Document:

Exhibit 10.4

  

FORM
OF

NON-COMPETITION
AND NON-SOLICITATION AGREEMENT

 

THIS
NON-COMPETITION AND NON-SOLICITATION AGREEMENT (this “Agreement”) is being executed and delivered as
of [●], 2017 by [_______________________], an individual residing in [____________] (the “Subject Party”),
in favor of and for the benefit of Pacific Special Acquisition Corp., a business company incorporated in the British Virgin
Islands with limited liability, which will be known after the consummation of the transactions contemplated by the Merger Agreement
(as defined below) as “Borqs Technologies, Inc.” (including any successor entity thereto, “Purchaser”),
Borqs International Holding Corp., a company formed under the laws of the Cayman Islands with limited liability (together
with its successors, including the Surviving Company (as defined in the Merger Agreement), the “Company”),
and each of Purchaser’s and/or the Company’s respective present and future successors and direct and indirect Subsidiaries
(collectively with Purchaser and the Company, the “Covered Parties”). Any capitalized term used, but
not defined in this Agreement will have the meaning ascribed to such term in the Merger Agreement.

 

WHEREAS,
on December 27, 2016, Purchaser and the Company entered into that certain Merger Agreement (as amended from time to time in accordance
with the terms thereof, the “Merger Agreement”), by and among (i) Purchaser, (ii) PAAC Merger Subsidiary
Limited, a company formed under the laws of the Cayman Islands with limited liability and a wholly-owned subsidiary of Purchaser
(“Merger Sub”), (iii) Zhengqi International Holding Limited, in the capacity as the Purchaser Representative
thereunder (including any successor Purchaser Representative appointed in accordance therewith, the “Purchaser Representative”),
(iv) Zhengdong Zou, in the capacity as the Seller Representative thereunder, (v) the Company and (vi) for certain limited purposes
thereunder, Zhengqi International Holding Limited, a company incorporated in the British Virgin Islands, pursuant to which, subject
to the terms and conditions thereof, Merger Sub merged with an into the Company, with the Company continuing as the surviving
company, and with the Company’s shareholders receiving equity shares of Purchaser;

 

WHEREAS,
the Company, directly and indirectly through its Subsidiaries (including the WFOE, the VIE Entities and their respective Subsidiaries),
provides software and solutions for connected devices in the Internet of Things industry, and mobile communication service as
a Mobile Virtual Network Operator (the “Business”);

 

WHEREAS,
in connection with, and as a condition to the consummation of the transactions contemplated by the Merger Agreement (the “Transactions”),
and to enable Purchaser and the Company to secure more fully the benefits of the Transactions, including the protection and maintenance
of the goodwill and confidential information of the Company and its Subsidiaries, Purchaser has required that the Subject Party
enter into this Agreement;

 

WHEREAS,
the Subject Party is entering into this Agreement in order to induce Purchaser and Merger Sub to consummate the Transactions,
pursuant to which the Subject Party will directly or indirectly receive a material benefit; and

 

WHEREAS,
the Subject Party, as a former and/or current shareholder, director, officer and/or employee of the Company or its Subsidiaries,
has contributed to the value of the Company and has obtained extensive and valuable knowledge and confidential information concerning
the business of the Company and its Subsidiaries.

 

     

     

    

 

NOW,
THEREFORE, in order to induce Purchaser to consummate the Transactions, and for other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the Subject Party hereby agrees as follows:

 

1. 
Restriction on Competition.

 

(a) 
Restriction. The Subject Party hereby agrees that during the period from the Closing until the later of (i) the four (4)
year anniversary of the Closing Date and (ii) the date on which the Subject Party is no longer a director, officer, manager, employee
or independent contractor of any Covered Party (the “Termination Date”, and such period from the Closing
until the later of clauses (i) and (ii), the “Restricted Period”), the Subject Party will not, and will
cause its Controlled Affiliates not to, without the prior written consent of Purchaser (which may be withheld in its sole discretion),
anywhere in the People’s Republic of China or in any other markets in which the Covered Parties are engaged, or are actively
contemplating to become engaged, in the Business as of the Closing Date or during the Restricted Period (the “Territory”),
directly or indirectly engage in the Business (other than through a Covered Party) or own, manage, finance or control, or participate
in the ownership, management, financing or control of, or become engaged or serve as an officer, director, member, partner, employee,
agent, consultant, advisor or representative of, a business or entity (other than a Covered Party) that engages in the Business
(a “Competitor”). Notwithstanding the foregoing, the Subject Party and his or her Affiliates may own
passive investments of no more than two percent (2%) of any class of outstanding equity interests in a Competitor that is publicly
traded, so long as the Subject Party and his or her Affiliates and immediate family members are not involved in the management
or control of such Competitor (“Permitted Ownership”).

 

(b) 
Acknowledgment. The Subject Party acknowledges and agrees, based upon the advice of legal counsel and/or the Subject Party’s
own education, experience and training, that (i) the Subject Party possesses knowledge of confidential information of the Company
and its Subsidiaries and the Business, (ii) the Subject Party’s execution of this Agreement is a material inducement to
Purchaser to consummate the Transactions and to realize the goodwill of the Company and its Subsidiaries, for which the Subject
Party and/or his or her Affiliates will receive a substantial direct or indirect financial benefit, and that Purchaser would not
have entered into the Merger Agreement or consummated the Transactions but for the Subject Party’s agreements set forth
in this Agreement; (iii) it would impair the goodwill of the Company and its Subsidiaries and reduce the value of the assets of
the Company and its Subsidiaries and cause serious and irreparable injury if the Subject Party were to use his or her ability
and knowledge by engaging in the Business in competition with a Covered Party, and/or to otherwise breach the obligations contained
herein and that the Covered Parties would not have an adequate remedy at law because of the unique nature of the Business, (iv)
the Subject Party and his or her Controlled Affiliates have no intention of engaging in the Business during the Restricted Period
other than through Permitted Ownership, (v) the relevant public policy aspects of restrictive covenants, covenants not to compete
and non-solicitation provisions have been discussed, and every effort has been made to limit the restrictions placed upon the
Subject Party to those that are reasonable and necessary to protect the Covered Parties’ legitimate interests, (vi) the
Covered Parties conduct and intend to conduct the Business everywhere in the Territory and compete with other businesses that
are or could be located in any part of the Territory, (vii) the foregoing restrictions on competition are fair and reasonable
in type of prohibited activity, geographic area covered, scope and duration, (viii) the consideration provided to the Subject
Party under this Agreement and the Merger Agreement is not illusory, and (ix) such provisions do not impose a greater restraint
than is necessary to protect the goodwill or other business interests of the Covered Parties.

 

    	 	2	 

     

    

 

2. 
No Solicitation; No Disparagement.

 

(a) 
No Solicitation of Employees and Consultants. The Subject Party agrees that, during the Restricted Period, the Subject
Party and his or her Controlled Affiliates will not, without the prior written consent of Purchaser (which may be withheld in
its sole discretion), either on its own behalf or on behalf of any other Person (other than, if applicable, a Covered Party in
the performance of the Subject Party’s duties on behalf of the Covered Parties), directly or indirectly: (i) hire or engage
as an employee, independent contractor, consultant or otherwise any Covered Personnel (as defined below); (ii) solicit, induce,
encourage or otherwise knowingly cause (or attempt to do any of the foregoing) any Covered Personnel to leave the service (whether
as an employee, consultant or independent contractor) of any Covered Party; or (iii) in any way interfere with or attempt to interfere
with the relationship between any Covered Personnel and any Covered Party; provided, however, the Subject Party
will not be deemed to have violated this Section 2(a) if any Covered Personnel voluntarily and independently solicits an
offer of employment from the Subject Party or his or her Controlled Affiliate (or other Person whom any of them is acting on behalf
of) by responding to a general advertisement or solicitation program conducted by or on behalf of the Subject Party or his or
her Controlled Affiliate (or such other Person whom any of them is acting on behalf of) that is not specifically targeted at such
Covered Personnel or Covered Personnel generally, so long as such Covered Personnel is not hired. For purposes of this Agreement,
“Covered Personnel” shall mean any Person who is or was an employee, consultant or independent contractor
of the Covered Parties, (A) if the relevant time of determination is before the Termination Date, as of such date of determination
or during the one (1) year period preceding such date and, (B) if the relevant time of determination is after the Termination
Date, as of the Termination Date or during the one (1) year period preceding the Termination Date.

 

(b) 
Non-Solicitation of Customers and Suppliers. The Subject Party agrees that, during the Restricted Period, the Subject Party
and his or her Controlled Affiliates will not, without the prior written consent of Purchaser (which may be withheld in its sole
discretion), individually or on behalf of any other Person (other than, if applicable, a Covered Party in the performance of the
Subject Party’s duties on behalf of the Covered Parties), directly or indirectly: (i) solicit, induce, encourage or otherwise
knowingly cause (or attempt to do any of the foregoing) any Covered Customer (as defined below) to (A) cease being, or not become,
a client or customer of any Covered Party with respect to the Business or (B) reduce the amount of business of such Covered Customer
with any Covered Party, or otherwise alter such business relationship in a manner adverse to any Covered Party, in either case,
with respect to or relating to the Business; (ii) interfere with or disrupt (or attempt to interfere with or disrupt) the contractual
relationship between any Covered Party and any Covered Customer; (iii) divert any business with any Covered Customer relating
to the Business from a Covered Party; (iv) solicit for business, provide services to, engage in or do business with, any Covered
Customer for products or services that are part of the Business; or (v) interfere with or disrupt (or attempt to interfere with
or disrupt), any Person that was a vendor, supplier, distributor, agent or other service provider of a Covered Party at the time
of such interference or disruption, for a purpose competitive with a Covered Party as it relates to the Business. For purposes
of this Agreement, a “Covered Customer” shall mean any Person who is or was an actual customer or client
(or prospective customer or client with whom a Covered Party actively marketed or made or taken specific action to make a proposal)
of a Covered Party, (A) if the relevant time of determination is before the Termination Date, as of such date of determination
or during the one (1) year period preceding such date and, (B) if the relevant time of determination is after the Termination
Date, as of the Termination Date or during the one (1) year period preceding the Termination Date.

 

(c) 
Non-Disparagement. The Subject Party agrees that from and after the Closing Date until the second (2nd) anniversary
of the end of the Restricted Period, the Subject Party and its Controlled Affiliates will not, directly or indirectly engage in
any conduct that involves the making or publishing (including through electronic mail distribution or online social media) of
any written or oral statements or remarks (including the repetition or distribution of derogatory rumors, allegations, negative
reports or comments) that are disparaging, deleterious or damaging to the integrity, reputation or good will of one or more Covered
Parties or their respective management, officers, employees, independent contractors or consultants. Notwithstanding the foregoing,
subject to Section 3 below, the provisions of this Section 2(c) shall not restrict the Subject Party from providing
truthful testimony or information in response to a subpoena or investigation by a Governmental Authority or in connection with
any legal action by the Subject Party against any Covered Party under this Agreement, the Merger Agreement or any other Ancillary
Document that is asserted by the Subject Party in good faith.

 

    	 	3	 

     

    

 

3. 
Confidentiality. From and after the Closing Date, the Subject Party will, and will cause its Representatives to, keep confidential
and not (except, if applicable, in the performance of the Subject Party’s duties on behalf of the Covered Parties) directly
or indirectly use, disclose, reveal, publish, transfer or provide access to, any and all Covered Party Information without the
prior written consent of Purchaser (which may be withheld in its sole discretion). As used in this Agreement, “Covered
Party Information” means all material and information relating to the business, affairs and assets of any Covered
Party, including material and information that concerns or relates to such Covered Party’s bidding and proposal, technical,
computer hardware or software, administrative, management, operational, data processing, financial, marketing, sales, human resources,
business development, planning and/or other business activities, regardless of whether such material and information is maintained
in physical, electronic, or other form, that is: (A) gathered, compiled, generated, produced or maintained by such Covered Party
through its Representatives, or provided to such Covered Party by its suppliers, service providers or customers; and (B) intended
and maintained by such Covered Party or its Representatives, suppliers, service providers or customers to be kept in confidence.
The obligations set forth in this Section 3 will not apply to any Covered Party Information where the Subject Party can
prove that such material or information: (i) is known or available through other lawful sources not bound by a confidentiality
agreement with, or other confidentiality obligation to, any Covered Party; (ii) is or becomes publicly known through no violation
of this Agreement or other non-disclosure obligation of the Subject Party or any of its Representatives; (iii) is already in the
possession of the Subject Party at the time of disclosure through lawful sources not bound by a confidentiality agreement or other
confidentiality obligation as evidenced by the Subject Party’s documents and records; or (iv) is required to be disclosed
pursuant to an order of any administrative body or court of competent jurisdiction (provided that (A) the applicable Covered Party
is given reasonable prior written notice, (B) the Subject Party cooperates (and causes its Representatives to cooperate) with
any reasonable request of any Covered Party to seek to prevent or narrow such disclosure and (C) if after compliance with clauses
(A) and (B) such disclosure is still required, the Subject Party and its Representatives only disclose such portion of the Covered
Party Information that is expressly required by such order, as it may be subsequently narrowed).

 

4. 
Representations and Warranties. The Subject Party hereby represents and warrants, to and for the benefit of the Covered Parties
as of the date of this Agreement and as of the Closing Date, that: (a) the Subject Party has full power and capacity to execute
and deliver, and to perform all of the Subject Party’s obligations under, this Agreement; and (b) neither the execution
and delivery of this Agreement nor the performance of the Subject Party’s obligations hereunder will result directly or
indirectly in a violation or breach of any agreement or obligation by which the Subject Party is a party or otherwise bound. By
entering into this Agreement, the Subject Party certifies and acknowledges that the Subject Party has carefully read all of the
provisions of this Agreement, and that the Subject Party voluntarily and knowingly enters into this Agreement.

 

5. 
Remedies. The covenants and undertakings of the Subject Party contained in this Agreement relate to matters which are of a
special, unique and extraordinary character and a violation of any of the terms of this Agreement may cause irreparable injury
to the Covered Parties, the amount of which may be impossible to estimate or determine and which cannot be adequately compensated.
The Subject Party agrees that, in the event of any breach or threatened breach by the Subject Party of any covenant or obligation
contained in this Agreement, each applicable Covered Party will be entitled to obtain the following remedies (in addition to,
and not in lieu of, any other remedy at law or in equity or pursuant to the Merger Agreement or the other Ancillary Documents
that may be available to the Covered Parties, including monetary damages), and a court of competent jurisdiction may award: (i)
an injunction, restraining order or other equitable relief restraining or preventing such breach or threatened breach, without
the necessity of proving actual damages or posting bond or security, which the Subject Party expressly waives; and (ii) recovery
of the Covered Party’s attorneys’ fees and costs incurred in enforcing the Covered Party’s rights under this
Agreement. The Subject Party hereby consents to the award of any of the above remedies to the applicable Covered Party in connection
with any such breach or threatened breach. The Subject Party hereby acknowledges and agrees that in the event of any breach of
this Agreement, any value attributed or allocated to this Agreement (or any other non-competition agreement with the Subject Party)
under or in connection with the Merger Agreement shall not be considered a measure of, or a limit on, the damages of the Covered
Parties.

 

    	 	4	 

     

    

 

6. 
Survival of Obligations. The expiration of the Restricted Period will not relieve the Subject Party of any obligation or liability
arising from any breach by the Subject Party of this Agreement during the Restricted Period. Each Subject Party further agrees
that the time period during which the covenants contained in Section 1 and Section 2 of this Agreement will be effective
will be computed by excluding from such computation any time during which the Subject Party is in violation of any provision of
such Sections.

 

7. 
Miscellaneous.

 

(a) 
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 Purchaser (or any other Covered Party), 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

         

        and

         

        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
        copies (that will not constitute notice) to: 

         

        Fenwick
        & West LLP

        801 California Street

        Mountain View, CA 94041

        Attention: 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

	 

                                                                                                     If to the Subject Party, to:
 the address below the Subject Party’s name on the signature page to this Agreement.

                                                                                 

 

    	 	5	 

     

    

 

(b) 
Integration and Non-Exclusivity. This Agreement, the Merger Agreement and the other Ancillary Documents contain the entire
agreement between the Subject Party and the Covered Parties concerning the subject matter hereof. Notwithstanding the foregoing,
the rights and remedies of the Covered Parties under this Agreement are not exclusive of or limited by any other rights or remedies
which they may have, whether at law, in equity, by contract or otherwise, all of which will be cumulative (and not alternative).
Without limiting the generality of the foregoing, the rights and remedies of the Covered Parties, and the obligations and liabilities
of the Subject Party, under this Agreement, are in addition to their respective rights, remedies, obligations and liabilities
(i) under the laws of unfair competition, misappropriation of trade secrets, or other requirements of statutory or common law,
or any applicable rules and regulations and (ii) otherwise conferred by contract, including the Merger Agreement and any other
written agreement between the Subject Party and any of the Covered Parties. Nothing in the Merger Agreement will limit any of
the obligations, liabilities, rights or remedies of the Subject Party or the Covered Parties under this Agreement, nor will any
breach of the Merger Agreement or any other agreement between the Subject Party and any of the Covered Parties limit or otherwise
affect any right or remedy of the Covered Parties under this Agreement. If any term or condition of any other agreement between
the Subject Party and any of the Covered Parties conflicts or is inconsistent with the terms and conditions of this Agreement,
the more restrictive terms will control as to the Subject Party.

 

(c) 
Severability; Reformation. Each provision of this Agreement is separable from every other provision of this Agreement.
If any provision of this Agreement is found or held to be invalid, illegal or unenforceable, in whole or in part, by a court of
competent jurisdiction, then (i) such provision will be deemed amended to conform to applicable laws so as to be valid, legal
and enforceable to the fullest possible extent, (ii) the invalidity, illegality or unenforceability of such provision will not
affect the validity, legality or enforceability of such provision under any other circumstances or in any other jurisdiction,
and (iii) the invalidity, illegality or unenforceability of such provision will not affect the validity, legality or enforceability
of the remainder of such provision or the validity, legality or enforceability of any other provision of this Agreement. The Subject
Party and the Covered 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. Without limiting the foregoing, if any court of competent jurisdiction determines that any part hereof is unenforceable
because of the duration, geographic area covered, scope of such provision, or otherwise, such court will have the power to reduce
the duration, geographic area covered or scope of such provision, as the case may be, and, in its reduced form, such provision
will then be enforceable. The Subject Party will, at a Covered Party’s request, join such Covered Party in requesting that
such court take such action.

 

(d) 
Amendment; Waiver. This Agreement may not be amended or modified in any respect, except by a written agreement executed
by the Subject Party, Purchaser and the Purchaser Representative (or their respective permitted successors or assigns). No waiver
will be effective unless it is expressly set forth in a written instrument executed by the waiving party (and if such waiving
party is a Covered Party, the Purchaser Representative) and any such waiver will have no effect except in the specific instance
in which it is given. Any delay or omission by a party in exercising its rights under this Agreement, or failure to insist upon
strict compliance with any term, covenant, or condition of this Agreement will not be deemed a waiver of such term, covenant,
condition or right, nor will any waiver or relinquishment of any right or power under this Agreement at any time or times be deemed
a waiver or relinquishment of such right or power at any other time or times.

 

    	 	6	 

     

    

 

(e) 
Dispute Resolution. Any dispute, difference, controversy or claim arising in connection with or related or incidental to,
or question occurring under, this Agreement or the subject matter hereof (other than applications for a temporary restraining
order, preliminary injunction, permanent injunction or other equitable relief or application for enforcement of a resolution under
this Section 7(e)) (a “Dispute”) shall be governed by this Section 7(e). A party must,
in the first instance, provide written notice of any Disputes to the other parties subject to such Dispute, which notice must
provide a reasonably detailed description of the matters subject to the Dispute. Any Dispute that is not resolved may at any time
after the delivery of such notice immediately be referred to and finally resolved by arbitration pursuant to the then-existing
Expedited Procedures of the Commercial Arbitration Rules (the “AAA Procedures”) of the American Arbitration
Association (the “AAA”). Any party involved in such Dispute may submit the Dispute to the AAA to commence
the proceedings after the Resolution Period. To the extent that the AAA Procedures and this Agreement are in conflict, the terms
of this Agreement shall control. The arbitration shall be conducted by one arbitrator nominated by the AAA promptly (but in any
event within five (5) Business Days) after the submission of the Dispute to the AAA and reasonably acceptable to each party subject
to the Dispute, which arbitrator shall be a commercial lawyer with substantial experience arbitrating disputes under acquisition
agreements. The arbitrator shall accept his or her appointment and begin the arbitration process promptly (but in any event within
five (5) Business Days) after his or her nomination and acceptance by the parties subject to the Dispute. The proceedings shall
be streamlined and efficient. The arbitrator shall decide the Dispute in accordance with the substantive law of the State of New
York. Time is of the essence. Each party shall submit a proposal for resolution of the Dispute to the arbitrator within twenty
(20) days after confirmation of the appointment of the arbitrator. The arbitrator shall have the power to order any party to do,
or to refrain from doing, anything consistent with this Agreement, the Ancillary Documents and applicable Law, including to perform
its contractual obligation(s); provided, that the arbitrator shall be limited to ordering pursuant to the foregoing power
(and, for the avoidance of doubt, shall order) the relevant party (or parties, as applicable) to comply with only one or the other
of the proposals. The arbitrator's award shall be in writing and shall include a reasonable explanation of the arbitrator's reason(s)
for selecting one or the other proposal. The seat of arbitration shall be in New York County, State of New York. The language
of the arbitration shall be English.

 

(f) 
Governing Law; Jurisdiction. This Agreement shall be governed by, construed and enforced in accordance with the Laws of
the State of New York without regard to the conflict of laws principles thereof. Subject to Section 7(e), 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”). Subject
to Section 7(e), each party hereto 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 brought by any party hereto, (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 and (c) waives any bond, surety or other security that might be required of any other
party with respect thereto. Each party 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 or in equity. Each party irrevocably consents to
the service of the summons and complaint and any other process in any other action or proceeding 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 7(a). Nothing in this Section 7(f) shall affect the right of any
party to serve legal process in any other manner permitted by Law.

 

    	 	7	 

     

    

 

(g) 
WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO 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. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF ANY ACTION, SEEK TO ENFORCE THAT FOREGOING
WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 7(g). ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR
A COPY OF THIS SECTION 7(g) WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF EACH SUCH PARTY TO THE WAIVER OF ITS RIGHT
TO TRIAL BY JURY.

 

(h) 
Successors and Assigns; Third Party Beneficiaries. This Agreement will be binding upon the Subject Party and the Subject
Party’s estate, successors and assigns, and will inure to the benefit of the Covered Parties, and their respective successors
and assigns. Each Covered Party may freely assign any or all of its rights under this Agreement, at any time, in whole or in part,
to any Person which acquires, in one or more transactions, at least a majority of the equity securities (whether by equity sale,
merger or otherwise) of such Covered Party or all or substantially all of the assets of such Covered Party and its Subsidiaries,
taken as a whole, without obtaining the consent or approval of the Subject Party. The Subject Party agrees that the obligations
of the Subject Party under this Agreement are personal and will not be assigned by the Subject Party. Each of the Covered Parties
are express third party beneficiaries of this Agreement and will be considered parties under and for purposes of this Agreement.

 

(i)  
Purchaser Representative Authorized to Act on Behalf of Covered Parties. The parties acknowledge and agree that the Purchaser
Representative is authorized and shall have the sole right to act on behalf of Purchaser and the other Covered Parties under this
Agreement, including the right to enforce Purchaser’s rights and remedies under this Agreement. Without limiting the foregoing,
in the event that the Subject Party serves as a director, officer, employee or other authorized agent of a Covered Party, the
Subject Party shall have no authority, express or implied, to act or make any determination on behalf of a Covered Party in connection
with this Agreement or any dispute or Action with respect hereto.

 

(j)  
Construction. The Subject Party acknowledges that the Subject Party has been represented by counsel, or had the opportunity
to be represented by counsel of the Subject Party’s choice. Any rule of construction to the effect that ambiguities are
to be resolved against the drafting party will not be applied in the construction or interpretation of this Agreement. Neither
the drafting history nor the negotiating history of this Agreement will be used or referred to in connection with the construction
or interpretation of this Agreement. The headings and subheadings contained in this Agreement are for reference purposes only
and shall not affect in any way the meaning or interpretation of this Agreement. In this Agreement: (i) the words “include,”
“includes” and “including” when used herein shall be deemed in each case to be followed by the words “without
limitation”; (ii) the definitions contained herein are applicable to the singular as well as the plural forms of such terms;
(iii) whenever required by the context, any pronoun 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; (iv) the words “herein,” “hereto,”
and “hereby” and other words of similar import 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; (v) the word “if” and other words of similar
import when used herein shall be deemed in each case to be followed by the phrase “and only if”; (vi) the term “or”
means “and/or”; and (vii) any agreement or instrument defined or referred to herein or in any agreement or instrument
that is referred to herein means such agreement or instrument as from time to time amended, modified or supplemented, including
by waiver or consent and references to all attachments thereto and instruments incorporated therein.

 

    	 	8	 

     

    

 

(k) 
Counterparts. This Agreement may be executed in one or more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one
and the same agreement. A photocopy, faxed, scanned and/or emailed copy of this Agreement or any signature page to this Agreement,
shall have the same validity and enforceability as an originally signed copy.

 

(l)  
Effectiveness. This Agreement shall be binding upon the Subject Party upon the Subject Party’s execution and delivery
of this Agreement, but this Agreement shall only become effective upon the consummation of the Transactions. In the event that
the Merger Agreement is validly terminated in accordance with its terms prior to the consummation of the Transactions, this Agreement
shall automatically terminate and become null and void, and the parties shall have no obligations hereunder.

 

 

 

 

 

 

 

[Remainder
of Page Intentionally Left Blank; Signature Page Follows]

 

    	 	9	 

     

    

 

IN
WITNESS WHEREOF, the undersigned has duly executed and delivered this Non-Competition and Non-Solicitation Agreement as of the
date first written above.

 

	 	Subject
    Party:
	 	 
	 	Signature:_______________________________________    
	 	Print
    Name:
	 	 
	 	Address
    for Notice:
	 	 
	 	Address:
__________________________________________
	 	__________________________________________________
	 	 __________________________________________________
	 	Facsimile
No.: ______________________________________
	 	Telephone
No.: _____________________________________
	 	Email:
_____________________________________________

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

{Signature
Page to Non-Competition Agreement}

 

     

     

    

 

Acknowledged
and accepted as of the date first written above:

 

	Purchaser:
    	 	 
	 	 	 
	PACIFIC SPECIAL ACQUISITION CORP.	 
	 	 	 
	By:	                                  	 
	Name:  	 	 
	Title:	 	 
	 	 	 
	Company:	 	 
	 	 	 
	BORQS INTERNATIONAL HOLDING CORP.	 
	 	 
	By:	 	 
	Name:	 	 
	Title:	 	 
	 	 	 
	The Purchaser Representative:	 
	 	 	 
	ZHENGQI INTERNATIONAL HOLDING LIMITED, solely in its capacity as the Purchaser Representative hereunder	 
	 	 	 
	By:	 	 
	Name:	 	 
	Title:	 	 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

{Signature
Page to Non-Competition Agreement}Exhibit 10.5

 

FORM
OF

INSTRUCTIONS FOR LETTER OF TRANSMITTAL
 FOR
SHAREHOLDERS AND WARRANT HOLDERS (“HOLDERS”)
 OF
BORQS INTERNATIONAL HOLDING CORP (THE “COMPANY”)

 

		1.	Delivery
                                         of Letter of Transmittal, Exhibits and Certificates. The Letter of Transmittal,
                                         together with the exhibits attached thereto, properly completed and duly executed, together
                                         with the certificate(s) for the securities described, should be delivered to the Company
                                         at the address below in the envelope enclosed for your convenience. If the space provided
                                         on the Letter of Transmittal is inadequate, the applicable information should be listed
                                         on a separate schedule to be attached thereto.

 

THE
METHOD OF DELIVERY OF ALL REQUIRED DOCUMENTS IS AT THE ELECTION AND RISK OF THE HOLDER, BUT IF SENT BY MAIL, IT IS RECOMMENDED
THAT THEY BE SENT BY REGISTERED MAIL WITH RETURN RECEIPT REQUESTED. DELIVERY OF THE DOCUMENTS WILL BE EFFECTIVE, AND RISK OF LOSS
AND TITLE WITH RESPECT THERETO SHALL PASS, ONLY WHEN THE MATERIALS ARE ACTUALLY RECEIVED BY THE COMPANY AT THE ADDRESS BELOW.

 

		2.	Signatures.

 

		a.	If
                                         the Letter of Transmittal is signed by the registered owner(s) of the share certificate(s)
                                         listed and surrendered thereby, no endorsements of certificates or separate stock powers
                                         are required. If the Letter of Transmittal is signed by the original recipient of the
                                         warrants to be surrendered, no evidence of transfer is required. If the certificate(s)
                                         or warrants surrendered is (are) owned of record by two or more joint owners, all such
                                         owners must sign the Letter of Transmittal.

 

		b.	If,
                                         with respect to any surrendered certificate(s), the Letter of Transmittal is signed by
                                         a person other than the registered owner of the certificate(s) listed or its duly authorized
                                         representative (as confirmed by proper evidence satisfactory to the Company and to Pacific
                                         Special Acquisition Corp. (the “Purchaser”)), such certificate(s)
                                         must be endorsed or accompanied by appropriate stock powers, in either case signed exactly
                                         as the name or names of the registered owner or owners appear on the certificate(s).
                                         Signatures on such Letters of Transmittal and such certificates or stock powers must
                                         be guaranteed by a financial institution that is a member of a Securities Transfer Association
                                         approved medallion program such as STAMP, SEMP or MSP (an “Eligible Institution”).

 

		c.	If,
                                         with respect to any warrant(s), the Letter of Transmittal is signed by a person other
                                         than the person to whom such warrants were issued or its duly authorized representative
                                         (as confirmed by proper evidence satisfactory to the Company and the Purchaser), such
                                         warrants must be accompanied by appropriate evidence of transfer, signed exactly as the
                                         name or names of the person indicated in such warrants. Signatures on such Letters of
                                         Transmittal and evidence of transfer must be guaranteed by an Eligible Institution.

 

		d.	If
                                         the Letter of Transmittal or any certificate, warrant, stock power or other exhibit to
                                         the Letter of Transmittal is signed by trustees, executors, administrators, guardians,
                                         attorney-in-fact, officers of corporations or other entities or others, acting in a fiduciary
                                         or representative capacity, such persons should so indicate when signing and proper evidence,
                                         satisfactory to the Company and the Purchaser, of their authority to do so must be submitted.

 

		3.	Special
                                         Payment and Delivery Instructions.  Indicate on the Letter of Transmittal all
                                         names and addresses to which consideration for the securities is to be issued and the
                                         amounts thereto, if different from the name and address of the person(s) signing the
                                         Letter of Transmittal. Signatures on such Letters of Transmittal must be guaranteed by
                                         an Eligible Institution.

 

		4.	Form
                                         W-8/W-9. If you are a U.S. person, please enter your social security or employer
                                         identification number, and complete, sign and date the attached Form W-9. If you are
                                         a non-U.S. person, you must provide a properly completed and executed Internal Revenue
                                         Service Form W-8BEN or other Form W-8, which you can obtain from the Company by contacting
                                         the designated person below.

 

    	 		 

     

    

 

		5.	Additional
                                         Copies. Additional copies of the Letter of Transmittal may be obtained from the
                                         Company at the address listed below.

 

		6.	Lost,
                                         Stolen or Destroyed Certificates and Warrant. If any share certificates or warrants
                                         have been lost, stolen or destroyed, please so indicate on the front of the Letter of
                                         Transmittal, and additional paperwork will be sent to you to replace the lost, stolen
                                         or destroyed certificates or warrants, as applicable.

 

All
questions as to the validity, form and eligibility of any surrender of certificates or warrants will be determined by the Company
and the Purchaser, and such determination shall be final and binding on each Holder. The Company and the Purchaser reserve the
right to together waive any irregularities or defects in the surrender of any certificates or warrants. A surrender will not be
deemed to have been made until all irregularities have been cured or waived. Neither the Company nor the Purchaser is under any
obligation to waive or to provide any notification of any irregularities or defects in the surrender of any certificates or warrants,
nor shall the Company or the Purchaser be liable for any failure to give such notification.

 

All
documentation and requests should be sent to the Company at the following address:

 

Borqs
International Holding Corp.

Tower A, Building B23

Universal Business Park

No. 10 Jiuxiangqiao Road

Chaoyang District, Beijing 100015, China

Attention: Pat Chan

Facsimile No.: 86-10-5975-6363

Telephone No: 86-10-5975-6336

Email: pat.chan@borqs.com

 

    	 	2	 

     

    

 

Method
of delivery of the certificate(s) is at the option and risk of the Holder. See Instruction 1.

 

All
Holders, please mail or deliver each of the following:

 

	☐	An original of this Letter of Transmittal, duly executed
by Holder

 

	☐	An original of the Lock-Up Agreement, duly executed
by Holder, the form of which is attached as Exhibit A

 

	☐	An original of the Registration Rights Agreement, duly
executed by Holder, the form of which is attached as Exhibit B

 

	☐	A completed and executed IRS Form W-9 or Form W-8BEN
(or Other Form W-8), as applicable, the form of which is attached as Exhibit C.

 

If
you are a holder of Company shares, please also mail the following:

 

	☐	The certificate(s) representing your Company shares

 

	☐	If required, as described in the instructions, an original
stock power, duly executed by Holder, the form of which is attached as Exhibit D

 

If
you are a holder of Company warrants, please also mail the following:

 

	☐	All agreements for your Company warrants

 

Please
return all documents to the Company using the address set forth in the instructions.

 

    	 	3	 

     

    

 

LETTER
OF TRANSMITTAL

 

To
Exchange Securities of Borqs International Holding Corp Pursuant to the Merger of Borqs International Holding Corp and PAAC Merger
Subsidiary Limited.

 

This
letter of transmittal (this “Letter of Transmittal”) is being furnished in connection with the merger
of PAAC Merger Subsidiary Limited, a Cayman Islands company (“Merger Sub”) and a wholly-owned subsidiary
of Pacific Special Acquisition Corp., a British Virgin Islands company (the “Purchaser”), with and into
Borqs International Holding Corp, a Cayman Islands company (the “Company”), pursuant to the Merger Agreement,
dated as of December 27, 2016 (as amended, the “Merger Agreement”), by and among (i) the Purchaser,
(ii) Merger Sub, (iii) Zhengqi International Holding Limited, a British Virgin Islands company, in the capacity thereunder as
the Purchaser Representative (the “Purchaser Representative”), (iv) Zhengdong Zou, in the capacity thereunder
as the Seller Representative (the “Seller Representative”), (v) the Company and (vi) solely for limited
purposes thereof, Zhengqi International Holding Limited, a British Virgin Islands company. Pursuant to the Merger Agreement, and
subject to the terms and conditions set forth therein, Merger Sub will merge with and into the Company with the Company surviving
the Merger as a wholly-owned subsidiary of the Purchaser (the “Merger”). At the effective time of the
Merger (the “Effective Time”), each issued and outstanding (a) share in the capital of the Company (other
than shares in respect of which dissenters or appraisal rights have been properly exercised and perfected under Cayman law and
shares held in treasury) (each, a “Company Share”) will be cancelled and cease to exist in exchange
for the right to receive ordinary shares of the Purchaser (the “Merger Consideration Shares”), (b) warrant
to acquire shares in the capital of the Company (each, a “Company Warrant”) shall be cancelled, retired
and terminated in exchange for the right to receive from the Purchaser a new warrant for ordinary shares of the Purchaser with
its price and number of shares equitably adjusted based on the conversion of the Company Shares into the Merger Consideration
shares, but with terms otherwise the same as the Purchaser’s publicly traded warrants (the “Replacement Purchaser
Warrants”), and (c) option to acquire shares in the capital of the Company (each, a “Company Option”)
(whether vested or unvested) shall be assumed by Purchaser and automatically converted into an option to acquire ordinary shares
of the Purchaser, with its price and number of shares equitably adjusted based on the conversion of the Company Shares into the
Merger Consideration Shares. Any capitalized term used but not defined in this Letter of Transmittal will have the meaning ascribed
to such term in the Merger Agreement.

 

The
undersigned holder (“Holder”) of Company Shares and/or Company Warrants understands that this Letter
of Transmittal is being provided to both the Company and the Purchaser in connection with, and as a condition to the consummation
of the Merger, and that the Company and the Purchaser are consummating the Merger and the other transactions contemplated by the
Merger Agreement in reliance upon the representations, warranties, covenants and agreements of Holder set forth in this Letter
of Transmittal.

 

IN
ADDITION, HOLDER HAS READ, UNDERSTANDS AND AGREES TO ALL OF THE TERMS AND CONDITIONS SET FORTH IN THE MERGER AGREEMENT, THE ANCILLARY
DOCUMENTS TO WHICH THE HOLDER IS BOUND, THE MATERIALS ACCOMPANYING THIS LETTER OF TRANSMITTAL AND THE ACCOMPANYING INSTRUCTIONS
BEFORE COMPLETING ANY OF THE INFORMATION BELOW.

 

Please
read carefully this entire Letter of Transmittal and the accompanying instructions before completing any of the boxes below.

 

1. Representations
and Warranties of Holder. Holder hereby represents, warrants and covenants to the Company and the Purchaser as follows
as of the date of this Letter of Transmittal and as of the Effective Time:

 

(a) Ownership
of Securities. All of the Company Shares and Company Warrants owned by Holder, including without limitation the number,
type, class and series thereof, are set forth and accurately described in Schedule 1 below (the “Holder
Company Securities”). Holder has beneficial ownership over, is the lawful owner of, and has good and valid
title to, the Holder Company Securities, free and clear of any and all pledges, mortgages, encumbrances, charges, proxies,
voting agreements, liens, adverse claims, options, security interests and demands of any nature or kind whatsoever (other
than those imposed by applicable securities laws or the Company’s organizational documents, as in effect on the date
hereof, or any applicable Voting Agreement entered into by Holder with the Company and the Purchaser in connection with the
Merger Agreement). There are no claims for finder’s fees or brokerage commission or other like payments in connection
with the Merger Agreement or the transactions contemplated thereby payable by Holder pursuant to arrangements made by such
Holder. Except for the Holder Company Securities set forth on Schedule 1 and any Company Options, Holder is not a
beneficial owner or record holder of any: (i) equity securities of the Company, (ii) securities of the Company having the
right to vote on any matters on which the holders of equity securities of the Company may vote, or (iii) options, warrants or
other rights to acquire from the Company any equity securities or securities convertible into or exchangeable for equity
securities of the Company.

 

    	 	4	 

     

    

 

(b) Binding
Agreement. Holder (i) if a natural person, is of legal age to execute this Letter of Transmittal and each of the
Exhibits hereto, including the Lock-Up Agreement and the Registration Rights Agreement, and any other document required by
this Letter of Transmittal (collectively with the Letter of Transmittal, the “Transmittal
Documents”), and is legally competent to do so and (ii) if not a natural person, is (A) a corporation or other
entity duly organized and validly existing under the laws of the jurisdiction of its organization and (B) has all necessary
power and authority to execute and deliver the Transmittal Documents, to perform its obligations hereunder and thereunder and
to consummate the transactions contemplated hereby and thereby. If Holder is not a natural person, the execution and delivery
of the Transmittal Documents, the performance of its obligations hereunder and thereunder and the consummation of the
transactions contemplated hereby and thereby by Holder has been duly authorized by all necessary corporate or similar action
on the part of Holder. This Letter of Transmittal and each other Transmittal Document, assuming due authorization, execution
and delivery hereof by the other parties hereto and thereto, constitutes a legal, valid and binding obligation of Holder,
enforceable against Holder in accordance with its terms (except as such enforceability may be limited by bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and other similar laws of general applicability relating to or
affecting creditor’s rights, and to general equitable principles).

 

(c) No
Conflicts. No filing with, or notification to, any governmental authority, and no consent, approval, authorization or
permit of any other person or entity is necessary for the execution of this Letter of Transmittal or any other Transmittal
Document by Holder, the performance of its obligations hereunder or thereunder or the consummation by it of the transactions
contemplated hereby or thereby. None of the execution and delivery of this Letter of Transmittal or any other Transmittal
Document by Holder, the performance of its obligations hereunder or thereunder or the consummation by it of the transactions
contemplated hereby or thereby will (i) conflict with or result in any breach of the organizational documents of Holder, if
applicable, (ii) result in, or give rise to, a violation or breach of or a default under any of the terms of any contract or
obligation to which Holder is a party or by which Holder or any of the Company Shares or Company Warrants or its other assets
may be bound, or (iii) violate any applicable law or order, except for any of the foregoing in clauses (i) through (iii) as
would not reasonably be expected to impair in any material respect Holder’s ability to perform its obligations under
this Letter of Transmittal or the other Transmittal Documents. Holder has not entered into any agreement or knowingly taken
any action (nor will enter into any agreement or knowingly take any action) that would make any representation or warranty of
Holder contained in this Letter of Transmittal untrue or incorrect in any material respect or have the effect of preventing
Holder from performing any of its material obligations under this Letter of Transmittal or any Transmittal
Document.

 

    	 	5	 

     

    

 

(d) Investment
Representations. Holder: (i) is an “accredited investor” as such term is defined in Rule 501(a) of
Regulation D under the Securities Act of 1933, as amended (the “Securities Act”); (ii) is acquiring
its portion of the Merger Consideration Shares and/or Replacement Purchaser Warrants, and/or the Purchaser Ordinary Shares
underlying each such Replacement Purchaser Warrant (collectively, the “Purchaser Securities”) for
itself for investment purposes only, and not with a view towards any resale or distribution of such Purchaser Securities;
(iii) has been advised and understands that the Purchaser Securities (A) are being issued in reliance upon one or more
exemptions from the registration requirements of the Securities Act and any applicable state securities laws, (B) have not
been and shall not be registered under the Securities Act or any applicable state securities laws and, therefore, must be
held indefinitely and cannot be resold unless such Purchaser Securities are registered under the Securities Act and all
applicable state securities laws, unless exemptions from registration are available and (C) will be subject to additional
restrictions on transfer pursuant to the Lock-Up Agreement; (iv) is aware that an investment in the Purchaser is a
speculative investment and is subject to the risk of complete loss; and (v) acknowledges that the Purchaser is under no
obligation hereunder to register the Purchaser Securities under the Securities Act (except as may be set forth in the
Registration Rights Agreement). Holder does not have any contract with any person or entity to sell, transfer, or grant
participations to such person or entity, or to any third person or entity, with respect to the Purchaser Securities. By
reason of Holder’s business or financial experience, or by reason of the business or financial experience of
Holder’s “purchaser representatives” (as that term is defined in Rule 501(h) under the Securities Act),
Holder is capable of evaluating the risks and merits of an investment in Purchaser and of protecting its interests in
connection with this investment. Holder has carefully read and understands all materials provided by or on behalf of
Purchaser or its affiliates or the managers, directors, officers, employees, agents or advisors of Purchaser or its
affiliates (collectively, “Purchaser’s Representatives”) to Holder or its affiliates or the
managers, directors, officers, employees, agents or advisors of Holder or its affiliates (collectively,
“Holder’s Representatives”) pertaining to an investment in the Purchaser and has consulted,
as Holder has deemed advisable, with its own attorneys, accountants or investment advisors with respect to the investment
contemplated hereby and its suitability for Holder. Holder acknowledges that the Purchaser Securities are subject to dilution
for events not under the control of Holder. Holder has completed its independent inquiry and has relied fully upon the advice
of its own legal counsel, accountant, financial and other Holder’s Representatives in determining the legal, tax,
financial and other consequences of the Merger Agreement and the Transmittal Documents and the transactions
contemplated hereby and thereby and the suitability of the foregoing for Holder and its particular circumstances, and has not
relied upon any representations or advice by Purchaser or Purchaser’s Representatives. Holder acknowledges and agrees
that no representations or warranties have been made by Purchaser or any Purchaser’s Representatives to Holder, and
that Holder has not been guaranteed or represented to by any person or entity, (i) any specific amount or the event of the
distribution of any cash, property or other interest in Purchaser or (ii) the profitability or value of the Purchaser
Securities in any manner whatsoever. Holder: (A) has been represented by independent counsel (or has had the opportunity to
consult with independent counsel and has declined to do so); (B) has had the full right and opportunity to consult with
Holder’s attorneys and other advisors and has availed itself of this right and opportunity; (C) has carefully read and
fully understands the Merger Agreement and this Letter of Transmittal and the other Transmittal Documents in their entirety
and has had them fully explained to it by such counsel; (D) is fully aware of the contents hereof and the meaning, intent and
legal effect thereof; and (E) is competent to execute this Letter of Transmittal and the other Transmittal Documents and has
executed this Letter of Transmittal and the other Transmittal Documents free from coercion, duress or undue
influence.

 

2. Escrow
and Indemnification. Holder acknowledges, covenants and agrees that: (a) Pursuant to Section 1.14 of the Merger
Agreement, four percent (4%) of the Merger Consideration Shares (as set forth in the Merger Agreement, the
“Escrow Shares”), together with any dividends, distributions or other income thereon (the Escrow
Shares together with any such dividends, distributions or other income, as set forth in the Merger Agreement, the
“Escrow Property”), will be held in escrow for a period of eighteen (18) months after the Closing
Date (the “Escrow Period”) (subject to amounts retained in escrow thereafter for then pending
claims) and shall serve as security for, and a source of payment of, the indemnification rights of the Purchaser, the
Purchaser Representative, their respective affiliates and their respective officers, directors, managers, employees,
successors and permitted assigns (collectively, the “Indemnified Parties”) pursuant to Article VI
of the Merger Agreement, and consequently, Holder’s Pro Rata Share (as defined in the Merger Agreement) of the
Escrow Shares and any other Escrow Property will be held in escrow in accordance with the Merger Agreement and the Escrow
Agreement to be entered into in connection with the Merger Agreement; and Holder, if a holder of Company Shares, will be
required to provide several indemnification to the Indemnified Parties for claims made during the Escrow Period to the extent
of the Escrow Property then remaining in the escrow account.

 

3. Disposition
of Company Shares and Company Warrants. Pursuant to the Merger Agreement, Holder hereby: (a) surrenders, cancels and
terminates Holder’s Company Shares, if any, in exchange for Holder’s Pro Rata Share of the Merger Consideration
Shares (net of any Escrow Shares), subject to the Merger Agreement and the Escrow Agreement; and (b) agrees that
Holder’s Company Warrants, if any, will be surrendered, cancelled and terminated in accordance with the Merger
Agreement and replaced with Replacement Purchaser Warrants. Holder hereby authorizes and instructs the Purchaser to (i) make
entries in its register of members to record and give effect to the issue and allotment of the portion of Merger
Consideration Shares (less the Escrow Shares) due to Holder as a result of the Merger, if any, in the name of and deliver to
the address indicated below (unless otherwise instructed in Schedule 2 hereto), and (ii) replace Holder’s Company
Warrants, if any, with Replacement Purchaser Warrants pursuant to the Merger Agreement.

 

    	 	6	 

     

    

 

4. Appointment
of Seller Representative to Act on Holder’s Behalf. By the execution and delivery of this Letter of Transmittal,
Holder on behalf of itself and its successors and assigns, hereby agrees to the provisions of Section 10.15 of the Merger
Agreement and irrevocably constitutes and appoints Zhengdong Zou in the capacity as the Seller Representative as set forth in
the Merger Agreement, as the true and lawful agent and attorney-in-fact of Holder with full powers of substitution to act in
the name, place and stead of thereof with respect to the performance on behalf of Holder to the extent set forth in Section
10.15 of the Merger Agreement; provided, that the Seller Representative shall have no authority to incur expenses or
liabilities for or on behalf of the Holder exceeding the Holder’s Pro Rata Share of the Escrow Property.

 

5. Release
of Claims. In consideration of the receipt of its Pro Rata Share of the Merger Consideration Shares and/or the
Replacement Warrant, Holder, intending to be legally bound, effective as of the Effective Time hereby releases and discharges
the Company and its affiliates and their respective directors, officers, employees, agents, representatives, successors and
assigns (collectively, “Releasees”) fully, finally and forever, from all and any manner of claims,
actions, rights, causes of actions, suits, obligations, liabilities debts, due sums of money, agreements, promises, damages,
judgments, executions, accounts, expenses, costs, attorneys’ fees and demands whatsoever, whether in law, contract or
equity, whether known or unknown, matured or unmatured, foreseen or unforeseen, arising out of events existing or occurring
contemporaneously with or prior to the Effective Time, in each case, in Holder’s capacity as a shareholder, warrant
holder or option holder of the Company (or its precedessors) or otherwise relating to Holder’s acquisition, ownership,
control or sale of Company Shares, Company Warrants or Company Options; provided, that nothing contained herein shall operate
to release (i) any liabilities of a Releasee based upon, arising out of or relating to, without duplication, this Letter of
Transmittal or any of the other Transmittal Documents, the Merger Agreement, or any of the Ancillary Documents or (ii) the
Company for Fraud Claims made by the Purchaser against the Company under the Merger Agreement for which Holder has any
responsibility beyond the Escrow Property. Holder hereby irrevocably covenants to refrain from, directly or indirectly
asserting, commencing or instituting any cause of action, suit or claim of any kind against any Releasee based upon any
matter intended or purported to be released hereby. This release may not be altered except in a writing signed by the person
or entity against whose interest such change shall operate. This release shall be governed by and construed under the laws of
the State of New York, without regard to principals of conflicts of law.

 

6. Confidentiality.
Holder hereby agrees for a period of two (2) years from and after the date hereof to, and to cause Holder’s
Representatives to: (i) treat and hold in strict confidence any Company Confidential Information (as defined in the Merger
Agreement), and not use for any purpose (except in connection with the consummation of the transactions contemplated by this
Letter of Transmittal, the Merger Agreement or the Ancillary Documents, performing its obligations hereunder or thereunder or
enforcing its rights hereunder or thereunder), nor directly or indirectly disclose, distribute, publish, disseminate or
otherwise make available to any third party any of the Company Confidential Information without the Company’s and the
Purchaser’s prior written consent; and (ii) in the event that Holder or any of Holder’s Representatives becomes
legally compelled to disclose any Company Confidential Information, (A) provide the Company and the Purchaser with prompt
written notice of such requirement so that the Company and the Purchaser may seek a protective order or other remedy or waive
compliance with this Section 6 and (B) in the event that such protective order or other remedy is not obtained, or the
Company and the Purchaser waive compliance with this this Section 6, furnish only that portion of such Company
Confidential Information which is legally required to be provided as advised in writing by outside counsel and to exercise
its commercially reasonable efforts to obtain assurances that confidential treatment will be accorded such Company
Confidential Information. Notwithstanding the foregoing, in this event that Holder is already subject to confidentiality
obligations to the Company which are in effect as of the Closing Date which provide that such confidentiality obligations are
the sole confidentiality provisions with respect to the Company applicable to Holder, then those confidentiality obligations
will apply to Holder in lieu of the provisions of this Section 6.

 

{remainder
of page intentionally left blank; signature page follows}

 

    	 	7	 

     

    

 

IMPORTANT
— HOLDERS SIGN HERE

 

(Must
be signed by registered Holder(s) exactly as name(s) appear(s) on share certificate(s), warrants and/or on a security
position listing or by person(s) authorized to become registered holder(s) as evidenced by certificates and documents
transmitted herewith. If signature is by trustees, executors, administrators, guardians, attorneys-in-fact, officers of
corporations or others acting in a fiduciary or representative capacity, please set forth full title and see Instruction
2.)

 

Method
of delivery of the certificate(s) is at the option and risk of the Holder. See Instruction 1.

 

Signature(s): ___________________________________________________________________________

 

Print
Name: ____________________________________________________________________________

 

Title
(if signing on behalf of an entity Holder): __________________________________________________

 

Mailing
Address: ________________________________________________________________________

 

Area
Code and Telephone Number: __________________________________________________________

 

Email
Address: _____________________________________________________________________

 

Dated:
                       , 2017

 

GUARANTEE
OF SIGNATURE(S)

(See
Instruction 2)

Complete
ONLY if required by Instruction 2.

 

FOR
USE BY ELIGIBLE INSTITUTION ONLY.

PLACE
MEDALLION GUARANTEE IN SPACE BELOW.

 

	Firm:________________________________________________________________

         

        By:_________________________________________________________________

         

        Title:________________________________________________________________

         

        Date:________________________________________________________________

         

        Address
        _______________________________________________________________

         

        _______________________________________________________________

         

        _______________________________________________________________

 

    	 	8	 

     

    

 

	Schedule
        1

         

        Holder
        Company Securities

         

         

	Names(s)
    and Address(es) of Registered Owner(s)

    (Please fill in, if blank, exactly as name(s) appear(s) on the records of the Company)	Company
    Shares

    (Attach additional list if necessary)
	 

         

         
	Company
        Certificate

        Number(s)

         

        _________________

        

         

        _________________

         

        _________________

         
	Number
        and Class of Company Shares

        

         

        _______________________________

         

        _______________________________

         

        _______________________________

        

	Names(s)
    and Address(es) of Warrant Holder(s)

    (Please fill in, if blank, exactly as name(s) appear(s) on warrant documentation)	Company
Warrants 

(Attach additional list if necessary)

	 	Company
        Warrant

        Number(s)

         

        _________________

         

        _________________

         

        _________________

        
	Number
        and Class of Shares Purchasable under Company Warrants

         

        _______________________________

         

        _______________________________

         

        _______________________________

         

 

 

	* 	If any certificate(s) representing Company Shares that
you own or Company Warrants representing your right to purchase Company Shares have been lost or destroyed, check this box and
see Instruction 6. Please fill out the remainder of this Letter of Transmittal and:

 

		1.	Indicate
                                         here the number and class of Company Shares represented by the lost or destroyed certificates:
	 	 	 
	 	 	
	 	 	(number
                                         and class of Company Shares);

 

 

		2.	Indicate
                                         here the number and class of Company Shares purchasable pursuant to the lost or destroyed
                                         Company Warrants
	 	 	 
	 		
	 	 	(number
and class of Company Shares underlying Company Warrants)

 

     

     

    

 

Schedule
2

 

Special
Issuance and Delivery Instructions

 

	SPECIAL
        ISSUANCE INSTRUCTIONS

        (See Instructions 2 and 3)

         

        To
        be completed ONLY if the Pro Rata Share of Merger Consideration Shares or Replacement Purchaser Warrants are to be issued
        in the name of someone other than the undersigned Holder.

         

        Holder
        Company Securities to which the Special Issuance Instruction applies (must match at least one of the Holder Company Securities
        listed on Schedule 1):

         

        ______________________________________________

         

        ______________________________________________

         

        ______________________________________________

        

Issue to:

Name:                                                                              

                                     (Please
Print)

Address:                                                                         

          (Include
        Zip Code)

         

                                                                                                  

                 (Tax
Identification or Social Security No.)

         

        If
        the above space is inadequate, please note that fact above and continue on a separate attachment
	 	SPECIAL
        DELIVERY INSTRUCTIONS

        (See Instructions 2 and 3)

         

        To
        be completed ONLY if the physical copies of the new certificates for the Pro Rata Share of Merger Consideration Shares
        or the Replacement Purchaser Warrants are to be delivered to someone other than the undersigned or to the undersigned
        at an address other than that shown above.

         

        Holder
        Company Securities to which the Special Delivery Instruction applies (must match at least one of the Holder Company Securities
        listed on Schedule 1):

         

        ______________________________________________

         

        ______________________________________________

         

        ______________________________________________

        

         

        Deliver
        to:

        

        Name:                                                                              

                                             (Please
        Print)

        

        Address:                                                                         

        

          (Include
        Zip Code)

         

        If
        the above space is inadequate, please note that fact above and continue on a separate attachment

        

 

     

     

    

 

Exhibit
A

 

Form
of Lock-Up Agreement

 

TO
BE COMPLETED BY ALL HOLDERS

 

[Complete
attached Form Lock-Up Agreement]

     

     

    

 

Exhibit
B

 

Form
of Registration Rights Agreement

 

TO
BE COMPLETED BY ALL HOLDERS

 

[Complete attached Form Registration Rights Agreement]

 

     

     

    

 

Exhibit
C-1

 

IRS
Form W-9

 

TO
BE COMPLETED BY ALL U.S. HOLDERS

 

(See
Instruction 4)

 

[Complete
attached Form W-9]

 

     

     

    

 

Exhibit
C-2

 

Form
W-8BEN

 

TO
BE COMPLETED BY ALL NON-U.S. HOLDERS

 

(See
Instruction 4)

 

[Complete
attached Form W-8BEN]

 

     

     

    

 

Exhibit
D

 

Form
of Stock Power

 

TO
BE COMPLETED BY HOLDERS OF COMPANY SHARES

WHERE THE LETTER OF TRANSMITTAL IS NOT SIGNED BY THE

REGISTERED OWNER OF THE STOCK CERTIFICATE(S)

 

(See
Instruction 2)

 

[Complete
attached Form Stock Power]

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00265-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00265-of-00352.parquet"}]]