ex4_10.htm


    
      

    

    Exhibit
      4.10

    
      


    

    
      
        	
                Subscription
                  No.:

              	 	 
	
                Offeree:

              	 	 


      

    

    
       

      
 

    

    
      


    

    
       

      
        
          

        

      

       

      SUBSCRIPTION
        PACKAGE

    

    
      

        
 


    

    
      Private
        Placement of 150 Units at $50,000 per Unit

    

    
      Each
        Unit consisting of

    

    
      5,000
        Shares of Series I 8% Cumulative Convertible Preferred
        Stock

    

    
      and

    

    
      250,000
        Common Stock Purchase Warrants

    

    
      


    

    
      


    

    
      Minimum
        Subscription: One Unit

    

    
      


    

    
      


    

    
      March
        12,
        2007

    

    


    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    
       

    

    
      SUBSCRIPTION
        INSTRUCTIONS

    

    
      


    

    
      (Please
        Read Carefully)

    

    
      


    

    
      NO
        PERSON WILL BE ACCEPTED AS A PURCHASER PRIOR TO THE CLOSING OF THE OFFERING.
        THE
        COMPANY AND THE PLACEMENT AGENT EACH RESERVES THE RIGHT TO REJECT ANY
        SUBSCRIPTION, IN WHOLE OR IN PART, OR TO ALLOT TO ANY PROSPECTIVE PURCHASER
        FEWER THAN THE NUMBER OF UNITS SUBSCRIBED FOR BY SUCH PURCHASER. ANY
        REPRESENTATION TO THE CONTRARY IS UNAUTHORIZED AND MUST NOT BE RELIED
        UPON.

    

    
      


    

    
      Baywood
        International, Inc., a Nevada corporation (the "Company"), is hereby offering
        (the "Offering") units (the "Units") each comprised of 5,000 Shares of Series
        I
        8% Cumulative Convertible Preferred Stock (the "Convertible Preferred Stock")
        and common stock purchase warrants (the "Warrants") exercisable for an aggregate
        of 250,000 shares of common stock, par value $0.001 per share (the "Common
        Stock"), of the Company. The purchase price per Unit (the "Purchase Price")
        shall be US $50,000 per Unit. The conversion price of the Convertible Preferred
        Stock shall be $0.04 per share of Common Stock and the exercise price of
        the
        Warrant shall be $0.02 per share of Common Stock, in each case subject to
        adjustment.  Each subscription must be for a minimum of one Unit
        unless the Company and Northeast Securities, Inc., as placement agent (the
        "Placement Agent"), in their sole discretion, permit subscriptions for a
        lesser
        amount.

    

    
      


    

    
      
        	
                I.

              	
                This
                  Subscription Booklet contains all of the materials necessary for
                  you to
                  purchase the Units. This material is arranged in the following
                  order:

              


      

    

    
      


    

    
      
        	
              	
                Ÿ

              	
                Amended
                  and Restated Confidential Private Placement
                  Memorandum

              


      

    

    
      


    

    
      
        	
              	
                Ÿ

              	
                Subscription
                  Agreement

              


      

    

    
      


    

    
      
        	
              	
                Ÿ

              	
                A.
                  Subscription Package for an INDIVIDUAL
                  investor

              


      

    

    
      


    

    
      
        	
              	
                Ÿ

              	
                B.
                  Subscription Package for a TRUST
                  investor

              


      

    

    
      


    

    
      
        	
              	
                Ÿ

              	
                C.  Subscription
                  Package for a PARTNERSHIP
                  investor

              


      

    

    
      


    

    
      
        	
              	
                Ÿ

              	
                D.
                  Subscription Package for a CORPORATE
                  investor

              


      

    

    
      


    

    
      
        	
              	
                Ÿ

              	
                E.
                  Subscription Package for a RETIREMENT PLAN
                  investor

              


      

    

    
      


    

    
      Each
        Subscription Package contains:

    

    
      


    

    
      (1)           a
        Questionnaire designed to enable you to demonstrate that you meet the minimum
        legal requirements under federal and state securities laws to purchase the
        Units; and

    

    


    
      
        
          
          

        

        
          ii

          
            

          

        

        
          
          

        

      

    

    


    
      


    

    
      (2)           a
        Signature Page for the Questionnaire and the Subscription Agreement containing
        representations relating to your subscription.

    

    
      


    

    
      
        	
                II.

              	
                After
                  reading the Subscription Agreement, please turn to the appropriate
                  Subscription Package (A, B, C, D, or E) and fill in all applicable
                  information. You must complete and sign ALL of the documents in
                  the
                  appropriate section. This includes: (a) the Questionnaire, and
                  (b) the
                  Signature Page for the Questionnaire and the Subscription Agreement.
                  Once
                  you have completed the appropriate portions of the Subscription
                  Booklet,
                  please return the entire Subscription Booklet and any additional
                  required
                  documents (as described in the Questionnaire) to the Placement
                  Agent at
                  the address set forth below in Section
                  IV.

              


      

    

    
      


    

    
      
        	
                III.

              	
                The
                  Purchase Price may be made by check or by wire transfer as provided
                  below:

              


      

    

    
      


    

    
      Bank
        Name: Vineyard Bank N.A.

    

    Bank
      Address: 8105 Irvine Center Drive, Ste. 650, Irvine, CA 92618

    Bank
      Representative:  Laura Green

    
      ABA
        Number:  122238572

    

    
      Account
        Name:  Northeast Securities, Inc., FBO Baywood International,
        Inc.

    

    
      Account
        Number:  014102374

    

    
      


    

    
      Checks
        should be made payable to Vineyard National Bank, as Escrow Agent for Baywood
        International, Inc., and sent to the Escrow Agent at the address shown
        above.  DO NOT SEND CHECKS TO THE PLACEMENT
        AGENT.

    

    
      


    

    
      If
        you
        are a foreign person or foreign entity, you may be subject to a withholding
        tax
        on dividends paid by the Company. In order to eliminate or reduce such
        withholding tax, you may submit a properly executed Internal Revenue Service
        Form 4224 (Exemption from Withholding of Tax on Income Effectively Connected
        with the Conduct of a Trade or Business in the United States) or Internal
        Revenue Service Form 1001 (Ownership Exemption or Reduced Rate Certificate),
        claiming exemption from withholding or eligibility for treaty benefits in
        the
        form of a lower rate of withholding tax on interest or
        dividends.

    

    
      


    

    
      
        	
                IV.

              	
                Send
                  all completed documents to the Placement Agent, Northeast Securities,
                  Inc., 100 Wall Street, 8th
                  Floor, New
                  York, NY, 10005, Attention:  David Tsiang.  In
                  addition, questions regarding completion of subscription documents
                  should
                  be directed to Mr. Tsiang at the above address, telephone: (212)
                  607-5406.

              


      

    

    
      


    

    
      


    

    
      PLEASE
        PRINT IN INK OR TYPE ALL INFORMATION

    

    
      


    

    
      FAILURE
        TO COMPLY WITH THE ABOVE INSTRUCTIONS WILL CONSTITUTE AN INVALID SUBSCRIPTION,
        WHICH, IF NOT CORRECTED, WILL RESULT IN THE REJECTION OF YOUR SUBSCRIPTION
        REQUEST. EVEN IF CORRECTED, THE DELAY MAY RESULT IN (1) THE ACCEPTANCE OF
        PURCHASERS WHOSE SUBSCRIPTION BOOKLETS WERE INITIALLY RECEIVED BY THE PLACEMENT
        AGENT AFTER YOURS OR (2) THE OFFERING BEING CLOSED WITHOUT YOUR SUBSCRIPTION
        REQUEST BEING CONSIDERED BY THE COMPANY.

    

    


    
      
        
          
          

        

        
          iii

          
            

          

        

        
          
          

        

      

    

    


    
      Annex
        A

       

    

    
      DEFINITIVE

    

    
      SUBSCRIPTION
        AGREEMENT

       

    

    
      
        
          

        

         

      

    

    
      BAYWOOD
        INTERNATIONAL, INC.

    

    
      

        

      

       

    

    
      
        	
                To:

              	
                Baywood
                  International, Inc.

              


      

    

    
      


    

    
      This
        Subscription Agreement is made between Baywood International, Inc., a Nevada
        corporation (the "Company"), and the undersigned prospective purchaser who
        is
        subscribing hereby for Units (each a "Unit"), each Unit comprised of 5,000
        shares of Series I 8% Cumulative Convertible Preferred Stock, par value $.001
        per share (the "Convertible Preferred Stock"), and common stock purchase
        warrants (the "Warrants") exercisable for an aggregate of 250,000 shares
        of
        common stock, par value $0.001 per share (the "Common Stock"), of the Company.
        Each Warrant shall be in the form attached as Annex C to the Memorandum (as
        defined below).  The purchase price per Unit (the "Purchase Price")
        shall be $50,000. The conversion price of the Convertible Preferred Stock
        initially shall be $0.04 per share and the exercise price of the Warrant
        initially shall be $0.02 per share, in each case subject to adjustment pursuant
        to (i) the Certificate of Designation setting forth the terms and conditions
        of
        the Convertible Preferred Stock and (ii) the Warrant, in each case as such
        documents are summarized in the Memorandum and attached thereto, respectively.
        This subscription is submitted to you in accordance with, and subject to,
        the
        terms and conditions described in this Subscription Agreement and the Amended
        and Restated Confidential Private Placement Memorandum, dated March 12, 2007
        (the "Memorandum"), and, together with this Subscription Agreement (the
        "Disclosure Materials"), provided to the undersigned.

    

    
      


    

    
      In
        consideration of the Company's agreement to sell Units, or, in the discretion
        of
        the Company and Northeast Securities, Inc., as placement agent (the "Placement
        Agent"), fractions thereof, to the undersigned upon the terms and conditions
        summarized in the Memorandum, the undersigned agrees and represents as
        follows:

    

    
      


    

    
      
        	
                A.

              	
                SUBSCRIPTION.

              


      

    

    
      


    

    
      The
        undersigned hereby irrevocably subscribes for, and agrees to purchase, the
        number of Units indicated on the signature page hereto at a purchase price
        per
        Unit equal to the Purchase Price. Upon execution and delivery hereof, the
        undersigned shall deliver to the Escrow Agent in accordance with the terms
        hereof either a check or wire transfer in accordance with this Subscription
        Agreement and the instructions hereto, in the full amount of the purchase
        price
        of the Units for which the undersigned is subscribing or a check in such
        amount
        (the "Payment"). In the event that the undersigned shall elect to deliver
        the
        Payment in the form of a check, such check should have a notation thereon
        that
        such check relates to the Baywood International, Inc. private
        placement.

    

    


    
      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

    

    
       

    

    
      (1)           The
        Payment (or, in the case of rejection of a portion of the undersigned's
        sub-scription, the part of the Payment relating to such rejected portion)
        will
        be returned promptly, without interest, if the undersigned's subscription
        is
        rejected in whole or in part, or if the Company does not accept subscriptions
        for an aggregate of $5,000,000 (before commissions and expenses) of Units
        (the
“Minimum Offering Amount”), or if the acquisition of LifeTime is not
        consummated, prior to the Termination Date of the Offering, as described
        in the
        Memorandum.  The Company and the Placement Agent will hold an initial
        closing of the Offering (the "Initial Closing") at such time as (a) the Company
        has accepted subscriptions for at least the Minimum Offering Amount, and
        (b) the
        acquisition of LifeTime is being consummated.  The Company and the
        Placement Agent may elect to hold additional closings (each an "Additional
        Closing") from time to time after the Initial Closing on the basis described
        herein. Upon receipt by the Company of payment for the Units to be purchased
        hereunder by subscribers whose subscriptions are accepted (each, a "Purchaser")
        at the Initial Closing or any Additional Closing (each a "Closing"), the
        subscriber for the Units so purchased will be registered on the stock and
        warrant registers of the Company as the record owner of the securities
        underlying the Units so purchased and the Company shall deliver to the
        Purchaser: (i) evidence that the Certificate of Designations for the Convertible
        Preferred Stock shall have been filed in the appropriate offices of the State
        of
        Nevada such that the Company lawfully may issue shares of Convertible Preferred
        Stock having the rights, powers, privileges and designations described in
        the
        Certificate of Designation attached as Annex B to the Memorandum, (ii) an
        executed share certificate representing the shares of Convertible Preferred
        Stock, (iii) an executed Warrant in the form attached as Annex C to the
        Memorandum, and (iv) an executed Registration Rights Agreement in the form
        attached as Annex D to the Memorandum (the “Registration Rights
        Agreement”).  This Subscription Agreement, the Warrant Agreement and
        the Registration Rights Agreement (as defined below) are herein referred
        to as
        the “Transaction Documents”.

    

    
      


    

    
      (2)           The
        undersigned hereby agrees to be bound upon the (i) execution and delivery
        to the
        Placement Agent of the signature page to the undersigned's completed
        questionnaire submitted by the undersigned (the "Questionnaire") and this
        Subscription Agreement and (ii) acceptance on the Closing by the Company
        of the
        undersigned's subscription (the "Subscription").

    

    
      


    

    
      (3)           The
        undersigned agrees that the Company and the Placement Agent, may, in their
        sole
        and absolute discretion, reduce the undersigned's subscription to any number
        of
        Units that in the aggregate does not exceed the number of Units hereby
        subscribed for without any prior notice to, or further consent by, the
        undersigned. The undersigned hereby irrevocably constitutes and appoints
        the
        Placement Agent, and each officer of the Placement Agent, with full power
        of
        substitution, the true and lawful agent and attorney-in-fact of the undersigned,
        with full power and authority in the undersigned's name, place, and stead,
        (A)
        to amend this Subscription Agreement and the Questionnaire, including in
        each
        case the undersigned's signature page thereto, to effect any of the foregoing
        provisions of this Paragraph A(4), and (B) to execute and deliver the
        Registration Rights Agreement on behalf of the undersigned.

    

    


    
      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

    

    
       

    

    
      
        	
                B.

              	
                REGISTRATION
                  RIGHTS

              


      

    

    
      


    

    
      At
        the
        Closing relating to this Subscription, the Company shall deliver to the
        undersigned a Registration Rights Agreement executed by the Company and the
        Placement Agent, as Agent for the Purchasers.

    

    
      


    

    
      
        	
                C.

              	
                REPRESENTATIONS
                  AND WARRANTIES.

              


      

    

    
      


    

    
      The
        undersigned hereby represents and warrants to, and agrees with, the Company
        and
        the Placement Agent, as follows:

    

    
      


    

    (1)           The
      undersigned has read the Memorandum (including without limitation the documents
      incorporated by reference therein and as well as those documents attached
      thereto (the “Incorporated Documents”) and fully understands the Memorandum and
      the terms of the Offering (as defined in the instructions attached
      hereto).  With respect to individual or partnership tax and other
      economic considerations involved in this investment, the undersigned is not
      relying on the Company or the Placement Agent. The undersigned has carefully
      considered and, to the extent the undersigned believes such discussion
      necessary, has discussed with the undersigned's professional legal, tax,
      accounting, and financial advisors the suitability of an investment in the
      Units
      for the undersigned's particular tax and financial situation and has determined
      that the Units being subscribed for by the undersigned are a suitable investment
      for the undersigned.  In this regard, the undersigned understands that
      while the Placement Agent will receive compensation in connection with the
      Offering, it is not guaranteeing or assuming any responsibility for compliance
      by the Company with the terms of the Offering or the Transaction
      Documents.

    
      


    

    
      (2)           The
        undersigned acknowledges that all documents, records, and books pertaining
        to
        this investment which the undersigned has requested (including, without
        limitation, the Disclosure Materials) have been made available for inspection
        by
        the undersigned, the undersigned's attorney, accountant, or
        adviser(s).

    

    
      


    

    
      (3)           The
        undersigned and/or the undersigned's adviser(s) has/have had a reasonable
        opportunity to ask questions of, and receive answers from, a person or persons
        acting on behalf of the Company concerning the Offering and all such questions
        have been answered to the full satisfaction of the
        undersigned.

    

    
      


    

    
      (4)           The
        undersigned is not subscribing for Units as a result of, or subsequent to,
        any
        advertisement, article, notice, or other communication published in any
        newspaper, magazine, or similar media or broadcast over television or radio
        or
        presented at any seminar or meeting.

    

    
      


    

    
      (5)           The
        undersigned: (i) has a pre-existing business relationship with the Company,
        the
        Placement Agent, or one of its respective officers, directors, or controlling
        persons; and (ii) by reason of the undersigned's business or financial
        experience or the business or financial experience of the undersigned's
        professional advisors who are unaffiriafed with, and who are not compensated
        by,
        the Company, the Placement Agent, or any of its respective affiliates, directly
        or indirectly, can be reasonably assumed to have the capacity to protect
        the
        undersigned's interests in connection with the investment in the
        Units.

    

    


    
      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

    

    
       

    

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

    

    
      investment.

    

    
      


    

    
      (7)           The
        undersigned or the undersigned's purchaser representative, as the case may
        be,
        has such knowledge and experience in financial, tax, and business matters
        so as
        to enable the undersigned to utilize the information made available to the
        undersigned in connection with the Offering to evaluate the merits and risks
        of
        an investment in the Units and to make an informed investment decision with
        respect thereto.

    

    
      


    

    
      (8)           The
        undersigned will not sell or otherwise transfer the Units without registration
        under the Securities Act of 1933, as amended (the "Securities Act"), or
        applicable state securities laws or an exemption therefrom. The Units have
        not
        been registered under the Securities Act or under the securities laws of
        any
        states. The undersigned represents that the undersigned is purchasing the
        Units
        for the undersigned's own account, for investment, and not with a view to
        resale
        or distribution, except in compliance with the Securities Act. The undersigned
        has not offered or sold any portion of the Units being acquired nor does
        the
        undersigned have any present intention of dividing such Units with others
        or of
        selling, distributing, or otherwise disposing of any portion of such Units
        either currently or after the passage of a fixed or determinable period of
        time
        or upon the occurrence or non-occurrence of any predetermined event or
        circumstance in violation of the Securities Act. Except as otherwise provided
        in
        the Registration Rights Agreement, the Company has no obligation to register
        the
        Units.

    

    
      


    

    
      (9)           The
        undersigned recognizes that investment in the Units involves substantialrisks,
        including loss of the entire amount of such investment. Further, the undersigned
        has carefully read and considered the matters set forth in the Disclosure
        Materials, and has taken full cognizance of, and understands all of, the
        risks
        related to the purchase of the Units.

    

    
      


    

    
      (10)           The
        undersigned acknowledges that the certificates representing the shares of
        Convertible Preferred Stock and the Warrant shall be stamped or otherwise
        imprinted with a legend substantially in the following form and
        that

    

    
      the
        Company may issue stop transfer instructions to the transfer agent of such
        securities:

    

    
      


    

    
      "THE
        SECURITIES REPRESENTED HEREBY AND ISSUABLE UPON THE CONVERSION/EXERCISE HEREOF
        HAVE NOT BEEN REGISTERED UNDER UNITED STATES FEDERAL OR  STATE
        SECURITIES LAWS AND MAY NOT BE OFFERED FOR SALE, SOLD, OR OTHERWISE DISPOSED
        OF
        OR ASSIGNED FOR VALUE, DIRECTLY OR INDIRECTLY, NOR MAY THE SECURITIES BE
        TRANSFERRED ON THE BOOKS OF THE CORPORATION, WITHOUT REGISTRATION OF SUCH
        SECURITIES UNDER ALL APPLICABLE UNITED STATES, FEDERAL AND STATE SECURITIES
        LAWS
        OR COMPLIANCE WITH AN APPLICABLE EXEMPTION THEREFROM, SUCH COMPLIANCE, AT
        THE
        OPTION OF THE CORPORATION, TO BE EVIDENCED BY AN OPINION OF STOCKHOLDER'S
        COUNSEL, IN FORM AND SUBSTANCE; ACCEPTABLE TO THE CORPORATION, THAT NO VIOLATION
        OF SUCH REGISTRATION PROVISIONS WOULD RESULT FROM ANY, PROPOSED TRANSFER
        OR
        ASSIGNMENT."

    

    


    
      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

    

    
       

    

    
      (11)           The
        undersigned acknowledges and agrees that it shall not be entitled to seek
        any
        remedies with respect to the Offering from any party other than the Company
        and
        the Placement Agent.  Further, the undersigned acknowledges that the
        Placement Agent has been represented by Hand Baldachin & Amburgey LLP, and
        that such counsel has not represented and is not representing the
        undersigned.

    

    
      


    

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

    

    
      


    

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

    

    
      


    

    
      (14)           The
        undersigned is an accredited investor, as defined in Rule 501(a) of Regulation
        D
        and under state securities of "blue sky" laws, as indicated in the applicable
        Questionnaire attached hereto and hereby made a part hereof.

    

    
      


    

    
      (15)           The
        undersigned shall indemnify and hold harmless the Company, the Placement;
        Agent,
        and each respective officer, director, employee, agent, representative or
        control person thereof, who is or may be a party to, or is or may be threatened
        to be made a party to, any threatened, pending, or completed action, suit,
        or
        proceeding, whether civil, criminal, administrative, or investigative, by
        reason
        of, or arising from, any actual or alleged misrepresentation or misstatement
        of
        facts or omission to represent or state facts made or alleged to have been
        made
        by the undersigned, or omitted or alleged to have been omitted by the
        undersigned, concerning the undersigned or the undersigned's authority to
        invest
        or financial position in connection with the Offering, including, without
        limitation, any such misrepresentation, misstatement, or omission contained
        in
        the Questionnaire or any other document submitted by the undersigned, against
        losses, liabilities, and expenses (including reasonable attorneys' fees,
        judgments, fines, and amounts paid in settlement) actually and reasonably
        incurred by the Company, the Placement Agent, and each respective officer,
        director, employee, agent, representative or control person thereof, in
        connection with such action, suit, or proceeding.

    

    


    
      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

    

    
       

    

    
      (16)           The
        undersigned has his, her or its principal residence in the state or jurisdiction
        set forth on the signature page to this Subscription Agreement, and the address
        and social security number or federal tax identification number, if any,
        set
        forth below is the true and correct address and social security number or
        federal tax identification number of the undersigned.  The undersigned
        has no present intention of becoming a resident of another state or
        jurisdiction.

    

    
      


    

    
      II.         
          Company Representations and
        Warranties.  The Company represents and warrants to, and
        agrees with the undersigned, as follows:

    

    
      


    

    
      (1)           The
        Company is duly organized and validly exists as a corporation in good standing
        under the laws of the State of Nevada.

    

    
      


    

    
      (2)           Subject
        to the effectiveness of the Charter Amendment (as defined below), the Company
        has all necessary power and authority to execute and deliver this Subscription
        Agreement and each of the other Transactions Documents, and to perform its
        obligations hereunder and thereunder to issue the Convertible Preferred Stock
        and the Warrants and to consummate the closing of this Offering; all necessary
        corporate action has been duly and validly taken by the Company to authorize
        the
        execution, delivery and performance of the Transaction Documents.  The
        Company’s Board of Directors (the “Board”) has authorized and the holders of a
        majority of the outstanding Common Stock have approved an amendment to the
        Company’s Articles of Incorporation to effect an increase in the number of
        authorized shares of Common Stock from 200,000,000 to 500,000,000 shares
        (the
“Charter Amendment”), and the Company is currently in the process of complying
        with the notice requirements of the Securities and Exchange Commission (“SEC”)
        in connection therewith.  Upon compliance with such requirements, the
        Charter Amendment shall be effective.   If accepted by and
        countersigned on behalf of the Company, the Transaction Documents will have
        been
        duly and validly authorized, executed and delivered by the Company and will
        constitute the legal, valid and binding obligation of the Company enforceable
        against the Company in accordance with their respective terms, except (i)
        as the
        enforceability thereof may be limited by bankruptcy, insolvency (including,
        without limitation, all laws relating to fraudulent transfers), reorganization,
        moratorium or similar laws affecting enforcement of creditors' rights generally,
        (ii) as enforcement thereof is subject to general principles of equity
        (regardless of whether enforcement is considered in a proceeding in equity
        or at
        law), and (iii) as enforceability of any indemnification provision may be
        limited under the federal and slate securities laws.

    

    
      


    

    
      (3)           The
        Company has all necessary power and authority to execute, issue and deliver
        the
        Convertible Preferred Stock and the Warrants and, subject to the effectiveness
        of the Charter Amendment, the shares of Common Stock issuable upon the
        conversion of the shares of Convertible Preferred Stock or the exercise of
        the
        Warrants, as the case may be (collectively the “Securities”), the Convertible
        Preferred Stock and the Warrants have been duly and validly authorized, and,
        when duly issued and delivered to the undersigned, will be duly and validly
        authorized and issued, fully paid and non-assessable and will be free and
        clear
        of any preemptive rights and liens.

    

    


    
      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

    

     

    
      (4)           The
        Company is not currently (i) in violation of its articles of incorporation
        or by
        laws or (ii) except as set forth in the Memorandum and/or the Incorporated
        Documents, in default, and no event has occurred which, with notice or lapse
        of
        time or both, would constitute such a default, in the due performance or
        observance of any term, covenant or condition contained in any indenture,
        mortgage, deed of trust, loan agreement, note, lease, license, franchise
        agreement, permit, certificate, contract or other agreement or instrument
        to
        which it is a party or by which it is bound or to which any of its properties
        or
        assets is subject.

    

    
      


    

    
      (5)           The
        execution and delivery by the Company of the Transaction Documents, the
        performance of the obligations of the Company pursuant to each of the
        Transaction documents and the issuance of the Convertible Preferred Stock
        and
        Warrants will not, as of the date the Offering is consummated, (i) conflict
        with
        or result in a breach or violation of any of the terms or provisions of,
        or
        constitute a default under, any indenture, mortgage, deed of trust, loan
        agreement, note, lease, license, franchise agreement, permit, certificate,
        contract or other agreement or instrument to which the Company is a party
        or by
        which the Company is bound or to which any of the property or assets of the
        Company is subject, (ii) result in any violation of the provisions of the
        charter, by laws or formation documents of the Company or any statute or;
        any
        order, rule or regulation of any court or governmental agency or body having
        jurisdiction over the Company or any of its properties or assets, (iii) result
        in the imposition or creation of (or the obligation to create or impose)
        any
        Lien under any agreement or instrument to which the Company is a party or
        by
        which any of the Company or its properties or assets is bound or (iv) result
        in
        the suspension, termination or revocation of any permit, license, consent,
        exemption, franchise, authorization or other approval (each, an "Authorization")
        the Company or any other impairment of the rights of the holder of any such
        Authorization.

    

    
      


    

    
      (6)           The
        Company owns or possesses adequate rights to use all patents, patent
        applications, trademarks, service marks, trade names, trademark registrations,
        service mark registrations, copyrights and licenses necessary for the conduct
        of
        its business and has no reason to believe that the conduct of its business
        will
        conflict with, and has not received any notice of any claim of conflict with,
        any such rights of others, in each case except as could not reasonably be
        expected to have a: material adverse effect financial condition, business
        or
        results of operations of the Company.  The Company has taken
        reasonable security measures to protect the secrecy, confidentiality and
        value
        of its intellectual property and other proprietary information in all respects.
        The inventories of the Company do not consist of, in any material amount,
        items
        that are obsolete, damaged or slow-moving. The Company's inventories are
        in good
        and merchantable condition in all material respects, are suitable and usable
        for
        the purposes for which they are intended and are in a condition such that
        they
        can be sold in the ordinary course of business consistent with past practice.
        All equipment which the Company owns or in which it has an interest is in
        good
        repair and operating condition, ordinary wear and tear
        excepted.

    

    
      


    

    (7)           The
      Memorandum did not as of its date, and will not as of the date of the Initial
      Closing and each Additional Closing (each a “Closing Date”), contain any untrue
      statement of a material fact or omit to state a material fact necessary in
      order
      to make the statements therein, in the light of the circumstances under which
      they were made, not misleading.

    


    
      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

    

     

    (8)           (a)           Since
      January 1, 2005, the Company has filed all reports, schedules, statements and
      other documents required to be filed by it with the SEC.  Such
      documents and the Incorporated Documents filed since January 1, 2005, when
      they
      became effective or were filed with the SEC, as the case may be, conformed
      in
      all material respects to the requirements of the Securities Exchange Act of
      1934, as amended, and the rules and regulations of the SEC thereunder
      (collectively, the “Exchange Act”); and none of such documents contained any
      untrue statement of a material fact or omitted to state any material fact
      required to be stated therein or necessary to make the statements therein,
      in
      the light of the circumstances under which they were made, not
      misleading.

    
      


    

    
      (9)           Each
        of the Company and its subsidiaries has been duly incorporated or formed
        and is
        validly existing and in good standing as corporation in the jurisdiction
        in
        which it is organized, is duly qualified to do business and is in good standing
        as a foreign corporation in each jurisdiction in which its ownership or lease
        of
        property or the conduct of its businesses requires such qualification, and
        where
        the failure to qualify would have a material adverse effect on the business
        or
        condition (financial or other) of the Company (a “Material Adverse Effect”), and
        has all power and authority necessary to own, lease or hold its properties
        and
        to conduct the businesses in which it is engaged.

    

    


    (10)           Except
      as set forth in the Memorandum and/or the Incorporated Documents, there are
      no
      actions, suits, proceedings, inquiries or investigations before or by any court,
      public board, self-regulatory organization or body or governmental agency to
      which the Company or any of its subsidiaries is a party or of which any property
      or assets of the Company or any of its subsidiaries is subject which, if
      determined adversely to the Company or any of its subsidiaries, individually
      or
      in the aggregate, might have a Material Adverse Effect, and, to the best of
      the
      Company’s knowledge, no such proceedings are threatened or contemplated by any
      person, entity or governmental authority.

    
      


    

    
      (11)           Since
        the date of the latest financial statements included the Disclosure Materials,
        there has not been any change in the common stock, equity interests, short-term
        debt or long-term debt of the Company or any material adverse change, or
        any
        development involving a prospective material adverse change, in or affecting
        the
        business, general affairs, management, position (financial or otherwise),
        stockholders’ equity, results of operations, cash flow or earnings of the
        Company taken as a whole, other than as set forth in the Incorporated
        Documents.

    

    


    (12)           The
      financial statements, including the related notes and supporting schedules,
      included in the Incorporated Documents, comply in all material respects with
      the
      applicable accounting requirements of the SEC and present fairly the financial
      condition, results of operations and changes in financial position of the
      Company on the basis stated therein at the respective dates or for the
      respective periods to which they apply; such statements and related schedules
      and notes have been prepared in accordance with generally accepted accounting
      principles in the United States consistently applied throughout the periods
      involved.

    


    (13)           No
      consent, approval, authorization or order of, or filing or registration with,
      any court or governmental agency or body is required for the execution, delivery
      and performance of this Subscription Agreement or any other Transaction Document
      by the Company, the issuance of the Securities the performance of the
      obligations of the Company hereunder and thereunder and the consummation of
      the
      closing of the transactions contemplated hereby and thereby, except (i) with
      respect to the transactions contemplated by the Registration Rights Agreement
      as
      may be required under the Exchange Act, (ii) the notice requirements of the
      SEC
      and the filing in the State of Nevada in connection with the Charter Amendment,
      and (iii) for such consents, approvals, authorizations, orders, filings or
      registrations which have been obtained or made.

    


    
      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

    

    
       

    

    
      
        	
                D.

              	
                UNDERSTANDINGS.

              


      

    

    
      


    

    I.      
            Company Covenants. In
      addition to the other agreements of the Company in this Subscription Agreement,
      the Company further agrees as follows:

    


    
      (1)           So
        long as any of the shares of Convertible Preferred Stock, Warrants, or shares
        of
        Common Stock issued pursuant to conversion of the Convertible Preferred Stock
        or
        exercise of the Warrants remain outstanding and are “restricted securities”
within the meaning of Rule 144(a)(3) under the Securities Act, to make available
        to any holder of such securities in connection with any sale thereof and any
        prospective purchaser of such securities from such holder, upon the request
        of
        such holder or prospective purchaser, the information (“Rule 144A Information”)
        required by Rule 144A(d)(4) under the Securities Act if, at the time of such
        request, the Company is not subject to Section 13 or 15(d) of the Exchange
        Act.

    

    
      


    

    
      (2)           To
        conduct this Offering in compliance with the requirements of Regulation D
        under
        the Securities Act and not to sell, offer for sale or solicit offers to buy
        or
        otherwise negotiate in respect of any security (as defined in the Securities
        Act) that would be integrated with the sale of the Units to the undersigned
        in a
        manner that would require the registration of any such sale of any of the
        Convertible Preferred Stock, Warrants, or shares of Common Stock issued pursuant
        to conversion of the Convertible Preferred Stock or exercise of the Warrants
        under the Securities Act.

    

    


    
      II.      
             Investor Covenants.  In
        addition to the other agreements of the undersigned in this Subscription
        Agreement, the undersigned understands, acknowledges, and agrees with the
        Company and the Placement Agent as follows:

    

    
      


    

    
      (1)           This
        Subscription may be rejected, in whole or in part, by the Company and the
        Placement Agent, in its sole and absolute discretion, at any time before
        the
        relevant Closing, notwithstanding prior receipt by the undersigned of notice
        of
        acceptance of the undersigned's Subscription.

    

    
      


    

    
      (2)           The
        undersigned hereby acknowledges and agrees that the subscription hereunder
        is
        irrevocable by the undersigned, that, except as may be provided under applicable
        laws, the undersigned is not entitled to cancel, terminate, or revoke this
        Subscription Agreement or any agreements of the undersigned hereunder and
        that
        this Subscription Agreement and such other agreements shall survive the death
        or
        disability of the undersigned and shall be binding upon and inure to the
        benefit
        of the parties and their heirs, executors, administrators, successors, legal
        representatives, and permitted assigns. If the undersigned is more than one
        person, the obligations of the undersigned hereunder shall be joint and several
        and the agreements, representations, warranties, and acknowledgments herein
        contained shall be deemed to be made by, and be binding upon, each such person
        and his/her heirs, executors, administrators, successors, legal representatives,
        and permitted assigns.

    

    


    
      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

    

    
       

    

    
      (3)           No
        federal or state agency has made any finding or determination as to the accuracy
        or adequacy of the Disclosure Materials or as to the fairness of the terms
        of
        this Offering for investment nor any recommendation or endorsement of the
        Units.

    

    
      


    

    
      (4)           The
        Offering is intended to be exempt from registration under the Securities
        Act by
        virtue of Section 4(2) or 4(6) of the Securities Act and the provisions of
        Regulation D thereunder, which is in part dependent upon the truth,
        completeness, and accuracy of the statements made by the undersigned herein
        and
        in the Questionnaire.

    

    
      


    

    
      (5)           It
        is understood that in order not to jeopardize the Offering's exempt status
        under
        Section 4(2) or 4(6) of the Securities Act and Regulation D, any transferee
        will, at a minimum, be required to fulfill the investor suitability requirements
        thereunder.

    

    
      


    

    
      (6)           The
        Placement Agent will receive compensation in connection with the Offering,
        but
        is not guaranteeing or assuming responsibility for the operation or possible
        liability of me Company, meludingy without limitation, compliance by the
        Company
        with the agreements entered into in connection with the Offering, and will
        not
        supervise or participate in the operation or management of the
        Company.

    

    
      


    

    
      (7)           The
        undersigned acknowledges that the information contained in the Disclosure
        Materials is confidential and non-public and agrees that all such information
        shall be kept in confidence by the undersigned and neither used by the
        undersigned for the undersigned's personal benefit (other than in connection
        with this Subscription) nor disclosed to any third party for any reason;
        provided, however, that this obligation shall not apply to any such information
        that (i) is part of the public knowledge or literature and readily accessible
        at
        the date hereof, (ii) becomes part of the public knowledge or literature
        and
        readily accessible by publication (except as a result of a breach of this
        provision), or (iii) is received from third parties (except third parties
        who
        disclose such information in violation of any confidentiality agreements
        or
        obligations, including, without limitation, any Subscription Agreement entered
        into with the Company and/or the Placement Agent).

    

    
      


    

    
      (8)           The
        representations, warranties, and agreements of the undersigned contained
        herein
        and in any other writing delivered in connection with the transactions
        contemplated hereby shall be true and correct in all respects on and as of
        the
        date of the Closing as if made on and as of such date and shall survive the
        execution and delivery of this Subscription Agreement and the purchase of
        the
        Units.

    

    
      


    

    
      (9)           Insofar
        as indemnification for liabilities under the Securities Act may be permitted
        to
        directors, officers, or controlling persons of the Company, the Company has
        been
        informed that, in the opinion of the SEC, such indemnification is against
        public
        policy as expressed in the Securities Act and is therefore unenforceable
        to such
        extent.

    

    
      


    

    
      (10)           IN
        MAKING AN INVESTMENT DECISION, PURCHASERS MUST RELY ON THEIR OWN EXAMINATION
        OF
        THE COMPANY AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS
        INVOLVED. THE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE
        SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING
        AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF
        THE
        DISCLOSURE MATERIALS OR THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY
        IS A
        CRIMINAL OFFENSE.

    

    


    
      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

    

    
       

    

    
      (11)           THE
        UNITS MAY NOT BE TRANSFERRED, RESOLD, OR OTHERWISE DISPOSED OF, EXCEPT AS
        PERMITTED UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS,
        PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. PURCHASERS SHOULD BE AWARE
        THAT
        THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR
        AN
        INDEFINITE PERIOD OF TIME.

    

    
      


    

    
      (12)           SECURITIES
        LEGENDS:

    

    
      


    

    
      NASAA
        UNIFORM LEGEND:

    

    
      


    

    
      IN
        MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN EXAMINATION
        OF
        THE ISSUER AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS
        INVOLVED. THESE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE
        SECURITIES COMMISSION OR REGULATORY AUTHORITY.  FURTHERMORE, THE
        FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY
        OF THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
        THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE
        AND
        MAY NOT BE TRANSFERRED OR RESOLD, EXCEPT AS PERMITTED UNDER THE SECURITIES
        ACT
        OF 1933, AS AMENDED, AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO
        REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY
        MAY BE
        REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE
        PERIOD
        OF TIME.

    

    
      


    

    
      FOR
        RESIDENTS OF FLORIDA:

    

    
      


    

    
      PURSUANT
        TO SECTION 517.061(1 l)(a)(5) OF THE FLORIDA SECURITIES ACT, FLORIDA INVESTORS
        HAVE A RIGHT TO RESCIND THEIR SUBSCRIPTION AGREEMENTS WITHIN THREE BUSINESS
        DAYS
        AFTER THE DELIVERY OF ANY CONSIDERATION FOR THE SECURITIES. YOUR WITHDRAWAL
        WILL
        BE WITHOUT ANY FURTHER LIABILITY TO YOU. TO ACCOMPLISH SUCH WITHDRAWAL, YOU
        NEED
        ONLY TELEPHONE OR SEND A TELEGRAM (WITHIN SUCH TIME PERIOD) TO BAYWOOD
        INTERNATIONAL, INC., 14950 NORTH 83RD PLAZA,
        SUITE 1,
        SCOTTSDALE, ARIZONA 85260, ATTENTION: PRESIDENT. SHOULD YOU MAKE THIS REQUEST
        ORALLY, YOU MUST ALSO SEND A TELEGRAM CONFIRMING YOUR
        REQUEST.

    

    
      


    

    
      THE
        FLORIDA DEPARTMENT OF BANKING AND FINANCE HAS NOT REVIEWED THE OFFERING OR
        THESE
        DISCLOSURE MATERIALS AND THE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
        FLORIDA SECURITIES ACT. UNLESS THESE SECURITIES ARE REGISTERED, THEY MAY
        NOT BE
        SOLD OR TRANSFERRED IN FLORIDA, EXCEPT IN A TRANSACTION THAT IS EXEMPT UNDER
        SATO ACT.

    

    


    
      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

    

    
       

    

    
      FOR
        NEW YORK RESIDENTS:

    

    
      


    

    
      NEITHER
        THIS AGREEMENT NOR THE DISCLOSURE MATERIALS HAS BEEN REVIEWED BY THE ATTORNEY
        GENERAL OF THE STATE OF NEW YORK PRIOR TO ITS ISSUANCE AND USE. THE ATTORNEY
        GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED UPON OR ENDORSED THE MERITS
        OF
        THIS OFFERING. ANY REPRESENTATION TO THE CONTRARY IS
        UNLAWFUL.

    

    
      


    

    
      NEITHER
        THIS AGREEMENT NOR THE DISCLOSURE MATERIALS CONTAINS AN UNTRUE STATEMENT
        OF A
        MATERIAL FACT OR OMITS TO STATE A MATERIAL FACT NECESSARY TO MAKE THE STATEMENTS
        MADE, IN LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY WERE MADE, NOT
        MISLEADING.  THIS AGREEMENT AND THE DISCLOSURE MATERIALS CONTAIN A
        FAIR SUMMARY OF THE MATERIAL TERMS AND DOCUMENTS PURPORTED TO BE SUMMARIZED
        HEREIN.

    

    
      


    

    
      FOR
        RESIDENTS OF ALL STATES:

    

    
      


    

    
      THE
        SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
        OF
        1933, AS AMENDED, OR THE SECURITIES LAWS OF CERTAIN STATES AND ARE BEING
        OFFERED
        AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF
        SATO
        ACT AND SUCH LAWS. THE INTERESTS ARE SUBJECT IN VARIOUS STATES TO RESTRICTIONS
        ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT
        AS
        PERMITTED UNDER SATO ACT AND SUCH LAWS PURSUANT TO REGISTRATION OR EXEMPTION
        THEREFROM. THE SECURITIES OFFERED HEREBY HAVE NOT BEEN APPROVED OR DISAPPROVED
        BY THE SECURITIES AND EXCHANGE COMMISSION, ANY STATE SECURITIES COMMISSION
        OR
        OTHER REGULATORY AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED
        UPON OR ENDORSED THE MERITS OF THIS OFFERING OR THE ACCURACY OF ADEQUACY
        OF THE
        CONFIDENTIAL TERM SHEET. ANY REPRESENTATION TO THE CONTRARY IS
        UNLAWFUL.

    

    
      


    

    
      FOR
        FOREIGN INVESTORS:

    

    
      


    

    
      THE
        SECURITIES BEING OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
        ACT, AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES (AS DEFINED UNDER
        REGULATION S UNDER THE SECURITIES ACT) OR TO, OR FOR THE ACCOUNT OR BENEFIT
        OF,
        A U.S. PERSON UNLESS THE SECURITIES ARE REGISTERED UNDER THE SECURITIES ACT
        OR
        AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT IS
        AVAILABLE.

    

    


    
      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

    

    
       

    

    
      PROSPECTIVE
        INVESTORS WILL BE REQUIRED TO REPRESENT THAT THEY ARE NOT U.S. PERSONS AND
        ARE
        NOT ACQUIRING THE SECURITIES FOR THE ACCOUNT OR BENEFIT OF A U.S.
        PERSON.

    

    
      


    

    
      
        	
                E.

              	
                MISCELLANEOUS.

              


      

    

    
      


    

    
      (1)           Capitalized
        terms used in this Subscription Agreement, if not otherwise defined herein,
        shall have the respective meanings attributed to such terms in the Disclosure
        Materials. All pronouns and any variations thereof used herein shall be deemed
        to refer to the masculine, feminine, impersonal, singular, or plural, as
        the
        identity of the person or persons may require.

    

    
      


    

    
      (2)           Except
        as set forth in Section A(3) herein, no provision of this Subscription Agreement
        shall be waived, modified, changed, discharged, terminated, revoked, or
        canceled, except by an instrument in writing signed by the party effecting
        the
        same against whom anychange, discharge, or termination is
        sought.

    

    
      


    

    
      (3)           Unless
        otherwise required herein, notices required or permitted to be given hereunder
        shall be in writing and shall be deemed to be sufficiently given when personally
        delivered or sent by registered mail, return receipt requested, addressed:
        (i)
        if to the Company, at 14950 North 83rd Plaza,
        Suite 1,
        Scottsdale, Arizona 85260, Attention: President, with a copy to the Placement
        Agent, or (ii) if to the undersigned, at the address for correspondence set
        forth in the Questionnaire, or at such other address as may have been specified
        by written notice given in accordance with this paragraph
        E(3).

    

    
      


    

    
      (4)           Failure
        of the Company to exercise any right or remedy under this Subscription Agreement
        or any other agreement between the Company and the undersigned, or otherwise,
        or
        delay by the Company in exercising such right or remedy, will not operate
        as a
        waiver thereof. No waiver by the Company will be effective unless and until
        it
        is in writing and signed by the Company.

    

    
      


    

    
      (5)           This
        Subscription Agreement shall be governed by, and enforced and construed in
        all
        respects in accordance with, the laws of the New York, as such laws are applied
        by New York courts to agreements entered into, and to be performed in, New
        York
        by and between residents of New York, and shall be binding upon the undersigned,
        the undersigned's heirs, estate, legal representatives, successors, and assigns
        and shall inure to the benefit of the Company, its successors and assigns.
        If
        any provision of this Subscription Agreement 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 the minimum extent required to conform with such statute or rule
        of
        law. Any provision hereof that may prove invalid or unenforceable under any
        law
        shall not affect the validity or enforceability of any other provision
        hereof.

    

    
      


    

    
      (6)           This
        Subscription Agreement constitutes the entire agreement between the parties
        hereto with respect to the subject matter hereof and may be amended only
        by a
        writing executed by both parties hereto.

    

    


    
      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

    

    
       

    

    
      
        	
                F.

              	
                EXECUTION
                  OF AGREEMENT BY POWER OF
                  ATTORNEY.

              


      

    

    
      


    

    
      THE
        UNDERSIGNED ACKNOWLEDGES THAT THE UNDERSIGNED HAS SIGNED THIS SUBSCRIPTION
        AGREEMENT ON THE UNDERSIGNED'S OWN BEHALF, AND NOT BY POWER OF ATTORNEY,
        OR, IN
        THE EVENT THAT THIS AGREEMENT HAS BEEN SIGNED ON THE UNDERSIGNED'S BEHALF
        BY
        POWER OF ATTORNEY, THAT THE UNDERSIGNED REPRESENTS THAT ATTACHED HERETO IS
        A
        TRUE AND COMPLETE COPY OF SUCH POWER OF ATTORNEY.

    

    
      


    

    
      
        	
                G.

              	
                SIGNATURE

              


      

    

    
      


    

    
      The
        signature of this Subscription Agreement is contained as part of the applicable
        Subscription Package, entitled "Signature Page".

    

    


    
      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

    

    


    
      A.           BAYWOOD
        INTERNATIONAL, INC.

    

    
      INDIVIDUAL
        INVESTOR QUESTIONNAIRE

    

    
      


    

    
      Investor
        Name: ________________________________

    

    
      


    

    
      
        	
                To:

              	
                Baywood
                  International, Inc.

              


      

    

    
      


    

    
      The
        information contained in this Questionnaire is being furnished in order to
        determine whether the undersigned's subscription to purchase the Units described
        in the Subscription Booklet may be accepted.

    

    
      


    

    
      ALL
        INFORMATION CONTAINED IN THIS QUESTIONNAIRE WILL BE TREATED CONFIDENTIALLY.
        The
        undersigned understands, however, that the Company may present this
        Questionnaire to such parties as it deems appropriate if called upon to
        establish that the proposed offer and sale of the Units is exempt from
        registration under the Securities Act of 1933, as amended, or meets the
        requirements of applicable state securities or "blue sky" laws. Further,
        the
        undersigned understands that the offering is required to be reported to the
        Securities and Exchange Commission and to various state securities or "blue
        sky"
        regulators.

    

    
      


    

    
      IF
        YOU ARE PURCHASING SECURITIES WITH YOUR SPOUSE, YOU MUST BOTH SIGN THE SIGNATURE
        PAGE TO THIS QUESTIONNAIRE.

    

    
      


    

    
      
        	
                I.

              	
                PLEASE
                  INDICATE DESIRED TYPE OF OWNERSHIP OF
                  UNITS.

              


      

    

    
      


    

    
      
        	
              	
                £

              	
                Individual

              


      

    

    
      


    

    
      
        	
              	
                £

              	
                Joint
                  Tenants (rights of
                  survivorship)

              


      

    

    
      


    

    
      
        	
              	
                £

              	
                Tenants
                  in Common (no rights of
                  survivorship)

              


      

    

    
      


    

    
      II.           PLEASE
        CHECK ANY OF THE STATEMENTS 1-5 BELOW THAT APPLIES TO
        YOU.

    

    
       

    

    
      
        	
                 

              	
                
                  £
                    1.

                

              	
                I
                  have an individual net worth* or joint net worth with my spouse
                  in excess
                  of $1,000,000.

              


      

    

    
      


    

    
      
        	
                 

              	
                
                  £
                    2.

                

              	
                I
                  have had an individual income* in excess of $200,000 in each of
                  the last
                  two calendar years, and I reasonably expect an individual income
                  in excess
                  of  $200,000 in the current calendar year. NOTE: IF YOU ARE
                  BUYING JOINTLY WITH YOUR SPOUSE, YOU MUST EACH HAVE AN INDIVIDUAL
                  INCOME
                  IN EXCESS OF $200,000 IN EACH OF THESE YEARS IN ORDER TO CHECK
                  THIS
                  BOX.

              


      

    

    


    
      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

    

    
       

    

    
      
        	
                 

              	
                
                  £
                    3.

                

              	
                My
                  spouse and I have had a joint income in excess of $300,000 in each
                  of the
                  last two calendar years, and I reasonably expect a joint income
                  in excess
                  of $300,000 for the current calendar year, and I am a resident
                  of Alabama,
                  Arizona, California, Colorado, Connecticut, Delaware, the District
                  of
                  Columbia, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa,
                  Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan,
                  Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New
                  Hampshire, New Jersey, New Mexico, New York, North Carolina, North
                  Dakota,
                  Ohio, Oklahoma, Oregon, Pennsylvania, Puerto Rico, Rhode Island,
                  South
                  Carolina, South Dakota, Tennessee, Texas, Vermont, Virginia, Washington,
                  West Virginia, Wisconsin, or Wyoming, or a country other than the
                  United
                  States of America.

              


      

    

    
      


    

    
      
        	
                 

              	
                
                  £
                    4.

                

              	
                I
                  am a resident of the Commonwealth of Massachusetts, and my investment
                  in
                  the Units does not exceed 25% of my net worth or, if I am married,
                  25% of
                  the combined net worth of my spouse and me, excluding principal
                  residence
                  and home furnishings.

              


      

    

    
      


    

    
      
        	
                 

              	
                
                  £
                    5.

                

              	
                I
                  am a director or executive officer of Baywood International,
                  Inc.

              


      

    

    
      


    

    
      


    

    
      
        	
                III.

              	
                OTHER
                  CERTIFICATIONS.

              


      

    

    
      


    

    
      By
        signing the Signature Page, I certify the following (or, if I am purchasing
        Units with my spouse as co-owner, each of us certifies the
        following):

    

    
      


    

    
      
        	
              	
                (a)

              	
                that
                  I am at least 21 years of
                  age;

              


      

    

    
      


    

    
      
        	
              	
                (b)

              	
                that
                  my purchase of Units will be solely for my own account and not
                  for the
                  account of any other person (other than my spouse, if co-owner);
                  and

              


      

    

    
      


    

    
      
        	
              	
                (c)

              	
                that
                  the name, residence address, and social security or taxpayer
                  identification number as set forth in this Questionnaire are true,
                  correct, and complete.

              


      

    

    
      


    

    
      
        	
                IV.

              	
                GENERAL
                  INFORMATION.

              


      

    

    
      


    

    
      (a)
        PURCHASER.

    

    
      


    

    
      
        	
                Name:

              
	 
	 
	
                Social
                  Security or Taxpayer Identification Number:

              
	 
	 
	
                Residence
                  Address:

              
	 
	
                (Number
                  and Street)

              


      

    

    
      

        
          
            
            

          

          
            16

            
              

            

          

          
            
            

          

        

      

       

    

    
      
        	 	 	 
	
                (City)

              	
                (State)

              	
                (Zip
                  Code)

              
	 	 	 
	
                Residence
                  Telephone Number:

              	 	 
	 	 	 
	 	 	 
	
                (Area
                  Code)

              	
                (Number)

              	 
	 	 	 
	
                Business
                  Name and Address:

              	 	 
	 	 	 
	 	 	 
	 	
                (Name
                  of Business)

              	 
	 	 	 
	 	 	 
	 	
                (Number
                  and Street)

              	 
	 	 	 
	 	 	 
	
                (City)

              	
                (State)

              	
                (Zip
                  Code)

              
	 	 	 
	
                Business
                  Telephone Number:

              	 	 
	 	 	 
	 	 	 
	
                (Area
                  Code)

              	
                (Number)

              	 


      

    

    
      


    

    
      I
        prefer
        to have correspondence sent to:  £
        Residence  £
        Business

    

    
      


    

    
      (c)           SPOUSE,
        IF CO-OWNER.

    

    
      


    

    
      


    

    
      
        	
                Name:

              	 	 
	 	 	 
	 	 	 
	
                Social
                  Security or Taxpayer Identification Number: 

              	 
	 	 	 
	 	 	 
	 	 	 
	
                Residence
                  Address

              	 	 
	
                (if
                  different from Purchaser's):

              	 	 
	 	 	 
	 	 	 
	 	
                (Number
                  and Street)

              	 
	 	 	 
	 	 	 
	 	 	 
	
                (City)

              	
                (State)

              	
                (Zip
                  Code)

              
	 	 	 
	
                Residence
                  Telephone Number

              	 	 
	
                
                  (if
                    different from Purchaser' s):

                

              	 	 
	 	
                (Area
                  Code)

              	
                (Number)

              


      

    

    


    
      
        
          
          

        

        
          17

          
            

          

        

        
          
          

        

      

    

    
       

    

    
      
        	
                Business
                  Name and Address

              	 	 
	
                
                  (if
                    different from Purchaser's):

                

              	 	 
	 	
                (Business
                  Name)

              	 
	 	 	 
	 	 	 
	 	 	 
	 	
                (Number
                  and Street)

              	 
	 	 	 
	 	 	 
	
                (City)

              	
                (State)

              	
                (Zip
                  Code)

              
	 	 	 
	
                Business
                  Telephone Number

              	 	 
	
                
                  (if
                    different from Purchaser's):

                

              	 	 
	 	
                (Area
                  Code)

              	
                (Number)

              


      

    

    
      


    

    
      I
        prefer
        to have correspondence sent to: £ Residence
        £
        Business

    

    


    
      
        
          
          

        

        
          18

          
            

          

        

        
          
          

        

      

    

    


    
      BAYWOOD
        INTERNATIONAL, INC.

    

    
      INDIVIDUAL
        SIGNATURE PAGE

    

    
      


    

    
      Your
        signature on this Individual Signature Page evidences your agreement to be
        bound
        by the Questionnaire and the Subscription
        Agreement.

    

    
      


    

    
      The
        undersigned represents that (a) he/she has read and understands this
        Subscription Agreement, (b) the information contained in this Questionnaire
        is
        complete and accurate and (c) he/she will telephone David Tsiang at (212)
        607-5406 immediately if any material change in any of this information occurs
        before the acceptance of his/her subscription and will promptly send the
        Company
        written confirmation of such change.

    

    
      


    

    
      
        	 	 	 
	
                Number
                  of Units applied for

              	 	
                Date

              
	 	 	 
	 	 	 
	 	 	
                Signature

              
	 	 	 
	 	 	 
	 	 	
                Name
                  (Please Type or Print)

              
	 	 	 
	 	 	 
	 	 	
                Signature
                  of Spouse if Co-Owner

              
	 	 	 
	 	 	 
	 	 	
                Name
                  of Spouse if Co-Owner

              
	 	 	
                (Please
                  Type or Print)

              


      

    

    
      


    

    
      


    

    
      
        	
                IF
                  YOU ARE PURCHASING UNITS WITH YOUR SPOUSE, YOU MUST BOTH SIGN THIS
                  SIGNATURE PAGE.

              


      

    

    
      


    

    
      


    

    
      THE
        UNITS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
        (THE
        "SECURITIES ACT"), AND MAY NOT BE OFFERED, SOLD, OR OTHERWISE TRANSFERRED
        OR
        DISPOSED OF UNLESS SUCH SECURITIES ARE INCLUDED IN AN EFFECTIVE REGISTRATION
        STATEMENT UNDER THE SECURITIES ACT OR AN OPINION OF COUNSEL, CONCURRED IN
        BY
        COUNSEL TO THE COMPANY, HAS BEEN DELIVERED TO THE EFFECT THAT REGISTRATION
        OF
        SUCH SECURITIES IS NOT REQUIRED.

    

    


    
      
        
          
          

        

        
          19

          
            

          

        

        
          
          

        

      

    

    


    
      B.           BAYWOOD
        INTERNATIONAL, INC.

    

    
      TRUST
        QUESTIONNAIRE

    

    
      


    

    
      


    

    
      Investor
        Name:___________________________________

    

    
      


    

    
      To:           Baywood
        International, Inc.

    

    
      


    

    
      The
        information contained in this Questionnaire is being furnished in order to
        determine whether the undersigned TRUST'S subscription to purchase the Units
        described in the Subscription Booklet may be accepted.

    

    
      


    

    
      ALL
        INFORMATION CONTAINED IN THIS QUESTIONNAIRE WILL BE TREATED CONFIDENTIALLY.
        The
        undersigned TRUST understands, however, that the Company may present this
        Questionnaire to such parties as it deems appropriate if called upon to
        establish that the proposed offer and sale of the Units is exempt from
        registration under the Securities Act of 1933, as amended, or meets the
        requirements of applicable state securities or "blue sky" laws. Further,
        the
        undersigned TRUST understands that the offering is required to be reported
        to
        the Securities and Exchange Commission and to various state securities and
        "blue
        sky" regulators.

    

    
      


    

    
      
        	
                NOTE:

              	
                RETIREMENT
                  PLANS SHOULD COMPLETE THE QUESTIONNAIRE IN SECTION E OF THIS SUBSCRIPTION
                  PACKAGE.

              


      

    

    
       

      
        
          	
                  I.

                	
                  PLEASE
                    CHECK STATEMENTS 1 OR 2 BELOW, AS
                    APPLICABLE.

                


        

         

      

    

    
      
        	
                 

              	
                
                  £
                    1.

                

              	
                All
                  of the trustees of the TRUST are residents of Alabama, Arizona,
                  California, Colorado, Connecticut, Delaware, the District of Columbia,
                  Florida, Georgia, Hawaii, Idaho, Indiana, Iowa, Kansas, Kentucky,
                  Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota,
                  Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire,
                  New
                  Jersey, New Mexico, New York, North Carolina, North Dakota, Pennsylvania,
                  Ohio, Oklahoma, Oregon, Puerto Rico, Rhode Island, South Carolina,
                  South
                  Dakota, Tennessee, Texas, Vermont, Virginia, Washington, West Virginia,
                  Wisconsin, or Wyoming, or a country other than the United States
                  of
                  America; and

              


      

    

    
      


    

    
      
        	
              	
                a.

              	
                the
                  TRUST has total assets in excess of $5,000,000;
                  and

              


      

    

    
      


    

    
      
        	
              	
                b.

              	
                the
                  TRUST was not formed for the specific purpose of acquiring the
                  Units;
                  and

              


      

    

    
      


    

    
      
        	
              	
                c.

              	
                the
                  purchase by the TRUST is directed by a person who has such knowledge
                  and
                  experience in financial and business matters that he/she is capable
                  of
                  evaluating the merits and risks of an investment in the
                  Units.

              


      

    

    
      


    

    
      
        	
                 

              	
                
                  £
                    2.

                

              	
                The
                  TRUST is a revocable grantor TRUST which the grantor may revoke
                  at any
                  time without the consent or approval of any other person; the grantor
                  retains sole investment control over the assets of the trust;
                  and

              


      

    

    


    
      
        
          
          

        

        
          20

          
            

          

        

        
          
          

        

      

    

    
       

    

    
      
        	
              	
                a.

              	
                the
                  grantor is a natural person whose individual net worth* or joint
                  net worth
                  with the grantor's spouse exceeds $1,000,000;
                  or

              


      

    

    
      


    

    
      
        	
              	
                b.

              	
                the
                  grantor is a natural person who had an individual income* in excess
                  of
                  $200,000 in each of the last two calendar years and who reasonably
                  expects
                  an individual income in excess of $200,000 in the current calendar
                  year;
                  or

              


      

    

    
      


    

    
      
        	
              	
                c.

              	
                the
                  grantor is a natural person who, together with his or her spouse,
                  has had
                  a joint income in excess of $300,000 in each of the last two calendar
                  years and who reasonably expects a joint income in excess of $300,000
                  in
                  the current calendar year, and all of the trustees of the TRUST
                  are
                  residents of Alabama, Arizona, California, Colorado, Connecticut,
                  Delaware, the District of Columbia, Florida, Georgia, Hawaii, Idaho,
                  Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland,
                  Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana,
                  Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York,
                  North
                  Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Puerto
                  Rico,
                  Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Vermont,
                  Virginia, Washington, West Virginia, Wisconsin, or Wyoming, or
                  a country
                  other than the United States of America;
                  or

              


      

    

    
      


    

    
      
        	
              	
                d.

              	
                the
                  grantor is a director or executive officer of Baywood International,
                  Inc.For purposes of this Questionnaire, the term "net worth" means
                  the
                  excess of total assets over total liabilities. In determining income,
                  an
                  investor should add to his or her adjusted gross income any amounts
                  attributable to tax-exempt income received, losses claimed as a
                  limited
                  partner in any limited partnership, deductions claimed for depletion,
                  contributions to IRA or Keogh retirement plan, alimony payments,
                  and any
                  amount by which income from long-term capital gains has been reduced
                  in
                  arriving at adjusted gross
                  income.

              


      

    

    
      


    

    
      IF
        THE TRUST IS A REVOCABLE GRANTOR TRUST, EACH GRANTOR MUST PHOTOCOPY AND COMPLETE
        SECTION II BELOW.

    

    
      


    

    
      II.           FOR
        REVOCABLE GRANTOR TRUSTS ONLY: PLEASE CHECK ANY OF STATEMENTS 1-5 BELOW THAT
        APPLY TO THE GRANTOR.

    

    
      


    

    
      
        	
                 

              	
                
                  £
                    1.

                

              	
                I
                  have an individual net worth or joint net worth with my spouse
                  in excess
                  of $1,000,000.

              


      

    

    
      


    

    
      
        	
                 

              	
                
                  £
                    2.

                

              	
                I
                  have had an individual income in excess of $200,000 in each of
                  the last
                  two calendar years, and I reasonably expect an individual income
                  in excess
                  of $200,000 in the current calendar year. NOTE: IF YOU ARE BUYING
                  JOINTLY
                  WITH YOUR SPOUSE, YOU MUST EACH HAVE AN INDIVIDUAL INCOME IN EXCESS
                  OF
                  $200,000 IN EACH OF THESE YEARS IN ORDER TO CHECK THIS
                  BOX.

              


      

    

    
       

      
        
          
          

        

        
          21

          
            

          

        

        
          
          

        

      

       

    

    
      
        	
                 

              	
                
                  £
                    3.

                

              	
                My
                  spouse and I have had a joint income in excess of $300,000 in each
                  of the
                  last two calendar years, and I reasonably expect a joint income
                  in excess
                  of $300,000 in the current calendar year, and I am a resident of
                  Alabama,
                  Arizona, California, Colorado, Connecticut, Delaware, the District
                  of
                  Columbia, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa,
                  Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan,
                  Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New
                  Hampshire, New Jersey, New Mexico, New York, North Carolina, North
                  Dakota,
                  Ohio, Oklahoma, Oregon, Pennsylvania, Puerto Rico, Rhode Island,
                  South
                  Carolina, South Dakota, Tennessee, Texas, Vermont, Virginia, Washington,
                  West Virginia, Wisconsin, or Wyoming, or a country other than the
                  United
                  States of America.

              


      

    

    
      


    

    
      
        	
                 

              	
                
                  £
                    4.

                

              	
                I
                  am a resident of Massachusetts, and my investment in the Units
                  does
                  notexceed 25% of my net worth or, if I am married, 25% of the combined
                  net
                  worth of my spouse and me, excluding principal residence and home
                  furnishings.

              


      

    

    
      


    

    
      
        	
              	
                5.

              	
                I
                  am a director or executive officer of Baywood International,
                  Inc.

              


      

    

    
      


    

    
      
        	 	 	 
	
                Print
                  Name of Grantor(s)

              	 	
                Signature
                  of Grantor(s)

              


      

    

    
      


    

    
      


    

    
      
        	
                III.

              	
                OTHER
                  CERTIFICATIONS.

              


      

    

    
      


    

    
      By
        signing the Signature Page, the undersigned certifies the
        following:

    

    
      


    

    
      
        	
              	
                (a)

              	
                that
                  the TRUST'S purchase of the Units will be solely for the TRUST'S
                  own
                  account and not for the account of any other
                  person;

              


      

    

    
      


    

    
      
        	
              	
                (b)

              	
                that
                  the TRUST'S purchase of the Units is within the investment powers
                  and
                  authority of the TRUST (as set forth in the declaration of trust
                  or other
                  governing instrument) and that all necessary consents, approvals,
                  and
                  authorizations for such purchase have been obtained and that each
                  person
                  who signs the Signature Page has all requisite power and authority
                  as
                  trustee to execute this Questionnaire and the Subscription Agreement
                  on
                  behalf of the TRUST;

              


      

    

    
      


    

    
      
        	
              	
                (c)

              	
                that
                  the TRUST has not been established in connection with either (i)
                  an
                  employee benefit plan (as defined in Section 3(3) of Employee Retirement
                  Income Security Act of 1974, as amended ("ERISA")), whether or
                  not subject
                  to the provisions of Title I of ERISA, or (ii) a plan described
                  in Section
                  4975(e) (i) of the Internal Revenue Code;
                  and

              


      

    

    
      


    

    
      
        	
              	
                (d)

              	
                that
                  the TRUST'S name, address, place of formation, and taxpayer identification
                  number as set forth in this Questionnaire are true, correct, and
                  complete.

              


      

    

    


    
      
        
          
          

        

        
          22

          
            

          

        

        
          
          

        

      

    

    


    
      
        	
                IV.

              	
                GENERAL
                  INFORMATION.

              


      

    

    
      


    

    
      (a)
        PROSPECTIVE PURCHASER (THE TRUST).

    

    
      


    

    
      
        	
                Name:

              	 	 
	 	 	 
	
                Address:

              	 	 
	 	
                (Number
                  and Street)

              	 


      

       

      
        	 	 	 
	
                (City)

              	
                (State)

              	
                (Zip
                  Code)

              
	 	 	 
	
                Address
                  for Correspondence (if different):

              	 	 
	
                 

              	
                (Number
                  and Street)

              	 
	 	 	 
	 	 	 
	
                (City)

              	
                (State)

              	
                (Zip
                  Code)

              


      

       

      
        	
                Telephone
                  Number:

              	 	 
	
                 

              	
                (Area
                  Code)

              	
                (Number):

              


      

       

      
        	
                State
                  in which Formed:

              	 	 


      

       

      
        	
                Date
                  of Formation:

              	 	 


      

       

      
        	
                Taxpayer
                  Identification Number:

              	 	 


      

    

    
      


    

    
      
        	
              	
                (b)

              	
                TRUSTEE(S)
                  WHO ARE EXECUTING THIS QUESTIONNAIRE ON BEHALF OF THE
                  TRUST.

              


      

    

    
      


    

    
      
        	 	
                Name(s)
                  of

              	 
	 	
                Trustee(s):

              	 


      

       

      
        	 	
                If
                  Grantor Trust, Name(s) of Grantor(s):

              	 


      

    

    
      


    

    
      
        	
                V.

              	
                ADDITIONAL
                  INFORMATION.

              


      

    

    
      


    

    
      A
        TRUST MAY BE REQUIRED TO ATTACH A COPY OF THE TRUST AGREEMENT, DECLARATION
        OF
        TRUST, OR OTHER GOVERNING INSTRUMENT, AS AMENDED, AS WELL AS ALL OTHER DOCUMENTS
        THAT AUTHORIZE THE TRUST TO INVEST IN THE UNITS. ALL DOCUMENTATION MUST BE
        COMPLETE AND CORRECT.

    

    


    
      
        
          
          

        

        
          23

          
            

          

        

        
          
          

        

      

    

    


    
      BAYWOOD
        INTERNATIONAL, INC.

    

    
      TRUST
        SIGNATURE PAGE

    

    
      


    

    
      Your
        signature on this TRUST Signature Page evidences the agreement by the
        Trustee(s), on behalf of the TRUST, to be bound by the Questionnaire and
        the
        Subscription Agreement.

    

    
      


    

    
      1.           The
        undersigned trustees represent that (a) the information contained in this
        Questionnaire is complete and accurate and (b) the TRUST will telephone David
        Tsiang at (212) 607-5406 immediately if any material change in any of this
        information occurs before the acceptance of the TRUST'S subscription and
        will
        promptly send the Company written confirmation of such
        change.

    

    
      


    

    
      2.           The
        undersigned trustees hereby certify that they have read and understand this
        Subscription Agreement.

    

    
      


    

    
      3.           The
        undersigned trustees hereby represent and warrant that the persons signing
        this
        Subscription Agreement on behalf of the TRUST are duly authorized to acquire
        the
        Units and sign this Subscription Agreement on behalf of the TRUST and, further,
        that the undersigned TRUST has all requisite authority to purchase such Units
        and enter into this Subscription Agreement.

    

    
      


    

    
      
        	 	 	 
	
                Number
                  of Units applied for

              	 	
                Date

              


      

    

    
      


    

    
      


    

    
      
        	
                Please
                  Type or Print the Exact Legal

              	 
	
                Title
                  of Trust as follows; Trustee's name,

              	 
	
                as
                  trustee for [Name of Grantor] under

              	
                Title
                  of Trust

              
	
                Agreement
                  [or Declaration] of Trust dated

              	 
	
                [Date
                  of Trust Formation]

              	 


      

    

    
      


    

    
      
        	
                Name
                  of

              	 	 	
                Name
                  of Trustee:

              	 
	
                Trustee:

              	 	 	
                Trustee:

              	 
	
                 

              	
                 (Please
                  Type or Print)

              	 	
                 

              	
                (Please
                  Type or Print)

              


      

       

      
        	
                By:

              	 	 	
                By:

              	 
	
                 

              	
                (Signature
                  of Trustee)

              	 	
                 

              	
                (Signature
                  of Trustee)

              


      

    

    
      


    

    
      THE
        UNITS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
        (THE
        "SECURITIES ACT") AND MAY NOT BE OFFERED, SOLD, OR OTHERWISE TRANSFERRED
        OR
        DISPOSED OF UNLESS SUCH SECURITIES ARE INCLUDED IN AN EFFECTIVE REGISTRATION
        STATEMENT UNDER THE SECURITIES ACT OR AN OPINION OF COUNSEL, CONCURRED IN
        BY
        COUNSEL TO THE COMPANY, HAS BEEN DELIVERED TO THE EFFECT THAT REGISTRATION
        OF
        SUCH SECURITIES IS NOT REQUIRED.

    

    


    
      
        
          
          

        

        
          24

          
            

          

        

        
          
          

        

      

    

    


    
      BAYWOOD
        INTERNATIONAL, INC.

    

    
      PARTNERSHIP
        QUESTIONNAIRE

    

    
      


    

    
      Investor
        Name:__________________________________

    

    
      


    

    
      
        	
                To:

              	
                Baywood
                  International, Inc.

              


      

    

    
      


    

    
      The
        information contained in this Questionnaire is being furnished in order to
        determine whether the undersigned PARTNERSHIP'S subscription to purchase
        the
        Units described in the Subscription Booklet may be accepted.

    

    
      


    

    
      ALL
        INFORMATION CONTAINED IN THIS QUESTIONNAIRE WILL BE TREATED CONFIDENTIALLY.
        The
        undersigned PARTNERSHIP understands, however, that the Company may present
        this
        Questionnaire to such parties as it deems appropriate if called upon to
        establish that the proposed offer and sale of the Units is exempt from
        registration under the Securities Act of 1933, as amended, or meets the
        requirements of applicable state securities or "blue sky" laws. Further,
        the
        undersigned PARTNERSHIP understands that the offering is required to be reported
        to the Securities and Exchange Commission and to various state securities
        and
        "blue sky" regulators.

    

    
      


    

    
      
        	
                I.

              	
                PLEASE
                  CHECK ANY OF STATEMENTS 1-3 BELOW THAT APPLIES TO THE
                  PARTNERSHIP.

              


      

    

    
      


    

    
      
        	
                 

              	
                
                  £
                    1.

                

              	
                The
                  undersigned PARTNERSHIP: (a) has total assets in excess of $5,000,000;
                  (b)
                  was not formed for the specific purpose of acquiring the Units;
                  and (c)
                  has its principal place of business in Alabama, Arizona, Colorado,
                  Connecticut, Delaware, the District of Columbia, Florida, Georgia,
                  Hawaii,
                  Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine,
                  Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana,
                  Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York,
                  North
                  Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Puerto
                  Rico,
                  Rhode Island, South Carolina, South Dakota, Tennessee, Vermont,
                  Virginia,
                  Washington, West Virginia, Wisconsin, or Wyoming, or a country
                  other than
                  the United States of America.

              


      

    

    
      


    

    
      
        	
                 

              	
                
                  £
                    2.

                

              	
                Each
                  of the partners of the undersigned PARTNERSHIP is able to certify
                  that
                  such partner meets at least one of the following three
                  conditions:

              


      

    

    
      


    

    
      
        	
              	
                a.

              	
                the
                  partner is a natural person whose individual net worth or joint
                  net worth
                  with his or her spouse exceeds $1,000,000;
                  or

              


      

    

    
      ____________

    

    
      For
        purposes of this Questionnaire, the term "net worth" means the excess of
        total
        assets over total liabilities. In determining income, an investor should
        add to
        his or her adjusted gross income any amounts attributable to tax-exempt income
        received, losses claimed as a limited partner in any limited partnership,
        deductions claimed for depletion, contributions to IRA or Keogh retirement
        plan,
        alimony payments, and any amount by which income from long-term capital gains
        has been reduced in arriving at adjusted gross income.

    

    


    
      
        
          
          

        

        
          25

          
            

          

        

        
          
          

        

      

    

    


    
      
        	
              	
                b.

              	
                the
                  partner is a natural person whose individual income* was in excess
                  of
                  $200,000 in each of the last two calendar years and who reasonably
                  expects
                  an individual income in excess of $200,000 in the current calendar
                  year;
                  or

              


      

    

    
      


    

    
      
        	
              	
                c.

              	
                the
                  partner is a director or executive officer of Baywood International,
                  Inc.

              


      

    

    
       

    

    
      
        	
                 

              	
                
                  
                    £
                      3.

                  

                

              	
                Each
                  of the partners of the undersigned PARTNERSHIP is able to certify
                  that
                  such partner is a natural person who, together with his or her
                  spouse, has
                  had a joint income in excess of $300,000 in each of the last two
                  calendar
                  years andwho reasonably expects a joint income in excess of $300,000
                  in
                  the current calendar year, and the undersigned PARTNERSHIP has
                  its
                  principal place ofbusiness in Alabama, Arizona, California, Colorado,
                  Connecticut, Delaware, theDistrict of Columbia, Florida, Georgia,
                  Hawaii,
                  Idaho, Illinois, Indiana, Iowa,Kansas, Kentucky, Louisiana, Maine,
                  Maryland, Massachusetts, Michigan,Minnesota, Mississippi, Missouri,
                  Montana, Nebraska, Nevada, NewHampshire, New Jersey, New Mexico,
                  New York,
                  North Carolina, NorthDakota, Ohio, Oklahoma, Oregon, Pennsylvania,
                  Puerto
                  Rico, Rhode Island,South Carolina, South Dakota, Tennessee, Texas,
                  Utah,
                  Vermont, Virginia,Washington, West Virginia, Wisconsin, or Wyoming,
                  or a
                  country other thanthe United States of
                  America.

              


      

    

    
      


    

    
      
        	
                
                  IF
                    YOU CHECKED STATEMENT 2 OR STATEMENT 3 IN SECTION I AND DID NOT
                    CHECK
                    STATEMENT 1, YOU MUST PROVIDE A LETTER SIGNED BY A GENERAL PARTNER
                    OF THE
                    UNDERSIGNED PARTNERSHIP LISTING THE NAME OF EACH PARTNER (WHETHER
                    A
                    GENERAL OR LIMITED PARTNER) AND THE REASON (UNDER STATEMENT 2
                    OR STATEMENT
                    3) SUCH PARTNER QUALIFIES AS AN ACCREDITED INVESTOR (ON THE BASIS
                    OF NET
                    WORTH, INDIVIDUAL INCOME, OR JOINT INCOME), OR EACH PARTNER MUST
                    PHOTOCOPY
                    AND COMPLETE SECTION II
                    BELOW.

                

              


      

    

    
      


    

    
      
        	
                II.

              	
                IF
                  YOU CHECKED STATEMENT 2 OR STATEMENT 3 IN SECTION IABOVE,
                  EACH PARTNER MUST CHECK ANY OF THE STATEMENTS 1-5 BELOW
                  THAT APPLIES TO SUCH PARTNER AND SIGN WHERE
                  INDICATED.

              


      

    

    
      


    

    
      
        	
                 

              	
                
                  
                    £
                      1.

                  

                

              	
                I
                  have an individual net worth or joint net worth with my spouse
                  in excess
                  of $1,000,000.

              


      

    

    
      


    

    
      
        	
                 

              	
                
                  
                    £
                      2.

                  

                

              	
                I
                  have had an individual income in excess of $200,000 in each of
                  the last
                  two calendar years, and I reasonably expect an individual income
                  in excess
                  of $200,000 in the current calendar year. NOTE: IF YOU ARE BUYING
                  JOINTLY
                  WITH YOUR SPOUSE, YOU MUST EACH HAVE AN INDIVIDUAL INCOME IN EXCESS
                  OF
                  $200,000 IN EACH OF THESE  YEARS
                  IN ORDER TO CHECK THIS
                  BOX.

              


      

    

    
      

        
          
            
            

          

          
            26

            
              

            

          

          
            
            

          

        

      

    

    
       

    

    
      
        	
                 

              	
                
                  £
                    3.

                

              	
                My
                  spouse and I have had a joint income in excess of $300,000 in each
                  of the
                  last two calendar years, and I reasonably expect a joint income
                  in excess
                  of $300,000 in the current calendar year, and I am a resident of
                  Alabama,
                  Arizona, California, Colorado, Connecticut, Delaware, the District
                  of
                  Columbia, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa,
                  Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan,
                  Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New
                  Hampshire, New Jersey, New Mexico, New York, North Carolina, North
                  Dakota,
                  Ohio, Oklahoma, Oregon, Pennsylvania, Puerto Rico, Rhode Island,
                  South
                  Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia,
                  Washington, West Virginia, Wisconsin, or Wyoming, or a country
                  other than
                  the United States of America.

              


      

    

    
      


    

    
      
        	
                 

              	
                
                  £
                    4.

                

              	
                I
                  am a Massachusetts resident, and my investment in the
                  Units  does not exceed 25% of my net worth or, if I am married,
                  25% of the combined net worth of my spouse and me, excluding principal
                  residence and home
                  furnishings.

              


      

    

    
      


    

    
      
        	
                 

              	
                
                  £
                    5.

                

              	
                I
                  am a director or executive officer of Baywood International,
                  Inc.

              


      

    

    
      


    

    
      
        	 	 	 
	
                Print
                  Name of Partner(s)

              	 	
                Signature
                  of Partner(s)

              


      

    

    
      


    

    
      
        	
                III.

              	
                OTHER
                  CERTIFICATIONS.

              


      

    

    
      


    

    
      By
        signing the Signature Page, the undersigned certifies the
        following:

    

    
      


    

    
      
        	
              	
                (a)

              	
                that
                  the PARTNERSHIP'S purchase of the Units will be solely for the
                  PARTNERSHIP'S own account and not for the account of any other
                  person;
                  and

              


      

    

    
      


    

    
      
        	
              	
                (b)

              	
                that
                  the PARTNERSHIP'S name, address of principal place of business,
                  place of
                  formation, and taxpayer identification number as set forth in this
                  Questionnaire are true, correct, and
                  complete.

              


      

    

    


    
      
        
          
          

        

        
          27

          
            

          

        

        
          
          

        

      

    

    


    
      IV.           GENERAL
        INFORMATION.

    

    
      


    

    
      (a)           PROSPECTIVE
        PURCHASER (THE PARTNERSHIP)

    

    
      


    

    
      
        	
                Name:

              	 	 
	
                Address:

              	 	 
	
                 

              	
                (Number
                  and Street)

              	 


      

       

      
        	 	 	 
	
                (City)

              	
                (State)

              	
                (Zip
                  Code)

              


      

       

      
        	
                Address
                  for Correspondence (if different):

              	
                 

              	 
	 	
                (Number
                  and Street)

              	 


      

       

      
        	
                 

              	 	 
	
                (City)

              	
                (State)

              	
                (Zip
                  Code)

              


      

       

      
        	
                Telephone
                  Number:

              	 	 
	
                 

              	
                (Area
                  Code)

              	
                (Number)

              


      

       

      
        	
                State
                  in which Formed:

              	 	 


      

       

      
        	
                Date
                  of Formation:

              	 	 


      

       

      
        	
                Taxpayer
                  Identification Number:

              	 	 


      

    

    
      


    

    
      
        	
              	
                (b)

              	
                THE
                  PERSON WHO IS EXECUTING THIS QUESTIONNAIRE ON BEHALF OF THE
                  PARTNERSHIP

              


      

    

    
      


    

    
      
        	
                Name:

              	 


      

    

    
      


    

    
      
        	
                Position
                  or Title:

              	 


      

    

    
      


    

    
      
        	
              	
                (c)

              	
                IF
                  SECTION II HAS BEEN COMPLETED, NAMES OF INDIVIDUALPARTNERS WHOSE
                  SIGNATURES MUST APPEAR ON THE SIGNATURE PAGE TO THIS
                  QUESTIONNAIRE

              


      

    

    
      


    

    
      
        	
                Name(s)
                  of Individual Partners:

              	 


      

    

    


    
      
        
          
          

        

        
          28

          
            

          

        

        
          
          

        

      

    

    
       

    

    
      BAYWOOD
        INTERNATIONAL,
        INC.

    

    
      PARTNERSHIP
        SIGNATURE PAGE

    

    
      


    

    
      Your
        signature on this Partnership Signature Page evidences the agreement by the
        PARTNERSHIP to be bound by the Questionnaire and the Subscription Agreement.
        The
        undersigned PARTNERSHIP hereby represents that (a) the information contained
        in
        this Questionnaire is complete and accurate and (b) the PARTNERSHIP will
        notify
        David Tsiang at (212) 607-5406 immediately if any material change in any
        of this
        information occurs before the acceptance of the undersigned PARTNERSHIP'S
        subscription and will promptly send the Company written confirmation of such
        change.

    

    
      


    

    
      
        	
                1.

              	
                The
                  undersigned PARTNERSHIP hereby certifies that it has read and understands
                  this Subscription Agreement.

              


      

    

    
      


    

    
      
        	
                2.

              	
                The
                  undersigned PARTNERSHIP hereby represents and warrants that the
                  person
                  signing this Subscription Agreement on behalf of the PARTNERSHIP
                  is a
                  general partner of the PARTNERSHIP, has been duly authorized by
                  the
                  PARTNERSHIP to acquire the Units and sign this Subscription Agreement
                  on
                  behalf of the PARTNERSHIP, and, further, that the undersigned PARTNERSHIP
                  has all requisite authority to purchase such Units and enter into
                  this
                  Subscription Agreement.

              


      

    

    
      


    

    
      
        	 	 	 	 
	
                Number
                  of Units applied for

              	 	 	
                Date

              
	 	 	 	 
	 	 	 	 
	 	 	 	
                Name
                  of Partnership

              
	 	 	 	
                (Please
                  Type or Print)

              
	 	 	 	 
	 	 	 	 
	 	 	
                By:

              	 
	 	 	 	
                (Signature)

              
	 	 	 	 
	 	 	 	 
	 	 	Name:	
                 

              
	 	 	 	
                (Please
                  Type or Print)

              
	 	 	 	 
	 	 	 	 
	 	 	 	
                Title:

              


      

    

    
      


    

    
      THE
        UNITS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
        (THE
        "SECURITIES ACT"), AND MAY NOT BE OFFERED, SOLD, OR OTHERWISE TRANSFERRED
        OR
        DISPOSED OF UNLESS SUCH SECURITIES ARE INCLUDED IN AN EFFECTIVE REGISTRATION
        STATEMENT UNDER THE SECURITIES ACT OR AN OPINION OF COUNSEL, CONCURRED IN
        BY
        COUNSEL TO THE COMPANY, HAS BEEN DELIVERED TO THE EFFECT THAT REGISTRATION
        OF
        SUCH SECURITIES IS NOT REQUIRED.

    

    


    
      
        
          
          

        

        
          29

          
            

          

        

        
          
          

        

      

    

    


    
      D.           BAYWOOD
        INTERNATIONAL,
        INC.

    

    
      CORPORATION
        QUESTIONNAIRE

    

    
      


    

    
      Investor
        Name:_____________________

    

    
      


    

    
      
        	
                To:

              	
                Baywood
                  International, Inc.

              


      

    

    
      


    

    
      The
        information contained in this Questionnaire is being furnished in order to
        determine whether the undersigned CORPORATION'S subscription to purchase
        the
        Units described in the Subscription Booklet may be accepted.

    

    
      


    

    
      ALL
        INFORMATION CONTAINED IN THIS QUESTIONNAIRE WILL BE, TREATED CONFIDENTIALLY.
        The
        undersigned CORPORATION understands, however, that the Company may present
        this
        Questionnaire to such parties as it deems appropriate if called upon to
        establish that the proposed offer and sale of the Units is exempt from
        registration, under the Securities Act of 1933, as amended, or meets the
        requirements of applicable state securities or "blue sky" laws. Further,
        the
        undersigned CORPORATION understands that the offering is required to be reported
        to the Securities and Exchange Commission and to various state securities
        and
        "blue sky" regulators.

    

    
      


    

    
      
        	
                I.

              	
                PLEASE
                  CHECK ANY OF STATEMENTS 1-5 BELOW THAT APPLIES TO THE
                  CORPORATION.

              


      

    

    
      


    

    
      
        	
                 

              	
                
                  £
                    1.

                

              	
                The
                  undersigned CORPORATION: (a) has total assets in excess of $5,000,000;
                  (b)
                  was not formed for the specific purpose of acquiring any Units;
                  and (c)
                  has its principal place of business in Alabama, Arizona, Colorado,
                  Connecticut, Delaware, the District of Columbia, Florida, Georgia,
                  Hawaii,
                  Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Massachusetts,
                  Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska,
                  Nevada, New
                  Hampshire, New Jersey, New Mexico, New York, North Carolina, North
                  Dakota,
                  Ohio, Oklahoma, Oregon, Pennsylvania, Puerto Rico, Rhode Island,
                  South
                  Carolina, South Dakota, Tennessee, Vermont, Virginia, Washington,
                  West
                  Virginia, Wisconsin, or Wyoming, or a country other than the United
                  States
                  of America.

              


      

    

    
      


    

    
      
        	
                 

              	
                
                  £
                    2.

                

              	
                The
                  undersigned CORPORATION: (a) has total assets in excess of $14,000,000;
                  (b) was not formed for the specific purpose of acquiring any Units;
                  and
                  (c) has its principal place of business in
                  California.

              


      

    

    
      


    

    
      
        	
                 

              	
                
                  £
                    3.

                

              	
                Each
                  of the stockholders of the undersigned CORPORATION is able to certify
                  that
                  such stockholder meets at least one of the following two
                  conditions:

              


      

    

    
      


    

    
      
        	
              	
                a.

              	
                the
                  stockholder is a natural person whose individual net worth or joint
                  net
                  worth with his or her spouse exceeds $1,000,000;
                  or

              


      

    

    
      


    

    
      
        	
              	
                b.

              	
                the
                  stockholder is a natural person who had an individual income* in
                  excess of
                  $200,000 in each of the last two calendar years and who reasonably
                  expects
                  an individual income in excess of $200,000 in the current calendar
                  year.

              


      

    

    


    
      
        
          
          

        

        
          30

          
            

          

        

        
          
          

        

      

    

    
       

    

    
      
        	
                 

              	
                
                  £
                    4.

                

              	
                Each
                  of the stockholders of the undersigned CORPORATION is able to certify
                  that
                  such stockholder is a natural person who, together with his or
                  her spouse,
                  has had a joint income in excess of $300,000 in each of the last
                  two
                  calendar years and who reasonably expects a joint income in excess
                  of
                  $300,000 in the current calendar year, and the undersigned CORPORATION
                  has
                  its principal place of business in Alabama, Arizona, California,
                  Colorado,
                  Connecticut, Delaware, the District of Columbia, Florida, Georgia,
                  Hawaii,
                  Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine,
                  Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri,
                  Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico,
                  New
                  York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania,
                  Puerto Rico, Rhode Island, South Carolina, South Dakota, Tennessee,
                  Texas,
                  Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin,
                  or Wyoming,
                  or a country other than the United States of
                  America.

              


      

    

    
      


    

    
      
        	
                 

              	
                
                  £
                    5.

                

              	
                The
                  undersigned CORPORATION is:

              


      

    

    
      


    

    
      
        	
              	
                a.

              	
                a
                  bank as defined in Section 3(a)(2) of the Securities Act;
                  or

              


      

    

    
      


    

    
      
        	
              	
                b.

              	
                a
                  savings and loan association or other institution as defined in
                  Section
                  3(a)(5)(A) of the Securities Act whether acting in its individual
                  or
                  fiduciary capacity; or

              


      

    

    
      


    

    
      
        	
              	
                c.

              	
                a
                  broker or dealer registered pursuant to Section 15 of the Securities
                  Exchange Act of 1934, as amended;
                  or

              


      

    

    
      


    

    
      
        	
              	
                d.

              	
                an
                  insurance company as defined in Section 2(13) of the Securities
                  Act;
                  or

              


      

    

    
      


    

    
      
        	
              	
                e.

              	
                an
                  investment company registered under the Investment Company Act
                  of 1940, as
                  amended, or a business development company as defined in Section
                  2(a)(48)
                  of the Investment Company Act of 1940, as amended;
                  or

              


      

    

    
       

      
        
          
            	
                  	
                    
                      f.

                    

                  	
                    
                      a
                        small business investment company licensed by the U.S. Small
                        Business
                        Administration under Section 301 (c) or (d) of the Small
                        Business
                        Investment Act of 1958, as amended;
                        or

                    

                  


          

        

        
           

        

      

    

    
      
        	
              	
                g.

              	
                a
                  private business development company as defined in Section 202(a)(22)
                  of
                  the Investment Advisers Act of 1940, as
                  amended.

              


      

    

    
       

      *

      _______________________

    

    
      For
        purposes of this Questionnaire, the term "net worth" means the excess of
        total
        assets over total liabilities. In determining income, an investor should
        add to
        his or her adjusted gross income any amounts attributable to tax-exempt income
        received, losses claimed as a limited partner in any limited partnership,
        deductions claimed for depletion, contributions to IRA or Keogh retirement
        plan,
        alimony payments, and any amount by which income from long-term capital gains
        has been reduced in arriving at adjusted gross income.

    

    
      

        
          
            
            

          

          
            31

            
              

            

          

          
            
            

          

        

      

    

    
       

    

    
      
        	
                
                  IF
                    YOU CHECKED STATEMENT 3 OR STATEMENT 4 IN SECTION I AND DID NOT
                    CHECK
                    STATEMENT 1, YOU MUST PROVIDE A LETTER SIGNED BY AN OFFICER OF
                    THE
                    UNDERSIGNED CORPORATION LISTING THE NAME OF EACH STOCKHOLDER
                    AND THE
                    REASON (UNDER STATEMENT 3 OR STATEMENT 4) WHY SUCH STOCKHOLDER
                    QUALIFIES
                    AS AN ACCREDITED INVESTOR (ON THE BASIS OF NET WORTH, INDIVIDUAL
                    INCOME,
                    OR JOINT INCOME) OR EACH STOCKHOLDER MUST PHOTOCOPY AND COMPLETE
                    SECTION
                    II BELOW.

                

              


      

    

    
      


    

    
      IF
        YOU CHECKED STATEMENT 3 OR STATEMENT 4 IN I ABOVE, EACH STOCKHOLDER MUST
        CHECK
        ANY OF THE STATEMENTS 1-5 BELOW THAT APPLIES TO SUCH STOCKHOLDER AND SIGN
        BELOW
        WHERE  INDICATED.

    

    
      


    

    
      


    

    
      
        	
                 

              	
                
                  £
                    1.

                

              	
                I
                  have an individual net worth or joint net worth with my spouse
                  in excess
                  of $1,000,000.

              


      

    

    
      


    

    
      
        	
                 

              	
                
                  £
                    2.

                

              	
                I
                  have had an individual income in excess of $200,000 in each of
                  the last
                  two calendar years, and I reasonably expect an individual income
                  in excess
                  of $200,000 in the current calendar year. NOTE: IF YOU ARE BUYING
                  JOINTLY
                  WITH YOUR SPOUSE, YOU MUST EACH HAVE AN INDIVIDUAL INCOME IN EXCESS
                  OF
                  $200,000 IN EACH OF THESE YEARS IN ORDER TO CHECK THIS
                  BOX.

              


      

    

    
      


    

    
      
        	
                 

              	
                
                  £
                    3.

                

              	
                My
                  spouse and I have had a joint income in excess of $300,000 in each
                  of the
                  last two calendar years, and I reasonably expect a joint income
                  in excess
                  of $300,000 in the current calendar year, and I am a resident of
                  Alabama,
                  Arizona, California, Colorado, Connecticut, Delaware, the District
                  of
                  Columbia, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa,
                  Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan,
                  Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New
                  Hampshire, New Jersey, New Mexico, New York, North Carolina, North
                  Dakota,
                  Ohio, Oklahoma, Oregon, Pennsylvania, Puerto Rico, Rhode Island,
                  South
                  Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia,
                  Washington, West Virginia, Wisconsin, or Wyoming, or a country
                  other; than
                  the United States of America.

              


      

    

    
      


    

    
      
        	
                 

              	
                
                  £
                    4.

                

              	
                I
                  am a Massachusetts resident, and my investment in the Units does
                  not
                  exceed 25% of my net worth or, if I am married, 25% of the combined
                  net
                  worth of my spouse and me, excluding principal residence and home
                  furnishings.

              


      

    

    
      


    

    
      
        	
                 

              	
                
                  £
                    5.

                

              	
                I
                  am a director or executive officer of Baywood International,
                  Inc.

              


      

    

    
      


    

    
      


    

    
      
        	 	 	 
	
                Print
                  Name of Unit holder(s)

              	 	
                Signature
                  of Unitholder(s)

              


      

    

    


    
      
        
          
          

        

        
          32

          
            

          

        

        
          
          

        

      

    

    
       

    

    
      III.           OTHER
        CERTIFICATIONS.

    

    
      


    

    
      By
        signing the Signature Page, the undersigned certifies the
        following:

    

    
      


    

    
      
        	
              	
                (a)

              	
                that
                  the CORPORATION'S purchase of Units will be solely for the CORPORATION'S
                  own account and not for the account of any other person or entity;
                  and

              


      

    

    
      


    

    
      
        	
              	
                (b)

              	
                that
                  the CORPORATION'S name, address of principal place of business,
                  place of
                  incorporation, and taxpayer identification number as set forth
                  in this
                  Questionnaire are true, correct, and
                  complete.

              


      

    

    
      


    

    
      
        	
                IV.

              	
                GENERAL
                  INFORMATION.

              


      

    

    
      


    

    
      
        	
              	
                (a)

              	
                PROSPECTIVE
                  PURCHASER (THE CORPORATION)

              


      

    

    
      


    

    
      
        	
                Name:

              	 


      

    

    
      


    

    
      
        	
                Principal
                  Place of Business:

              	 
	 	
                (Number
                  and Street)

              


      

    

    
      


    

    
      
        	 	 	 
	
                (City)

              	
                (State)

              	
                (Zip
                  Code)

              


      

    

    
      


    

    
      
        	
                Address
                  for Correspondence (if different):

              	 
	 	
                (Number
                  and Street)

              


      

    

    
      


    

    
      
        	 	 	 
	
                (City)

              	
                (State)

              	
                (Zip
                  Code)

              


      

    

    
      


    

    
      
        	
                Telephone
                  Number:

              	 	 
	 	
                (Area
                  Code)

              	
                (Number)

              


      

    

    
      


    

    
      
        	
                State
                  of Incorporation:

              	 


      

    

    
      


    

    
      
        	
                Date
                  of Formation:

              	 


      

    

    
      


    

    
      
        	
                Taxpayer
                  Identification Number:

              	 


      

    

    
      


    

    
      
        	
                Number
                  of Stockholders:

              	 


      

    

    
      


    

    
      
        	
              	
                (b)

              	
                INDIVIDUAL
                  WHO IS EXECUTING THIS QUESTIONNAIRE ON BEHALF OF THE
                  CORPORATION

              


      

    

    
      


    

    
      
        	
                Name:

              	 


      

    

    
      


    

    
      
        	
                Position
                  or Title:

              	 


      

    

    
      


    

    
      
        	
              	
                (c)

              	
                IF
                  SECTION II HAS BEEN COMPLETED, NAMES OF INDIVIDUAL STOCKHOLDERS
                  WHOSE
                  SIGNATURES MUST APPEAR ON THE SIGNATURE PAGE TO THIS
                  QUESTIONNAIRE

              


      

    

    
      


    

    
      
        	
                Name(s)
                  of Unitholders:

              	 


      

    

    


    
      
        
          
          

        

        
          33

          
            

          

        

        
          
          

        

      

    

    


    
      E.    BAYWOOD
        INTERNATIONAL,
        INC.

    

    
      RETIREMENT
        PLAN QUESTIONNAIRE

    

    
      


    

    
      


    

    Investor
      Name:_____________________

     

    
      
        	
                To:

              	
                Baywood
                  International, Inc.

              


      

    

    
      


    

    
      The
        information contained in this Questionnaire is being furnished in order to
        determine whether the undersigned RETIREMENT PLAN'S subscription to purchase
        the
        Units described in the Subscription Booklet may be accepted.

    

    
      


    

    
      ALL
        INFORMATION CONTAINED IN THIS QUESTIONNAIRE WILL BE TREATED CONFIDENTIALLY.
        The
        undersigned RETIREMENT PLAN understands, however, that the Company may present
        this Questionnaire to such parties as it deems appropriate if called upon
        to
        establish that the proposed offer and sale of the Units is exempt from
        registration under the Securities Act of 1933, as amended, or meets the
        requirements of applicable state securities or "blue sky" laws. Further,
        the
        undersigned RETIREMENT PLAN understands that the offering is required to
        be
        reported to the Securities and Exchange Commission and to various state
        securities or "blue sky" regulators.

    

    
      


    

    
      
        	
                I.

              	
                PLEASE
                  CHECK ANY OF THE FOLLOWING STATEMENTS, AS
                  APPLICABLE.

              


      

    

    
      


    

    
      
        	
                 

              	
                
                  £
                    1.

                

              	
                The
                  undersigned RETIREMENT PLAN certifies that it is a Keogh plan orIndividual
                  Retirement Account in which each participant satisfies at least
                  one of the
                  following conditions:

              


      

    

    
      


    

    
      
        	
              	
                       
                  a.

              	
                such
                  person's individual net worth* or joint net worth with his or her
                  spouse
                  exceeds $1,000,000; or

              


      

    

    
      


    

    
      
        	
              	
                       
                  b.

              	
                such
                  person had an individual income* in excess of $200,000 in each
                  of the last
                  two calendar years and reasonably expects an individual income
                  in excess
                  of $200,000 in the current calendar year;
                  or

              


      

    

    
      


    

    
      
        	
              	
                       
                  c.

              	
                such
                  person, together with his or her spouse, had a joint income in
                  excess of
                  $300,000 in each of the last two calendar years and reasonably
                  expects a
                  joint income in excess of $300,000 in the current calendar year
                  and is a
                  resident of

              


      

    

    
       

    

    
      _____________________

    

    
      
        	
                *

              	
                For
                  purposes of this Questionnaire, the term "net worth" means the
                  excess of
                  total assets over total liabilities. In determining income, an
                  Investor
                  should add to his or her adjusted gross income any amounts attributable
                  to
                  tax-exempt income received, losses claimed as a limited partner
                  in any
                  limited partnership, deductions claimed for depletion, contributions
                  to
                  IRA or Keogh retirement plan, alimony payments, and any amount
                  by which
                  income from long-term capital gains has been reduced in arriving
                  at
                  adjusted gross income.

              


      

    

    
      

        
          
            
            

          

          
            34

            
              

            

          

          
            
            

          

        

      

       

    

    
      Alabama,
        Arizona, Colorado, Connecticut, Delaware, the District of Columbia, Florida,
        Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana,
        Maine, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana,
        Nebraska, Nevada, New Hampshire, New Mexico, New York, North Carolina, North
        Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Puerto, Rico, Rhode Island,
        South
        Carolina, South Dakota, Tennessee, Vermont, Virginia, Washington, West Virginia,
        Wisconsin, or Wyoming, or a country other than the United States of
        America.

    

    
      


    

    
      
        	
                2.

              	
                The
                  undersigned RETIREMENT PLAN certifies that it is an employee benefit
                  plan
                  within the meaning of the Employee Retirement Income Security Act
                  of 1974,
                  as amended ("ERISA"), and:

              


      

    

    
      


    

    
      
        	
                 

              	
                
                  £
                    a.

                

              	
                The
                  undersigned RETIREMENT PLAN is self-directed, with investment decisions
                  made solely by persons that are not residents of Alaska,
                  Arkansas, California, Maryland, New Jersey, Texas, or Utah, and
                  each such person directing his account and for whom the
                  investment is being made satisfies at least one of the following
                  conditions:

              


      

    

    
      


    

    
      
        	
              	
                       
                  (1)

              	
                such
                  person's individual net worth or joint net worth with his or her
                  spouse
                  exceeds $1,000,000; or

              


      

    

    
      


    

    
      
        	
              	
                       
                  (2)

              	
                such
                  person had an individual income in excess of $200,000 in each of
                  the last
                  two calendar years and reasonably expects an individual income
                  in excess
                  of $200,000 in the current calendar year;
                  or

              


      

    

    
      


    

    
      
        	
              	
                       
                  (3)

              	
                such
                  person together with his or her spouse, had a joint income in excess
                  of
                  $300,000 in each of the last two calendar years and reasonably
                  expects a
                  joint income in excess of $300,000 in the current calendar year
                  and is a
                  resident of Alabama, Arizona, Colorado, Connecticut, Delaware,
                  the
                  District of Columbia, Florida, Georgia, Hawaii, Idaho, Illinois,
                  Indiana,
                  Iowa, Kansas, Kentucky, Louisiana, Maine, Massachusetts, Michigan,
                  Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New
                  Hampshire, New Mexico, New York, North Carolina, North Dakota,
                  Ohio,
                  Oklahoma, Oregon, Pennsylvania, Puerto Rico, Rhode Island, South
                  Carolina,
                  South Dakota, Tennessee, Vermont, Virginia, Washington, West Virginia,
                  Wisconsin, or Wyoming, or a country other than the United States
                  of
                  America.

              


      

    

    
      


    

    
      
        	
              	
                       
                  (4)

              	
                such
                  person is a director or executive officer of Baywood International,
                  Inc.

              


      

    

    
      


    

    
      
        	
                 

              	
                
                  £
                    b.

                

              	
                The
                  undersigned RETIREMENT PLAN has total assets in excess of $5,000,000
                  and
                  such Plan is not maintained in Alaska, California, or New Jersey;
                  or

              


      

    

    
      


    

    
      
        	
                 

              	
                
                  £
                    c.

                

              	
                The
                  investment decisions are made by a plan fiduciary as defined in
                  Section
                  3(21) of ERISA that (1) is either a bank, insurance company, or
                  registered
                  investment adviser or (2) is located in jurisdictions other than
                  Alaska, Arkansas, California, New Jersey, or Texas and
                  is a savings and, loan
                  association.

              


      

    

    


    
      
        
          
          

        

        
          35

          
            

          

        

        
          
          

        

      

    

    
       

    

    
      
        	
                IF
                  YOU CHECKED STATEMENT 1 OR STATEMENT 2(a) IN SECTION I ABOVE, EACH
                  RETIREMENT PLAN PARTICIPANT FOR WHOSE ACCOUNT THE INVESTMENT IS
                  BEING MADE
                  MUST PHOTOCOPY AND COMPLETE SECTION II
                  BELOW.

              


      

    

    
      


    

    
      
        	
                II.

              	
                IF
                  YOU CHECKED STATEMENT 1 OR STATEMENT 2(a) IN SECTION I ABOVE, EACH
                  RETIREMENT PLAN PARTICIPANT FOR WHOSE ACCOUNT THE INVESTMENT IS
                  BEING MADE
                  MUST CHECK ANY OF THE STATEMENTS 1-5 BELOW THAT APPLIES TO SUCH
                  PARTICIPANT.

              


      

    

    
      


    

    
      
        	
                 

              	
                
                  £
                    1.

                

              	
                I
                  have an individual net worth or joint net worth with my spouse
                  in excess
                  of $1,000,000.

              


      

    

    
      


    

    
      
        	
                 

              	
                
                  £
                    2.

                

              	
                I
                  have had an individual income in excess of $200,000 in each of
                  the last
                  two calendar years, and I reasonably expect an individual income
                  in excess
                  of  $200,000 in the current calendar year. NOTE: IF YOU ARE
                  BUYING JOINTLY WITH YOUR SPOUSE, YOU MUST EACH HAVE AN INDIVIDUAL
                  INCOME
                  IN EXCESS OF $200,000 IN EACH OF THESE  YEARS IN ORDER TO CHECK
                  THIS BOX.

              


      

    

    
      


    

    
      
        	
                 

              	
                
                  £
                    3.

                

              	
                My
                  spouse and I have had a joint income in excess of $300,000 in each
                  of the
                  last two calendar years, and I reasonably expect a joint income
                  excess of
                  $300,000 in the current calendar year, and I am a resident of Alabama,
                  Arizona, Colorado, Connecticut, Delaware, the District of Columbia,
                  Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas,
                  Kentucky, Louisiana, Maine, Massachusetts, Michigan, Minnesota,
                  Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire,
                  New
                  Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma,
                  Oregon,
                  Pennsylvania, Puerto Rico, Rhode Island, South Carolina, South
                  Dakota,
                  Tennessee, Vermont, Virginia, Washington, West Virginia, Wisconsin,
                  or
                  Wyoming, or a country other than the United States of
                  America.

              


      

    

    
      


    

    
      
        	
                 

              	
                
                  £
                    4.

                

              	
                I
                  am a Massachusetts resident, and my investment in the Units does
                  not
                  exceed 25% of my net worth or, if I am married, 25% of the combined
                  net
                  worth of my spouse and me, excluding principal residence and home
                  furnishings.

              


      

    

    
      


    

    
      
        	
                 

              	
                
                  £
                    5.

                

              	
                I
                  am a director or executive officer of Baywood International,
                  Inc.

              


      

    

    
      


    

    
      
        	 	 	 
	
                Print
                  Name of Participant

              	 	
                Signature
                  of Participant

              


      

    

    


    
      
        
          
          

        

        
          36

          
            

          

        

        
          
          

        

      

    

    
       

    

    
      
        	
                III.

              	
                OTHER
                  CERTIFICATIONS.

              


      

    

    
      


    

    
      By
        signing the Signature Page, the undersigned certifies the
        following:

    

    
      


    

    
      
        	
              	
                (a)

              	
                that
                  the RETIREMENT PLAN'S purchase of Units will be solely for the
                  RETIREMENT
                  PLAN'S own account and not for the account of any other person
                  or
                  entity;

              


      

    

    
      


    

    
      
        	
              	
                (b)

              	
                that
                  the RETIREMENT PLAN'S governing documents duly authorize the type
                  of
                  investment contemplated herein, and the undersigned is authorized
                  and
                  empowered to make such investment on behalf of the RETIREMENT PLAN;
                  and

              


      

    

    
      


    

    
      
        	
              	
                (c)

              	
                that
                  the RETIREMENT PLAN'S name, address, place of formation, and taxpayer
                  identification number as set forth in this Questionnaire are true,
                  correct, and complete.

              


      

    

    
      


    

    
      
        	
                IV.

              	
                GENERAL
                  INFORMATION.

              


      

    

    
      


    

    
      
        	
              	
                (a)

              	
                PROSPECTIVE
                  PURCHASER (THE RETIREMENT
                  PLAN)

              


      

    

    
      


    

    
      
        	
                Name:

              	 


      

    

    
      


    

    
      
        	
                Address:

              	 
	 	
                (Number
                  and Street)

              


      

    

    
      


    

    
      
        	 	 	 
	
                (City)

              	
                (State)

              	
                (Zip
                  Code)

              


      

    

    
      


    

    
      
        	
                Address
                  for Correspondence (if different):

              	 
	 	
                (Number
                  and Street)

              


      

    

    
      


    

    
      
        	 	 	 
	
                (City)

              	
                (State)

              	
                (Zip
                  Code)

              


      

    

    
      


    

    
      
        	
                Telephone
                  Number:

              	 	 
	 	
                (Area
                  Code)

              	
                (Number)

              


      

    

    
      


    

    
      
        	
                State
                  in which Formed:

              	 


      

    

    
      


    

    
      
        	
                Date
                  of Formation:

              	 


      

    

    
      


    

    
      
        	
                Taxpayer
                  Identification Number:

              	 


      

    

    
      


    

    
      
        	
              	
                (B)

              	
                INDIVIDUAL
                  WHO IS EXECUTING THIS QUESTIONNAIRE ON BEHALF OF THE RETIREMENT
                  PLAN
                  (TRUSTEE FOR AN EMPLOYEE BENEFIT PLAN; CUSTODIAN FOR AN IRE OR
                  KEOGH).

              


      

    

    
      


    

    
      
        	
                Name:

              	 


      

    

    
      


    

    
      
        	
                Position
                  or Title:

              	 


      

    

     

    
      
        
          
          

        

        
          37

          
            

          

        

        
          
          

        

      

    

    
       

      
        
          
            	
                    V.

                  	
                    ADDITIONAL
                      INFORMATION.

                  


          

        

         

      

    

    
      
        	
                
                  THE
                    RETIREMENT PLAN MAY BE REQUIRED TO ATTACH COPIES OF ALL DOCUMENTS
                    GOVERNING THE PLAN AS WELL AS ALL OTHER DOCUMENTS AUTHORIZING
                    THE
                    RETIREMENT PLAN TO INVEST IN THE UNITS. INCLUDE, AS NECESSARY,
                    THE TRUST
                    AGREEMENT AND DOCUMENTS DEFINING PERMITTED INVESTMENTS BY THE
                    RETIREMENT
                    PLAN AND DEMONSTRATING AUTHORITY OF THE SIGNING INDIVIDUAL TO
                    ACT ON
                    BEHALF OF THE PLAN. ALL DOCUMENTATION MUST BE COMPLETE AND
                    CORRECT.

                

              


      

    

    


    
      
        
          
          

        

        
          38

          
            

          

        

        
          
          

        

      

    

    


    
      BAYWOOD
        INTERNATIONAL INC.

    

    
      RETIREMENT
        PLAN SIGNATURE PAGE

    

    
      


    

    
      Your
        signature on this RETIREMENT PLAN Signature Page evidences the agreement
        by the
        RETIREMENT PLAN to be bound by the Questionnaire and the Subscription
        Agreement.

    

    
      


    

    
      1.           The
        undersigned RETIREMENT PLAN hereby represents that (a) the information contained
        in this Questionnaire is complete and accurate and (b) the RETIREMENT PLAN
        will
        notify David Tsiang at (212) 607-5406 immediately if any material change
        in any
        of the information occurs prior to the acceptance of the undersigned RETIREMENT
        PLAN'S subscription and will promptly send the Company written confirmation
        of
        such change.

    

    
      


    

    
      2.           The
        undersigned RETIREMENT PLAN hereby certifies that it has read and understands
        this Subscription Agreement.

    

    
      


    

    
      3.           The
        undersigned RETIREMENT PLAN hereby represents and warrants that the person
        signing this Subscription Agreement on behalf of the RETIREMENT PLAN has
        been
        duly authorized to acquire the Units and sign this Subscription Agreement
        on
        behalf of the RETIREMENT PLAN and, further, that the undersigned RETIREMENT
        PLAN
        has all requisite authority to purchase the Units and enter into this
        Subscription Agreement.

    

    
      


    

    
      


    

    
      
        	 	 	 	 
	
                Number
                  of Units applied for

              	 	 	
                Date

              
	 	 	 	 
	 	 	 	 
	 	 	 	
                Name
                  of Retirement Plan

              
	 	 	 	
                (Please
                  Type or Print)

              
	 	 	 	 
	 	 	 	 
	 	 	
                By:

              	
                 

              
	 	 	 	
                (Signature)

              
	 	 	 	 
	 	 	Name:	 
	 	 	 	
                (Please
                  Type or Print)

              
	 	 	 	 
	 	 	 	 
	 	 	 	
                Title:

              


      

    

    
      

        
          
            
            

          

          
            39

            
              

            

          

          
            
            

          

        

      

       

    

    
      THE
        UNITS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
        (THE
        "SECURITIES ACT"), AND MAY NOT BE OFFERED, SOLD, OR OTHERWISE TRANSFERRED
        OR
        DISPOSED OF UNLESS SUCH SECURITIES ARE INCLUDED IN AN EFFECTIVE REGISTRATION
        STATEMENT UNDER THE SECURITIES ACT OR AN OPINION OF COUNSEL, CONCURRED IN
        BY
        COUNSEL TO THE COMPANY, HAS BEEN DELIVERED TO THE EFFECT THAT REGISTRATION
        OF
        SUCH SECURITIES IS NOT REQUIRED.

    

    
       

       

    

    
      40