Document:

Exhibit 10.3

 

 

Pacific
Special Acquisition Corp.

40
Wall Street, 28th Floor

New
York, New York 10005

 

	 	__________, 2015

 

Zhengqi
International Holding Limited

40
Wall Street, 28th Floor

New
York, New York 10005

 

Ladies
and Gentlemen:

 

This
letter will confirm our agreement that, commencing on the effective date (the “Effective Date”) of the
registration statement (the “Registration Statement”) for the initial public offering (the “IPO”)
of the securities of Pacific Special Acquisition Corp. (the “Company”) and continuing until the earlier
of (i) the consummation by the Company of an initial business combination or (ii) the Company’s liquidation (in each case
as described in the Registration Statement) (such earlier date hereinafter referred to as the “Termination Date”),
Zhengqi International Holding Limited (“Zhengqi International”) shall make available to the Company certain office
space and administrative and support services as may be required by the Company from time to time, situated at 40 Wall Street,
28th Floor, New York, New York 10005 (or any successor location).  In exchange therefore, the Company shall
pay Zhengqi International the sum of $10,000 per month on the Effective Date and continuing monthly thereafter until the Termination
Date Zhengqi International hereby agrees that it does not have any right, title, interest or claim of any kind in or to any monies
that may be set aside in a trust account (the “Trust Account”) that may be established upon the consummation
of the IPO (the “Claim”) and hereby waives any Claim it may have in the future as a result of, or arising
out of, any negotiations, contracts or agreements with the Company and will not seek recourse against the Trust Account for any
reason whatsoever. No party hereto may assign either this letter agreement or any of its rights, interests, or obligations hereunder
without the prior written approval of the other party, provided that Zhengqi International may assign this letter agreement to
an affiliate without the prior written approval of the Company. Any purported assignment in violation of this paragraph shall
be void and ineffectual and shall not operate to transfer or assign any interest or title to the purported assignee.

 

	 	Very truly yours,
	 	 
	 	PACIFIC SPECIAL ACQUISITION
    CORP.
	 	 	 
	 	By:	 
	 	Name:	Zhouhong Peng
	 	Title:	Chief Executive Officer and Chief Financial
    Officer

 

	AGREED TO AND ACCEPTED BY:	 
	 	 
	ZHENGQI INTERNATIONAL HOLDING
    LIMITED	 
	 	 	 
	By:	 	 
	Name:	 	 
	Title:Exhibit 10.4

 

SHARE
ESCROW AGREEMENT

 

SHARE
ESCROW AGREEMENT, dated as of [_______], 2015 (“Agreement”), by and among PACIFIC SPECIAL ACQUISITION CORP., a British
Virgin Islands Company (“Company”), ZHENGQI INTERNATIONAL HOLDING LIMITED
(“ZIHL”), JIAN TU, ZHOUHONG PENG, DAVID BORIS, YAQI FENG, GUOXIONG LUO, JASON ZEXIAN SHEN and HONGHUI
DENG (collectively “Initial Shareholders”) and CONTINENTAL STOCK TRANSFER & TRUST COMPANY, a New York
corporation (“Escrow Agent”).

 

WHEREAS,
the Company has entered into an Underwriting Agreement, dated as of [_______], 2015 (“Underwriting Agreement”), with
EarlyBirdCapital, Inc. (“EBC”) acting as representative of the several underwriters (collectively, the “Underwriters”),
pursuant to which, among other matters, the Underwriters have agreed to purchase 5,000,000 units (“Units”) of the
Company, plus an additional 750,000 Units if the Underwriters exercise their over-allotment option in full. Each Unit consists
of one ordinary share of the Company, no par value per share (“Ordinary Share”), one warrant (the “Warrant”)
to purchase one-half of one Ordinary Share and one right (“Right”) to receive one-tenth of one Ordinary Share upon
the Company’s initial business combination (as described in the Registration Statement, hereinafter a “Business Combination”),
all as more fully described in the Company’s final Prospectus, dated [_______], 2015 (“Prospectus”), comprising
part of the Company’s Registration Statement on Form S-1 (File No. 333-206435) under the Securities Act of 1933, as amended
(“Registration Statement”), declared effective on [________], 2015 (“Effective Date”).

 

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

 

WHEREAS,
the Company and the Initial Shareholders desire that the Escrow Agent accept the Escrow Shares, in escrow, to be held and disbursed
as hereinafter provided.

 

IT
IS AGREED:

 

1.
   Appointment of Escrow Agent. The Company and the Initial Shareholders hereby appoint the Escrow Agent
to act in accordance with and subject to the terms of this Agreement and the Escrow Agent hereby accepts such appointment and
agrees to act in accordance with and subject to such terms.

 

2.
   Deposit of Escrow Shares. On the Effective Date, certificates representing each Initial Shareholder’s
respective Escrow Shares (and any applicable share power) shall be placed in escrow, to be held and disbursed subject to the terms
and conditions of this Agreement. Each Initial Shareholder acknowledges that the certificate representing such Initial Shareholder’s
Escrow Shares will be legended to reflect the deposit of such Escrow Shares under this Agreement.

  

3.
   Disbursement of the Escrow Shares.

 

3.1
   The Escrow Agent shall hold the Escrow Shares during the period (the “Escrow Period”) commencing
on the date hereof and (i) for 50% of the Escrow Shares, ending on the earlier of (x) one year after the date of the consummation
of the Company’s initial Business Combination and (y) the date on which the closing sale price of the Company’s Ordinary
Shares equals or exceeds $12.50 per share (as adjusted for share splits, share dividends, reorganizations and recapitalizations)
for any 20 trading days within any 30-trading day period commencing after the Company’s initial Business Combination and
(ii) for the remaining 50% of the Escrow Shares, ending one year after the date of the consummation of an initial Business Combination;
provided, however, that if, subsequent to the Company’s consummation of an initial Business Combination, the Company (or
the surviving entity) subsequently consummates a liquidation, merger, share exchange or other similar transaction which results
in all of the shareholders of such entity having the right to exchange their Ordinary Shares for cash, securities or other property,
then the Escrow Agent will, upon receipt of a notice executed by the Chairman of the Board, Chief Executive Officer or other authorized
officer of the Company, in form reasonably acceptable to the Escrow Agent, certifying that such transaction is then being consummated,
release the Escrow Shares then held by it to the Initial Shareholders. The Company shall promptly provide notice of the consummation
of an initial Business Combination to the Escrow Agent. Upon completion of the Escrow Period, the Escrow Agent shall disburse
such amount of each Initial Shareholder’s Escrow Shares (and any applicable share power) to such Initial Shareholder; provided,
however, that if the Escrow Agent is notified by the Company pursuant to Section 6.7 hereof that the Company is being liquidated
at any time during the Escrow Period, then the Escrow Agent shall promptly destroy the certificates representing the Escrow Shares.
The Escrow Agent shall have no further duties hereunder after the disbursement or destruction of the Escrow Shares in accordance
with this Section 3.

 

     

     

    

 

3.2
   Notwithstanding Section 3.1, if the Underwriters do not exercise their over-allotment option to purchase an
additional 750,000 Units of the Company in full within 45 days of the date of the Prospectus (as described in the Underwriting
Agreement), ZIHL agrees that the Escrow Agent shall return to the Company for cancellation, at no cost, a number of Escrow Shares
held by ZIHL determined by multiplying (a) 187,500 by (b) a fraction, (i) the numerator of which is 750,000 minus the number of
Ordinary Shares purchased by the Underwriters upon the exercise of their over-allotment option, and (ii) the denominator of which
is 750,000. The Company shall promptly provide notice to the Escrow Agent of the expiration or termination of the Underwriters’
over-allotment option and the number of Units, if any, purchased by the Underwriters in connection with their exercise thereof.

 

4.    Rights of Initial
Shareholders in Escrow Shares.

 

4.1
   Voting Rights as a Shareholder. Subject to the terms of the Insider Letters described in Section 4.4
hereof and except as herein provided, the Initial Shareholders shall retain all of their rights as shareholders of the Company
during the Escrow Period, including, without limitation, the right to vote such shares.

 

4.2
   Dividends and Other Distributions in Respect of the Escrow Shares. During the Escrow Period, all dividends
payable in cash with respect to the Escrow Shares shall be paid to the Initial Shareholders, but all dividends payable in shares
or other non-cash property (“Non-Cash Dividends”) shall be delivered to the Escrow Agent to hold in accordance with
the terms hereof. As used herein, the term “Escrow Shares” shall be deemed to include the Non-Cash Dividends distributed
thereon, if any.

 

4.3
   Restrictions on Transfer. During the Escrow Period, the only permitted transfers of the Escrow Shares
will be (i) to any persons (including their affiliates and shareholders) participating in the private placement of the private
units, officer, director, securityholder, employee, member or affiliate of ZIHL, (ii) amongst the Initial Holders or to the Company’s
officers, directors and employees, (iii) if the Initial Shareholder is an entity, as a distribution to partners, members or shareholders
of the Initial Shareholder upon the liquidation and dissolution of the Initial Shareholder, (iv) by bona fide gift to a member
of the Initial Shareholder’s immediate family or to a trust, the beneficiary of which is the Initial Shareholder or a member
of the Initial Shareholder’s immediate family for estate planning purposes, (v) by virtue of the laws of descent and distribution
upon death of the Initial Holder, (vi) pursuant to a qualified domestic relations order, (vii) by certain pledges to secure obligations
incurred in connection with purchases of the Company’s securities, (viii) by private sales at prices no greater than the
price at which the Escrow Shares were originally purchased or (ix) to the Company for cancellation as set forth in Section 3.2
hereof or in connection with the consummation of a Business Combination, in each case, except for clause (ix), on the condition
that such transfers may be implemented only upon the respective transferee’s written agreement to be bound by the terms
and conditions of this Agreement and of the Insider Letter (as defined below) signed by the Initial Shareholder transferring the
Escrow Shares.

 

4.4
   Insider Letters. Each of the Initial Shareholders has executed a letter agreement with EBC and the Company,
dated as indicated on Exhibit A hereto, and the form of which is filed as an exhibit to the Registration Statement (“Insider
Letter”), respecting the rights and obligations of such Initial Shareholder in certain events, including but not limited
to the liquidation of the Company.

 

5.
   Concerning the Escrow Agent.

 

5.1
   Good Faith Reliance. The Escrow Agent shall not be liable for any action taken or omitted by it in good
faith and in the exercise of its own best judgment, and may rely conclusively and shall be protected in acting upon any order,
notice, demand, certificate, opinion or advice of counsel (including counsel chosen by the Escrow Agent), statement, instrument,
report or other paper or document (not only as to its due execution and the validity and effectiveness of its provisions, but
also as to the truth and acceptability of any information therein contained) which is believed by the Escrow Agent to be genuine
and to be signed or presented by the proper person or persons. The Escrow Agent shall not be bound by any notice or demand, or
any waiver, modification, termination or rescission of this Agreement unless evidenced by a writing delivered to the Escrow Agent
signed by the proper party or parties and, if the duties or rights of the Escrow Agent are affected, unless it shall have given
its prior written consent thereto.

 

    	 	2	 

     

    

 

5.2
   Indemnification. The Escrow Agent shall be indemnified and held harmless by the Company from and against
any expenses, including counsel fees and disbursements, or loss suffered by the Escrow Agent in connection with any action, suit
or other proceeding involving any claim which in any way, directly or indirectly, arises out of or relates to this Agreement,
the services of the Escrow Agent hereunder, or the Escrow Shares held by it hereunder, other than expenses or losses arising from
the gross negligence or willful misconduct of the Escrow Agent. Promptly after the receipt by the Escrow Agent of notice of any
demand or claim or the commencement of any action, suit or proceeding, the Escrow Agent shall notify the other parties hereto
in writing. In the event of the receipt of such notice, the Escrow Agent, in its sole discretion, may commence an action in the
nature of interpleader in an appropriate court to determine ownership or disposition of the Escrow Shares or it may deposit the
Escrow Shares with the clerk of any appropriate court or it may retain the Escrow Shares pending receipt of a final, non appealable
order of a court having jurisdiction over all of the parties hereto directing to whom and under what circumstances the Escrow
Shares are to be disbursed and delivered. The provisions of this Section 5.2 shall survive in the event the Escrow Agent resigns
or is discharged pursuant to Sections 5.5 or 5.6 below.

 

5.3
   Compensation. The Escrow Agent shall be entitled to reasonable compensation from the Company for all
services rendered by it hereunder. The Escrow Agent shall also be entitled to reimbursement from the Company for all expenses
paid or incurred by it in the administration of its duties hereunder including, but not limited to, all counsel, advisors’
and agents’ fees and disbursements and all taxes or other governmental charges.

 

5.4
   Further Assurances. From time to time on and after the date hereof, the Company and the Initial Shareholders
shall deliver or cause to be delivered to the Escrow Agent such further documents and instruments and shall do or cause to be
done such further acts as the Escrow Agent shall reasonably request to carry out more effectively the provisions and purposes
of this Agreement, to evidence compliance herewith or to assure itself that it is protected in acting hereunder.

 

5.5
   Resignation. The Escrow Agent may resign at any time and be discharged from its duties as escrow agent
hereunder by its giving the other parties hereto written notice and such resignation shall become effective as hereinafter provided.
Such resignation shall become effective at such time that the Escrow Agent shall turn over to a successor escrow agent appointed
by the Company, the Escrow Shares held hereunder. If no new escrow agent is so appointed within the 60 day period following the
giving of such notice of resignation, the Escrow Agent may deposit the Escrow Shares with any court it reasonably deems appropriate.

 

5.6
   Discharge of Escrow Agent. The Escrow Agent shall resign and be discharged from its duties as escrow
agent hereunder if so requested in writing at any time by the other parties hereto, jointly, provided, however, that such resignation
shall become effective only upon acceptance of appointment by a successor escrow agent as provided in Section 5.5.

 

5.7
   Liability. Notwithstanding anything herein to the contrary, the Escrow Agent shall not be relieved from
liability hereunder for its own gross negligence or its own willful misconduct.

 

5.8
   Waiver. The Escrow Agent hereby waives any right of set-off or any other right, title, interest or claim
of any kind (“Claim”) in, or to any distribution of, the Trust Account (as defined in that certain Investment Management
Trust Agreement, dated as of the date hereof, by and between the Company and the Escrow Agent as trustee thereunder) and hereby
agrees not to seek recourse, reimbursement, payment or satisfaction for any Claim against the Trust Account for any reason whatsoever.

 

    	 	3	 

     

    

 

6.
   Miscellaneous.

 

6.1
   Governing Law; Jurisdiction. In connection with Section 5-1401 of the General Obligations Law of the
State of New York, this Agreement shall be governed by, and construed in accordance with, the laws of the State of New York without
regard to principles of conflicts of law that would result in the application of the substantive law of another jurisdiction.
The parties hereto agree that any action, proceeding or claim arising out of or relating in any way to this Agreement shall be
resolved through final and biding arbitration in accordance with the International Arbitration Rules of the American Arbitration
Association (“AAA”). The arbitration shall be brought before the AAA International Center for Dispute Resolution’s
offices in New York City, New York, will be conducted in English and will be decided by a panel of three arbitrators selected
from the AAA Commercial Disputes Panel and that the arbitrator panel’s decision shall be final and enforceable by any court
having jurisdiction over the party from whom enforcement is sought. The cost of such arbitrators and arbitration services, together
with the prevailing party’s legal fees and expenses, shall be borne by the non-prevailing party or as otherwise directed
by the arbitrators. The Company hereby appoints, without power of revocation, Ellenoff Grossman & Schole LLP, 1345 Avenue
of the Americas, New York, NY 10105, Fax No.: (212) 370-7889, Attn: Stuart Neuhauser, Esq., as their respective agent to accept
and acknowledge on its behalf service of any and all process which may be served in any arbitration, action, proceeding or counterclaim
in any way relating to or arising out of this Agreement. The Company further agrees to take any and all action as may be necessary
to maintain such designation and appointment of such agent in full force and effect for a period of seven years from the date
of this Agreement. This Agreement may be executed in several original or facsimile counterparts, each one of which shall constitute
an original, and together shall constitute but one instrument.

 

6.2
   Third Party Beneficiaries. Each of the Initial Shareholders hereby acknowledges that the Underwriters
are third party beneficiaries of this Agreement and this Agreement may not be modified or changed without the prior written consent
of EBC.

 

6.3
   Entire Agreement. This Agreement contains the entire agreement of the parties hereto with respect to
the subject matter hereof and, except as expressly provided herein, may not be changed or modified except by an instrument in
writing signed by the party to the charged.

 

6.4
   Headings. The headings contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation thereof.

 

6.5
   Binding Effect. This Agreement shall be binding upon and inure to the benefit of the respective parties
hereto and their legal representatives, successors and assigns.

 

6.6
   Notices. Any notice or other communication required or which may be given hereunder shall be in writing
and either be delivered personally or be mailed, certified or registered mail, or by private national courier service, return
receipt requested, postage prepaid, and shall be deemed given when so delivered personally or, if mailed, two days after the date
of mailing, as follows:

 

If
to the Company, to:

 

Pacific
Special Acquisition Corp.

40 Wall
Street, 28th Floor

New York,
New York 10005

Attn:
Zhouhong Peng, Chief Executive Officer

and Chief
Financial Officer

 

If
to a Shareholder, to his address set forth in Exhibit A.

 

and
if to the Escrow Agent, to:

 

Continental
Stock Transfer & Trust Company

17
Battery Place

New
York, New York 10004

Attn:
Chairman

 

    	 	4	 

     

    

 

A
copy of any notice sent hereunder shall be sent to:

 

EarlyBirdCapital,
Inc.

275
Madison Avenue, 27th Floor

New
York, New York 10016

Attn:
David M. Nussbaum, Chairman

 

and:

 

Ellenoff
Grossman & Schole LLP

1345 Avenue
of the Americas,

New York,
NY10105

Attn:
Stuart Neuhauser, Esq.

 

and:

Graubard
Miller

The Chrysler
Building

405 Lexington
Avenue

New York,
New York 10174

Attn:
David Alan Miller, Esq.

 

The
parties may change the persons and addresses to which the notices or other communications are to be sent by giving written notice
to any such change in the manner provided herein for giving notice.

 

6.7
   Liquidation of the Company. The Company shall give the Escrow Agent written notification of the liquidation
and dissolution of the Company in the event that the Company fails to consummate a Business Combination within the time period
specified in the Prospectus.

 

[Signature
Page Follows]

 

    	 	5	 

     

    

 

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

 

	 	COMPANY:
	 	 	 
	 	PACIFIC SPECIAL ACQUISITION CORP.
	 	 	 
	 	By:	 
	 	 	Name:
    Zhouhong Peng
	 	 	Title:
    Chief Executive Officer and Chief Financial Officer
	 	 	 
	 	INITIAL SHAREHOLDERS:
	 	 	 
	 	Zhengqi International Holding Limited
	 	 	 
	 	By:	 
	 	 	Name:
    
	 	 	Title:
	 	 	 
	 	 	 
	 	 	Jian
    Tu
	 	 	 
	 	 	 
	 	 	Zhouhong
    Peng
	 	 	 
	 	 	 
	 	 	David
    Boris
	 	 	 
	 	 	 
	 	 	Yaqi
    Feng
	 	 	 
	 	 	 
	 	 	Guoxiong
    Luo
	 	 	 
	 	 	 
	 	 	Jason
    Zexian Shen
	 	 	 
	 	 	 
	 	 	Honghui
    Deng

 

	 	 	 
	 	ESCROW AGENT:
	 	 	 
	 	CONTINENTAL STOCK TRANSFER
	 	& TRUST COMPANY
	 	 	 
	 	By:	 
	 	 	Name:
    
	 	 	Title:
    

 

    	 	6	 

     

    

 

EXHIBIT
A

 

	Name and Address of
 Initial Shareholder
	 	Number
 of Shares
	 	 	Share
 Certificate

Number
	 	Date of
 Insider Letter

	Zhengqi International Holding Limited	 	 	997,500	 	 	[●]	 	[_______],
    2015
	 	 	 	 	 	 	 	 	 
	Jian Tu	 	 	150,000	 	 	[●]	 	[_______],
    2015
	 	 	 	 	 	 	 	 	 
	Zhouhong Peng	 	 	80,000	 	 	[●]	 	[_______],
    2015
	 	 	 	 	 	 	 	 	 
	David Boris	 	 	60,000	 	 	[●]	 	[_______],
    2015
	 	 	 	 	 	 	 	 	 
	Yaqi Feng	 	 	60,000	 	 	[●]	 	[_______],
    2015
	 	 	 	 	 	 	 	 	 
	Guoxiong Luo	 	 	30,000	 	 	[●]	 	[_______],
    2015
	 	 	 	 	 	 	 	 	 
	Jason
Zexian Shen
	 	 	30,000	 	 	[●]	 	[_______],
    2015
	 	 	 	 	 	 	 	 	 
	Honghui Deng	 	 	30,000	 	 	[●]	 	[_______],
    2015

 

 

7

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