
      as
      herein provided, the Initial Stockholders shall retain all of their rights
      as
      stockholders of the Company during the Escrow Period, including, 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 Stockholders, 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) to an entity’s members upon its liquidation,
      (ii) by gift to a member of an Initial Stockholder’s immediate family or to a
      trust, the beneficiary of which is an Initial Stockholder or a member of an
      Initial Stockholder’s immediate family, (iii) by virtue of the laws of descent
      and distribution upon death of any Initial Stockholder, (iv) pursuant to a
      qualified domestic relations order or (v) by private
      sales made at or prior to the consummation of a Business Combination at prices
      no greater than the price which the Initial Stockholder paid for the Escrow
      Shares;
      provided,
      however,
      that
      such 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 Stockholder transferring the Escrow Shares.
      

    

    4.4 Insider
      Letters.
      Each of
      the Initial Stockholders 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 Stockholder 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 protected in acting upon any order, notice, demand, certificate,
      opinion or advice of counsel (including counsel chosen by the Escrow Agent),
      statement, instrument, report or other paper or document (not only as to its
      due
      execution and the validity and effectiveness of its provisions, but also as
      to
      the truth and acceptability of any information therein contained) which is
      believed by the Escrow Agent to be genuine and to be signed or presented by
      the
      proper person or persons. The Escrow Agent shall not be bound by any notice
      or
      demand, or any waiver, modification, termination or rescission of this Agreement
      unless evidenced by a writing delivered to the Escrow Agent signed by the proper
      party or parties and, if the duties or rights of the Escrow Agent are affected,
      unless it shall have given its prior written consent thereto. 

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

       

    

     5.2 Indemnification.
      The
      Escrow Agent shall be indemnified and held harmless by the Company from and
      against any expenses, including counsel fees and disbursements, or loss suffered
      by the Escrow Agent in connection with any action, suit or other proceeding
      involving any claim 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
      commencement 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 discretion, 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 circumstances 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 reasonable compensation from the Company
      for
      all services rendered by it hereunder. The Escrow Agent shall also be entitled
      to reimbursement from the Company for all expenses paid or incurred by it in
      the
      administration of its duties hereunder including, but not limited to, all
      counsel, advisors’ and agents’ fees and disbursements and all taxes or other
      governmental charges.

    

    5.4 Further
      Assurances.
      From
      time to time on and after the date hereof, the Company and the Initial
      Stockholders shall deliver or cause to be delivered to the Escrow Agent such
      further documents and instruments and shall do or cause to be done such further
      acts as the Escrow Agent shall reasonably request to carry out more effectively
      the provisions and purposes of this Agreement, to evidence compliance herewith
      or to assure 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 hereinafter provided. Such resignation
      shall become effective at such time that the Escrow Agent shall turn over to
      a
      successor escrow agent appointed by the Company, the Escrow Shares held
      hereunder. If no new escrow agent is so appointed within the 60 day period
      following the giving 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, provided, however, that such resignation shall become effective 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 contrary, the Escrow Agent shall not
      be
      relieved from liability hereunder for its own gross negligence or its own
      willful misconduct.

    

    6. Miscellaneous.

    

    6.1 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 Stockholders 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
                Discovery Acquisition Corp. 

            

    

    2666
      East
      Bayshore Road, Suite B

    Palo
      Alto, California 94303

    Attn: Chairman

    

    If
      to a
      Stockholder, 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:

    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.

    

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

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

     

    
      	 	
              CHINA
                DISCOVERY ACQUISITION CORP. 

              

              

              

              By:
                 ______________________________  

              Name:

              Title:

               

              INITIAL
                STOCKHOLDERS:

              
 

              ___________________________

              Beatrice
                Hom

              

              

              ___________________________

              Wing
                Yip

              

              

              ___________________________

              Michael
                Hsu

              
 

              ___________________________

              Vincent
                Shen

              

              

              ___________________________

              Francois
                Shih

              

              

              ___________________________

              Li
                Wen Shi

              

              

              ___________________________

              Xiong
                Yin

              

              CONTINENTAL
                STOCK TRANSFER

              &
                TRUST COMPANY

              

              

              By:________________________________

              Name:
                

              Title:
                

            

    

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    EXHIBIT
      A

    

    
      	
              Name
                and Address of 

              Initial
                Stockholder 

            	
              Number
                

              of
                Shares

            	
              Stock
                

              Certificate
                Number

            	
              Date
                of 

              Insider
                Letter

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