Exhibit 10.3


 


October
14, 2015


 


Pacific
Special Acquisition Corp.


855 Pudong
South Road


The World
Plaza, 27th Floor


Pudong,
Shanghai


China 200120


 


EarlyBirdCapital,
Inc.


275
Madison Avenue, 27th Floor


New
York, New York 10016


 


Re:
        Initial Public Offering


 


Gentlemen:


 


This
letter is being delivered to you in accordance with the Underwriting Agreement (the “Underwriting Agreement”)
entered into by and between Pacific Special Acquisition Corp., a British Virgin Islands Company (the “Company”),
and EarlyBirdCapital, Inc., as Representative (the “Representative”) of the several Underwriters named
in Schedule 1 thereto (the “Underwriters”), relating to an underwritten initial public offering (the
“IPO”) of the Company’s units (the “Units”), each comprised of one ordinary
share, no par value, of the Company (the “Ordinary Shares”), one right (“Right”)
to receive one-tenth of one Ordinary Share upon consummation of the Company’s initial Business Combination and one warrant
(the “Warrant”) to purchase one-half of one Ordinary Share. Certain capitalized terms used herein are
defined in paragraph 16 hereof.


 


In
order to induce the Company and the Underwriters to enter into the Underwriting Agreement and to proceed with the IPO, and in
recognition of the benefit that such IPO will confer upon the undersigned as a shareholder of the Company, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the undersigned hereby agrees with the
Company as follows:


 


1.
  If the Company solicits approval of its shareholders of a Business Combination (as defined below), the undersigned
will vote all Ordinary Shares beneficially owned by him, her or it, whether acquired before, in or after the IPO, in favor of
such Business Combination.


 


2.
   (a) In the event that the Company fails to consummate a Business Combination within the time period set forth
in the Company’s Amended and Restated Memorandum and Articles of Association, as the same may be amended from time to time,
the undersigned shall take all reasonable steps to (i) cause the Trust Fund to be liquidated and distributed to the holders of
IPO Shares and (ii) cause the Company to liquidate as soon as reasonably practicable.


 


(b)
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, her or its Insider Shares or
Private 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. The undersigned acknowledges and agrees that there will be no distribution from the Trust Fund with respect
to any Rights or Warrants, which will terminate on the Company’s liquidation.


 


(c)
In the event of the liquidation of the Trust Fund, Mr. Jian Tu 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 to or contracted for the Company, or by any target business with which the Company
has discussed entering into a transaction agreement, but only to the extent necessary to ensure that such loss, liability, claim,
damage or expense does not reduce the amount of funds in the Trust Fund; provided that such indemnity shall not
apply if such vendor or prospective target business executes an agreement waiving any claims against the Trust Fund.


 






     

    


    

 


3.
   The undersigned will escrow all of his, her or its Insider Shares pursuant to the terms of a Share Escrow
Agreement which the Company will enter into with the undersigned and an escrow agent acceptable to the Company.


 


4.
    [Intentionally Omitted].


 


5.
    In order to minimize potential conflicts of interest which may arise from multiple affiliations, the undersigned
directors and officers of the Company agree to present to the Company for its consideration, prior to presentation to any other
person or entity, any suitable opportunity to acquire a target business, until the earlier of the consummation by the Company
of a Business Combination or the liquidation of the Company, subject to any pre-existing fiduciary and contractual obligations
the undersigned directors and officers might have.


 


6.
   The undersigned acknowledges and agrees that prior to entering into a Business Combination with a target business
that is affiliated with any Insiders of the Company or their affiliates, such transaction must be approved by a majority of the
Company’s disinterested independent directors and the Company must obtain an opinion from an independent investment banking
firm that such Business Combination is fair to the Company’s unaffiliated shareholders from a financial point of view.


 


7.
   Neither the undersigned, any member of the family of the undersigned, nor any affiliate of the undersigned will
be entitled to receive and will not accept any compensation or other cash payment for services rendered prior to, or in order
to effectuate, the consummation of the Business Combination; provided that the Company shall be allowed to (i)
repay working capital loans made by the undersigned or its affiliates to the Company in cash upon consummation of the Business
Combination or, at the undersigned’s discretion, with respect to up to an aggregate of $500,000 of working capital loans
from all lenders, by converting such loans into Private Units at a price of $10.00 per Private Unit, as more fully described in
the Registration Statement, (ii) repay a non-interest bearing loan in an aggregate amount of $300,000 and a non-interest bearing
advance in the amount of $90,917 made to the Company by Zhengqi International Holding Limited (“ZIHL”) to cover the
IPO expenses, (iii) pay $10,000 per month to an affiliate of the Chairman of the Company for office space and related services,
(iv) reimburse the undersigned and any affiliate of the undersigned for their out-of-pocket expenses incurred in connection with
identifying, investigating and consummating a Business Combination, and (v) pay to each of the Company’s independent directors
an annual retainer of $30,000 (to be prorated for a partial term), payable in arrears commencing on the first anniversary of the
closing of the Company’s IPO and ending on the earlier of the consummation of a Business Combination or a Company liquidation.


 


8.
   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.


 


9.
   The undersigned officers and directors agree to be the officers and directors of the Company until the earlier
of the consummation by the Company of a Business Combination or the liquidation of the Company. The undersigned officers’
and directors’ biographical information previously furnished to the Company and the Representative is true and accurate
in all material respects, does not omit any material information with respect to the officers’ and directors’ biography
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. Each of the undersigned officers’ and directors’ FINRA Questionnaire previously furnished to the Company
and the Representative is true and accurate in all material respects.


 






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10.   Each
of the undersigned represents and warrants that:


 


	 	(a)	He,
    she or it has never had a petition under the federal bankruptcy laws or any state or foreign insolvency law been filed by
    or against (i) him, her or it, or any partnership in which he, she or it was a general partner at or within two years before
    the time of filing; or (ii) (to the extent the undersigned is an individual) any corporation or business association of which
    he or she was an executive officer at or within two years before the time of such filing;


  


	 	(b)	He,
    she or it has never had a receiver, fiscal agent or similar officer been appointed by a court for his or her business or property,
    or any such partnership;
	 	 	 
	 	(c)	He,
    she, or it has never been convicted of fraud in a civil or criminal proceeding;
	 	 	 
	 	(d)	He,
    she, or it has never been convicted in a criminal proceeding or named the subject of a pending criminal proceeding (excluding
    traffic violations and minor offenses);
	 	 	 
	 	(e)	He,
    she, or it has never been the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of
    any court of competent jurisdiction, permanently or temporarily enjoining or otherwise limiting him from (i) acting as a futures
    commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction
    merchant, any other person regulated by the Commodity Futures Trading Commission (“CFTC”) or an associated person
    of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person,
    director or employee of any investment company, bank, savings and loan association or insurance company, or from engaging
    in or continuing any conduct or practice in connection with any such activity; or (ii) engaging in any type of business
    practice; or (iii) engaging in any activity in connection with the purchase or sale of any security or commodity or in
    connection with any violation of federal or state securities or federal commodities laws;
	 	 	 
	 	(f)	He,
    she, or it has never been the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of
    any federal or state authority barring, suspending or otherwise limiting for more than 60 days hiss right to engage in any
    activity described in 8(e)(i) above, or to be associated with persons engaged in any such activity;
	 	 	 
	 	(g)	He,
    she or it has never been found by a court of competent jurisdiction in a civil action or by the SEC to have violated any federal,
    state, or foreign securities law, where the judgment in such civil action or finding by the SEC has not been subsequently
    reversed, suspended or vacated;
	 	 	 
	 	(h)	He,
    she or it has never been found by a court of competent jurisdiction in a civil action or by the CFTC to have violated any
    federal commodities law, where the judgment in such civil action or finding by the CFTC has not been subsequently reversed,
    suspended or vacated;


  


	 	(i)	He,
    she or it has never been the subject of, or a party to, any federal, state, or foreign judicial or administrative order, judgment,
    decree or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of (i) any federal ,state
    or foreign securities or commodities law or regulation, (ii) any law or regulation respecting financial institutions or insurance
    companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil
    money penalty or temporary or permanent cease-and desist order, or removal or prohibition order or (iii) any law or regulation
    prohibiting mail or wire fraud or fraud in connection with any business entity;
	 	 	 
	 	(j)	He,
    she or it has never been the subject of, or party to, any sanction or order, not subsequently reversed, suspended or vacated,
    or any self-regulatory organization, any registered entity, or any equivalent exchange, association, entity or organization
    that has disciplinary authority over its members or persons associated with a member;
	 





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	 	(k)	He,
    she or it has never been convicted of any felony or misdemeanor: (i) in connection with the purchase or sale of any security;
    (ii) involving the making of any false filing with the SEC; or (iii) arising out of the conduct of the business of an underwriter,
    broker, dealer, municipal securities dealer, investment advisor or paid solicitor of purchasers of securities;
	 	 	 
	 	(l)	He,
    she or it was never subject to a final order of a state or foreign securities commission (or an agency of officer of a state
    performing like functions); a state or foreign authority that supervises or examines banks, savings associations, or credit
    unions; a state or foreign insurance commission (or an agency or officer of a state performing like functions); an appropriate
    federal or foreign banking agency; the Commodity Futures Trading Commission; or the National Credit Union Administration that
    is based on a violation of any law or regulation that prohibits fraudulent, manipulative, or deceptive conduct;
	 	 	 
	 	(m)	He,
    she or it has never been subject to any order, judgment or decree of any court of competent jurisdiction, that, at the time
    of such sale, restrained or enjoined him from engaging or continuing to engage in any conduct or practice: (i) in connection
    with the purchase or sale of any security; (ii) involving the making of any false filing with the SEC or any foreign regulatory
    agency with similar functions; or (iii) arising out of the conduct of the business of an underwriter, broker, dealer, municipal
    securities dealer, investment adviser or paid solicitor of purchasers of securities;


  


	 	(n)	He,
    she or it has never been subject to any order of the SEC or any foreign regulatory agency with similar functions that orders
    him to cease and desist from committing or causing a future violation of: (i) any scienter-based anti-fraud provision of the
    foreign or federal securities laws, including, but not limited to, Section 17(a)(1) of the Securities Act, Section 10(b) of
    the Exchange Act and Rule 10b-5 thereunder, and Section 206(1) of the Advisers Act or any other rule or regulation thereunder;
    or (ii) Section 5 of the Securities Act;
	 	 	 
	 	(o)	He,
    she or it has never been named as an underwriter in any registration statement or Regulation A offering statement filed with
    the SEC that was the subject of a refusal order, stop order, or order suspending the Regulation A exemption, or is, currently,
    the subject of an investigation or proceeding to determine whether a stop order or suspension order should be issued;
	 	 	 
	 	(p)	He,
    she or it has never been subject to a United States Postal Service false representation order, or is currently subject to
    a temporary restraining order or preliminary injunction with respect to conduct alleged by the United States Postal Service
    to constitute a scheme or device for obtaining money or property through the mail by means of false representations;
	 	 	 
	 	(q)	He,
    she or it is not subject to a final order of a state securities commission (or an agency of officer of a state performing
    like functions); a state authority that supervises or examines banks, savings associations, or credit unions; a state insurance
    commission (or an agency or officer of a state performing like functions); an appropriate federal banking agency; the Commodity
    Futures Trading Commission; or the National Credit Union Administration that bars the undersigned from: (i) association with
    an entity regulated by such commission, authority, agency or officer; (ii) engaging in the business of securities, insurance
    or banking; or (iii) engaging in savings association or credit union activities;
	 	 	 
	 	(r)	He,
    she or it is not subject to an order of the SEC entered pursuant to section 15(b) or 15B(c) of the Securities Exchange Act
    of 1934 (the “Exchange Act”) or section 203(e) or 203(f) of the Investment Advisers Act of 1940 (the “Advisers
    Act”) that: (i) suspends or revokes the undersigned’s registration as a broker, dealer, municipal securities dealer
    or investment adviser; (ii) places limitations on the activities, functions or operations of, or imposes civil money penalties
    on, such person; or (iii) bars the undersigned from being associated with any entity or from participating in the offering
    of any penny stock; and


 


	 	(s)	He,
    she or it has never been suspended or expelled from membership in, or suspended or barred from association with a member of,
    a securities self-regulatory organization (e.g., a registered national securities exchange or a registered national or affiliated
    securities association) for any act or omission to act constituting conduct inconsistent with just and equitable principles
    of trade.


 


11.
  The undersigned has full right and power, without violating any agreement by which he, she or it is bound, to enter
into this letter agreement and to hold the current position/title in the Company (if applicable).


 






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12.   The
undersigned hereby waives his, her or its right to exercise redemption rights with respect to any shares of the Ordinary Shares
owned or to be owned by he, she or it, directly or indirectly, whether purchased prior to the IPO, in the IPO or in the aftermarket,
and agrees that he, she or it will not seek redemption with respect to or otherwise sell, such shares in connection with any vote
to approve a Business Combination with respect thereto.


 


13.   The
undersigned hereby agrees to not propose, or vote in favor of, an amendment to the Company’s Amended and Restated Memorandum
and Articles of Association with respect to the Company’s pre-Business Combination activities prior to the consummation
of a Business Combination that would affect the substance or timing of the Company’s obligation to redeem 100% of the IPO
Shares if the Company does not complete a Business Combination within the time period set forth in the Amended and Restated Memorandum
and Articles of Association, unless the Company provides its public shareholders with the opportunity to redeem their IPO shares
upon approval of any such amendment at a price per share, payable in cash, equal to the aggregate amount then on deposit in the
Trust Account including interest income (net of taxes payable and any amounts released to the Company to fund working capital
requirements), divided by the number of then outstanding public shares.


  


14.
 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, Mr. Jian Tu agrees to advance such funds necessary to complete such liquidation
and agrees not to seek repayment for such expenses.


 


15.
  This letter 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. 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 exclusive, (ii) waives any objection to such exclusive jurisdiction and that such courts represent
an inconvenient forum and (iii) irrevocably agrees to appoint Ellenoff Grossman & Schole LLP 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.


  


16.
 As used herein, (i) a “Business Combination” shall mean a merger, share exchange,
asset acquisition, contractual arrangement, share purchase, recapitalization, reorganization or other similar business combination
with one or more businesses or entities; (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 Ordinary Shares
of the Company acquired by an Insider prior to the IPO; (iv) “IPO Shares” shall mean the Ordinary Shares
issued in the Company’s IPO; (v) “Private Units” shall mean (x) the Units purchased in the private
placement taking place simultaneously with the consummation of the Company’s IPO and (y) the additional Units that will
be purchased in a private placement upon the full or partial exercise of the underwriters’ over-allotment option for the
Company’s IPO; (vi) “Registration Statement” means the registration statement on Form S-1 filed
by the Company with respect to the IPO and (vii) “Trust Fund” shall mean the trust fund into which a
portion of the net proceeds of the Company’s IPO will be deposited.


 


17.
  Any notice, consent or request to be given in connection with any of the terms or provisions of this letter
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 facsimile transmission.


 


18.
 No party hereto may assign either this letter agreement or any of its rights, interests, or obligations hereunder
without the prior written consent of the other party. Any purported assignment in violation of this paragraph shall be void and
ineffectual and shall not operate to transfer or assign any interest or title to the purported assignee. This letter agreement
shall be binding on the parties hereto and any successors and assigns thereof.


 


19.
 The undersigned acknowledges and understands that the Underwriters and the Company will rely upon the agreements,
representations and warranties set forth herein in proceeding with the IPO.


 






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	 	Zhengqi
    International Holding Limited
	 	 	 
	 	By:	/s/ Zhouhong
    Peng
	 	 	Name: Zhouhong
    Peng
	 	 	Title: President
	 	 	 
	 	/s/ Jian
    Tu
	 	Jian
    Tu
	 	 
	 	/s/
    Zhouhong
    Peng 
	 	Zhouhong
    Peng
	 	 
	 	/s/
    David
    Boris 
	 	David
    Boris
	 	 
	 	/s/
    Yaqi
    Feng 
	 	Yaqi
    Feng
	 	 
	 	/s/
    Guoxiong
    Luo 
	 	Guoxiong
    Luo
	 	 
	 	/s/ Jason
    Zexian Shen
	 	Jason
    Zexian Shen
	 	 
	 	/s/
    Honghui
    Deng 
	 	Honghui
    Deng


 


 


[Signature
Page to the Insider Letter]


 


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