Document:

Exhibit 10.6

 

BACKSTOP AND SUBSCRIPTION AGREEMENT

 

This Backstop and Subscription
Agreement (this “Agreement”), made as of May 11, 2017 by and among Pacific Special Acquisition Corp.,
a British Virgin Islands business company with limited liability (the “Company”), and Zhengqi International
Holding Limited, a company incorporated in the British Virgin Islands (the “Subscriber”), is intended
to set forth certain representations, covenants and agreements among the Company and the Subscriber, with respect to the acquisition
by Subscriber of the Company’s ordinary shares of no par value (the “Ordinary Shares”), for aggregate
consideration of up to Twenty-Four Million U.S. Dollars ($24,000,000), through such acquisitions as are described in Sections 1(a)(iii)
and (iv) hereof, which representations, covenants and agreements are made in connection with the Company’s acquisition of
Borqs International Holding Corp, an exempted company incorporated under the laws of the Cayman Islands with limited liability
(“Borqs”), in accordance with that certain Merger Agreement, dated as of December 27, 2016 (as amended,
including by Amendment No.1 thereto on or about the date hereof, the “Merger Agreement”), by and among
the Company, PAAC Merger Subsidiary Limited, Zhengqi International Holding Limited in its capacity thereunder as the Purchaser
Representative, Zhengdong Zou in its capacity thereunder as the Seller Representative and, for certain limited purposes thereunder,
the Subscriber. Any capitalized term used but not defined in this Agreement will have the meaning ascribed to such term in the
Merger Agreement.

 

1.             Transfer
and Voting of Shares.

 

(a)       Subscriber
covenants and agrees that until the earlier of (i) the closing under the Merger Agreement (the “Merger Closing”)
or (ii) the date on which the Merger Agreement is terminated in accordance with its terms (the “Termination Date”),
it shall not, and shall ensure that each of its Affiliates do not, Transfer any Ordinary Shares (other than Ordinary Shares held
by the Subscriber as of the date hereof, the proceeds of which were not deposited by the Company into the Trust Account in connection
with the IPO). For purposes hereof, “Affiliate” shall mean affiliate as such term is defined in Rule
12b-2 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and “Transfer”
shall mean any direct or indirect transfer, redemption, disposition or monetization in any manner whatsoever, including through
redemption election or any derivative transactions.

 

(b)       Subscriber
covenants and agrees that it shall, and shall cause each of its Affiliates to, (i) vote all of the Ordinary Shares that it owns
as of the record date (the “Record Date”) for the Shareholder Meeting in favor of the Merger and the
other Shareholder Approval Matters at the Shareholder Meeting and (ii) not exercise its redemption or conversion rights with respect
to any Ordinary Shares that it owns as of the Record Date in connection with the Shareholder Meeting.

 

2.             Backstop.

 

(a)       Commencing
on the date hereof and through 5:00 p.m. Eastern Time on the last date on which it may purchase Ordinary Shares such that the settlement
of such purchase shall occur on or before the Record Date (the “Market Deadline”), Subscriber shall (provided
it is lawful to do so) have the right to purchase up to Twenty-Four Million U.S. Dollars ($24,000,000) of Ordinary Shares in the
open market or in other privately negotiated transactions with third parties. On the date immediately following the Market Deadline
and promptly at other times requested by the Company from time to time, Subscriber shall notify the Company in writing of the number
of Ordinary Shares so purchased (the “Open Market Shares”) and the aggregate purchase price paid therefor
by the Subscriber.

 

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(b)       Between
the Market Deadline and the close of business on the third Trading Day prior to the Shareholder Meeting (the “Private
Purchase Deadline”), if the Company reasonably believes in good faith that it will have less than Twenty-Four Million
U.S. Dollars ($24,000,000) in Closing Proceeds (as defined below) after giving effect to any Open Market Shares previously purchased
by the Subscriber pursuant to Section 2(a) hereof, it will promptly notify the Subscriber of the anticipated shortfall of Closing
Proceeds below $24,000,000 (the “Expected Shortfall”), and Subscriber shall (provided it is lawful to
do so) use its commercially reasonable efforts to purchase an amount of Ordinary Shares up to the Expected Shortfall in privately
negotiated transactions with third parties, including forward contracts (such shares, the “Private Purchase Shares”
and, together with the Open Market Shares, the “Market Shares”), provided that: (i) such transactions
settle no later than, and are conditioned upon, the Merger Closing and (ii) Subscriber shall not be required to purchase any Ordinary
Shares at a price above $10.40 per share. Notwithstanding the foregoing, Subscriber shall be permitted (provided it is lawful to
do so) prior to the Private Purchase Deadline to buy additional Ordinary Shares in such private transactions in excess of the Expected
Shortfall, up to a total of $24,000,000 in total Market Shares. On the date immediately following the Private Purchase Deadline,
and at such other times as may be requested by the Company from time to time, Subscriber shall (x) notify the Company in writing
of the number of Private Purchase Shares so purchased and the aggregate purchase price paid therefor by Subscriber and (y) provide
the Company, for all Private Purchase Shares acquired, all documentary evidence reasonably requested by the Company and its advisors
(including its legal counsel) and its transfer agent and proxy solicitor to confirm that: (i) the Subscriber purchased, or has
contracted to purchase, such shares, and (ii) the seller of such shares has provided to the Subscriber a representation that (A)
the seller voted such shares in favor of the Merger and the other Shareholder Approval Matters and (B) the seller of such shares
did not exercise its redemption or conversion rights for such shares in connection with the Shareholder Meeting or the Merger Closing.
Notwithstanding the foregoing, and for the avoidance of doubt, if the Merger Agreement is terminated in accordance with its terms
prior to the Merger Closing, then the Subscriber’s obligations to purchase Ordinary Shares under this Section 2(b) will immediately
terminate and be extinguished. For purposes of this Agreement, (i) “Closing Proceeds” means the sum of
(A) the funds left in the Trust Account as of the Merger Closing, after giving effect to any redemptions or conversions by Public
Stockholders, but before giving effect to the payment of any Transaction Expenses, plus (B) the amount of funds from any private
placements of the Company’s capital stock (or binding commitments therefor, other than the Subscriber’s obligations
in the Backstop Offering) occurring or to occur at or prior to the Merger Closing, and (ii) “Trading Day”
shall mean a day during which trading in the Ordinary Shares generally occurs on the Nasdaq or, if the Ordinary Shares are not
listed on the Nasdaq, on the principal other national or regional securities exchange on which the Ordinary Shares are then listed
or, if the Ordinary Shares are not listed on a national or regional securities exchange, on the principal other market on which
the Ordinary Shares are then listed or admitted for trading.

 

(c)       Immediately
after the deadline for the Public Stockholders to elect to redeem or convert their Ordinary Shares from funds in the Trust Account
in connection with the Merger Closing, the Company shall notify the Subscriber of the updated Expected Shortfall anticipated at
such time and after giving effect to any Market Shares previously purchased (or committed to be purchased) by the Subscriber pursuant
to Sections 2(a) and 2(b) hereof (the “Final Shortfall”). The Subscriber hereby irrevocably subscribes
for and agrees, subject to the substantially concurrent Merger Closing and the other terms and conditions set forth herein, to
purchase from the Company that number of Ordinary Shares equivalent to the Final Shortfall at a purchase price of $10.40 per share
(such shares, the “Backstop Shares”), and the Company agrees to sell such Backstop Shares to the Subscriber
at such price per share (such offering, the “Backstop Offering”); provided, that, if requested by the
Subscriber, the Company shall (provided it is lawful to do so) issue and sell to the Subscriber an additional number of Backstop
Shares in the Backstop Offering, up to a total of Twenty-Four Million U.S. Dollars ($24,000,000) when aggregated with all amounts
for Market Shares and Backstop Shares (the “Backstop Cap”). For the avoidance of doubt, if the Merger
Agreement is terminated in accordance with its terms prior to the Merger Closing, then the Subscriber’s obligations to purchase
Backstop Shares under this Section 2(c) will immediately terminate and be extinguished. Any such purchase under this Section 2(c)
shall be consummated substantially concurrent with the Merger Closing. For the avoidance of doubt, in the event that no Market
Shares are acquired by the Subscriber pursuant to Sections 2(a) and 2(b) hereof, the Subscriber’s obligations under this
Section 2(c) shall nevertheless continue to apply.

 

    	 	2	 

     

    

 

3.             Right
to Guarantee Escrow Shares. In consideration for the Subscriber’s obligations described in this Agreement, including
Sections 1 and 2 hereof, in accordance with the Merger Agreement, at the Merger Closing, the Guarantee Escrow Shares will be issued
in the name of the Subscriber and deposited in the Guarantee Escrow Account, to be held by the Escrow Agent in accordance with
the terms of the Merger Agreement and the Escrow Agreement for the Guarantee Escrow Account, and the Subscriber shall be entitled
to receive the Backstop Guarantee Escrow Share Amount from the Guarantee Escrow Account subject to, and in accordance with, the
terms and conditions of the Merger Agreement. The Company will, and will use its reasonable efforts to cause the Seller Representative
to, promptly provide any required notices to the Escrow Agent to cause the timely release of the Backstop Guarantee Escrow Share
Amount in accordance with the Merger Agreement to the extent that the Subscriber is entitled to such amounts in accordance with
the Merger Agreement.

 

4.             Delivery
of Subscription Amount; Acceptance of Subscriptions; Delivery. The Subscriber understands and agrees that its subscription
is made subject to the following terms and conditions:

 

(a)       Contemporaneously
with the execution and delivery of this Agreement, the Subscriber shall execute and deliver to the Company the Investor Questionnaire
attached hereto as Exhibit A (the “Investor Questionnaire”) and, in respect of the Backstop Offering
pursuant to Section 2(c) hereof, upon notice from the Company setting forth the reasonably anticipated date of the Merger Closing,
the Subscriber shall, no fewer than two (2) Business Days prior to such anticipated date (the “Funding Date”),
cause a wire transfer to be made for payment for the Backstop Shares in immediately available funds in the aggregate amount equal
to $10.40 multiplied by the number of Backstop Shares to be purchased by the Subscriber (the “Subscription Amount”)
to the account(s) designated in writing by the Company to the Subscriber prior to the Merger Closing. In the event that the Subscriber
enters into privately negotiated transactions with third parties in accordance with Section 2(b) hereof subsequent to the Funding
Date but prior to the Merger Closing, unless otherwise requested in writing by the Subscriber (but subject to the Backstop Cap),
the Subscription Amount shall be reduced by the dollar amount of such purchases and such excess funds (not to exceed the Subscription
Amount) shall be returned to the Subscriber. The payments provided for in this Section 2(a) shall be deposited in escrow with Continental
Stock Transfer & Trust Company (or other nationally recognized escrow agent with whom in all cases, whether with Continental
Stock Transfer & Trust Company or otherwise, the Company shall have an escrow agreement in place for purposes hereof, which
such agreement shall be on reasonable and customary terms) pending the Company’s acceptance of the subscription.

 

(b)       The
subscription of the Subscriber for the Backstop Shares shall be deemed to be accepted only (and shall not otherwise be accepted
by the Company except) when (i) the Company has confirmed in writing to the Subscriber that the Company’s representations
and warranties contained herein are, or shall be, true and correct as of the date of the Company’s acceptance of such subscription
and (ii) the Merger Closing occurs substantially concurrent with the Company’s acceptance of such subscription. If such acceptance
does not occur on or prior to the earlier of (x) the Merger Closing or (y) the Termination Date, the Subscriber’s subscription
shall automatically be deemed rejected (the “Subscription Rejection”). The payment of the Subscription
Amount will be returned promptly, without interest, to the Subscriber if the subscription is rejected in whole or in part or if
the Backstop Offering is withdrawn or canceled.

 

(c)       The
representations and warranties of the Company and the Subscriber set forth herein shall be true and correct as of the date that
the Company accepts the subscriptions set forth herein.

 

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5.             Expenses.
Each party hereto shall pay all of its own expenses in connection with this Agreement and the transactions contemplated hereby.

 

6.             Registration
Rights.

 

(a)       At
the Merger Closing, the Company and the Subscriber shall enter into a Registration Rights Agreement (the “Registration
Rights Agreement”), pursuant to which the Company will agree to (i) register the resale of the Backstop Shares, any
Guarantee Escrow Shares received by the Subscriber from the applicable Escrow Account and not forfeited in accordance with the
Merger Agreement (the “Subscriber Earnout Shares”), and any Market Shares requested by the Subscriber
under the Securities Act of 1933, as amended (the “Securities Act”), and the rules and regulations promulgated
thereunder, and applicable state securities laws, (ii) use reasonable best efforts to cause such registration with respect to such
Backstop Shares and such Market Shares to be declared effective no later than one-hundred and twenty (120) days following the Merger
Closing (provided, that the Company shall have no obligation to register the resale of any Subscriber Earnout Shares until they
are actually received by the Subscriber from the Escrow Account) and (iii) provide the Subscriber with customary demand and piggyback
registration rights. The Registration Rights Agreement shall include such additional terms and conditions as are customary and
reasonably satisfactory to the Company and the Subscriber.

 

(b)       None
of the Backstop Shares or Subscriber Earnout Shares may be Transferred except pursuant to an effective registration statement or
in a transaction that is exempt from the registration requirements of the Securities Act and applicable state securities laws.

 

(c)       Without
limitation to the generality of the foregoing, the Subscriber shall not execute any short sales or engage in other hedging transactions
of any kind with respect to any Ordinary Shares during the period from the date of the Merger Closing through the date that is
forty-five (45) consecutive days thereafter. For the avoidance of doubt, the prohibition set forth in this Section 6(c) shall not
be applicable on or after the Termination Date.

 

7.             Representations,
Warranties, Understandings, Risk Acknowledgments, and Covenants of The Subscriber. The Subscriber hereby represents, warrants
and covenants to the Company as follows: 

 

(a)       The
Subscriber is purchasing the Backstop Shares and acquiring the Subscriber Earnout Shares, if any, for its own account, not as a
nominee or agent, for investment purposes and not with a view towards distribution or resale within the meaning of the Securities
Act (absent the registration of the Backstop Shares and Subscriber Earnout Shares for resale under the Securities Act or a valid
exemption from registration). The Subscriber will not Transfer such shares at any time in violation of the Securities Act or applicable
state securities laws. The Subscriber acknowledges that the Backstop Shares and Subscriber Earnout Shares cannot be sold unless
subsequently registered under the Securities Act and applicable state securities laws or an exemption from such registration is
available.

 

(b)       The
Subscriber understands that (i) the Backstop Shares and the Subscriber Earnout Shares (A) have not been registered under the Securities
Act or any applicable state securities laws, (B) have been offered and will be sold in reliance upon an exemption from the registration
and prospectus delivery requirements of the Securities Act, (C) will be issued in reliance upon exemptions from the registration
and prospectus delivery requirements of applicable state securities laws which relate to private offerings and (D) may be required
to be held indefinitely because of the fact that the Backstop Shares and Subscriber Earnout Shares have not been registered under
the Securities Act or applicable state securities laws, and (ii) the Subscriber must therefore be capable of bearing the economic
risk of its investment hereunder indefinitely unless a subsequent disposition thereof is registered under the Securities Act and
applicable state securities laws or is exempt therefrom. The Subscriber further understands that such exemptions depend upon, among
other things, the bona fide nature of the investment intent of the Subscriber expressed herein. Pursuant to the foregoing, the
Subscriber acknowledges that until such time as the resale of the Backstop Shares and Subscriber Earnout Shares has been registered
under the Securities Act as contemplated by the Registration Rights Agreement or otherwise may be sold pursuant to an exemption
from registration, the certificates representing any Backstop Shares and Subscriber Earnout Shares acquired by the Subscriber shall
bear a restrictive legend substantially as follows (and a stop-transfer order may be placed against transfer of such Backstop Shares
and Subscriber Earnout Shares):

 

“THESE
ORDINARY SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY
APPLICABLE STATE SECURITIES LAWS. NEITHER THESE ORDINARY SHARES NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE FOLLOWING:

 

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BY ITS ACQUISITION HEREOF OR
OF A BENEFICIAL INTEREST HEREIN, THE ACQUIRER:

 

		1.	REPRESENTS THAT IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS A “QUALIFIED
INSTITUTIONAL BUYER” (WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT) OR IS AN “ACCREDITED INVESTOR”
AS DEFINED IN REGULATION D UNDER THE SECURITIES ACT AND THAT IT EXERCISES SOLE INVESTMENT DISCRETION WITH RESPECT TO EACH SUCH
ACCOUNT, AND

 

		2.	AGREES FOR THE BENEFIT OF PACIFIC SPECIAL ACQUISITION CORP. (THE “COMPANY”)
THAT IT WILL NOT OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY OR ANY BENEFICIAL INTEREST HEREIN PRIOR TO THE DATE THAT
IS THE LATER OF (X) ONE YEAR OR SUCH OTHER PERIOD OF TIME AS PERMITTED BY RULE 144 UNDER THE SECURITIES ACT OR ANY SUCCESSOR PROVISION
THERETO AFTER THE LAST DATE OF THE ACQUISITION FROM THE COMPANY OR AN AFFILIATE OF THE COMPANY, AND (Y) SUCH LATER DATE, IF ANY,
AS MAY BE REQUIRED BY APPLICABLE LAW, EXCEPT:

 

		(A)	TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, OR

 

		(B)	PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER
THE SECURITIES ACT, OR

 

		(C)	OUTSIDE THE UNITED STATES IN A TRANSACTION COMPLYING WITH THE REQUIREMENTS
OF REGULATION S UNDER THE SECURITIES ACT, OR

 

		(D)	TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT OR AN “ACCREDITED INVESTOR” AS DEFINED IN REGULATION D UNDER THE SECURITIES ACT, OR

 

		(E)	PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144
UNDER THE SECURITIES ACT OR ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

 

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PRIOR TO THE REGISTRATION OF
ANY TRANSFER IN ACCORDANCE WITH CLAUSE (2)(E) ABOVE, THE COMPANY AND THE TRANSFER AGENT RESERVE THE RIGHT TO REQUIRE THE DELIVERY
OF SUCH CERTIFICATIONS OR OTHER EVIDENCE AS MAY REASONABLY BE REQUIRED IN ORDER TO DETERMINE THAT THE PROPOSED TRANSFER IS BEING
MADE IN COMPLIANCE WITH THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. NO REPRESENTATION IS MADE AS TO THE AVAILABILITY
OF ANY EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.”

 

(c)       The
Subscriber has knowledge, skill and experience in financial, business and investment matters relating to an investment of this
type and is capable of evaluating the merits and risks of such investment and protecting the Subscriber’s interest in connection
with the acquisition of the Backstop Shares, Subscriber Earnout Shares and the Market Shares (collectively, the “Shares”).
The Subscriber understands that the acquisition of the Shares is a speculative investment and involves substantial risks and that
the Subscriber could lose the Subscriber’s entire investment. Further, the Subscriber has (i) carefully read and considered
the risks identified in the Disclosure Documents (as defined below) and (ii) carefully considered the risks related to the Merger,
the Company, and Borqs and has taken full cognizance of and understands all of the risks related to the Company, Borqs, the Merger,
the Shares and the transactions contemplated hereby, including the purchase of the Shares. Acknowledging the very significant tax
impact analysis and other analyses that is warranted in determining the consequences to it of purchasing and owning the Shares,
to the extent deemed necessary by the Subscriber, the Subscriber has had the opportunity to retain, at its own expense, and relied
upon, appropriate professional advice regarding the investment, tax and legal merits and consequences of the foregoing, including
purchasing and owning the Shares. The Subscriber has the ability to bear the economic risks of the Subscriber’s investment
in the Company, including a complete loss of the investment, and the Subscriber has no need for liquidity in such investment.

 

(d)       The
Subscriber has been furnished by the Company all information (or provided access to all information it reasonably requested) regarding
the business and financial condition of the Company and Borqs, the Company’s expected plans for future business activities,
and the merits and risks of an investment in the Shares which the Subscriber has reasonably requested or otherwise needs to evaluate
the investment in the Shares.

 

(e)       The
Subscriber acknowledges receipt of and has carefully reviewed and understands the following items (collectively, the “Disclosure
Documents”): (i) the IPO Prospectus; (ii) each filing made by the Company with the SEC under the Exchange Act following
the filing of the IPO Prospectus through the date of this Agreement, including the preliminary Proxy Statement; (iii) the Merger
Agreement, a copy of which has been made available to the Subscriber, as in effect on the date of this Agreement, including Amendment
No. 1 thereto; and (iv) the proposed draft amendments to the preliminary Proxy Statement based on the SECs comments, Amendment
No. 1 to the Merger Agreement and this Agreement and other recent events. The Subscriber understands the significant extent to
which certain of the disclosures contained in items (i) and (ii) above shall no longer apply following the Merger Closing.

 

(f)       The
Subscriber acknowledges that neither the Company nor any of its Affiliates has made or makes any representation or warranty to
the Subscriber in respect of the Company or Borqs, the Merger or the other transactions contemplated by the Merger Agreement, other
than in the case of the Company, the representations and warranties contained in this Agreement.

 

(g)       In
making its investment decision to purchase the Shares, the Subscriber is relying solely on investigations made by the Subscriber
and the Subscriber’s representatives. The offer to sell the Backstop Shares and issue the Subscriber Earnout Shares was communicated
to the Subscriber in such a manner that the Subscriber was able to ask questions of and receive answers from the management of
the Company concerning the terms and conditions of the proposed transaction and that at no time was the Subscriber presented with
or solicited by or through any advertisement, article, leaflet, public promotional meeting, notice or other communication published
in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or meeting or any
other form of general or public advertising or solicitation.

 

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(h)       The
Subscriber acknowledges that it has been advised that:

 

(i)       The
Backstop Shares and Subscriber Earnout Shares offered or issued or issuable hereby have not been approved or disapproved by the
SEC or any applicable state securities commission nor has the SEC or any applicable state securities commission passed upon the
accuracy or adequacy of any representations by the Company. Any representation to the contrary is a criminal offense.

 

(ii)       In
making an investment decision, the Subscriber must rely on its own examination of the Company, the Merger, Borqs and the Backstop
Offering, including the merits and risks involved. The Shares have not been recommended by any applicable federal or state securities
commission or regulatory authority. Furthermore, the foregoing authorities have not confirmed the accuracy or determined the adequacy
of any representation by the Company. Any representation to the contrary is a criminal offense.

 

(iii)       The
Backstop Shares and the Subscriber Earnout Shares will be “restricted securities” within the meaning of Rule 144 under
the Securities Act, are subject to restrictions on transferability and resale and may not be transferred or resold except as permitted
under the Securities Act and applicable state securities laws, pursuant to the applicable registration requirements or exemption
therefrom. The Subscriber is aware that the provisions of Rule 144 are not currently available and, in the future, may not become
available for resale of any of the Backstop Shares and Subscriber Earnout Shares and that the Company is an issuer subject to Rule
144(i) under the Securities Act. The Subscriber is aware that it may be required to bear the financial risks of this investment
for an indefinite period of time.

 

(i)       The
Subscriber agrees to furnish the Company with such other information as the Company may reasonably request in order to verify the
accuracy of the information contained herein and agrees to notify the Company immediately of any material change in the information
provided herein that occurs prior to the acceptance of this Agreement by the Company.

 

(j)       The
Subscriber further represents and warrants that the Subscriber is a “qualified institutional buyer” within the meaning
of Rule 144A under the Securities Act or an “accredited investor” within the meaning of Rule 501 of Regulation D under
the Securities Act, and Subscriber has executed the Investor Questionnaire and shall provide to the Company an updated Investor
Questionnaire promptly following any change in circumstances at any time on or prior to the Merger Closing.

 

(k)       As
of the date of this Agreement, the Subscriber and its Affiliates do not have, and during the thirty (30) day period prior to the
date of this Agreement the Subscriber and its Affiliates did not enter into, any “put equivalent position” as such
term is defined in Rule 16a-1 of under the Exchange Act or short sale positions with respect to the securities of the Company.
In addition, the Subscriber shall comply with all applicable provisions of Regulation M promulgated under the Securities Act.

 

(l)       If
the Subscriber is a natural person, the Subscriber has reached the age of majority in the state in which the Subscriber resides,
has adequate means of providing for the Subscriber’s current financial needs and contingencies, is able to bear the substantial
economic risks of an investment in the Shares for an indefinite period of time, has no need for liquidity in such investment and,
at the present time, can afford a complete loss of such investment.

 

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(m)       If
the Subscriber is a partnership, corporation, trust, estate or other entity (an “Entity”): (i) the Entity
has the full legal right and power and all authority and approval required (a) to execute and deliver, or authorize execution and
delivery of, this Agreement and all other instruments executed and delivered by or on behalf of the Entity in connection with the
acquisition of the Shares, (b) to delegate authority pursuant to power of attorney and (c) to acquire and hold such Shares; (ii)
the signature of the party signing on behalf of the Entity is binding upon the Entity; and (iii) the Entity has not been formed
for the specific purpose of acquiring the Shares, unless each beneficial owner of such entity is a “qualified institutional
buyer” within the meaning of Rule 144A under the Securities Act or is qualified as an accredited investor within the meaning
of Rule 501(a) of Regulation D promulgated under the Securities Act and has submitted information substantiating such individual
qualification.

 

(n)       If
the Subscriber is a retirement plan or is investing on behalf of a retirement plan, the Subscriber acknowledges that investment
in the Shares poses additional risks including the inability to use losses generated by an investment in the Shares to offset taxable
income.

 

(o)       This
Agreement has been duly authorized, executed and delivered by the Subscriber and constitutes a legal, valid and binding obligation
of the Subscriber enforceable against the Subscriber in accordance with its terms, except as such enforceability may be limited
by: (i) applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws in effect that limit creditors’
rights generally; (ii) equitable limitations on the availability of specific remedies; (iii) principles of equity (regardless of
whether such enforcement is considered in a proceeding in law or in equity); and (iv) to the extent rights to indemnification and
contribution may be limited by federal securities laws or the public policy underlying such laws.

 

(p)       The
Subscriber understands and confirms that the Company will rely on the representations and covenants of the Subscriber contained
herein in effecting the transactions contemplated by this Agreement and the other Transaction Documents (as defined herein). All
representations and warranties provided to the Company by or on behalf of the Subscriber, taken as a whole, are true and correct
and do not contain any untrue statement of material fact or omit to state any material fact necessary in order to make the statements
made therein, in the light of the circumstances under which they were made, not misleading.

 

(q)       Neither
the purchase of the Backstop Shares nor the acquisition of the Subscriber Earnout Shares by the Subscriber will subject the Company
to any of the “Bad Actor” disqualifications described in Rule 506(d) under the Securities Act.

 

(r)       Unless
otherwise specified in the Investor Questionnaire, the Subscriber is not a U.S. person (as defined in the Securities Act) and is
acquiring the Backstop Shares and Subscriber Earnout Shares in an offshore transaction in accordance with the requirements of Regulation
S under the Securities Act.

 

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8.             Representations
and Warranties of the Company. The Company represents and warrants to the Subscriber as follows:

 

(a)       Subject
to obtaining all required approvals necessary in connection with the performance of the Merger Agreement (including the approval
of the Company’s stockholders for the Merger Agreement and any approvals required for the Extension, if applicable) and any
required approvals pursuant to the applicable rules of Nasdaq (together, the “Required Approvals”), the
Company has all requisite corporate power and authority to enter into and perform this Agreement, the Registration Rights Agreement
and the Merger Agreement (collectively, the “Transaction Documents”), and to perform its obligations
under this Agreement and the other Transaction Document. Subject to obtaining the Required Approvals, the execution, delivery and
performance of this Agreement and the other Transaction Documents by the Company and the consummation by it of the transactions
contemplated hereby and thereby have been duly and validly authorized by all requisite corporate action, and no other proceedings
on the Company’s part are necessary to authorize the execution, delivery or performance of this Agreement and the other Transaction
Documents. This Agreement and each of the other Transaction Documents have been duly executed and delivered by the Company, and,
assuming that this Agreement and the Registration Rights Agreement constitute a valid and binding obligation of the Subscriber,
this Agreement and each of the other Transaction Documents will constitute upon execution and delivery by the Company, a legal,
valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as such enforceability
may be limited by: (i) applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws in effect that limit
creditors’ rights generally; (ii) equitable limitations on the availability of specific remedies; (iii) principles of equity
(regardless of whether such enforcement is considered in a proceeding in Law or in equity); and (iv) to the extent rights to indemnification
and contribution may be limited by federal securities laws or the public policy underlying such laws.

 

(b)       Subject
to obtaining the Required Approvals, the execution, delivery and performance of this Agreement and the other Transaction Documents
by the Company and the consummation by the Company of the transactions contemplated hereby and thereby will not (i) conflict with
or result in a violation of any provision of the Company’s Organizational Documents, (ii) violate or conflict with, or result
in a breach of any provision of, or constitute a default (or an event which with notice or lapse of time or both could become a
default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any material agreement,
to which the Company is a party, or (iii) result in a violation of any Law applicable to the Company or by which any property or
asset of the Company is bound or affected (except for such conflicts, defaults, terminations, amendments, accelerations, cancellations
and violations in clauses (ii) or (iii) of this Section 8(b) as have not had or would not reasonably be expect to have, individually
or in the aggregate, a material adverse effect on the business, properties, condition (financial or otherwise) or results of operations
of the Company and its Subsidiaries, taken as a whole (“Material Adverse Effect”)). The Company is not
in violation of its Organizational Documents in any material respect.

 

(c)       Except
for (i) the applicable requirements of any applicable Antitrust Laws, the federal securities Laws or any applicable state securities
or “blue sky” Laws and (ii) the filing of the Plan of Merger with the Registrar of Companies of the Cayman Islands
(and subject to obtaining the Required Approvals), the Company is not required to submit any notice, report or other filing with
any Governmental Authority in connection with the execution, delivery or performance by it of the Transaction Documents or the
consummation of the transactions contemplated by the Transaction Documents and no consent, approval or authorization of any Governmental
Authority or any other Person is required to be obtained by the Company in connection with its execution, delivery and performance
of this Agreement and each of the other Transaction Documents or the consummation of the transactions contemplated hereby and thereby,
(other than such consents, approvals or authorizations, the failure of which to obtain, have not had and would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect).

 

(d)       The
Company has timely filed all forms, reports and other documents required to be filed by it with the SEC (all of the foregoing filed
prior to the date hereof and all exhibits included therein and financial statements and schedules thereto and documents (other
than exhibits to such documents) incorporated by reference therein, being hereinafter referred to herein as the “SEC
Documents”) since the date of its IPO (the “IPO Date”), or has timely filed for a valid
extension of such time of filing and has filed any such SEC Document prior to the expiration of any such extension. As of their
respective dates, the SEC Documents complied in all material respects in accordance with the requirements of the Securities Act
and the Exchange Act, as the case may be, and the rules and regulations thereunder, and none of the SEC Documents, at the time
they were filed with the SEC (except to the extent that information contained in any SEC Document has been superseded by a later
timely filed SEC Document), contained any untrue statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements made therein, in light of the circumstances under which they were made,
not misleading.

 

    	 	9	 

     

    

 

(e)       Each
of the financial statements (including, in each case, any notes thereto) contained in the SEC Documents was prepared in accordance
with U.S. generally accepted accounting principles (“GAAP”) applied on a consistent basis throughout
the periods indicated (except as may be indicated in the notes thereto or, in the case of unaudited statements, as permitted by
Form 10-Q of the SEC) and each fairly presents, in all material respects, the financial position, results of operations and cash
flows of the Company as at the respective dates thereof and for the respective periods indicated therein.

 

(f)       The
Company has established and maintains disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the Exchange
Act). Such disclosure controls and procedures: (i) are designed to ensure that material information relating to the Company and
its Subsidiaries is made known to the Company’s chief executive officer and its chief financial officer by others within
those entities, particularly during the periods in which the Company’s reports and filings under the Exchange Act are being
prepared, (ii) have been evaluated for effectiveness as of the end of the most recent quarterly period reported to the SEC, and
(iii) are effective to perform the functions for which they were established. The Company is in compliance in all material respects
with the provisions of the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated thereunder that are applicable
to it.

 

(g)       As
of the date hereof, there are no, and since the Company’s formation, there have not been any Actions pending or, to the knowledge
of the Company, threatened in writing against the Company, including any such Actions that (i) challenges the validity or enforceability
of the Company’s obligations under this Agreement or the other Transaction Documents or (ii) seeks to prevent, delay or otherwise
would reasonably be expected to adversely affect the consummation by the Company of the transactions contemplated herein or therein.

 

(h)       
Except as and to the extent set forth on the balance sheet of the Company as of December 31, 2016, including the notes thereto,
the Company has no liability or obligation of a type required to be reflected in a balance sheet prepared in accordance with GAAP
or in the footnotes thereto, except for (i) liabilities and obligations incurred since December 31, 2016 in the ordinary course
of business that are not, individually or in the aggregate, material to the Company and none of which results from or arises out
of any material breach of or material default under any contract, material breach of warranty, tort, material infringement or material
violation of Law; (ii) liabilities and obligations incurred in connection with the transactions contemplated by this Agreement
and other Transaction Documents; and (iii) liabilities and obligations which have not had and would not reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect.

 

(i)       The
Company will file with the SEC a Current Report on Form 8-K or other periodic report under the Exchange Act disclosing the form
of this Agreement within four (4) Business Days after the date of this Agreement.

 

    	 	10	 

     

    

 

(j)       The
Company understands and confirms that the Subscriber will rely on the representations and covenants contained herein in effecting
the transactions contemplated by this Agreement.

 

9.             Understandings.
The Subscriber understands, acknowledges and agrees with the Company as follows:

 

(a)       The
Subscriber hereby acknowledges and agrees that, subject to the terms and conditions of this Agreement, the subscription hereunder
is irrevocable by the Subscriber, that, except as required by applicable Law, the Subscriber is not entitled to cancel, terminate
or revoke this Agreement or any agreements of the Subscriber hereunder, and that this Agreement and such other agreements shall
survive the death or disability of the Subscriber and shall be binding upon and inure to the benefit of the parties and their respective
heirs, executors, administrators, successors, legal representatives and permitted assigns.

 

(b)       No
federal or state agency has made any finding or determination as to the accuracy or adequacy of the Disclosure Documents or as
to the suitability of this offering for investment nor any recommendation or endorsement of the Shares.

 

(c)       The
Backstop Offering is intended to be exempt from registration, which is dependent upon the truth, completeness and accuracy of the
statements made by the Subscriber herein.

 

(d)       There
is only a limited public market for the Ordinary Shares. There can be no assurance that a Subscriber will be able to sell or dispose
of the Shares.

 

(e)       The
representations and warranties of the Subscriber contained in this Agreement and in any other writing delivered in connection with
the transactions contemplated hereby shall be true and correct in all respects on and as of the date hereof and the date of the
consummation of each offering of the Backstop Shares and issuance of the Subscriber Earnout Shares as if made on and as of such
date and such representation and warranties and all agreements of the Subscriber contained herein and in any other writing delivered
in connection with the transactions contemplated hereby.

 

10.           Survival.
All representations, warranties and covenants contained in this Agreement shall survive (i) the acceptance of this Agreement by
the Company and (ii) changes in the transactions, documents and instruments described herein which are not material or which are
to the benefit of the Subscriber, in each case until the earlier of the (A) Merger Closing or (B) Termination Date. The Subscriber
acknowledges the meaning and legal consequences of the representations, warranties and covenants contained herein and that the
Company has relied upon such representations, warranties and covenants in determining the Subscriber’s qualification and
suitability to purchase the Shares.

 

    	 	11	 

     

    

 

11.           Waiver
Against Trust. Reference is made to the IPO Prospectus. The Subscriber represents and warrants that it has read the IPO Prospectus
and understands that Company has established the Trust Account containing the proceeds of the IPO (including interest accrued from
time to time thereon) for the benefit of the Public Stockholders and that, except as otherwise described in the IPO Prospectus,
the Company may disburse monies from the Trust Account only: (a) to the Public Shareholders in the event they elect to redeem their
Ordinary Shares in connection with the consummation of its Business Combination, (b) to the Public Shareholders if the Company
fails to consummate a Business Combination by August 21, 2017 or such earlier date as determined by the Company’s directors
(as extended from April 20, 2017), (c) to pay any taxes and for working capital purposes from the interest accrued in the Trust
Account, and (d) to the Company after or concurrently with the consummation of its Business Combination. For and in consideration
of the Company entering into this Agreement and for other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the Subscriber hereby agrees on behalf of itself and its Affiliates that, notwithstanding anything to the
contrary in this Agreement, neither the Subscriber nor its Affiliates does now or shall at any time hereafter have any right, title,
interest or claim of any kind in or to any monies in the Trust Account or distributions therefrom, or make any claim against the
Trust Account (including any distributions therefrom), regardless of whether such claim arises as a result of, in connection with
or relating in any way to, any proposed or actual business relationship between the Company or its Representatives, on the one
hand, and the Subscriber or its Representatives, on the other hand, this Agreement or any other matter, and regardless of whether
such claim arises based on contract, tort, equity or any other theory of legal liability (any and all such claims are collectively
referred to hereafter as the “Released Claims”). The Subscriber on behalf of itself and its Affiliates
hereby irrevocably waives any Released Claims that the Subscriber or its Affiliates may have against the Trust Account (including
any distributions therefrom) now or in the future as a result of, or arising out of, any negotiations, contracts or agreements
with the Company or its Representatives and will not seek recourse against the Trust Account (including any distributions therefrom)
for any reason whatsoever (including for an alleged breach of this Agreement or any other agreement with the Company or its Affiliates).
The Subscriber agrees and acknowledges that such irrevocable waiver is material to this Agreement and specifically relied upon
by the Company and its Affiliates to induce the Company to enter in this Agreement, and the Subscriber further intends and understands
such waiver to be valid, binding and enforceable under applicable Law. To the extent the Subscriber or any of its Affiliates commences
any action or proceeding based upon, in connection with, relating to or arising out of any matter relating to the Company or its
Representatives, which proceeding seeks, in whole or in part, monetary relief against the Company or its Representatives, the Subscriber
hereby acknowledges and agrees its sole remedy shall be against funds held outside of the Trust Account and that such claim shall
not permit any the Subscriber or its Affiliates (or any Person claiming on any of their behalves or in lieu of them) to have any
claim against the Trust Account (including any distributions therefrom) or any amounts contained therein. In the event that the
Subscriber or any of its Affiliates commences Action based upon, in connection with, relating to or arising out of any matter relating
to the Company or its Representatives which proceeding seeks, in whole or in part, relief against the Trust Account (including
any distributions therefrom) or the Public Shareholders, whether in the form of money damages or injunctive relief, the Company
and its Representatives shall be entitled to recover from the Subscriber, its Affiliates, and the Subscriber Shareholders, the
associated legal fees and costs in connection with any such Action, in the event the Company or its Representatives, as applicable,
prevails in such Action. Notwithstanding anything to the contrary in this Section 11, the Released Claims shall not include, and
this Section 11 shall not otherwise affect, any rights of the Subscriber or its Affiliates as a Public Stockholder of the Company
to receive distributions from the Trust Account in its capacity as a Public Stockholder. This Section 11 shall survive termination
of this Agreement for any reason.

 

    	 	12	 

     

    

 

12.       Notices.
All notices, consents, waivers and other communications hereunder shall be in writing and shall be deemed to have been duly given
when delivered (i) in person, (ii) by facsimile or other electronic means, with affirmative confirmation of receipt, (iii) one
Business Day after being sent, if sent by reputable, nationally recognized overnight courier service or (iv) three (3) Business
Days after being mailed, if sent by registered or certified mail, pre-paid and return receipt requested, in each case to the applicable
party at the following addresses (or at such other address for a party as shall be specified by like notice):

 

	
         

        If to the Company prior to the Merger Closing or to the Subscriber,
        to:

         

        c/o Zhengqi International Holding Limited

        855 Pudong South Road

        The World Plaza, 27th Floor

        Pudong, Shanghai 200120, China

        Attn: Yaqi (Sophie) Feng, COO

        Facsimile No.:    86-21-8012-9882

        Telephone No:  86-21-8012-9878

        Email:    fengyq@tpyzq.com
	
         

        with a copy (which will not constitute notice) to:

         

        Ellenoff Grossman & Schole LLP

        1345 Avenue of the Americas, 11th Floor

        New York, New York 10105

        Attn:   Douglas Ellenoff, Esq.

                    Stuart Neuhauser, Esq.

        Facsimile No.:      (212) 370-7889

        Telephone No.:    (212) 370-1300

        Email:   ellenoff@egsllp.com

                      sneuhauser@egsllp.com

         

        and

         

        Borqs International Holding Corp.

        Tower A, Building B23

        Universal Business Park

        No. 10 Jiuxiangqiao Road

        Chaoyang District, Beijing 100015, China

        Attn: Pat Chan, CEO

        Facsimile No.:     86-10-5975-6363

        Telephone No:   86-10-5975-6336

        Email:    pat.chan@borqs.com

         

        and

         

        Fenwick & West LLP

        801 California Street

        Mountain View, CA 94041

        Attn: Eva Wang

        Facsimile No.:      (650) 938-5200

        Telephone No.:   (650) 335-7878

        Email: ewang@fenwick.com

         

	
         

        If to the Company after the Merger Closing, to:

         

        Borqs Technologies, Inc.

        Tower A, Building B23

        Universal Business Park

        No. 10 Jiuxiangqiao Road

        Chaoyang District, Beijing 100015

        China

        Attn: Pat Chan, CEO

        Facsimile No.:    86-10-5975-6363

        Telephone No:  86-10-5975-6336

        Email: pat.chan@borqs.com
	
         

        with a copy (which will not constitute notice) to:

         

        Fenwick & West LLP

        801 California Street

        Mountain View, CA 94041

        Attn:   Eva Wang

        Facsimile No.:      (650) 938-5200

        Telephone No.:   (650) 335-7878

        Email:   ewang@fenwick.com

         

        and

         

        Ellenoff Grossman & Schole LLP

        1345 Avenue of the Americas, 11th Floor

        New York, New York 10105

        Attn: Douglas Ellenoff, Esq.

        Stuart Neuhauser, Esq.

        Facsimile No.:      (212) 370-7889

        Telephone No.:   (212) 370-1300

        Email:    ellenoff@egsllp.com

                      sneuhauser@egsllp.com

         

 

    	 	13	 

     

    

 

13.           Notification
of Changes. The Subscriber agrees and covenants to notify the Company and Borqs immediately upon the occurrence of any event
prior to the Merger Closing that would cause any representation, warranty, covenant or other statement contained in this Agreement
to be false or incorrect in any material respect or of any material change in any statement made herein occurring prior to the
Merger Closing. The Company agrees and covenants to notify the Subscriber immediately upon the occurrence of any event prior to
the Merger Closing that would cause any representation, warranty, covenant or other statement contained in this Agreement to be
false or incorrect in any material respect or of any material change in any statement made herein occurring prior to the Merger
Closing.

 

14.           Obligations
Irrevocable. Subject to the terms and conditions contained herein, the obligations of the Subscriber to make its subscription
provided for hereunder shall be irrevocable, except with the consent of the Company and Borqs, until the Subscription Rejection.

 

15.           Amendments;
Waiver. This Agreement may be amended, supplemented or modified only by execution of a written instrument signed by the Company,
the Subscriber and Borqs. This Agreement may not be waived except by an instrument in writing signed by the party against whom
enforcement of waiver is sought (and, with respect to any waiver by the Company, Borqs).

 

16.           Assignment.
This Agreement shall not be assigned without the prior written consent of the Company, the Subscriber and Borqs, and any assignment
without such consent shall be null and void ab initio. Notwithstanding the foregoing, the Company and Borqs will not unreasonably
withhold, delay or condition their consent to transfer and assign all or a proportion of the Subscriber’s obligations under
this Agreement to an investor that is a “qualified institutional buyer” within the meaning of Rule 144A under the Securities
Act or an institutional “accredited investor” within the meaning of Rule 501 of Regulation D under the Securities Act
and who otherwise is reasonably expected to be capable of satisfying the Subscriber’s obligations transferred to such assignee.
Such assignee shall be entitled to receive a proportionate share of the Guarantee Escrow Shares based on the portion of the Subscriber’s
obligations transferred to such assignee, as well as entitled to receive the rights and obligations of the Subscriber under the
Registration Rights Agreement with respect to its Shares. Upon any such approved assignment by the Subscriber, such assignee shall
be deemed to be the “Subscriber” under this Agreement (and the Registration Rights Agreement) with respect to the rights
and obligations under this Agreement (and the Registration Rights Agreement) transferred to such assignee; provided, that each
Subscriber shall be severally, and not jointly, liable for any breach of this Agreement or the Registration Rights Agreement. Notwithstanding
the foregoing, in the event that an assignee does not fulfill its purchase obligations hereunder, the original Subscriber shall
be secondarily responsible for fulfilling such purchase obligations, and the original Subscriber shall (i) be permitted to enforce
this Agreement against such assignee on behalf of the Company, (ii) receive such defaulting assignee’s rights under this
Agreement (including its share of the Guarantee Escrow Shares), and (iii) be entitled to seek any remedies against the defaulting
assignee for such default to which it or the Company may be entitled under this Agreement, such assignment, at law or in equity.

 

17.           Binding
Effect; Third Party Beneficiaries. Except as otherwise provided herein, this Agreement shall be binding upon and inure to the
benefit of the parties and their heirs, successors and assigns, and the agreements, representations, warranties and acknowledgments
contained herein shall be deemed to be made by and be binding upon such heirs, executors, administrators, successors, legal representatives
and assigns. This Agreement does not confer any rights or remedies upon any person or entity other than the parties hereto and
their heirs, successors and permitted assigns, provided, however, that Borqs is an intended third-party beneficiary
of this Agreement, and the Company and the Subscriber hereby acknowledge and agree that Borqs has the right to cause the Company
to enforce its rights and perform its obligations under this Agreement including the right to cause the Company to make or not
make any election or otherwise exercise or not exercise a right hereunder.

 

    	 	14	 

     

    

 

18.           Governing
Law; Jurisdiction; WAIVER OF JURY TRIAL. This Agreement shall be governed by, construed and enforced in accordance with the
Laws of the State of Delaware without regard to the conflict of laws principles thereof. All Actions arising out of or relating
to this Agreement shall be heard and determined exclusively in any state or federal court located in New York, New York (or in
any court in which appeal from such courts may be taken) (the "Specified Courts"). Each party hereto (and
Borqs to the extent of its third party beneficiary rights) hereby (a) submits to the exclusive jurisdiction of any Specified Court
for the purpose of any Action arising out of or relating to this Agreement and (b) irrevocably waives, and agrees not to assert
by way of motion, defense or otherwise, in any such Action, any claim that it is not subject personally to the jurisdiction of
the above-named courts, that its property is exempt or immune from attachment or execution, that the Action is brought in an inconvenient
forum, that the venue of the Action is improper, or that this Agreement or the transactions contemplated hereby may not be enforced
in or by any Specified Court. Each party (and Borqs to the extent of its third party beneficiary rights) agrees that a final judgment
in any Action shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided
by Law. Each party irrevocably consents to the service of the summons and complaint and any other process in any other Action relating
to the transactions contemplated by this Agreement, on behalf of itself, or its property, by personal delivery of copies of such
process to such party at the applicable address set forth in Section 12. Nothing in this Section 18 shall affect the right of any
party to serve legal process in any other manner permitted by Law. EACH PARTY HERETO (AND BORQS TO THE EXTENT OF ITS THIRD PARTY
BENEFICIARY RIGHTS) HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH
RESPECT TO ANY ACTION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.

 

19.           Specific
Performance. Each party acknowledges that the rights of each party to consummate the transactions contemplated by this Agreement
are unique, recognizes and affirms that in the event of a breach of this Agreement by any party, money damages may be inadequate
and the non-breaching party (or Borqs) may have not adequate remedy at law, and agree that irreparable damage would occur in the
event that any of the provisions of this Agreement were not performed by an applicable party in accordance with their specific
terms or were otherwise breached. Accordingly, each party (and Borqs as a third party beneficiary) shall be entitled to seek an
injunction or restraining order to prevent breaches of this Agreement and to seek to enforce specifically the terms and provisions
hereof, without the requirement to post any bond or other security or to prove that money damages would be inadequate, this being
in addition to any other right or remedy to which such party may be entitled under this Agreement, at law or in equity.

 

20.           Severability.
In case any provision in this Agreement shall be held invalid, illegal or unenforceable in a jurisdiction, such provision shall
be modified or deleted, as to the jurisdiction involved, only to the extent necessary to render the same valid, legal and enforceable,
and the validity, legality and enforceability of the remaining provisions hereof shall not in any way be affected or impaired thereby
nor shall the validity, legality or enforceability of such provision be affected thereby in any other jurisdiction. Upon such determination
that any term or other provision is invalid, illegal or incapable of being enforced, the parties will substitute for any invalid,
illegal or unenforceable provision a suitable and equitable provision that carries out, so far as may be valid, legal and enforceable,
the intent and purpose of such invalid, illegal or unenforceable provision.

 

21.           Entire
Agreement. This Agreement and the Registration Rights Agreement, and to the extent incorporated herein, the Merger Agreement,
constitutes the entire agreement of the Subscriber and the Company relating to the matters contained herein and therein, superseding
all prior contracts or agreements relating to such matters, whether oral or written. Notwithstanding the foregoing, this Section
21 shall not affect any confidentiality obligations of the Subscriber to the Company or Borqs pursuant to any confidentiality agreements
entered into by the Subscriber prior to the date hereof.

 

    	 	15	 

     

    

 

22.           Interpretation.
The headings, titles and subtitles used in this Agreement are for convenience only and are not to be considered in construing or
interpreting this Agreement. In this Agreement, unless the context otherwise requires: (i) any pronoun used in this Agreement shall
include the corresponding masculine, feminine or neuter forms, and the singular form of nouns, pronouns and verbs shall include
the plural and vice versa; (ii) “including” (and with correlative meaning “include”) means including without
limiting the generality of any description preceding or succeeding such term and shall be deemed in each case to be followed by
the words “without limitation”; (iii) the words “herein,” “hereto,” and “hereby”
and other words of similar import in this Agreement shall be deemed in each case to refer to this Agreement as a whole and not
to any particular section or other subdivision of this Agreement; and (iv) the term “Dollars” or “$” means
United States dollars. The parties have participated jointly in the negotiation and drafting of this Agreement. Consequently, in
the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties hereto, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship
of any provision of this Agreement.

 

23.           Counsel.
The Subscriber hereby acknowledges that the Company and its counsel represent the interests of the Company and not those of the
Subscriber in any agreement (including this Agreement) to which the Company is a party.

 

24.           Further
Assurances. From time to time, at another party's request and without further consideration (but at the requesting party's
reasonable cost and expense), each party shall execute and deliver such additional documents and take all such further action as
may be reasonably necessary to consummate the transactions contemplated by this Agreement.

 

25.           Counterparts;
Facsimile. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall
be deemed to be an original and all of which together shall be deemed to be one and the same agreement. A facsimile or other electronic
transmission of this signed Agreement shall be legal and binding on all parties hereto.

 

{Remainder of Page Intentionally Left
Blank; Signature Page Follows}

 

    	 	16	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have executed this Agreement, as of the date first written above.

 

	 
	The Company:
	 	 	 
	 	PACIFIC SPECIAL ACQUISITION CORP.
	 	 	 
	 	By:	/s/
    Yaqi
    Feng                            
	 		Name: Yaqi
    Feng 
	 		Title: COO 
	 	 	 
	 	The Subscriber:
	 	 	 
	 	ZHENGQI INTERNATIONAL HOLDING
    LIMITED
	 	 	 
	 	By:	/s/ Zhouhong Peng
	 		Name: Zhouhong Peng
	 		Title: Director

 

 

{Signature
Page to Backstop and Subscription Agreement}

    	 		 

     

    

 

Exhibit A

Investor Questionnaire

 

THIS QUESTIONNAIRE MUST BE ANSWERED FULLY
AND RETURNED ALONG WITH YOUR COMPLETED SUBSCRIPTION AGREEMENT IN CONNECTION WITH YOUR PROSPECTIVE PURCHASE OF SHARES FROM PACIFIC
SPECIAL ACQUISITION CORP (THE “COMPANY”).

 

THE INFORMATION SUPPLIED IN THIS QUESTIONNAIRE
WILL BE HELD IN STRICT CONFIDENCE. NO INFORMATION WILL BE DISCLOSED EXCEPT TO THE EXTENT THAT SUCH DISCLOSURE IS REQUIRED BY LAW
OR REGULATION, OTHERWISE DEMANDED BY PROPER LEGAL PROCESS OR IN LITIGATION INVOLVING THE COMPANY AND ITS CONTROLLING PERSONS.

 

Capitalized terms used herein without definition
shall have the respective meanings given such terms as set forth in the Backstop and Subscription Agreement by and between Company
and Zhengqi International Holding Limited, a company incorporated in the British Virgin Islands (the “Agreement”).

 

(1)       The
undersigned represents and warrants that he, she or it comes within at least one category marked below, and that for any category
marked, he, she or it has truthfully set forth, where applicable, the factual basis or reason the undersigned comes within that
category. The undersigned agrees to furnish any additional information which the Company reasonably deems necessary in order to
verify the answers set forth below.

 

	Category A ___	
        The undersigned is an individual (not a
        partnership, corporation, etc.) whose individual net worth, or joint net worth with his or her spouse, presently exceeds $1,000,000.

         

        Explanation. In calculating net
        worth, you include all of your assets (other than your primary residence), whether liquid or illiquid, such as cash, stock, securities,
        personal property and real estate based on the fair market value of such property MINUS all debts and liabilities (except that
        a mortgage or other debt secured by your primary residence, up to the estimated fair market value of the primary residence at the
        time of the purchase of the Shares, shall not be included as a liability, provided that if the amount of such indebtedness outstanding
        at the time of the purchase of the Shares exceeds the amount outstanding 60 days before such time, other than as a result
        of the acquisition of your primary residence, the amount of such excess shall be included as a liability. Further, the amount of
        any mortgage or other indebtedness secured by your primary residence that exceeds the fair market value of the residence at the
        time of the purchase of the Shares shall be included as a liability.

	 	 
	Category B ___	The undersigned is an individual (not a partnership, corporation, etc.) who had an income in excess of $200,000 in each of the two most recent years, or joint income with his or her spouse in excess of $300,000 in each of those years (in each case including foreign income, tax exempt income and full amount of capital gains and losses but excluding any income of other family members and any unrealized capital appreciation) and has a reasonable expectation of reaching the same income level in the current year.
	 	 
	Category C ___	The undersigned is a director or executive officer of the Company which is issuing and selling the Shares.

 

    	 	1	 

     

    

 

	Category D ___	
        The undersigned is a bank, as defined in
        Section 3(a)(2) of the Securities Act of 1933, as amended (the “Act”); a savings and loan association or
        other institution as defined in Section 3(a)(5)(A) of the Act, whether acting in its individual or fiduciary capacity; any
        broker or dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934; any insurance company as defined
        in Section 2(a)(13) of the Act; any investment company registered under the Investment Company Act of 1940 or a business development
        company as defined in Section 2(a)(48) of that Act; any Small Business Investment Company licensed by the U.S. Small
        Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958; any plan established and
        maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for
        the benefit of its employees, if such plan has total assets in excess of $5,000,000; any employee benefit plan within the meaning
        of the Employee Retirement Income Security Act of 1974 if the investment decision is made by a plan fiduciary, as defined in Section 3(21)
        of such act, which is either a bank, savings and loan association, insurance company, or registered investment advisor, or if the
        employee benefit plan has total assets in excess of $5,000,000 or, if a self-directed plan, with investment decisions made solely
        by persons that are accredited investors (describe entity).

        ___________________________________________________________________
        ___________________________________________________________________

         

	Category E ___	
        The undersigned is a private business development
        company as defined in Section 202(a) (22) of the Investment Advisors Act of 1940 (describe entity) 

        ___________________________________________________________________
        ___________________________________________________________________  

         

	Category F ___	
        The undersigned is either a corporation,
        partnership, Massachusetts or similar business trust, or any organization described in Section 501(c)(3) of the Internal Revenue
        Code, in each case not formed for the specific purpose of acquiring the Shares and with total assets in excess of $5,000,000. (describe
        entity)

        ___________________________________________________________________
        ___________________________________________________________________

         

	Category G ___	
        The undersigned is a trust with total assets
        in excess of $5,000,000, not formed for the specific purpose of acquiring the Shares, where the purchase is directed by a “sophisticated
        investor” as defined in Regulation 506(b)(2)(ii) under the Act.

        __________________________________________________________________

        __________________________________________________________________ 

         

	Category H ___	
        The undersigned is an entity (other than
        a trust) in which all of the equity owners are “accredited investors” within one or more of the above categories. If
        relying upon this Category alone, each equity owner must complete a separate copy of this Investor Questionnaire. (describe entity)

        ___________________________________________________________________
        ___________________________________________________________________

         

	 	The undersigned agrees that the undersigned will notify the Company at any time on or prior to the applicable closing in the event that the representations and warranties in this Investor Questionnaire shall cease to be true, accurate and complete.

 

    	 	2	 

     

    

 

(2)           Suitability (please
answer each question) 

 

	 	(a)	Are you familiar with the risk aspects and the non-liquidity of investments such as the Shares for which you seek to acquire?

 

YES _____     NO
_____

 

	 	(b)	Do you understand that there is no guarantee of financial return on this investment and that you run the risk of losing your entire investment?

 

YES _____     NO
_____

 

(3)           Manner
in which title is to be held: (circle one)

 

	 	(a)	Individual Ownership
	 	(b)	Community Property
	 	(c)	Joint Tenant with Right of Survivorship (both parties must sign)
	 	(d)	Partnership
	 	(e)	Tenants in Common
	 	(f)	Company
	 	(g)	Trust
	 	(h)	Other

(4)           Are you a U.S.
person (as defined in the Securities Act)?

 

YES _____     NO
_____

 

 (5)           FINRA Affiliation.

 

Are
you affiliated or associated with a member of FINRA (please check one):

 

YES _____     NO
_____

 

If Yes, please describe: 

 

	 	 
	 	 
	 	 

 

*If subscriber is a Registered
Representative with a member of FINRA, have the following acknowledgment signed by the appropriate party:

 

The undersigned FINRA firm acknowledges
receipt of the notice required by the Conduct Rules of FINRA.

  

	 	 	 
	 	Name of NASD Member Firm	 
	 	 	 
	 	By:	 	 
	 	 	Authorized Officer	 
	 	 	 	 
	 	Date:	 	 

 

{Remainder of page intentionally left
blank}

 

    	 	3	 

     

    

 

The undersigned is informed
of the significance to the Company of the foregoing representations and answers contained in this Investor Questionnaire and such
answers have been provided under the assumption that the Company will rely on them. The undersigned represents and warrants to
the Company, as or on behalf of the Subscriber, that the information in this Investor Questionnaire is true, complete and accurate
and may be relied upon by the Company. The Subscriber understands that a false representation may constitute a violation of law,
and that any person or entity who suffers damage as a result of a false representation may have a claim against the Subscriber
for damages

  

	Individual
    Signature:	 	Entity
    Signature:
	 	 	 	 	 
	 	 	 
	Signature	 	Entity
    Name
	 	 	 	 	 
	 	 	By:	 
	Name
    (Print)	 		Signature
	 	 	 	 	 
	 	 	 	 
	Date:	 	 	Signatory
    Name (Print)
		 	 	 	 
	 	 	 	 	 
	 	 	 	 
		 	 	Title	 
	 	 	 	 	 
		 	 	Date:	 

 

 

4Exhibit 10.7

 

Borqs Wireless Ltd.

 

Employment Contract

 

	Party of the First Part: Borqs Wireless Ltd.	Party of the Second Part: Xiyuan CHEN
	 	 
	Legal Representative: Xiyuan CHEN

                                    Or Commissioned Agent:

                                    Address of the Party of the First
Part: No. 10

                                    Jiuxianqiao Road, Chaoyang District,
Beijing

                                    Tower A, Building B23, Universal
Business Park

                                    Postal Code: 100102
	Identification Card No.:

                                    Residence Location:

                                     

                                    Home Address:

                                    Postal Code:

                                    Telephone
No.:

 

This
employment contract (hereinafter, “this Contract”) is being concluded and signed by and between Borqs Wireless Ltd.,
a limited liability company incorporated in accordance with the laws of the People’s Republic of China (hereinafter, the “Company”)
and Mr./Ms. Xiyuan CHEN (hereinafter, the “Employee”) on July 1, 2013.

 

Each
party to this Contract, by means of amicable negotiations, voluntarily and on the basis of mutual benefit, hereby agrees and signs
this Contract as follows:

 

Article 1     Employment

 

1. 1        Content of the work
and the work place.

 

1.1.1 In accordance
with the relevant Chinese laws, statutes, and regulations, the Company agrees to employ the employee in the Company in the Office
of the Chief Executive Officer in order to conduct work as President and Chief Executive Officer in accordance with the articles
and provisions stipulated in this Contract, and the workplace shall be the premises of the Company, and the Employee agrees to
accept this employment.

 

1.1.2 The Employee
shall, at all times in accordance with the instructions directly issued by the Company, be responsible for conducting sad work,
and shall accept all the guidance and supervision of the top leadership and the relevant departments of the Company.

 

1.1.3 Both Parties
hereby acknowledge that, at any time during the term of this Contract, the Company shall be entitled, in accordance with the operating
requirements and the employee’s work performance, make suitable changes as the Company deems to be necessary with regard to the
department, work responsibilities, and position held by the Employee, the content of the work, or the workplace within the scope
of the Company and its subsidiaries.

 

1.2         Employment Term.

 

1.2.1
This Contract shall become effective on July 1, 2013 (the “Effective Date”). The Parties agree that this Contract
shall be a Fixed Term Contract, beginning on its effective date and ending on October 7, 2015 (hereinafter, the “Term of
the Contract”), unless in accordance with the provisions and clauses stipulated in this Contract it is extended or
terminated early. Prior to the expiration date of the Term of the Contract or in accordance with any extension of this
Article, if either Party wishes to renew the Contract, said Party shall, one (1) month before the expiration date notify the
other Party thereof in writing, After both Parties reach agreement
in writing, the Term of this Contract may be extended accordingly.

 

    	 	1	 

     

    

 

1.2.2 Each
Party to this Contract agrees that the first three (3) months of the Term of the Contract shall be a probationary period. If at
any time during this probationary period, the Company recognizes that the Employee is not in compliance with the terms and conditions
of employment, the Company shall be entitled, after explaining the reasons to the Employee, to rescind this Contract immediately
without any need to provide advance notice to the Employee. The Employee may terminate this Contract during the probationary period
by providing written notice to the Company three days in advance. Once this Contract has been terminated in accordance with the
provisions stipulated in this clause, except the obligations regarding confidentiality stipulated clearly elsewhere in this Contract,
neither Party shall be liable to the other Party for performing any obligations under the terms of this Contract.

 

1.3         Obligations
of the Employee. The Employee agrees that, besides the obligations stipulated in this Contract, during the Term of this Contract,
the Employee shall be required to:

 

1.3.1 During
his regular working hours according to this Contract, use all his time, energy, and skills in performing the obligations stipulated
in this Contract, and perform his duties effectively, exert his greatest efforts, and ensure the satisfactory completion of the
responsibilities assigned by the Company.

 

1.3.2 According
to the provisions of this Contract, the Company’s regulations and policies and applicable laws, regulations, and faithful and scrupulous
performance of his duties, perform his obligations for the Company as stipulated under the provisions of this Contract, not engage
in any activities that violate the Company’s regulations or that might harm the interests of the Company, and not to use the work
duties or position in the Company directly or indirectly to obtain his own personal interests.

 

1.3.3 The Employee
shall conscientiously comply with the system of rules stipulated by the Company, take care of the Company’s assets, respect professional
ethics, be industrious and meticulous, and proactively participate in the training and education organized by the Company. If the
Employee violates the system of rules stipulated by the Company or other work discipline, the Company may, in accordance with said
individual system of rules, apply disciplinary measures, up to terminating this Contract.

 

1.3.4 Prior
to the Company signing the Employment Contract, the Employee has agreed that he is signing this Contract with the Company only
after he has officially terminated the employment relationship with his previous employer. If the Employee violates this commitment
and causes this Contract to be null and void, the Employee shall accept all liability. If it causes losses to the Company, the
Employee shall be liable to pay compensation. The Company shall not assume liability for any economic disputes or legal liability
of the Employee prior to the signing of the Contract.

 

1.4         Obligations
of the Company. The Company hereby agrees that, besides for other obligations stipulated in this Contract, the Company shall
also, during the Term of this Contract be required to:

 

1.4.1 In accordance
with the relevant laws and regulations with regard to labor protection, provide a safe, healthy environment and working conditions
for the Employee;

 

1.4.2 Formulate
for the employee and provide to the employee an employee handbook, and said handbook shall stipulate all work regulations in compliance
with Chinese laws and regulations and include the bonus system and disciplinary rules, working hours, vacation time, the employee
corporate benefits plan, and the work safety plan. Once said handbook has become effective, it shall become an inseparable part
of this Contract, and both the Employee and the Company shall be required to comply strictly with it in accordance with this Contract.
However, if any provision in the employee handbook is inconsistent with or conflicts with any clause stipulated in this Contract,
the clause in this Contract shall take precedence.

 

1.5        Training.
If the Company decides to provide training events for the Employee in any location, the Employee shall participate in said
training, in accordance with said training plan and in the designated location. Unless this Contract is terminated in
accordance with Clauses 5.1, 5.2, and 5.3 or Clauses 5.6.2 or 5.6.3 in this Contract, after the Employee has participated in
said training, he shall provide services the Company for at least three (3) years in accordance with the provisions
stipulated in this Contract; and if the Employee conducts such service to the Company less than three (3) years, the Employee
shall compensate the Company for all the training expenses that the Company has expended for the training conducted and
provided to the Employee in accordance with this clause and pay a penalty for breach of contract. The sum of money for the
aforementioned training may be reduced year after year by thirty percent (30%) per year, in accordance with the number of
years of actual service for the Company after the Employee received the training. However, any compensation that the Employee
pays to the Company in accordance with the provisions stipulated in this clause may not affect or reduce any other of
liability he has for breach of the contract or of any of the obligations and liability assumed by him pursuant to Article 6
of this Contract.

 

    	 	2	 

     

    

 

Article 2     Employment Compensation

 

2.1         Salary.

 

2. 1.1 During
the period the Employee is employed in accordance with this Contract, unless there is agreement reached between the parties elsewhere
in this Contract, the Company shall, during the Term of this Contract stipulated in Article 1.2.1 of this Contract, pay the Employee,
in Chinese Yuan (CNY) a salary for compensation per month equivalent the amount in the offer letter (the amount in CNY in the offer
letter), and the salary for the probationary period shall be 100% of the official salary.

 

2.1.2 The annual
salary mentioned in this Contract or in other Company policies shall, in accordance with the Company’s salary policy, be paid to
the Employee by the Company with the annual amount of compensation divided into 12 equal monthly installments. For the composition
of the salary see the pay stub.

 

2.1.3 The Company
shall be entitled, in accordance with the Employee’s wishes and changes in the Employee’s work duties or position in the company,
or in accordance with the Company’s new salary policy, adjust or change the Employee’s salary level.

 

2.1.4
The Company may decrease or deduct the following expenses and sums from the Salary it pays to the Employee in accordance with
this Contract:

 

2.1.4.1 Income tax on the Employee’s salary withheld in accordance with Article 9 of this Contract;

 

2.1.4.2 The
social insurance expenses to be assumed by the Employee individually to be withheld by the Company on his behalf in accordance
with this Contract or in accordance with the relevant Chinese laws and regulations;

 

2.1.4.3 The
expenses specified by a court judgment or by an arbitral award that the Company is required to deduct from the Employee’s salary;

 

2.1.4.4 All
sums of compensation for losses to be paid by the Employee to the Company as stipulated in this Contract or by means of another
legal decision, and all other expenses and expenditures deducted from the salary paid to the Employee in accordance with applicable
Chinese laws and regulations.

 

2.2        Bonuses.
During the Term of this Contract, the Company may pay the Employee bonuses at any time pay the, in accordance with the
standards, clauses, terms and conditions, and amounts that it determines itself.

 

Article 3    Social Welfare Insurance,
Benefits, and Vacations

 

3.1        Social
welfare insurance and benefits. During the Term of this Contract, the Company shall provide the Employee social welfare insurance
and benefit payments stipulated by the relevant Chinese laws and regulations, including, but not limited to those with regard to
retirement, health care, and housing.

 

3.2        Vacations.
The Employee shall, in accordance with the relevant laws and regulations of China, have the right to paid leave and vacation as
stipulated in the Company’s policy, however, the Company shall have the right, in accordance with work requirements, to arrange
for the Employee to use the relevant vacation time early or defer the use of said time.

 

    	 	3	 

     

    

 

Article 4     Arrangement of Working
Hours

 

The Company
shall implement a standard full-time work system, adopting flexible working hours. The Employee shall, work eight (8) hours per
day (break times are not calculated in the working hours), forty (40) hours per week; however, because of work requirements or
depending on the intensity and the environment of the work, the Company shall have the right to arrange for increasing or decreasing
the number of hours of work per day or per week or adjust his beginning and ending times, and the Employee waives the right to
claim from the company any sum of additional compensation or an allowance on the basis of the aforementioned adjustments.

 

Article 5     Termination

 

5.1         Immediate
Termination. This Contract shall, terminate automatically without advance notice on the date on which any of the following
circumstances arises:

 

5.1.1 The Term
of the Contract stipulated in Article 1.2.1 of this Contract expires;

 

5.1.2 This Contract
is terminated within the probationary period in accordance with the provision stipulated by Article 1.2.2 of this Contract;

 

5.1.3 Both Parties
to this Contract agree to terminate this Contract early;

 

5.1.4 The Employee
is legally investigated for criminal liability or re-education through labor.

 

5.2         Immediate
termination of the Contract by the Company. Any of the following kinds of conduct on the part of the Employee shall constitute
a serious breach of contract on the part of the Employee and shall cause the Company to have the right to terminate this Contract
the same day it issues a written notice of termination:

 

5.2.1 The Employee
conducts any deceit of the Company or engages in any other dishonest conduct, regardless of whether said conduct causes the Company
to incur an actual loss;

 

5.2.2 The Employee
has committed gross negligence, engaged in corrupt practices, and caused interests of the management unit to suffer serious losses;

 

5.2.3 The Employee,
at the same time that he was an employee, established an employment relationship with another employer, has used his position for
it, and has refused to correct it;

 

5.24 The Employee’s
conduct constitutes a serious violation of Chinese laws and regulations, and has been legally investigated for criminal liability;

 

5.2.5 The Employee
has deliberately or seriously breached the employment regulations or work rules stipulated by the Company;

 

5.2.6 The Employee’s
conduct has breached the obligations stipulated in Article 1.3 of this Agreement or Article 6 or Article 7 of this Agreement;

 

5.2.7 Other
circumstances stipulated by Chinese laws and regulations that might terminate this Agreement.

 

5.3       Termination
with thirty days’ notice in writing.

 

5.3.1 Under
the circumstances in the provisions stipulated in Clauses 5.1 and 5.2 and in Clause 5.3.2 and under any of the following kinds
of circumstances, the Company shall be entitled to terminate this Contract, however, it must give thirty days’ notice in writing
to the Employee:

 

5.3.1.1 If the
Employee becomes ill or is injured for reasons other than work, and after the expiration of the legally stipulated period of illness
he cannot perform his original job, or cannot perform work that the Company otherwise arranges for him in accordance with the actual
circumstances and requirements of the Company at the time:

 

5.3.1.2 The
Employee, after he has had the Company’s on the job training or other formal training is still unable to perform the tasks in
accordance with this Contract or the requirements of the Company;

 

    	 	4	 

     

    

 

5.3.1.3 The
Employee has, other than the provisions stipulated in Article 5.2 of this Contract, engaged in conduct that is in breach of this
Contract and caused the Company to suffer significant losses; or

 

5.3.1.4 Objective
circumstances at the time this Contract is concluded in accordance with the significant changes indicated in Article 5.4 of this
Contract occur and render this Contract impossible to perform, even though both Parties have consulted each other and have still
not been able to reach agreement with regard to amending this Contract.

 

5.3.2 If the
following circumstances arise, the Company, under said circumstances, before terminating this Contract in accordance with the provisions
stipulated in Article 5.3.1 above, shall, at the same time, handle the matter in accordance with the relevant applicable Chinese
laws and regulations:

 

5.3.2.1 The
Employee, according to a determination of the relevant Chinese labor department, is suffering from an occupational illness or has
sustained an injury while serving the Company causing the Employee to lose or partially lose his ability to work; or

 

5.3.2.2 The
Employee, because of other causes, is ill or has sustained an injury and, has been diagnosed by a reputable health care institution
as stipulated by the relevant regulations of the Chinese Government and it is within the period of medical treatment determined
by a doctor’s certificate.

 

5.3.2.3 The
Employee submits a valid evidence proving that, according to provisions stipulated the applicable Chinese laws, it is within a
time period that the Company cannot dismiss a female employee.[The provision stipulated in this clause shall be applicable only
to female employees.]

 

5.4       Significant
changes in circumstances. The significant changes in circumstances stipulated in Article 5.3.1.4 of this Contract shall include
but not be limited to the following:

 

5.4.1 The Company conducts a merger
with another company and puts the corporate assets for sale on the market or transfers them to any other company or to any third
party;

 

5.4.2 For three (3) consecutive years, the Company’s production operations and marketing sales have not reached the
scheduled goals or the Company has been operating at a financial loss for three (3) consecutive years;

 

5.4.3
The Company has legally declared bankruptcy, dissolution, or liquidation;

 

5.4.4 New laws or regulations promulgated by the
Chinese Government render one or both Parties to the Contract legally unable to perform this Contract.

 

5.5      Compensation.

 

When a significant
change stipulated in Article 5.4 of this Contract causes the Company to terminate this Contract in accordance with the provisions
stipulated above, the Company shall, in accordance with the provisions stipulated in the applicable Chinese laws and regulations,
provide to the Employee an appropriate subsidy and compensation. However, both Parties hereby explicitly acknowledge that when
calculating said subsidy and compensation, any employment relationship prior to the one that hereby exists other than between the
Employee and the Company shall not be counted as Employment of the Employee by the Company, and the Employee’s employment by the
Company shall begin on the Effective Date of this Contract.

 

5.6       Termination
of the Contract by the Employee.

 

5.6.1 During
the Term of this Contract and under the circumstances stipulated by Article 1.5 of this Contract, the Employee may submit his resignation
and terminate this Contract; however, he must submit written notice to the company thirty (30) days in advance;

 

5.6.2 If the
Company seriously breaches the provisions of Clause 1.4 or Article 2, Article 3, or Article 4 of this Contract, and receives the
written notice from the Employee, thirty days after said breaches of contact such breaches of contract continue, the Employee shall
be entitled to terminate this Contract; or

 

5.6.3 If
the Company uses violence or makes threats or uses illegal methods to limit the personal freedom of the Employee, in order to
compel the Employee to conduct work that is prohibited by Chinese law, the Employee shall be entitled to issue written notice
of termination of this Contract to the Company.

 

    	 	5	 

     

    

 

5.6.4 Other
than the circumstances stipulated in Article 5.6.3, at the same time the Employee terminates this Contract, the Employee shall
compensate the Company for the advanced study and training, training expenses that the Company funded during the Term of the Contract
and for the expenses paid directly by the Company to hire the Employee (including but not limited to the expenses of employment
agencies or executive recruitment (headhunting) companies).

 

5.7       Compensation
by the Company.

 

When the following
events occur, the Company shall, in accordance with the provisions stipulated by the relevant Chinese laws and regulations, compensate
the Employee for the harm suffered as a result thereof:

 

5.7.1 The Company
has committed a serious breach of provisions stipulated in Clause 1.4.1 or Article 2, Article 3, or Article 4 of this Contract
and has not been able to stop the conduct in breach of contract after receiving written notification from the Employee indicating
such breach of contract;

 

5.7.2 If the
Company uses violence or makes threats or uses illegal methods to limit the personal freedom of the Employee.

 

5.8       Effective
date of termination.

 

5.8.1 When this Contract expires
in accordance with its provisions, or when terminated or rescinded, Clause 5.8 and Article 6, Article 7, and Article 8 of this
Contract shall remain in effect.

 

5.8.2 Within
seven (7) days after the expiration, termination, or rescission of this Contract, the Employee shall deliver or return to the Company
all the property that belongs to the Company that he has used or kept in his possession, including but not limited to the following:

 

5.8.2.1 All
the equipment, devices, and tools related to the employment that the Company provided for the Employee in accordance with this
Contract;

 

5.8.2.2 All
relevant Company management, operations, production, or product documents, files and records, and any copies of files that the
Employee had in his care, use, or under his control for which he was responsible;

 

5.8.2.3 Lists
of and/or materials regarding the Company’s vendors, customers, and other entities and individuals with which it has relationships;

 

5.8.2.4 The
computer equipment, hardware, disks, hard disks, compact disks or DVDs, and other office supplies provided by the Company. If
the Company suffers from any loss or harm as a result of a breach of the provision stipulated above by the Employee, the Employee
shall assume liability for compensating the Company for the production and operating losses thereby caused.

 

Article 6     Trade Secrets

 

6.1       Trade
secrets. The Employee hereby acknowledges that the Company possesses commercial and technical information that can bring economic
benefits to the Company that are not known to people or are not specially designated, and the Company has adopted appropriate measures
to protect said trade secrets and classified commercial information (hereinafter, “Trade Secrets”).The Employee may obtain
and come to know said Trade Secrets because of his employment position at the Company. Said Trade Secrets shall include but are
not limited to the following information and materials:

 

6.1.1 Technical
data and software materials (including design plans and flow charts);

 

    	 	6	 

     

    

 

6.1.2 Lists
of customers, vendors, sales representatives, and dealers;

 

6.1.3 Production
formulas, workflows, blueprints, and designs;

 

6.1.4 Proprietary
technology and patented technology and related materials, whether said proprietary technology and patented technology has already
obtained patent registration;

 

6.1.5 Information
and plans regarding supplies, marketing, and research and development;

 

6.1.6 Financial
information;

 

6.1.7 Records
of the Company’s meetings, decisions, and internal affairs.

 

6.2 The Employee
hereby agrees and guarantees that during the term of his employment in accordance with this Contract and for three years thereafter
the Employee may not use the Company’s Trade Secrets for his individual purposes and interests, and under circumstances in which
he has not receive separate written authorization from the Company, may not disclose said Trade Secrets to any company or individual,
organization, or entity in any form for any purpose. The Employee acknowledges that the Company possesses absolute property rights
to said Trade Secrets, and the Employee shall not raise any objections or claim any rights with regard to the property rights to
said Trade Secrets and unless it is in the name of the Company or with written approval from the Company shall not himself or in
the name of any other individual or company anywhere in the world seek the registration or recording of any property rights to
said Trade Secrets.

 

6.3       Non-Compete
Clause. In order to protect the Company’s Trade Secrets, the Employee agrees that during the term of this Contract and during
one year thereafter, unless he is performing services for the Company on the basis of this contract, he may hold any appointment
for any company, body, organization, or entity that has a competitive relationship with the Company, and he also may not himself
conduct or conduct jointly with any other company, body, organization, or individual any activities involving inventions, research,
management, production, or sales in any form that is in competition with the Company.

 

6.4       Compensation
for breach of contract. The Employee acknowledges that the Employee’s guarantee above to guarantee the Company’s Trade Secrets
and non-compete commitment in this Article is an express precondition for the Company’s agreement to hire the Employee in accordance
with this Contract, and if the Employee breaches any of said obligations it could cause the inestimable losses to the company.
The Employee therefore agrees that any action that breaches or violates the obligations stipulated in this Article shall entitle
the Company to file a lawsuit or request enforcement or a prohibition directly in the courts without going through a labor arbitration
and the Company shall not be required to prove the actual losses that it has sustained, and may ask the court for a decision or
judgment to grant compensation for the prohibitive and indemnifiable losses. The Employee agrees that under circumstances in which
the Company is able to prove that the Employee has breached the obligations stipulated in this Article, the Employee waives the
any right to demand that the Company prove the actual losses that it has sustained as a result.

 

Article 7     Intellectual Property

 

The
Employee agrees that during the period of his employment by the Company in accordance with this Contract, he himself or jointly
with others designs or upgrades any software products with regard to the Company’s products, production, management, sales, or
any other matters related to the Company’s operations, or various kinds of graphical products that he or they create, design,
or improve with regard to the company’s products, plans, work flows designs, or products produced or improved with regard to the
Company’s production facilities and research and development technology related thereto, along with concepts and programs produced
with regard to the Company’s operations management, raw materials supplies, product sales, and market development, as well as
any software products designed or upgraded related to the Company’s production, management, sales, products, or any other items
related to the Company’s operations shall all be regarded as his employment products, inventions, discoveries, and results and
shall be the exclusive property of the Company, The Employee agrees that he shall take all necessary steps (including signing
various types of documents) so that such kinds of works, inventions, discoveries, and results are under the name of the Company
and authorizes the Company to use them and conduct registrations and recordings in the name of the Company, so that the Company
can obtain the corresponding intellectual property rights, and shall not on this basis seek any expenses or compensation from
the Company besides his rightful reward.

 

    	 	7	 

     

    

Article 8     Resolution of Employment
Disputes

 

If any disputes
arise between the Company and the Employee with regard to this Contract, they shall first endeavor to resolve it through amicable
consultation. The consultation shall begin within five (5) days after written notice indicating the existence of the dispute and
requesting resolution of the dispute has been given by one Party to the other Party. If within ten (10) days after the beginning
of the consultation it has not been possible to resolve the dispute, either party may ask the Company’s union organization to
mediate and resolve the dispute. If within sixty (60) days after the aforementioned notice was issued, neither the aforementioned
consultation nor mediation has been able to resolve the dispute, either Party may request arbitration by the Labor Dispute Arbitration
Committee with jurisdiction in the city of Beijing. If either Party refuses to comply with the arbitral award issued by the Labor
Dispute Arbitration Committee, it may file a lawsuit in the People’s Court with jurisdiction within fifteen days after the issuance
of the arbitral award.

 

Article 9     Taxation

 

The Employee
shall be liable for the individual income taxes that must be paid on the salary, bonuses, and various kinds of income received
as compensation paid by the Company to the Employee as stipulated in this Contract, The Company shall withhold in advance the
individual income tax and other tax expenses at the time the salary, bonuses, and other kinds of income for compensation are paid
to the Employee.

 

Article 10     Other Provisions

 

10.1       Language
and text. This Contract has been drafted in Chinese, in two original counterparts, and shall become effective on the aforementioned
Effective Date when signed by the Company and the Employee. The Parties shall each have one counterpart, and both texts shall be
the same original text.

 

10.2       Ability
to sign the Contract. The Employee hereby represents and guarantees that the Employee can legally sign this Contract and be
bound by this Contract. The duties for which the Employee is signing this Contract and the work stipulated in this Contract has
not and shall not breach any other employment contract or agreement that is binding upon the Employee, and shall not breach the
provisions of any other company, organization, or body that are binding upon him.

 

10.3       Validity.
If any clause of this Contract is not in accordance with Chinese laws or regulations, Chinese laws and regulations shall prevail
within the scope of said inconsistency.

 

10.4       Severability.
When any clause stipulated in this Contract conflicts with or becomes invalid or inconsistent on the basis of Chinese law, said
clause or clauses may not influence the effectiveness and the validity of the other clauses of this Contract.

 

10.5       Amendments
in the Contract. Revisions of, amendments to, or supplements to of any article in this Contract must be approved in writing
by both the Company and the Employee and be signed to be valid.

 

10.6       Transfer.
The Employee may not transfer this Contract.

 

10.7       Entire
Agreement. This Contract stipulates the entire agreement reached between the parties with regard to the content of this
Contract, and replaces all previous contracts and understandings with regard thereto. The Company and the Employee may at any
time, with regard to Trade Secrets, the non-compete clause, and/or intellectual property rights, draft contractual provisions
that are more detailed and more strict. Once said contractual provisions become effective, they shall automatically become an
appendix and an integral part of this Contract.

 

10.8       The
interpretation and performance of this Contract shall be conducted on the basis of Chinese law.

 

    	 	8	 

     

    

 

Both Parties hereby sign with the
date as indicated at the beginning of this Contract.

 

	“The Company”	 	“The /Employee” (signature and seal)
	 	 	 
	Borqs Wireless Ltd. (corporate seal)	 	[illegible seal]
	Legal Representative or Commissioned Agent (signature or seal)	 	(signature)
	 	 	 
	 	 	/s/ Pat Sek Yuen Chan
	[signature]	 	 
	{stamp:] Borqs Wireless Ltd. 	 	 
	
        1101050464617“The Employee” (signature
and seal]
	 	 

 

    	 	9	 

     

    

 

Employment Contract Renewal Form

 

This
renewal of the Employment Contract Term shall be a (fixed /indefinite) term Contract, with the renewal being effective
beginning on October 8, 2015 until ________. During the term that this Contract continues to be in effect, the terms and
conditions of employment shall be maintained unchanged.

 

	Legal
    Representative or Commissioned Agent (signature or seal)	 	The
    Employee (signature and seal)
	 	 	 
	
	
	 	 	 
	[signature]	 	/s/
    Pat Sek Yuen Chan
	{stamp:]
    Borqs Wireless Ltd. 	 	 
	1101050464617
        The Employee (signature and seal]
	 	 
	 	 	[illegible
    seal]
	 	 	   

  

Employment Contract Renewal Form

 

This renewal of the Employment
Contract Term shall be ___ (fixed /indefinite) term Contract, with the renewal being effective beginning on July 1, 2015
until ________. During the term that this Contract continues to be in effect, the terms and conditions of employment shall be
maintained unchanged.

 

	Legal Representative or Commissioned
Agent (signature or seal)	 	The Employee (signature and seal)
	 	 	 
	 	 	 

 

 

 

10

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