Subscription Agreement
January
31, 2007
|
To
the
Board of Directors of
Gentlemen:
The
undersigned hereby subscribes for and agrees to purchase ______ units (“Insider
Units”), each consisting of one ordinary share (“Ordinary Shares”) and one
warrant (“Warrant(s)”), each to purchase one Ordinary Share, at $6.00 per
Insider Unit, and _______ Warrants (“Insider Warrants”) at $0.60 per Insider
Warrant, of China Discovery Acquisition Corp. (the “Corporation”) for an
aggregate purchase price of $________ (“Purchase Price”). The purchase and
issuance of the Insider Units and Insider Warrants shall occur simultaneously
with the consummation of the Corporation’s initial public offering of securities
(“IPO”) which is being underwritten by EarlyBirdCapital, Inc. (“EBC”). The
Insider Units and Insider Warrants will be sold to the undersigned on a private
placement basis and not part of the IPO.
At
least
24 hours prior to the effective date of the registration statement filed in
connection with the IPO (“Registration Statement”), the undersigned shall
deliver the Purchase Price to Xxxxxxxx Xxxxxx (“GM”) to hold in a non-interest
bearing account until the Corporation consummates the IPO. Simultaneously with
the consummation of the IPO, GM shall deposit the Purchase Price, without
interest or deduction, into the trust fund (“Trust Fund”) established by the
Corporation for the benefit of the Corporation’s public stockholders as
described in the Corporation’s Registration Statement, pursuant to the terms of
an Investment Management Trust Agreement to be entered into between the
Corporation and Continental Stock Transfer & Trust Company. In the event
that the IPO is not consummated within 14 days of the date the Purchase Price
is
delivered to GM, GM shall return the Purchase Price to the undersigned, without
interest or deduction.
The
undersigned represents and warrants that he or she has been advised that the
Insider Units and Insider Warrants have not been registered under the Securities
Act; that he or she is acquiring the Insider Units and Insider Warrants for
his
or her account for investment purposes only; that he or she has no present
intention of selling or otherwise disposing of the Insider Units and Insider
Warrants in violation of the securities laws of the United States; that he
or
she is an “accredited investor” as defined by Rule 501 of Regulation D
promulgated under the Securities Act of 1933, as amended (the “Securities Act”);
and that he or she is familiar with the proposed business, management, financial
condition and affairs of the Corporation.
Moreover,
the undersigned agrees that he or she shall not sell or transfer the Insider
Units or Insider Warrants or any underlying securities until after the
Corporation consummates a merger, capital stock exchange, asset acquisition
or
other similar business combination with an operating business (“Business
Combination”) and acknowledges that the certificates for such Insider Units and
Insider Warrantsshall contain a legend indicating such restriction on
transferability. If
the
Company solicits approval of its shareholders of a Business Combination, the
undersigned will vote all Ordinary Shares included within the Insider Units
in
accordance with the majority of the votes cast by the holders of the Ordinary
Shares issued in the Corporation’s IPO. Additionally,
the undersigned hereby waives, with respect to the Insider Units (and the
underlying securities), any and all right, title, interest or claim of any
kind
(“Claim”) in or to any distribution of the Trust Fund and any remaining net
assets of the Corporation as a result of the liquidation of the Corporation
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 Corporation and will
not
seek recourse against the Trust Fund for any reason whatsoever.
The
Corporation hereby acknowledges and agrees that, in the event the Corporation
calls the Warrants for redemption pursuant to that certain Warrant Agreement
to
be entered into by the Corporation and Continental Stock Transfer & Trust
Company in connection with the Corporation’s IPO, the Corporation shall allow
the undersigned to exercise any Warrants included within the Insider Units
and
any Insider Warrants by surrendering such Warrants for that number of Ordinary
Shares equal to the quotient obtained by dividing (x) the product of the number
of Ordinary Shares underlying the Warrant, multiplied by the difference between
the Warrant exercise price and the “Fair Market Value” (defined below) by (y)
the Fair Market Value. The “Fair Market Value” shall mean the average reported
last sale price of the Ordinary Shares for the 10 trading days ending on the
third trading day prior to the date on which the notice of redemption is sent
to
holders of Warrants.
The
terms
of this agreement and the restriction on transfers with respect to the Insider
Units and Insider Warrants may not be amended without the prior written consent
of EBC.
Very
truly yours,
______________________________
|
Agreed
to:
By:
________________________________
Name:
Title:
Xxxxxxxx Xxxxxx
By:
________________________________
Name:
Xxxxx Xxxx Xxxxxx
Title:
Managing Partner
EarlyBirdCapital,
Inc.
By:
________________________________
Name:
Xxxxxx Xxxxxx
Title:
Managing Director