KBS International Holdings Inc.: Exhibit 10.3 - Filed by newsfilecorp.com






Exhibit 10.3

EXECUTION COPY 

BAY PEAK 1 OPPORTUNITY CORP. 

March 11, 2011 

To the persons and entities
listed on the signature page
hereof: 



	 	Re: 	Additional Warrant Side Letter Agreement
      


This additional warrant side letter agreement (“Side
Letter”) is agreed to by and among Bay Peak 1 Opportunity Corp., a Nevada
corporation (the “Company”), each of the persons listed on the signature
pages hereto as the “Controlling Stockholders,” and the persons and
entities listed on the signature pages hereof as “Initial Holders.” The
Initial Holders are, or affiliates of, holders of shares of the Company’s Common
Stock, par value $0.0001 per share (the “Common Stock”). To induce the
Initial Holders, or their affiliates, to participate in a financing of the
Common Stock (the “Financing”), the Company and the Controlling
Stockholders have agreed to certain terms and conditions for the benefit of the
Initial Holders.

Accordingly, it is hereby agreed as
follows: 

1. Unless otherwise agreed by the undersigned Initial Holders,
the Company shall immediately, following the final closing of the Financing,
issue to the Initial Holders, or such Initial Holders’ designees, as identified
on Schedule A hereto (the “Designees”) a three-year warrant (each,
a “Warrant”) to purchase shares of Common Stock, in a form substantially
identical to that attached hereto as Exhibit A and equal in number to
fifty percent (50%) of the aggregate number shares of Common Stock issued by the
Company in the Financing, at a per share exercise price equal to 115% of the
average price per share at which the Common Stock was sold to investors in the
Financing. Such Warrants and the shares of Common Stock issuable upon exercise
thereof are being issued pursuant to an exemption from registration under the
Securities Act of 1933, as amended (the “Securities Act”), and will be
“restricted securities.”

2. Upon the exercise of all or any portion of the Warrant, the
holders of the shares of Common Stock issued in connection therewith will be
entitled to and deemed a party to that certain Investor Make Good Side Letter
Agreement, dated of even date herewith, by and among the Company, the
Controlling Stockholder, and investors listed on the signature pages thereto, as
may be amended by the parties thereto (the “Make Good Agreement”) in the
form attached hereto as Exhibit B. The Company and the Controlling
Stockholders agree to take all action necessary to give effect to the foregoing,
including execution of a new Make Good Agreement with the holder of the shares
of Common Stock issued in connection with an exercise of the Warrants. 

3. Investor Representations. With respect to the
acquisition of the Warrants (including the receipt of Common Stock upon any
exercise of the Warrants), each Initial Holder hereby represents and warrants to
the Company that it or any Designee, as the case may be: 

(a) has such knowledge and experience in financial and business
matters that it is capable of evaluating the merits and risks of the prospective
investment in the Company; 




EXECUTION COPY 

(b) is acquiring the Warrants for its own account, not on
behalf of other persons, for investment and not with a view to resale or
distribution; 

(c) (i) has an overall commitment to investments that are not
readily marketable, which is not disproportionate to its net worth, (ii) its
investment in the Warrants will not cause such overall commitment to become
excessive, and (iii) the investment is suitable for it when viewed in light of
its other securities holdings and its financial situation and needs; 

(d) has adequate means of providing for its current needs and
personal contingencies; 

(e) recognizes that any investment in the Company involves
substantial risk, including, the risk of losing all of its capital investment in
the Company, and it has evaluated and fully understands all risks in its
decision to acquire Warrants hereunder; 

(f) is an accredited investor as defined under Rule 501(a)
under the Securities Act; 

(g) has been furnished with all additional documents and
information which it has requested in writing;

(h) has had the opportunity to ask questions of and has
received answers from the Company concerning the Company and the Warrants and to
obtain any additional information necessary to verify the accuracy of the
information furnished; 

(f) has relied only on the information set forth herein in
making its investment decision and acknowledges that the information furnished
by the Company does not constitute investment, accounting, legal or tax advice
and the Designee is relying on its own professional advisors for such
advice;

(i) has been given the opportunity to inspect (either
individually or together with its consultants, auditors and counsel) all
documents, records and books pertaining to its investment; 

(j) has not paid or given to any third party any commission or
other remuneration in connection with the Warrants; and has not received any
public media advertisements and has not been solicited by any form of mass
mailing solicitation;

(k) understands the meaning and legal consequences of the
foregoing representations and warranties and acknowledges and agrees that the
Company is relying upon the representations and warranties made herein in
determining to issue to it the Warrants;

(l) certifies that each of the foregoing representations and
warranties is true and correct as of the date hereof and shall survive the
execution hereof and the acquisition of the Warrants or any shares of Common
Stock that may be received upon the exercise thereof; and 

(m) acknowledges that no Warrants (nor any shares of Common
Stock that may be received upon any exercise thereof) may be transferred in the
absence of registration under the Securities Act and applicable Blue Sky or
securities laws. 






EXECUTION COPY 

4. Miscellaneous.

(a) In connection with the execution of this Side Letter, the
Company, the Controlling Stockholders, and Hongri International Holdings Limited
have entered into a Share Exchange Agreement (the “Share Exchange
Agreement”). The Company and the Controlling Stockholders make and affirm
for the benefit of the Initial Holders, as of the date of this Side Letter, all
representations and warranties made by the Company and the Controlling
Stockholders in the Share Exchange Agreement (whether or not such
representations are made before or after the date of this Side Letter). The
parties hereto agree that the Initial Holders shall, as against the Controlling
Stockholders and the Company, be entitled to rely upon the representations and
warranties of the Controlling Stockholders, the Company and the other parties to
the Share Exchange Agreement as if all such representations and warranties had
been set forth in this Side Letter as representations and warranties of the
Controlling Stockholders and the Company, respectively. 

(b) This Side Letter may not be changed orally or modified,
amended, or supplemented without an express written agreement executed by the
parties hereto. No waiver of any of the provisions or conditions hereof or any
of the rights of a party hereto shall be effective or binding unless such waiver
shall be in writing and signed by the party claimed to have given or consented
thereto. This Side Letter shall be binding upon and inure to the benefit of each
party’s respective successors, heirs and permitted assigns, and the rights and
obligations of the parties hereunder may not be assigned without the written
consent of all parties hereto.

(c) All notices, communications and instructions required or
desired to be given under this Side Letter must be in writing and shall be
deemed to be duly given if sent by registered or certified mail, return receipt
requested, or overnight courier to the address, facsimile number or electronic
mail address provided for each party in the signature page hereto (or to such
other address and contact information and to the attention of such other person
as any of the above may have furnished to the other parties in writing and
delivered in accordance with the provisions set forth above, and, with respect
to any notice, communication or instruction to any Initial Purchaser), with a
copy to: Scudder Law Firm, P.C., L.L.O, Attn: Adam Hornung, 411 S.
13th St., Suite 200, Lincoln, NE 68502, 402-435-4239,
ahornung@scudderlaw.com. 

(d) This Side Letter shall be governed by and construed in
accordance with the internal laws of the State of New York applicable to
agreements made and to be performed entirely within the State of New York,
without regard to the conflicts of law principles thereof. 

(e) If any provision of this Side Letter becomes or is declared
by a court of competent jurisdiction to be illegal, unenforceable or void,
portions of such provision, or such provision in its entirety, to the extent
necessary, shall be severed from this Side Letter, and such court will replace
such illegal, void or unenforceable provision of this Side Letter with a valid
and enforceable provision that will achieve, to the extent possible, the same
economic, business and other purposes of the illegal, void or unenforceable
provision. The balance of this Side Letter shall be enforceable in accordance
with its terms. 

(f) In the event that any dispute among the parties to this
Side Letter should result in litigation, the prevailing party in such dispute
shall be entitled to recover from the losing party all fees, costs, and expenses
of enforcing any right of such prevailing party under or with respect to this
Side Letter, including without limitation, such reasonable fees and expenses of
attorneys and accountants, which shall include, without limitation, all fees,
costs, and expenses of appeals. 

(g) Each party hereto agrees to execute and deliver, by the
proper exercise of its corporate, limited liability company, partnership or
other powers, all such other and additional instruments and documents and do all such other acts and things
as may be necessary to more fully effectuate this Side Letter. 




EXECUTION COPY 

(h) This Side Letter may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. A facsimile, telecopy or
other reproduction of this Side Letter may be executed by one or more parties
hereto and delivered by such party by facsimile or any similar electronic
transmission device pursuant to which the signature of or on behalf of such
party can be seen. Such execution and delivery shall be considered valid,
binding and effective for all purposes. At the request of any party hereto, all
parties hereto agree to execute and deliver an original of this Agreement as
well as any facsimile, telecopy or other reproduction hereof. This Side Letter,
together with the separate written agreements referenced herein, embodies the
entire agreement and understanding of the parties hereto in respect of the
subject matter contained herein. 

[Remainder of Page Left Blank Intentionally] 

 




If this Side Letter correctly states your understanding of our
agreement, please indicate your consent and approval by executing in the blank
provided for your signature below. 

	 	Very truly yours, 
	 	  
	 	BAY PEAK 1 OPPORTUNITY CORP. 
		 
	 	By: 
	 	Name: Cory Roberts 
	 	Title: Chief Executive Officer 
	 	  
	 	Address for Notice: 
	 	169 Bolsa Ave. 
	 	Mill Valley, CA 94941 
	 	Attn: President 
	 	  
	 	Fax: 
	 	Email: cory@baypeak.com 


     [Signature Page (Company) to

Additional Warrant Side Letter Agreement] 




If this Side Letter correctly states your understanding of our
agreement, please indicate your consent and approval by executing in the blank
provided for your signature below. 

	 	CONTROLLING STOCKHOLDERS: 
	 	 
	 	                                                                           
      
	 	Printed
      Name:                                                                            
      
	 	Address for Notice: 
	 	  
	 	Fax: 
	 	Email: 
	 	  
	 	                                                                           
      
	 	Printed
      Name:                                                                            
      
	 	Address for Notice: 
	 	  
	 	Fax: 
	 	Email: 


[Signature Page (Controlling Stockholders) 
to

Additional Warrant Side Letter Agreement] 





This Side Letter is agreed to and accepted this ___ day of
________________, 2011: 

INITIAL HOLDER: 

                                                                           

By:                                                                            


By:                                                                            

Name:                                                                            

Title:                                                                            


Address for Notice: 

Fax: 
E-mail: 

With a copy to: 

[Signature Page (Initial Holder) 
to

Additional Warrant Side Letter Agreement] 





SCHEDULE A 

Warrant Delivery Instructions 


	Name of Initial Holder 	Designee for Warrants 	Percentage of Total 
Number of
      Warrants to be 
Issued 
	Canadian China Capital Partners Ltd. 		20% 
	Kema Management, Ltd. 	  	14% 
	Condo Dev 2006 LLC 	  	14% 
	PV Capital, LLC 	  	28% 
	bayPeak, llc 	  	24% 







EXHIBIT A 

FORM OF WARRANT 

NEITHER THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR
ANY SECURITY THAT MAY BE ISSUED UPON THE EXERCISE HEREOF HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY STATE
SECURITIES LAWS, AND NEITHER ANY SUCH SECURITIES NOR ANY INTEREST THEREIN MAY BE
OFFERED, SOLD, PLEDGED, ASSIGNED, OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND APPLICABLE STATE SECURITIES
LAWS OR PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE ACT AND APPLICABLE STATE SECURITIES LAWS, IN WHICH CASE THE HOLDER MUST,
PRIOR TO SUCH TRANSFER, FURNISH TO THE COMPANY AN OPINION OF COUNSEL, WHICH
COUNSEL AND OPINION ARE SATISFACTORY TO THE COMPANY, THAT SUCH SECURITIES MAY BE
OFFERED, SOLD, PLEDGED, ASSIGNED, OR OTHERWISE TRANSFERRED IN THE MANNER
CONTEMPLATED PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE ACT AND APPLICABLE STATE SECURITIES LAWS. IN ADDITION THE
SECURITIES THAT MAY BE ISSUED UPON THE EXERCISE HEREOF WILL BECOME SUBJECT TO
CERTAIN TRANSFER AND VOTING RESTRICTIONS SET FORTH IN A SIDE LETTER AGREEMENT
ENTERED INTO BETWEEN THE COMPANY AND CERTAIN STOCKHOLDERS OF THE COMPANY.


Right to Purchase up to 
______________________
Shares of
Common Stock of 

BAY PEAK 1 OPPORTUNITY CORP. 
(subject to adjustment
as provided herein) 


COMMON STOCK PURCHASE WARRANT (“WARRANT”) 

	No. [___] 	Issue Date:_____________, 2011



Bay Peak 1 Opportunity Corp. (the “Company”), hereby
certifies that, for value received,
_______________________________________________________, or its permitted
assigns (the “Holder”), is entitled, subject to the terms set forth
below, to purchase from the Company from and after the date hereof (the
“Exercise Date”) and at any time or from time to time before 5:00 p.m.,
New York time, through the close of business on the date that is three (3) years
from the Issue Date set forth above (the “Expiration Date”), up to
_______________________(_________) fully paid and nonassessable shares of the
Company’s common stock (“Common Stock”), at an exercise price of
US$[_________]1 per share (“Exercise Price”). The number and
character of such shares of Common Stock issuable upon exercise of this Warrant
and the Exercise Price per share are subject to adjustment as provided
herein.

1. Exercise of Warrant. 

1.1. Number of Shares Issuable upon Exercise. From and
after the Exercise Date through and including the Expiration Date, the Holder
shall be entitled to receive, upon exercise of this Warrant in whole or in part,
by delivery of an original or fax copy of a duly executed exercise notice in the form attached hereto as Exhibit A (the “Exercise
Notice”) and payment of the aggregate Exercise Price (subject to adjustment
pursuant to Section 3) of the shares thereby purchased in accordance with
Section 2 hereof, up to that number of shares of Common Stock referred to above,
provided, however, within seven (7) business days of the date said
Exercise Notice is delivered to the Company, the Holder shall have surrendered
this Warrant to the Company.


                                                                 
1
Exercise price to be 115% of the average price per share at which the Common
Stock was sold to investors in the Financing. 




2. Procedure for Exercise. 

2.1. Delivery of Stock Certificates, Etc., on Exercise.
The Company agrees that the shares of Common Stock purchased upon exercise of
this Warrant shall be deemed to be issued to the Holder as the record owner of
such shares as of the close of business on the date on which the Exercise Notice
is delivered to the Company and payment is made for such shares in accordance
herewith. As soon as practicable after the exercise of this Warrant in full or
in part, and in any event within five (5) business days thereafter, the Company
at its expense (including the payment by it of any applicable issue taxes) will
cause to be issued in the name of and delivered to the Holder, or as such Holder
(upon payment by such Holder of any applicable transfer taxes) may direct in
compliance with applicable securities laws, a certificate or certificates for
the number of duly and validly issued, fully paid, and nonassessable shares of
Common Stock to which such Holder shall be entitled on such exercise, plus, in
lieu of any fractional share to which such holder would otherwise be entitled,
cash equal to such fraction multiplied by the then Fair Market Value (as
hereinafter defined) of one full share, together with any other stock or other
securities and property (including cash, where applicable) to which such Holder
is entitled upon such exercise pursuant to Section 1 or otherwise. The “Fair
Market Value” of a share of Common Stock as of a particular date (the
“Determination Date”) shall mean (a) if the Common Stock is then listed
or quoted on a national trading market, the volume weighted average price of the
Common Stock for the twenty (20) trading days preceding such Determination Date,
(b) if prices for the Common Stock are then reported in any tier of the
interdealer quotation system operated by Pink OTC Markets Inc. (or a similar
company, organization or agency succeeding to its functions of reporting
prices), the average of the closing bid and ask prices per share of the Common
Stock for the twenty (20) trading days preceding such Determination Date as so
reported, or (c) in all other cases, the value of the Common Stock as determined
in good faith by the Company’s board of directors (the “Board of
Directors”). If the exercise of this Warrant is in connection with a public
offering of Common Stock, such exercise may be made conditional upon
consummation of such public offering. 

2.2. Exercise.

2.2.1. Payment may be made either by wire transfer or cashier’s
check drawn on a United States bank payable to the order of the Company. The
amount of payment shall be equal to the applicable aggregate Exercise Price for
the number of Common Stock shares specified in such Exercise Notice (as such
exercise number shall be adjusted to reflect any adjustment in the total number
of shares of Common Stock issuable to the Holder per the terms of this Warrant)
and the Holder shall thereupon be entitled to receive the number of duly
authorized, validly issued, fully paid and nonassessable shares of Common Stock
determined as provided herein. 

2.2.2. Upon exercise of all or any portion of this Warrant, the
holder of the shares of Common Stock issued upon the exercise of this Warrant
(the “Warrant Shares”) will be entitled to and deemed a party to that
certain Investor Make Good Side Letter Agreement, dated of even date herewith,
by and among the Company, the Controlling Stockholder, and the investors noted
on the signature pages thereto, as may be amended and supplemented by the
parties thereto (the “Make Good Agreement”) and will execute the
joinder Agreement attached as Schedule D thereto. The Company and the Holder
agree to take all action necessary to give effect to the foregoing, including
execution of a new Make Good Agreement with the holder of the Warrant Shares
issued in connection herewith. 

3 




3. Anti-Dilution Protections. 

3.1. Reorganization, Consolidation, Merger, Etc.

3.1.1. In case at any time or from time to time, the Company
shall (a) effect a reorganization, (b) consolidate with or merge into any other
person, (c) enter into any transaction (including, without limitation, a merger,
consolidation, share exchange, sale, lease or other disposition of all or
substantially all of the Company’s assets, liquidation, recapitalization or
reclassification of the Common Stock), in connection with which the previously
outstanding Common Stock shall be changed into or exchanged for different
securities of the Company or capital stock or other securities of another
corporation or interests in a non-corporate entity or other property (including
cash) or any combination of the foregoing (excluding any such transaction where
the other party is an affiliate of the Company and each Holder receives an
interest in the affiliate equivalent and proportional to its interest in the
Company), or (d) transfer all or substantially all of its properties or assets
to any other person under any plan or arrangement contemplating the dissolution
of the Company, then, in each such case, as a condition to the consummation of
such a transaction, proper and adequate provision (including a constructive
trust over any proceeds) shall be made by the Company whereby the Holder, on the
exercise of this Warrant at any time after the consummation or effective date of
such event, as the case may be, shall receive, in lieu of the Common Stock
issuable on such exercise prior to such consummation or such effective date, the
stock and other securities and property (including cash) to which such Holder
would have been entitled upon such consummation or in connection with such
dissolution, as the case may be, if such Holder had so exercised this Warrant,
immediately prior thereto, all subject to further adjustment thereafter as
provided in this Section 3. In case of a transaction described in this Section
3.1.1, the surviving or acquiring person or the Company, as appropriate, shall
deposit promptly with the Warrant Agent (as defined below) the funds, if any,
necessary to pay to the holders of the Warrants the amounts to which they are
entitled as described above. After such funds and the surrendered Warrant
certificates are received, the Warrant Agent is required to deliver a check in
such amount as is appropriate (or, in the case of consideration other than cash,
such other consideration as is appropriate) to such person or persons as it may
be directed in writing by the Holders surrendering such Warrants.

3.1.2. Upon any transaction described in Section 3.1.1, this
Warrant shall continue in full force and effect and the terms hereof shall be
applicable to the shares of stock and other securities and property receivable
on the exercise of this Warrant after the consummation of such reorganization,
consolidation or merger or the effective date of dissolution following any such
transfer, as the case may be, and shall be binding upon the issuer of any such
stock or other securities, including, in the case of any such transfer, the
person acquiring all or substantially all of the properties or assets of the
Company, whether or not such person shall have expressly assumed the terms of
this Warrant as provided in Section 3.1.1. In the event this Warrant does not
continue in full force and effect after the consummation of the transactions
described in Section 3.1.1, then the Company’s securities and property
(including cash, where applicable) receivable by the Holder will be delivered to
the Holder. 

3.2. Extraordinary Events Regarding Common Stock. In the
event that the Company shall (a) issue additional shares of Common Stock as a
dividend or other distribution on outstanding Common Stock or any preferred
stock issued by the Company, (b) subdivide its outstanding shares of Common
Stock, or (c) combine its outstanding shares of Common Stock into a smaller
number of shares of Common Stock, then, in each such event, simultaneously with
the happening of such event, (i) the Exercise Price shall be adjusted by
multiplying the then Exercise Price by the following fraction, and (ii) the
number of Warrant Shares issuable upon exercise of this Warrant shall be
adjusted by dividing the then number of Warrant Shares by the following
fraction: 

4 




Fraction:

(A) the numerator shall be the number
of shares of Common Stock outstanding immediately prior to such event and (B)
the denominator shall be the number of shares of Common Stock outstanding
immediately after such event.

The Exercise Price and number of Warrant Shares, as so
adjusted, shall be readjusted in the same manner upon the happening of any
successive event or events described herein in this Section 3.

3.3. Distributions. If the Company, at any time prior to
the Expiration Date, shall distribute to all holders of Common Stock (and not to
Holders of the Warrants) evidences of its indebtedness or assets (including cash
and cash dividends) or rights or warrants to subscribe for or purchase any
security), then in each such case the Exercise Price shall be simultaneously
adjusted by multiplying the Exercise Price in effect immediately prior to the
record date fixed for determination of stockholders entitled to receive such
distribution by a fraction of which the denominator shall be the Fair Market
Value of a share of Common Stock determined as of the record date mentioned
above, and of which the numerator shall be such Fair Market Value on such record
date less the then-per share Fair Market Value at such record date of the
portion of such assets or evidence of indebtedness so distributed applicable to
one outstanding share of the Common Stock as reasonably determined by the Board
of Directors; provided, however, that if the above fraction should result in a
negative number the Exercise Price shall be deemed to be $0.0001 per share. In
either case, the adjustments shall be described in a statement provided to the
Holder of the portion of assets or evidences of indebtedness so distributed or
such subscription rights applicable to one share of Common Stock. Such
adjustment shall be made whenever any such distribution is made and shall become
effective immediately after the record date mentioned above. 

3.4. Issuances.

3.4.1 In the event that at any time or from time to time the
Company shall issue, transfer, or sell (a) shares of Common Stock or any other
capital stock of the Company (whether preferred, common or otherwise), (b)
rights, options or warrants entitling the holder thereof to subscribe for shares
of Common Stock or any other capital stock of the Company (provided, however,
that no adjustment shall be made upon the exercise of such rights, options or
warrants), or (c) securities convertible into or exchangeable or exercisable for
Common Stock or any other capital stock (whether preferred, common or otherwise)
of the Company (provided, however, that no adjustment shall be made upon the
conversion, exchange or exercise of such securities (other than issuances
specified in (a), (b) or (c) which are made as the result of anti-dilution
adjustments in such securities)) for consideration equivalent to a price per
share of Common Stock at the date of such issuance that is less than
US$[________________]2, then the Exercise Price, as used throughout
this Warrant, shall be reduced, concurrently with such issuance, transfer or
sale, to a price (calculated to the nearest cent) determined by multiplying the
applicable Exercise Price by a fraction, the numerator of which shall be the
number of shares of Common Stock outstanding immediately prior to such issuance,
transfer or sale plus the number of shares of Common Stock which the aggregate
consideration received by the Company for the total number of securities so
issued, transferred or sold would purchase at the Exercise Price in effect
immediately prior to such issuance, transfer or sale, and the denominator of
which shall be the number of shares of Common Stock outstanding immediately
prior to such issuance, transfer or sale plus (without duplication) the number
of such additional shares of Common Stock to be issued, transferred or sold. For
the purpose of the above calculation, (A) the number of shares of Common Stock
outstanding immediately prior to such issue shall be calculated on a fully
diluted basis, as if all warrants (excluding this Warrant and all other warrants issued in connection with
this Side Letter) and other rights and securities convertible into or
exercisable or exchangeable for Common Stock had been fully converted, exercised
or exchanged into Common Stock immediately prior to such issuance, transfer or
sale, and (B) to the extent such transaction includes non-cash consideration or
involves an issuance, transfer, or sale other than of Common Stock, the Board of
Directors will reasonably determine the equivalent dollar value of consideration
received or number of shares of Common Stock issued, transferred, or sold in
such transaction.

                                                     
2
Price shall be 100% of the average price per share at which the Common Stock was
sold to investors in the Financing. 




3.4.2 Notwithstanding anything in Section 3.4.1 to the
contrary, Section 3.4.1 shall not apply to any issuance, sale, or transfer: (a)
the issuance of securities by the Company in connection with the acquisition of
another company (provided that such acquisition is approved by the Board of
Directors and the Investor Representative (as that terms is defined in the Make
Good Agreement)); (b) upon the issuance by or the conversion or exercise of any
options, warrants, rights or other securities outstanding on the date hereof or
that may be issued pursuant to any of those agreements listed on Schedule
A of the Make Good Agreement; (c) upon or in connection with a forward or
reverse split, dividend, distribution, combination or subdivision, or any
similar transaction for which a proportionate adjustment of this Warrant is made
pursuant to Section 3.2; (d) to employees, officers, directors, consultants,
agents, advisors, vendors, or other service providers of the Company pursuant to
any compensatory agreement approved by the Board of Directors (including the
Joint Nominee (as defined in the Make Good Agreement)); (e) where an adjustment
to the Exercise Price has already been made pursuant to Section 3.4.1; or (f) to
banks, providers of “floor plan” or similar financing, or equipment lessors
(including any pledge or the granting of any security interest) pursuant to a
debt financing, “floor plan” or similar financing transaction, equipment leasing
or real property leasing transaction approved by the Board of Directors
(including the Investor Nominee (as defined in the Make Good Agreement)). 

3.5. Notice and Certificate as to Adjustments.
Immediately following any adjustment or readjustment in the Warrant Shares, the
Company at its expense will immediately cause its chief financial officer or
other appropriate designee to compute such adjustment or readjustment in
accordance with the terms of this Warrant and prepare a certificate setting
forth such adjustment or readjustment and showing in detail the facts upon which
such adjustment or readjustment is based, including a statement of (a) the
consideration received or receivable by the Company for any additional shares of
Common Stock issued or sold or deemed to have been issued or sold, (b) the
number of shares of Common Stock outstanding or deemed to be outstanding, and
(c) the Exercise Price and the number of shares of Common Stock to be received
upon exercise of this Warrant, in effect immediately prior to such adjustment or
readjustment and as adjusted or readjusted as provided in this Warrant. Upon
written request of a Holder or any Warrant Agent of the Company appointed
pursuant to Section 10 hereof, the Company will forthwith mail a copy of each
such certificate to such Holder or any such Warrant Agent. 

3.6. Board Adjustment. The Board of Directors, in its
discretion, shall have the right at any time, or from time to time, to reduce
(but not increase) the Exercise Price (but not to an amount that is less than
the then par value (if any) of the Common Stock). 

4. Holder Rights.

4.1. Listing of Warrant Shares. The Company shall from
time to time use its best efforts to cause the Warrant Shares, immediately upon
their issuance upon the exercise of Warrants, to be listed on the principal
securities exchanges, interdealer quotation systems and markets, if any, on
which any shares of Common Stock are then listed or quoted. 

6 




4.2. No Dilution or Impairment. The Company will not, by
amendment of its certificate (or articles) of incorporation or through any
reorganization, recapitalization, transfer of assets, consolidation, merger,
share exchange, dissolution or any other voluntary action, avoid or seek to
avoid the observance or performance of any of the terms of this Warrant,
including without limitation the adjustments required under Section 3 hereof,
and will at all times in good faith assist in the carrying out of all such terms
and in taking of all such action as may be necessary or appropriate to protect
the rights of the Holder against dilution or other impairment. Without limiting
the generality of the foregoing and notwithstanding any other provision of this
Warrant to the contrary (including by way of implication), the Company (a) will
not increase the par value of any shares of Common Stock receivable on the
exercise of this Warrant above the amount payable therefor on such exercise or
(b) will take all such action as may be necessary or appropriate so that the
Company may validly and legally issue fully paid and nonassessable shares of
Common Stock on the exercise of this Warrant. 

5. Registration Rights. 

5.1. Resale Registration.

5.1.1. Within thirty (30) calendar days of the effectiveness of
the first registration statement filed by the Company pursuant to the Securities
Act of 1933, as amended and supplemented (the “Securities Act”), or the
policies, rules, and regulations related to the Securities Act or Exchange Act
(the “Regulations”), the Company shall file a registration statement
covering the resale of the Warrants and any securities issuable in connection
with the exercise thereof (the “Warrant Registration Statement”)
and shall use its best efforts to ensure that such Warrant Registration
Statement is declared effective within one hundred twenty (120) calendar days of
the filing of such resale registration statement. The Company shall use its best
efforts to cause the Warrant Registration Statement to remain continuously
effective, supplemented and amended to ensure that the Warrant Registration
Statement is available for its intended use by the Holders of the Warrants
entitled to this benefit and to ensure that the Warrant Registration Statement
conforms and continues to conform with the requirements of the Securities Act
and the Regulations, as announced from time to time, until the day which is one
(1) year after the effectiveness of the Warrant Registration Statement or such
earlier time and date when all of the Warrants or Warrant Shares have been sold
pursuant to the Warrant Registration Statement. The Company shall, if requested,
promptly incorporate in a prospectus supplement or post-effective amendment to
the Warrant Registration Statement such information as a majority in interest of
the Holders reasonably agree should be included therein and shall make all
required filings of such prospectus supplement or post-effective amendment as
soon as notified of the matters to be incorporated in such prospectus supplement
or post-effective amendment. 

5.1.2. During any consecutive 365-day period, the Company shall
be entitled to suspend the availability of the Warrant Registration Statement
for up to two (2) forty-five (45) consecutive-day periods, if the Board of
Directors determines in the exercise of its reasonable judgment that there is a
valid business purpose for such suspension and provides notice that such
determination was made by the Board of Directors to the Holders of the Warrants;
provided, however, that in no event shall the Company be required to disclose
the business purpose for such suspension if the Company determines in good faith
that such business purpose must remain confidential. 

5.1.3. Notwithstanding anything to the contrary herein, the
Company shall not be required to file a resale registration statement or
maintain the Warrant Registration Statement effective covering Warrants or
Warrant Shares pursuant to this Section 5.1 that are eligible for resale
pursuant to Rule 144 without restriction (including, without limitation, volume
restrictions) and without the need for current public information required by
Rule 144(c)(1) (or Rule 144(i)(2), if applicable) or that are the subject of a
then-effective registration statement. 

7 




5.2. Piggyback Registration. For a period of three years
following the date of this Warrant, the Holder shall be entitled to “piggyback”
the Warrants and any Warrant Shares on any registration by the Company for an
offering of any securities of the Company (“Shares”) for cash (including, but
not limited to, registration statements relating to secondary offerings of
Shares, but excluding any offerings registered on Forms S-4 or S-8 (including
reoffer prospectuses included thereunder)). If the proposed offering upon which
a Holder exercises such Holder’s piggyback rights shall be an underwritten
offering, then, in the event that the managing underwriter or managing
underwriters of such offering advise the Company and such Holder in writing
that, in their reasonable opinion, the inclusion of all of such Holder’s
securities proposed to be sold in such offering would adversely and materially
affect the success of the offering, the Shares that shall be included in such
offering shall be allocated first to the Company and then pro rata to those
persons that have exercised piggyback rights with respect to the Company’s
offering; provided that in no event shall any Common Stock requested to be
registered by such persons be reduced to less than thirty percent (30%) of the
original requested amount. Notwithstanding the foregoing, the inclusion of such
Holder’s securities in any registration referred to in this Section 5.2 may be
reduced as reasonably necessary in the opinion of the Company after consultation
with the Company’s counsel to comply with the provisions of Rule 415 under the
Securities Act. The Company shall not be required to register any Warrants or
Warrant Shares pursuant to this Section 5.2 that are eligible for resale
pursuant to Rule 144 without restriction (including, without limitation, volume
restrictions) and without the need for current public information required by
Rule 144(c)(1) (or Rule 144(i)(2), if applicable) or that are the subject of a
then-effective registration statement. 

5.3. Additional Registration Rights Terms.

5.3.1. The Company shall, to the fullest extent permitted by
law, indemnify and hold harmless each Holder participating in such registration,
its officers, directors, and affiliates and any agent thereof (collectively,
“Indemnified Persons”), against any losses, claims, demands, actions,
causes of action, assessments, damages, liabilities (joint or several), costs,
and expenses (including interest, penalties, and reasonable attorneys’ fees and
disbursements of one counsel for the Holders), relating to, imposed upon, or
incurred by the Indemnified Persons, directly or indirectly, under the
Securities Act or otherwise (hereinafter referred to in this Section 5.3.1 as a
“Claim” and in the plural as “Claims”) based upon, arising out of, or
resulting from any untrue statement or alleged untrue statement of any material
fact contained in any registration statement under which any Shares were
registered under the Securities Act or any state securities or blue sky laws, in
any preliminary prospectus (if used prior to the effective date of such
registration statement), or in any summary or final prospectus or in any
amendment or supplement thereto (if used during the period the Company is
required to keep the registration statement current), or arising out of, based
upon, or resulting from the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
made therein not misleading; provided, however, that the Company shall not be
liable to any Indemnified Person to the extent that any such Claim arises out
of, is based upon, or results from an untrue statement or alleged untrue
statement or omission made in such registration statement, such preliminary,
summary, or final prospectus or such amendment or supplement, in reliance upon
and in conformity with written information furnished to the Company by or on
behalf of such Indemnified Person specifically for use in the preparation
thereof. 

5.3.2. Any request to register Shares pursuant to Section 5.2
shall (a) be made within five (5) years of the date of this Warrant, (b) specify
the shares of Common Stock intended to be offered and sold by the Holder making
the request, and (c) contain the undertaking of such Holder to provide all such
information and materials and take all action as may be required in order to
permit the Company to comply with all applicable requirements in connection with
the registration of such Shares.

8 




In addition to the foregoing limitations, no Holder shall be
permitted to request registration of Shares under Section 5.2 if the Holder has
had its Shares included in the Warrant Registration Statement described in
Section 5.1.1. Further, the inclusion of a Holder’s securities in any
registration referred to in this Section 5 may be reduced as reasonably
necessary to comply with the provisions of Rule 415 under the Securities Act.


5.3.3. All expenses (other than any underwriter discounts and
commissions) incurred in connection with registrations, filings or
qualifications pursuant to this Section 5.3, including all registration, filing
and qualification fees; printer and accounting fees; the reasonable and actual
fees and disbursements of counsel for the Company; and the reasonable and actual
fees and disbursements of one counsel for the Holders, shall be borne and paid
by the Company. 

5.3.4. In the event of any express conflict between the terms
of the registration rights provided in Sections 5.1 through 5.3 and any
registration rights that a Holder may be entitled to upon exercise of the
Warrant pursuant to the Make Good Agreement; the terms of the Make Good
Agreement shall control.

5.4 Failure to Comply. In the event that the Company
fails to perform in strict accordance with any of its obligations under Section
5.1 or Section 5.2, the Company hereby agrees that, as partial liquidated
damages and not as a penalty, the Exercise Price shall be reduced by an amount
equal to US$[____________]3. In addition, the Exercise Price shall be
further reduced by an amount equal to US$[___________]4 for each
month that the Company continues in its failure to perform such obligations,
with the reduction to the Exercise Price occurring on each monthly anniversary
of such date thereafter; provided, however, that in no event will the Exercise
Price be lower than the par value of the Common Stock underlying this Warrant.
The Company shall send written notice to the Holder of any such reduction as
promptly as practicable. The Company agrees that this is a fair and reasonable
estimate of the damages caused by a failure to comply with Section 5.1 or
Section 5.2. 

6. Adjustment to Warrant Certificate. The form of any
warrant certificate need not be changed because of any adjustment made pursuant
to Section 3 or Section 5, and warrant certificates issued after such adjustment
may state the same Exercise Price and the same number of shares of Common Stock
issuable upon exercise of the Warrants as are stated in the warrant certificates
initially issued pursuant to this Warrant. The Company, however, may at any time
in its sole discretion make any change in the form of warrant certificate that
it may deem appropriate to give effect to such adjustments and that does not
affect the substance of the warrant certificate, and any warrant certificate
thereafter issued or countersigned, whether in exchange or substitution for an
outstanding warrant certificate or otherwise, may be in the form as so changed.


7. Agreements of the Company.

7.1. The Company represents that all Warrant Shares will, when
issued and paid for in accordance with the terms of this Warrant, be duly
authorized, validly issued, fully paid and nonassessable and free from all
taxes, liens and charges in respect of the issue thereof (other than
restrictions imposed by the applicable laws and taxes in respect of any transfer
occurring contemporaneously with such issue). The Company will take all such
action as may be necessary to ensure that Warrant Shares may be issued without
violation of any applicable law or regulation, or of any requirements of any
securities exchange upon which the Common Stock of the Company may be listed.


                                               
        
3 Initial
reduction amount shall be equal to 15% of the original Exercise Price.

4 Monthly reduction amount shall be equal to 1.5% of the original
Exercise Price. 

9 




7.2 During the period within which the rights represented by
this Warrant may be exercised, the Company will have at all times authorized,
and reserved (free from preemptive rights) for the purpose of issue or transfer
upon exercise of the rights evidenced by this Warrant, a sufficient number of
shares of its Common Stock to provide therefor. 

7.2. Unless otherwise made publicly available, the Company will
provide the Holder copies of all financial statements, reports and other
information regularly provided by the Company pursuant to Section 12 of the Make
Good Agreement. In addition, as soon as practicable after requested, the Company
will provide the Holder such other information concerning the Company as the
Holder of this Warrant may reasonably request in order to exercise any right or
privilege of the Holder of this Warrant or to enforce any obligation of the
Company under this Warrant. To the extent that any such information includes or
contains non-public information, the Company may, as a condition to providing
any Holder such information, require such Holder to enter into a confidentiality
agreement in form and substance reasonably acceptable to the Company and its
legal counsel with respect to such information.

7.3. The Company shall file with the U.S. Securities and
Exchange Commission (the “SEC”) in a timely manner all reports and other
documents as the Commission may prescribe under Section 13 or 15(d) of the
Exchange Act at any time after the Company has become subject to such reporting
requirements of the Exchange Act. The Company hereby agrees that it shall become
a “reporting company” within the meaning of Rule 144 under the Securities Act,
and, within one hundred eighty (180) calendar days following the date of this
Warrant, shall (a) file a registration statement with respect to its Common
Stock on Form 10 or Form S-1 (together with a Form 8-A) with the U.S. Securities
and Exchange Commission (the “SEC”) and (ii) upon the effective date of
the Company’s Exchange Act registration with the SEC, shall continuously comply
with the periodic reporting obligations of a company registered under Section 13
or 15(d) of the Exchange Act for a period of five hundred forty-five (545)
calendar days thereafter, such that the Warrants and any Warrant Shares held by
the Holder may be transferred without limitation or restriction pursuant to Rule
144. 

7.4. The provisions of this Section 7 are applicable to all of
the Warrants and Warrant Shares and shall survive until all such Warrants have
been exercised in full or have expired or been terminated in accordance with
their terms and all Warrant Shares have been sold. 

8. Assignment; Exchange of Warrant. Subject to
compliance with any applicable securities laws and the conditions set forth in
any restrictive legend appearing on the face hereof, this Warrant and all rights
hereunder are transferable, in whole or in part, upon surrender of this Warrant
at the principal office of the Company, together with a written assignment of
this Warrant substantially in the form attached hereto as Exhibit B duly
executed by the Holder or its agent or attorney and funds sufficient to pay any
transfer taxes payable upon the making of such transfer. Upon such surrender
and, if required, such payment, the Company shall execute and deliver a new
Warrant or Warrants in the name of the assignee or assignees and in the
denomination or denominations specified in such instrument of assignment, and
shall issue to the assignor a new Warrant evidencing the portion of this Warrant
not so assigned, and this Warrant shall promptly be cancelled. A Warrant, if
properly assigned, may be exercised by a new holder for the purchase of Warrant
Shares without having a new Warrant issued. 

9. Replacement of Warrant. On receipt of evidence
reasonably satisfactory to the Company of the loss, theft, destruction or
mutilation of this Warrant and, in the case of any such loss, theft or
destruction of this Warrant, on delivery of an indemnity agreement or security
reasonably satisfactory in form and amount to the Company or, in the case of any
such mutilation, on surrender and cancellation of this Warrant, the Company at
its expense will execute and deliver, in lieu thereof, a new Warrant of like
tenor. In the event of a partial exercise of this Warrant, the Company shall
issue to the Holder, upon written request, a Warrant in like form for the
unexercised portion thereof. 

10 




10. Warrant Agent. The Company may, by written notice to
each Holder of the Warrant, appoint an agent (the “Warrant Agent”) for
the purpose of issuing Common Stock on the exercise of this Warrant pursuant to
Sections 1 and 2, and replacing this Warrant pursuant to Section 9, or any of
the foregoing, and thereafter any such issuance, exchange or replacement, as the
case may be, shall be made at such office by such agent. 

11. Transfer on the Company’s Books. Until this Warrant
is transferred on the books of the Company, the Company may treat the registered
Holder hereof as the absolute owner hereof for all purposes, notwithstanding any
notice to the contrary. 

12. No Rights as Shareholder Until Exercise; Survival.
This Warrant does not entitle the Holder to any voting rights or other rights as
a shareholder of the Company prior to the exercise hereof. The rights and
obligations of the Company, of the Holder, and of any holder of Warrant Shares
shall survive the exercise of this Warrant. 

13. Saturdays, Sundays, Holidays, etc. If the last or
appointed day for the taking of any action or the expiration of any right
required or granted herein shall be a Saturday, Sunday or a U.S. legal holiday,
then such action may be taken or such right may be exercised on the next
succeeding day not a Saturday, Sunday or a U.S. legal holiday. 

14. Notices, Etc. All notices and other communications
from the Company to the Holder shall be mailed by first class registered or
certified mail, postage prepaid, at such address as may have been furnished to
the Company in writing by such Holder or, until any such Holder furnishes to the
Company an address, then to, and at the address of, the last Holder who has so
furnished an address to the Company. 

15. Miscellaneous. This Warrant shall be governed by and
construed in accordance with the internal laws of the State of New York
applicable to agreements made and to be performed entirely within the State of
New York, without regard to the conflicts of law principles thereof. The
prevailing party in any action or proceeding seeking to enforce any provision
of, or based on any right arising out of, this Warrant shall be entitled to
recover from the other party its reasonable attorneys’ fees and costs. In the
event that any provision of this Warrant is invalid or unenforceable under any
applicable statute or rule of law, then such provision shall be deemed
inoperative to the extent that it may conflict therewith and shall be deemed
modified to conform with such statute or rule of law. Any such provision which
may prove invalid or unenforceable under any law shall not affect the validity
or enforceability of any other provision of this Warrant. The headings in this
Warrant are for purposes of reference only, and shall not limit or otherwise
affect any of the terms hereof. The invalidity or unenforceability of any
provision hereof shall in no way affect the validity or enforceability of any
other provision hereof. The Company acknowledges that legal counsel participated
in the preparation of this Warrant and, therefore, stipulates that the rule of
construction that ambiguities are to be resolved against the drafting party
shall not be applied in the interpretation of this Warrant to favor any party
against the other party. 

[Signature Page to Follow] 

11 




IN WITNESS WHEREOF, the Company has executed this Warrant as of
the date first written above. 

	 	BAY PEAK 1 OPPORTUNITY CORP. 
	 	  
	 	  
	 	By:                                                                           
	 	Name: Cory
      Roberts                                             
      
	 	Title: Chief Executive
      Officer                               


[Signature Page to Warrant] 




Exhibit A 
to 
Common Stock Purchase
Warrant 
(Bay Peak 1 Opportunity Corp.) 


EXERCISE NOTICE 
(To Be Signed Only on Exercise of
Warrant) 



	TO: 	Bay Peak 1 Opportunity Corp. 
	  	Attention: Chief Financial Officer
  


The undersigned, pursuant to the provisions set forth in the
attached Warrant hereby irrevocably elects to purchase _______shares of Common
Stock covered by such Warrant and remits US$_____________ by wire
transfer or cashier’s check drawn on a United States bank check payable to the
order of the Company. 

The undersigned is an “accredited investor” as defined in
Regulation D, as promulgated under the Securities Act of 1933, as amended (the
“Securities Act”) and, as of the date hereof, the undersigned hereby makes to
and for the benefit of the Company all of the representations and warranties
contained in Section 3 of that certain Additional Warrant Side Letter Agreement,
dated as of _____________, 2010, by and between Bay Peak 1 Opportunity Corp. and
the undersigned, as if each such representation and warranty was individually
set forth herein. 

The undersigned represents and warrants that all offers and
sales by the undersigned of the shares of Common Stock shall be made pursuant to
registration of the Common Stock under the Securities Act or pursuant to an
exemption from registration under the Securities Act. 

Dated: _____________________________,
20___ 

__________________________________________________________

(Signature must conform to name of holder as specified on the face of the
Warrant) 

Address:
_______________________________
                
_______________________________ 

Exhibit A 
to 
Common Stock Purchase
Warrant (Bay Peak 1 Opportunity Corp.) 





Exhibit B 
to
Common Stock Purchase
Warrant 
(Bay Peak 1 Opportunity Corp.) 


FORM OF ASSIGNMENT 

(To assign the foregoing warrant, execute 
this form and
supply required information.
Do not use this form to exercise the warrant.)



FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced
thereby are hereby assigned to ____________________________________whose address
is __________________________________________________________. 

	 	Dated: ______________, 20_______ 
	 	Assigning Holder’s
      Signature:                                                                            
      
	 	Assigning Holder’s
      Address:                                                  
                                 
      



	Assignee Holder’s Signature:   
                                                                                 
      
	Assignee Holder’s
      Address:                                                                                 
      
	                                                  
                                                                                      
      


NOTE: The signature to this Assignment Form must correspond
with the name as it appears on the face of the Warrant, without alteration or
enlargement or any change whatsoever. 

Exhibit B 
to 
Common Stock Purchase
Warrant (Bay Peak 1 Opportunity Corp.)