NEITHER  THE  SECURITIES REPRESENTED HEREBY NOR THE SECURITIES ISSUABLE UPON THE
EXERCISE  HEREOF  HAVE  BEEN  REGISTERED  UNDER  THE  SECURITIES ACT OF 1933, AS
AMENDED  (THE  "SECURITIES  ACT'),  OR  ANY STATE SECURITIES LAWS AND MAY NOT BE
OFFERED,  SOLD,  PLEDGED,  ASSIGNED,  OR  OTHERWISE  TRANSFERRED  UNLESS  (1)  A
REGISTRATION  STATEMENT  WITH  RESPECT THERETO IS EFFECTIVE UNDER THE SECURITIES
ACT  AND  ANY  APPLICABLE  STATE SECURITIES LAWS, OR (2) THE COMPANY RECEIVES AN
OPINION  OF  COUNSEL  TO  THE  HOLDER  OF THIS WARRANT OR SUCH SECURITIES, WHICH
COUNSEL  AND  OPINION  ARE  REASONABLY  SATISFACTORY  TO  THE COMPANY, THAT THIS
WARRANT  OR  SUCH  SECURITIES,  AS  APPLICABLE,  MAY  BE OFFERED, SOLD, PLEDGED,
ASSIGNED,  OR  OTHERWISE  TRANSFERRED  IN  THE  MANNER  CONTEMPLATED  WITHOUT AN
EFFECTIVE  REGISTRATION  STATEMENT  UNDER THE SECURITIES ACT OR APPLICABLE STATE
SECURITIES  LAWS.


         THE TRANSFER OF THIS WARRANT IS RESTRICTED AS DESCRIBED HEREIN.


                           BAYWOOD INTERNATIONAL, INC.
                            WARRANTS FOR THE PURCHASE
                                       OF
               SHARES OF COMMON STOCK, PAR VALUE $0.001 PER SHARE

NO.

     THIS  CERTIFIES  that,  for  consideration,  the receipt and sufficiency of
which  are  hereby acknowledged, and other value received, O. Lee Tawes, III, an
individual  (the  "Holder")  is  entitled  to  subscribe for, and purchase from,
BAYWOOD  INTERNATIONAL,  INC.,  a  Nevada  corporation (the "Company"), upon the
terms  and  conditions  set forth herein, at any time or from time to time on or
after March 30, 2007 (the "Initial Exercise Date") until 5:00 P.M. New York City
local  time on the fifth anniversary of the Initial Exercise Date (the "Exercise
Period"),  up  to  an  aggregate  of 5,000,000 shares of common stock, par value
$0.001 per share (the "Common Stock"), of the Company. This Warrant is initially
exercisable  at  $0.02 per share; provided, however, that upon the occurrence of
                                  --------  -------
any  of  the  events  specified  in Section 5 hereof, the rights granted by this
Warrant,  including  the exercise price and the number of shares of Common Stock
to  be  received upon such exercise, shall be adjusted as therein specified. The
term "Exercise Price" shall mean, depending on the context, the initial exercise
price  (as  set  forth  above)  or  the  adjusted  exercise  price  per  share.

     As used herein, the term "this Warrant" shall mean and include this Warrant
and any Warrant or Warrants hereafter issued as a consequence of the exercise or
transfer  of  this  Warrant  in  whole  or  in  part. Each share of Common Stock
issuable upon the exercise hereof shall be hereinafter referred to as a "Warrant
Share".


                                        1
<PAGE>
     1.     This  Warrant may be exercised during the Exercise Period, either in
whole  or in part, by the surrender of this Warrant (with the completed Election
to  Exercise  in  the form set forth in Schedule 1 attached hereto and forming a
                                        ----------
part  hereof,  duly  executed)  to  the Company at its office at 1490 North 83rd
Place,  Suite  1,  Scottsdale,  Arizona  852601,  or  at  such other place as is
designated  in  writing by the Company, together with payment of an amount equal
to  the product of the Exercise Price and the number of Warrant Shares for which
this  Warrant  is  being exercised in the form of, at the Holder's option, (A) a
certified or bank cashier's check payable to the Company, or (B) a wire transfer
of  funds  to  an  account  designated  by  the Company.  If this Warrant is not
registered  in  the  name  of  the  initial  registered  Holder,  an  assignment
evidencing the assignment of this Warrant to the current Holder, in the form set
forth  in  Schedule  2  attached  hereto  and forming part hereof, shall also be
presented  to  the  Company  at  the  time  of  exercise.

     2.     Upon  each  exercise  of  the  Holder's  rights  to purchase Warrant
Shares,  the  Holder  shall  be deemed to be the holder of record of the Warrant
Shares,  notwithstanding  that  the  transfer books of the Company shall then be
closed  or  certificates  representing  the Warrant Shares with respect to which
this  Warrant  was  exercised shall not then have been actually delivered to the
Holder.  As  soon  as  practicable after each such exercise of this Warrant, the
Company  shall  issue  and  deliver  to the Holder a certificate or certificates
representing  the  Warrant Shares issuable upon such exercise, registered in the
name  of the Holder or its designee. If this Warrant should be exercised in part
only,  the  Company  shall,  upon  surrender  of  this Warrant for cancellation,
execute and deliver a Warrant evidencing the right of the Holder to purchase the
balance  of  the  aggregate number of Warrant Shares purchasable hereunder as to
which  this  Warrant  has  not  been  exercised  or  assigned.

     3.     Any  Warrants  issued  upon the transfer or exercise in part of this
Warrant  shall  be  numbered  and shall be registered in a warrant register (the
"Warrant  Register") as they are issued.  The Company shall be entitled to treat
the  registered  holder  of  any Warrant on the Warrant Register as the owner in
fact thereof for all purposes, and shall not be bound to recognize any equitable
or other claim to, or interest in, such Warrant on the part of any other person,
and  shall  not be liable for any registration of transfer of Warrants which are
registered  or  to  be registered in the name of a fiduciary or the nominee of a
fiduciary  unless  made with the actual knowledge that a fiduciary or nominee is
committing  a  breach  of  trust in requesting such registration or transfer, or
with  the  knowledge of such facts that its participation therein amounts to bad
faith.  This Warrant shall be transferable on the books of the Company only upon
delivery thereof, duly endorsed by the Holder or by his duly authorized attorney
or  representative, or accompanied by proper evidence of succession, assignment,
or  authority to transfer, together with an assignment evidencing the assignment
of this Warrant, in the form set forth in Schedule 2 attached hereto and forming
a part hereof. In all cases of transfer by an attorney, executor, administrator,
guardian,  or  other  legal  representative, duly authenticated evidence of his,
her,  or its authority shall be produced. Upon any registration of transfer, the
Company  shall deliver a new Warrant or Warrants to the person entitled thereto.
This  Warrant may be exchanged, at the option of the Holder thereof, for another
Warrant,  or  other  Warrants  of  different  denominations,  of  like tenor and
representing  in  the  aggregate  the right to purchase a like number of Warrant
Shares  (or  portions  thereof),  upon  surrender  to  the  Company  or its duly
authorized  agent.  Notwithstanding  the  foregoing,  the  Company shall have no
obligation  to  cause  Warrants  to  be


                                        2
<PAGE>
transferred  on  its  books  to  any person if, in the opinion of counsel to the
Company, such transfer does not comply with the provisions of the Securities Act
of  1933,  as  amended  (the  "Securities  Act"),  and the rules and regulations
thereunder.

     4.     (a)     The  Company  shall  at all times reserve and keep available
out  of  its  authorized  and  unissued  Common Stock, solely for the purpose of
providing  for  the  exercise  of  the Warrants, such number of shares of Common
Stock as shall, from time to time, be sufficient therefor. The Company covenants
that  all  Warrant  Shares which may be issued upon the exercise of the purchase
rights  represented  by  this Warrant will, upon exercise of the purchase rights
represented  by this Warrant, be duly authorized, validly issued, fully paid and
non-assessable  and  free  from  all  taxes, liens and charges in respect of the
issue  thereof  (other  than  taxes  in  respect  of  any  transfer  occurring
contemporaneously  with such issue), without any personal liability attaching to
the  ownership  thereof and will not be issued in violation of any preemptive or
similar  rights of stockholders. The Company further covenants that its issuance
of  this Warrant shall constitute full authority to its officers who are charged
with the duty of executing stock certificates to execute and issue the necessary
certificates  for  the  Warrant  Shares upon the exercise of the purchase rights
under  this  Warrant. The Company will take all such reasonable action as may be
necessary  to  assure  that such Warrant Shares may be issued as provided herein
without violation of any applicable law or regulation, or of any requirements of
the  trading  market  upon  which  the  Common  Stock  may  be  listed.

          (b)     The  transfer  agent for the Common Stock and every subsequent
transfer agent for any of the Company's securities issuable upon the exercise of
this  Warrant  shall  be  irrevocably  authorized  and  directed at all times to
reserve  such  number  of  authorized  securities  as shall be required for such
purpose.  The  Company  shall  keep  a  copy  of  this  Warrant on file with the
transfer agent for the Common Stock and with every subsequent transfer agent for
shares  of  the Company's securities issuable upon the exercise of this Warrant.
The  Company  shall  supply  such transfer agent with duly executed certificates
representing  the  Common  Stock  or  other  securities  for  such  purposes.

     5.     (a)     (i)     The  Exercise  Price for the Warrants in effect from
time to time, and the number of shares of Common Stock issuable upon exercise of
the  Warrants, shall be subject to adjustment, as follows: in the event that the
Company  shall  at  any time after the date hereof (A) declare a dividend on the
outstanding  Common  Stock payable in shares of its capital stock, (B) subdivide
the  outstanding  Common Stock, (C) combine (including by way of a reverse stock
split)  the  outstanding  Common  Stock  into a smaller number of shares, or (D)
issue  any  shares  of its capital stock by reclassification of the Common Stock
(including  any  such  reclassification  in  connection  with a consolidation or
merger  in which the Company is the continuing corporation), then, in each case,
the  Exercise  Price  per Warrant Share in effect at the time of the record date
for  the  determination  of  stockholders  entitled  to receive such dividend or
distribution  or  of  the  effective  date  of such subdivision, combination, or
reclassification  shall  be adjusted so that it shall equal the price determined
by  multiplying  such Exercise Price by a fraction, the numerator of which shall
be  the  number  of shares of Common Stock outstanding immediately prior to such
action,  and  the  denominator  of which shall be the number of shares of Common
Stock  outstanding  after giving effect to such action. Such adjustment shall be
made  successively  whenever any event listed above shall occur and shall become
effective  at  the  close


                                        3
<PAGE>
of  business  on  such  record  date  or  at  the  close of business on the date
immediately  preceding  such  effective  date,  as  applicable.

               (ii)     (A)     If  at  any  time or from time to time after the
original  issuance  date  of  this  Warrant,  the Company issues or sells, or is
deemed  by the express provisions of this subsection (i) to have issued or sold,
Additional  Shares  of  Common  Stock  (as defined in subsection (ii)(D) below),
other  than  as  a  result  of,  or in connection with, any action referenced in
Section  5(a)(i)  hereof,  for  an  Effective  Price  (as  defined in subsection
(a)(ii)(D) below) less than the then effective Exercise Price, then in each such
case  the  then  existing  Exercise Price shall be reduced, as of the opening of
business on the date of such issue or sale, to a price determined by multiplying
the then effective Exercise Price by a fraction (i) the numerator of which shall
be  (A)  the  number  of  shares  of Common Stock deemed outstanding (as defined
below) immediately prior to such issue or sale, plus (B) the number of shares of
Common  Stock  which  the  aggregate  consideration  received  (as  defined  in
subsection  (a)(ii)(B)) by the Company for the total number of Additional Shares
of  Common  Stock  so  issued would purchase at such Exercise Price and (ii) the
denominator  of  which  shall  be  the  number  of shares of Common Stock deemed
outstanding  (as defined below) immediately prior to such issue or sale plus the
total number of Additional Shares of Common Stock so issued. For the purposes of
the  preceding  sentence,  the  number  of  shares  of Common Stock deemed to be
outstanding  as of a given date shall equal the number of shares of Common Stock
actually  outstanding.  No  adjustment shall be made to the Exercise Price in an
amount  less  than  one  percent per share. Any adjustment otherwise required by
this  Section  5(a)(ii)(A)  that is not required to be made due to the preceding
sentence  shall  be included in any subsequent adjustment to the Exercise Price.

               (B)     For  the  purpose of making any adjustment required under
this  Section  5(a)(ii), the consideration received by the Company for any issue
or  sale  of securities shall (1) to the extent it consists of cash, be computed
at  the  net  amount  of  cash  received  by  the Company after deduction of any
underwriting or similar commissions, compensation or concessions paid or allowed
by  the  Company  in connection with such issue or sale but without deduction of
any  expenses  payable by the Company, (2) to the extent it consists of property
other than cash, be computed at the fair value of that property as determined in
good  faith  by  the  Board of Directors, and (3) if Additional Shares of Common
Stock, Convertible Securities (as defined in subsection (a)(ii)(C)) or rights or
options  to  purchase  either  Additional  Shares of Common Stock or Convertible
Securities  are  issued or sold together with other stock or securities or other
assets  of the Company for a consideration which covers both, be computed as the
portion  of  the  consideration so received that may be reasonably determined in
good  faith  by the Board of Directors to be allocable to such Additional Shares
of  Common  Stock,  Convertible  Securities  or  rights  or  options.

               (C)     For  the  purpose  of  the adjustment required under this
Section  5(a)(ii),  if the Company issues or sells (i) stock or other securities
convertible  into,  Additional Shares of Common Stock (such convertible stock or
securities being herein referred to as "Convertible Securities"), or (ii) rights
or  options for the purchase of Additional Shares of Common Stock or Convertible
Securities  and if the Effective Price of such Additional Shares of Common Stock
is  less  than  the Exercise Price the Company shall be deemed to have issued at
the time of the issuance of such rights or options or Convertible Securities the
maximum  number


                                        4
<PAGE>
of  Additional  Shares  of  Common  Stock  issuable  upon exercise or conversion
thereof and to have received as consideration for the issuance of such shares an
amount  equal  to the total amount of the consideration, if any, received by the
Company  for  the  issuance of such rights or options or Convertible Securities,
plus,  in  the  case  of  such  rights  or  options,  the  minimum  amounts  of
consideration,  if  any, payable to the Company upon the exercise of such rights
or  options, plus, in the case of Convertible Securities, the minimum amounts of
consideration,  if  any,  payable  to the Company (other than by cancellation of
liabilities  or  obligations  evidenced by such Convertible Securities) upon the
conversion  thereof;  provided that if in the case of Convertible Securities the
                      -------------
minimum  amounts of such consideration cannot be ascertained, but are a function
of  antidilution  or  similar protective clauses, the Company shall be deemed to
have  received  the  minimum  amounts of consideration without reference to such
clauses; provided further that if the minimum amount of consideration payable to
         ----------------
the  Company  upon  the exercise or conversion of rights, options or Convertible
Securities  is  reduced  over  time  or  on  the occurrence or non-occurrence of
specified events other than by reason of antidilution adjustments, the Effective
Price  shall  be  recalculated  using the figure to which such minimum amount of
consideration  is  reduced;  provided  further  that  if  the  minimum amount of
                             -----------------
consideration  payable  to  the  Company upon the exercise or conversion of such
rights,  options  or  Convertible  Securities  is  subsequently  increased,  the
Effective  Price  shall be again recalculated using the increased minimum amount
of  consideration payable to the Company upon the exercise or conversion of such
rights, options or Convertible Securities. No further adjustment of the Exercise
Price,  as  adjusted  upon  the  issuance of such rights, options or Convertible
Securities,  shall  be  made  as  a  result of the actual issuance of Additional
Shares  of  Common  Stock  on  the exercise of any such rights or options or the
conversion  of any such Convertible Securities. If any such rights or options or
the  conversion  privilege  represented by any such Convertible Securities shall
expire  without having been fully exercised, the Exercise Price as adjusted upon
the  issuance  of  such  rights,  options  or  Convertible  Securities  shall be
readjusted  to  the  Exercise  Price  which  would  have  been  in effect had an
adjustment  been  made  on  the  basis that the only Additional Shares of Common
Stock  so  issued  were  the Additional Shares of Common Stock, if any, actually
issued or sold on the exercise of such rights or options or rights of conversion
of  such  Convertible Securities, and such Additional Shares of Common Stock, if
any,  were issued or sold for the consideration actually received by the Company
upon  such  exercise,  plus  the consideration, if any, actually received by the
Company  for  the  granting  of  all  such  rights  or  options,  whether or not
exercised,  plus  the  consideration  received  for  issuing  or  selling  the
Convertible  Securities  actually  converted,  plus  the  consideration, if any,
actually  received  by the Company (other than by cancellation of liabilities or
obligations  evidenced by such Convertible Securities) on the conversion of such
Convertible  Securities.

               (D)     "Additional Shares of Common Stock" shall mean all shares
of  Common  Stock  issued by the Company or deemed to be issued pursuant to this
Section  5(a)(ii),  other than (1) shares of Common Stock issued upon conversion
of  the  Convertible  Preferred Stock or exercise of the Warrants, (2) shares of
Common Stock issued as a result of, or in connection with, any action referenced
in  Section  5(a)(i)  hereof,  (3)  securities  issued  upon  the exercise of or
conversion of convertible securities, options or warrants issued and outstanding
on  the  date  of this Warrant, provided, however, that such securities have not
been  amended  since  the  date  of  this Warrant to increase the number of such
securities  or  to  decrease  the  exercise  or  conversion  price  of  any such
securities  (other  than  by  the  antidilution  provisions  thereof,  if  any),


                                        5
<PAGE>
and  (4)  issuances of equity securities to employees, consultants, landlords or
suppliers of or to the Company in one or more transactions approved by the Board
of  Directors  or  in  mergers,  consolidations, acquisitions, joint ventures or
strategic  alliances  approved  by  the Board of Directors. References to Common
Stock  in  the  subsections  of  this  clause (D) above shall mean all shares of
Common  Stock  issued  by  the  Company  or deemed to be issued pursuant to this
Section  5(a)(ii).  The  "Effective  Price" of Additional Shares of Common Stock
shall  mean  the  quotient determined by dividing the total number of Additional
Shares  of Common Stock issued or sold, or deemed to have been issued or sold by
the  Company  under  this  Section  5(a)(ii),  into  the aggregate consideration
received,  or  deemed  to have been received by the Company for such issue under
this  Section  5(a)(ii)(D),  for  such  Additional  Shares  of  Common  Stock.

          (b)     If the Company, at any time while this Warrant is outstanding,
shall distribute to all or substantially all holders of Common Stock (and not to
the  Holder)  evidence  of  its  indebtedness or assets (including cash and cash
dividends) or rights or warrants to subscribe for or purchase any security other
than  the  Common  Stock  (which shall be subject to Section 5(a)), then in each
such case the Exercise Price shall be adjusted by multiplying the Exercise Price
in  effect  immediately  prior  to  the  record  date fixed for determination of
stockholders  entitled  to  receive such distribution by a fraction of which (i)
the  denominator  shall  be  the  Current Market Price per share of Common Stock
determined as of the record date mentioned above and (ii) the numerator shall be
such Current Market Price per share of Common Stock on such record date less the
then  per  share  fair  market  value at such record date of the portion of such
evidence of indebtedness or assets (including cash and cash dividends) or rights
or  warrants  to  subscribe  for  or purchase any security other than the Common
Stock  so  distributed  applicable to one outstanding share of the Common Stock,
which  fair  market  value  shall  be  reduced  by  the  fair  market  value  of
consideration,  if  any,  paid  to  the  Company  by  holders of Common Stock in
exchange  for  such  evidence of indebtedness or assets or rights or warrants so
distributed,  in  each case as such fair market value is determined by the Board
of Directors of the Company in good faith. In either case, the adjustments shall
be  described  in a statement provided to the Holder of the portion of evidences
of  indebtedness  or  assets  (including  cash  and cash dividends) or rights or
warrants  to  subscribe for or purchase any security other than the Common Stock
so  distributed  or  such  subscription rights applicable to one share of Common
Stock.  Such adjustment shall be made whenever any such distribution is made and
shall  become  effective  immediately  after  the  record  date mentioned above.

          (c)     Further,  in  the  event of any adjustment pursuant to Section
5(a)  or  Section  5(b), the number of Warrant Shares shall be adjusted to equal
the  quotient  of (1) divided by (2), where (1) equals the product of the number
of  Warrant  Shares issuable upon the exercise of this Warrant immediately prior
to  such  adjustment  multiplied  by  the  Exercise  Price  per  Warrant  Share
immediately  prior  to  such adjustment, and where (2) equals the Exercise Price
immediately  following  such  adjustment.

          (d)     As  used  herein, the Current Market Price per share of Common
Stock  on any date shall be deemed to be the average of the daily closing prices
for  the 30 consecutive trading days immediately preceding the date in question.
The  closing  price  for each day shall be the last reported sales price regular
way  or,  in case no such reported sale takes place on such day, the closing bid
price  regular way, in either case on the principal national securities exchange
(including,  for


                                        6
<PAGE>
purposes hereof, the Nasdaq National Market) on which the Common Stock is listed
or  admitted  to  trading  or,  if the Common Stock is not listed or admitted to
trading  on any national securities exchange, the highest reported bid price for
the Common Stock as furnished by the National Association of Securities Dealers,
Inc.  through the Nasdaq SmallCap Market or a similar organization if the Nasdaq
SmallCap  Market  is no longer reporting such information. If, on any such date,
the Common Stock is not listed or admitted to trading on any national securities
exchange  and  is  not  quoted  on  the  Nasdaq  SmallCap  Market or any similar
organization, the Current Market Price shall be deemed to be the fair value of a
share  of Common Stock on such date, as determined in good faith by the Board of
Directors  of  the  Company,  absent  manifest  error.

          (e)     All  calculations  under  this  Section 5 shall be made to the
nearest  cent  or  to  the nearest one-hundredth of a share, as the case may be.

          (f)     In  any  case  in  which  this Section 5 shall require that an
adjustment in the number of Warrant Shares be made effective as of a record date
for  a  specified event, the Company may elect to defer, until the occurrence of
such  event,  issuing  to the Holder, if the Holder exercised this Warrant after
such  record  date, the Warrant Shares, if any, issuable upon such exercise over
and  above the number of Warrant Shares issuable upon such exercise on the basis
of  the  number of shares of Common Stock outstanding or in effect prior to such
adjustment;  provided,  however,  that the Company shall deliver to the Holder a
             -------------------
due  bill  or  other  appropriate  instrument  evidencing  the Holder's right to
receive  such additional shares of Common Stock upon the occurrence of the event
requiring  such  adjustment.

          (g)     Whenever  there  shall  be  an  adjustment as provided in this
Section  5,  the  Company  shall  within 15 days thereafter cause written notice
thereof  to be sent in accordance with Section 13 hereunder to the Holder, which
notice shall be accompanied by an officer's certificate setting forth the number
of  Warrant Shares issuable and the Exercise Price thereof after such adjustment
and  setting  forth a brief statement of the facts requiring such adjustment and
the  computation  thereof,  which  officer's  certificate  shall  be  conclusive
evidence  of  the  correctness  of  any  such  adjustment absent manifest error.

          (h)     The Company shall not be required to issue fractions of shares
of  Common Stock or other capital stock of the Company upon the exercise of this
Warrant.  If  any  fraction of a share of capital stock would be issuable on the
exercise  of  this  Warrant  (or  specified portions thereof), the Company shall
purchase  such  fraction for an amount in cash equal to the same fraction of the
Current  Market  Price  of such share of Common Stock on the date of exercise of
this  Warrant.

          (i)     No adjustment in the Exercise Price per Warrant Share shall be
required  if  such  adjustment  is  less than $.005; provided, however, that any
                                                     ------------------
adjustments  which by reason of this Section 5 are not required to be made shall
be  carried  forward  and  taken  into  account  in  any  subsequent adjustment.

     6.     (a)     In  case  of  any  capital reorganization, other than in the
cases  referred  to  in  Sections  5(a)  and (b) hereof, or the consolidation or
merger  of  the  Company  with  or  into  another


                                        7
<PAGE>
corporation  (other  than  a merger or consolidation in which the Company is the
continuing  corporation and which does not result in any reclassification of the
outstanding  shares of Common Stock or the conversion of such outstanding shares
of  Common Stock into shares of other stock or other securities or property), or
in  the  case  of  any  sale, lease, or conveyance to another corporation of the
property and assets of any nature of the Company as an entirety or substantially
as  an  entirety  (such  actions  being  hereinafter collectively referred to as
"Reorganizations"),  there shall thereafter be deliverable upon exercise of this
Warrant  (in  lieu  of the number of Warrant Shares theretofore deliverable) the
number  of  shares of stock or other securities or property to which a holder of
the  respective  number  of  Warrant  Shares  which  would  otherwise  have been
deliverable upon the exercise of this Warrant would have been entitled upon such
Reorganization  if  this Warrant had been exercised in full immediately prior to
such  Reorganization.  In case of any Reorganization, appropriate adjustment, as
determined in good faith by the Board of Directors of the Company, shall be made
in the application of the provisions herein set forth with respect to the rights
and  interests  of  the  Holder  so  that  the provisions set forth herein shall
thereafter  be  applicable,  as nearly as possible, in relation to any shares or
other  property thereafter deliverable upon exercise of this Warrant.   Any such
adjustment  shall be made by, and set forth in, a supplemental agreement between
the  Company,  or  any  successor  thereto, and the Holder, with respect to this
Warrant,  and  shall  for  all  purposes  hereof conclusively be deemed to be an
appropriate  adjustment.  The  Company  shall not effect any such Reorganization
unless,  upon  or  prior to the consummation thereof, the successor corporation,
or, if the Company shall be the surviving corporation in any such Reorganization
and  is not the issuer of the shares of stock or other securities or property to
be  delivered  to  holders  of  shares  of  the  Common Stock outstanding at the
effective time thereof, then such issuer, shall assume by written instrument the
obligation  to  deliver to the Holder such shares of stock, securities, cash, or
other  property  as such holder shall be entitled to purchase in accordance with
the  foregoing  provisions.  In the event of sale, lease, or conveyance or other
transfer  of  all or substantially all of the assets of the Company as part of a
plan  for  liquidation of the Company, all rights to exercise this Warrant shall
terminate  30 days after the Company gives written notice to the Holder and each
registered  holder  of  a Warrant that such sale or conveyance or other transfer
has  been  consummated.

          (b)      In  case  of  any reclassification or change of the shares of
Common  Stock issuable upon exercise of this Warrant (other than a change in par
value  or  from  a  specified  par  value  to  no par value, or as a result of a
subdivision  or  combination, but including any change in the shares into two or
more  classes or series of shares), or in case of any consolidation or merger of
another  corporation  into  the  Company  in which the Company is the continuing
corporation  and  in  which  there  is a reclassification or change (including a
change  to  the right to receive cash or other property) of the shares of Common
Stock (other than a change in par value, or from no par value to a specified par
value,  or as a result of a subdivision or combination, but including any change
in  the  shares  into  two  or  more classes or series of shares), the Holder or
holders of this Warrant shall have the right thereafter to receive upon exercise
of  this  Warrant  solely  the  kind  and  amount  of  shares of stock and other
securities,  property,  cash,  or  any  combination thereof receivable upon such
reclassification,  change, consolidation, or merger by a holder of the number of
Warrant  Shares  for  which  this  Warrant might have been exercised immediately
prior  to  such  reclassification, change, consolidation, or merger. Thereafter,
appropriate  provision  shall  be  made for adjustments which shall be as nearly
equivalent  as  practicable  to  the  adjustments  in  Section  5.


                                        8
<PAGE>
          (c)     The  above  provisions of this Section 6 shall similarly apply
to  successive  reclassifications  and  changes of shares of Common Stock and to
successive  consolidations,  mergers,  sales,  leases,  or  conveyances.

     7.     In  case  at  any  time  the  Company  shall  propose:

          (a)     to  pay  any  dividend  or  make any distribution on shares of
Common  Stock  in  shares  of Common Stock or make any other distribution (other
than  regularly  scheduled  cash dividends which are not in a greater amount per
share  than  the most recent such cash dividend) to all holders of Common Stock;
or

          (b)     to  issue  any  rights,  warrants,  or other securities to all
holders  of  Common  Stock  entitling  them to purchase any additional shares of
Common  Stock  or  any  other  rights,  warrants,  or  other  securities;  or

          (c)     to effect any reclassification or change of outstanding shares
of  Common  Stock  or  any  consolidation, merger, sale, lease, or conveyance of
property,  as  described  in  Section  6;  or

          (d)     to  effect  any liquidation, dissolution, or winding-up of the
Company;  or

          (e)     to  take  any  other action which would cause an adjustment to
the  Exercise  Price  per  Warrant  Share;  then, and in any one or more of such
cases,  the Company shall give written notice thereof in accordance with Section
13  hereunder  at least 15 days prior to (i) the date as of which the holders of
record  of  shares  of Common Stock to be entitled to receive any such dividend,
distribution,  rights,  warrants, or other securities are to be determined, (ii)
the  date  on  which  any such reclassification, change of outstanding shares of
Common  Stock,  consolidation,  merger,  sale,  lease,  conveyance  of property,
liquidation,  dissolution, or winding-up is expected to become effective and the
date as of which it is expected that holders of record of shares of Common Stock
shall  be entitled to exchange their shares for securities or other property, if
any,  deliverable  upon  such  reclassification,  change  of outstanding shares,
consolidation,  merger,  sale,  lease,  conveyance  of  property,  liquidation,
dissolution, or winding-up, or (iii) the date of such action which would require
an  adjustment  to  the  Exercise  Price  per  Warrant  Share.

     8.     The  issuance of any shares or other securities upon the exercise of
this  Warrant and the delivery of certificates or other instruments representing
such  shares  or other securities shall be made without charge to the Holder for
any  tax  or  other  charge in respect of such issuance.  The Company shall not,
however,  be  required  to  pay  any  tax which may be payable in respect of any
transfer  involved  in the issue and delivery of any certificate in a name other
than  that  of  the  Holder,  and  the Company shall not be required to issue or
deliver  any  such certificate unless and until the person or persons requesting
the issue thereof shall have paid to the Company the amount of such tax or shall
have established to the satisfaction of the Company that such tax has been paid.


                                        9
<PAGE>
     9.     The  Company  shall  not  amend  its  Articles of Incorporation, its
By-laws or participate in any reorganization, transfer of assets, consolidation,
merger,  dissolution,  issue or sale of securities or any other voluntary action
for the purpose of avoiding or seeking to avoid the observance or performance of
any  of the terms to be observed or performed by the Company pursuant to Section
5  hereof,  but shall at all times in good faith assist in carrying out all such
action  as  may  be  reasonably necessary or appropriate in order to protect the
rights of the Investor against dilution or other impairment as provided therein.

     10.     The Company will (a) obtain and keep effective any and all permits,
consents and approvals of Federal or state governmental agencies and authorities
and  make all filings under Federal and state securities laws, that are required
in  connection  with  the issuance and delivery of this Warrant, the exercise of
this  Warrant,  and  the issuance and delivery of the Warrant Shares issued upon
exercise  of  this Warrant, and (b) have the Warrant Shares, upon their issuance
and  eligibility  for  listing,  listed on each securities exchange on which the
Common  Stock  are  then  listed.

     11.     Unless  registered,  the  Warrant  Shares issued on exercise of the
Warrants  shall  be  subject  to  a  stop  transfer order and the certificate or
certificates  representing  the  Warrant Shares shall bear the following legend:

     THE  SECURITIES  REPRESENTED  HEREBY  HAVE  NOT  BEEN  REGISTERED UNDER THE
     SECURITIES  ACT  OF  1933,  AS  AMENDED  (THE  "SECURITIES  ACT"),  OR  ANY
     STATE  SECURITIES  LAWS AND MAY NOT BE OFFERED, SOLD, PLEDGED, ASSIGNED, OR
     OTHERWISE  TRANSFERRED  UNLESS  (1)  A  REGISTRATION STATEMENT WITH RESPECT
     THERETO  IS  EFFECTIVE  UNDER  THE  SECURITIES ACT AND ANY APPLICABLE STATE
     SECURITIES  LAWS,  OR (2) THE COMPANY RECEIVES AN OPINION OF COUNSEL TO THE
     HOLDER  OF  THIS  WARRANT OR SUCH SECURITIES, WHICH COUNSEL AND OPINION ARE
     REASONABLY  SATISFACTORY  TO  THE  COMPANY,  THAT  THIS  WARRANT  OR  SUCH
     SECURITIES,  AS  APPLICABLE,  MAY  BE  OFFERED, SOLD, PLEDGED, ASSIGNED, OR
     OTHERWISE  TRANSFERRED  IN  THE  MANNER  CONTEMPLATED  WITHOUT AN EFFECTIVE
     REGISTRATION  STATEMENT  UNDER  THE  SECURITIES  ACT  OR  APPLICABLE  STATE
     SECURITIES  LAWS.

     12.     Promptly  upon  the appointment of any subsequent transfer agent of
the  Common  Stock,  or  any other securities issuable upon the exercise of this
Warrant,  the  Company  will deliver to the Holder a statement setting forth the
name  and  address  of  such  subsequent  transfer  agent.

     13.     All  notices  that  are required or permitted hereunder shall be in
writing  and  shall  be sufficient if personally delivered, sent by facsimile in
the  case of notice to the Company only, or sent by registered or certified mail
or  Federal  Express  or other nationally recognized overnight delivery service.
Any notices shall be deemed given upon the earlier of the date when received at,
the  day  when delivered via facsimile or the third day after the date when sent
by  registered  or


                                       10
<PAGE>
certified  mail  or  the day after the date when sent by Federal Express to, the
address  set  forth below, unless such address is changed by notice to the other
party  hereto:

     if to the Company:

     Baywood International, Inc.
     14950 North 83rd Place
     Suite 1
     Scottsdale, Arizona 85260
     Attention:  Chief Executive Officer
     Facsimile: (480) 483-2168

     if to the Holder:  As set forth in the Warrant Register of the Company.

The  Company or the Holder by notice to the other party may designate additional
or  different  addresses  as  shall  be  furnished  in  writing  by  such party.

     14.     The  Company covenants that upon receipt by the Company of evidence
reasonably  satisfactory  to it of the loss, theft, destruction or mutilation of
this  Warrant  or  any  stock certificate relating to the Warrant Shares, and in
case  of  loss,  theft  or  destruction,  of  indemnity  or  security reasonably
satisfactory  to  it  (which,  in the case of the Warrant, shall not include the
posting  of  any  bond),  and upon surrender and cancellation of such Warrant or
stock certificate, if mutilated, the Company will make and deliver a new Warrant
or  stock  certificate  of  like  date, tenor and denomination , in lieu of such
Warrant  or  stock  certificate

     15.     (a)     The Holder of any Warrant shall not have, solely on account
of  such status, any rights of a stockholder of the Company, either at law or in
equity, or to any notice of meetings of stockholders or of any other proceedings
of  the  Company,  except  as  provided  in  this  Warrant.

             (b)     No  provision  hereof, in the absence of affirmative action
by  Holder  to  Warrant  Shares,  and  no  enumeration  herein  of the rights or
privileges of Holder hereof, shall give rise to any liability of such Holder for
the  purchase  price of any Common Stock or as a stockholder of Company, whether
such  liability  is  asserted  by  Company  or  by  creditors  of  Company.

     16.     The provisions of this Warrant may not be amended, modified or
changed except by an instrument in writing signed by each of the Company and the
Holder.

     17.     All  the  covenants  and  provisions  of this Warrant by or for the
benefit  of  the  Company or the Holder shall be binding upon and shall inure to
the  benefit  of  their  respective  permitted successors and assigns hereunder.

     18.     The  Company  agrees  to take such further action and to deliver or
cause  to  be  delivered  to  each  other  after the date hereof such additional
agreements  or  instruments  as  any  of


                                       11
<PAGE>
them may reasonably request for the purpose of carrying out this Warrant and the
agreements  and  transactions  contemplated  hereby  and  thereby.

     19.     Each  party  hereto  acknowledges and agrees that irreparable harm,
for which there may be no adequate remedy at law and for which the ascertainment
of damages would be difficult, would occur in the event any of the provisions of
this  Warrant  were  not performed in accordance with its specific terms or were
otherwise  breached.  Each party hereto accordingly agrees that each other party
hereto  shall be entitled to an injunction or injunctions to prevent breaches of
the  provisions of this Warrant, or any agreement contemplated hereunder, and to
enforce  specifically the terms and provisions hereof or thereof in any court of
the  United  States  or  any state thereof having jurisdiction, in each instance
without  being  required  to post bond or other security and in addition to, and
without  having  to  prove  the  inadequacy  of,  other  remedies  at  law.

     20.     (a)     This Warrant shall be construed in accordance with the laws
of  the State of New York applicable to contracts made and performed within such
State,  without  regard  to  principles  of  conflicts  of  law.

          (b)     EACH  OF  THE  PARTIES  HEREBY IRREVOCABLY AND UNCONDITIONALLY
SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND
OF  THE  FEDERAL  COURTS  SITTING  IN  THE  STATE  OF NEW YORK IN ALL ACTIONS OR
PROCEEDINGS  ARISING  OUT  OF OR RELATING TO THIS AGREEMENT. EACH OF THE PARTIES
AGREES  THAT  ALL  ACTIONS  OR  PROCEEDINGS  ARISING  OUT OF OR RELATING TO THIS
AGREEMENT  MUST  BE  LITIGATED  EXCLUSIVELY  IN ANY SUCH STATE OR, TO THE EXTENT
PERMITTED  BY  LAW,  FEDERAL  COURT  THAT  SITS  IN  THE COUNTY OF NEW YORK, AND
ACCORDINGLY,  EACH  PARTY  IRREVOCABLY  WAIVES ANY OBJECTION WHICH IT MAY NOW OR
HEREAFTER  HAVE  TO  THE LAYING OF THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN
ANY SUCH COURT. EACH PARTY FURTHER IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN
THE  MANNER PROVIDED FOR NOTICES IN SECTION 13 HEREOF. NOTHING IN THIS AGREEMENT
OR  ANY  OTHER  TRANSACTION  DOCUMENT WILL AFFECT THE RIGHT OF ANY PARTY TO THIS
AGREEMENT  TO  SERVE  PROCESS  IN  ANY  OTHER  MANNER  PERMITTED  BY  LAW.

          (c)     EACH  PARTY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN
ANY  LEGAL  PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS
AGREEMENT,  OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON
CONTRACT,  TORT  OR ANY OTHER THEORY). EACH OF THE PARTIES (1) CERTIFIES THAT NO
REPRESENTATIVE,  AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR  OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO  ENFORCE  THE  FOREGOING  WAIVER  AND  (2) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES  HERETO  HAVE  BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS,  THE  MUTUAL  WAIVERS  AND  CERTIFICATIONS  IN  THIS  SECTION  20.


                                       12
<PAGE>
Dated:  March 30,  2007

                                        BAYWOOD INTERNATIONAL, INC.


                                        By:  /s/ Neil Reithinger
                                             ------------------------------
                                             Name:  Neil  Reithinger
                                             Title:  President & C.E.O.


[Seal]

/s/ Karl H. Rullich
-----------------------------------
Secretary


                                       13
<PAGE>
                                                                      Schedule 1
                                                                      ----------

                              ELECTION TO EXERCISE


To:     Baywood  International,  Inc.

     The undersigned hereby exercises his, her, or its rights to purchase shares
of  Common  Stock,  par  value $0.001 per share (the "Common Stock"), of Baywood
International, Inc., a Nevada corporation (the "Company"), covered by the within
Warrant  and  tenders  payment  herewith  in the amount of $_____________ by (i)
certified  or bank cashier's check payable to the order of the Company ; or (ii)
a  wire  transfer  of such funds to an account designated by the Company  (check
applicable  box)  in  accordance  with  the  terms  thereof,  and  requests that
certificates  for  the  securities  constituting  such shares of Common Stock be
issued  in  the  name  of,  and  delivered  to:




(Print  Name,  Address,  and  Social  Security  or  Tax  Identification  Number)


and,  if  such  number  of  shares of Common Stock shall not constitute all such
shares of Common Stock covered by the within Warrant, that a new Warrant for the
balance  of  the  shares  of Common Stock covered by the within Warrant shall be
registered  in  the  name  of,  and delivered to, the undersigned at the address
stated  below.


Dated:___________________               Name__________________________
                                             (Print)
Address:


                                        ______________________________
                                             Signature


                                       14
<PAGE>
                                                                      Schedule 2
                                                                      ----------


                               FORM OF ASSIGNMENT

     (To be executed by the registered holder if such holder desires to transfer
the  attached  Warrant.)

     FOR  VALUE  RECEIVED,________________________  hereby  sells,  assigns, and
transfers  unto_____________  a  Warrant  to purchase _________ shares of Common
Stock,  par  value  $0.001  per share, of  Baywood International, Inc., a Nevada
corporation  (the  "Company"),  and  does  hereby  irrevocably  constitute  and
appoint_______________  attorney  to  transfer  such Warrant on the books of the
Company,  with  full  power  of  substitution.

Dated:___________________


                                        Signature_____________________


                                     NOTICE

The signature on the foregoing Assignment must correspond to the name as written
upon  the  face  of  this  Warrant  in  every  particular, without alteration or
enlargement  or  any  change  whatsoever.


                                       15
<PAGE>
NEITHER  THE  SECURITIES REPRESENTED HEREBY NOR THE SECURITIES ISSUABLE UPON THE
EXERCISE  HEREOF  HAVE  BEEN  REGISTERED  UNDER  THE  SECURITIES ACT OF 1933, AS
AMENDED  (THE  "SECURITIES  ACT'),  OR  ANY STATE SECURITIES LAWS AND MAY NOT BE
OFFERED,  SOLD,  PLEDGED,  ASSIGNED,  OR  OTHERWISE  TRANSFERRED  UNLESS  (1)  A
REGISTRATION  STATEMENT  WITH  RESPECT THERETO IS EFFECTIVE UNDER THE SECURITIES
ACT  AND  ANY  APPLICABLE  STATE SECURITIES LAWS, OR (2) THE COMPANY RECEIVES AN
OPINION  OF  COUNSEL  TO  THE  HOLDER  OF THIS WARRANT OR SUCH SECURITIES, WHICH
COUNSEL  AND  OPINION  ARE  REASONABLY  SATISFACTORY  TO  THE COMPANY, THAT THIS
WARRANT  OR  SUCH  SECURITIES,  AS  APPLICABLE,  MAY  BE OFFERED, SOLD, PLEDGED,
ASSIGNED,  OR  OTHERWISE  TRANSFERRED  IN  THE  MANNER  CONTEMPLATED  WITHOUT AN
EFFECTIVE  REGISTRATION  STATEMENT  UNDER THE SECURITIES ACT OR APPLICABLE STATE
SECURITIES  LAWS.


         THE TRANSFER OF THIS WARRANT IS RESTRICTED AS DESCRIBED HEREIN.


                           BAYWOOD INTERNATIONAL, INC.
                            WARRANTS FOR THE PURCHASE
                                       OF
               SHARES OF COMMON STOCK, PAR VALUE $0.001 PER SHARE

NO.

     THIS  CERTIFIES  that,  for  consideration,  the receipt and sufficiency of
which  are  hereby  acknowledged,  and  other  value  received,  John  Talty, an
individual  (the  "Holder")  is  entitled  to  subscribe for, and purchase from,
BAYWOOD  INTERNATIONAL,  INC.,  a  Nevada  corporation (the "Company"), upon the
terms  and  conditions  set forth herein, at any time or from time to time on or
after March 30, 2007 (the "Initial Exercise Date") until 5:00 P.M. New York City
local  time on the fifth anniversary of the Initial Exercise Date (the "Exercise
Period"),  up  to  an  aggregate  of 5,000,000 shares of common stock, par value
$0.001 per share (the "Common Stock"), of the Company. This Warrant is initially
exercisable  at  $0.02 per share; provided, however, that upon the occurrence of
                                  --------  -------
any  of  the  events  specified  in Section 5 hereof, the rights granted by this
Warrant,  including  the exercise price and the number of shares of Common Stock
to  be  received upon such exercise, shall be adjusted as therein specified. The
term "Exercise Price" shall mean, depending on the context, the initial exercise
price  (as  set  forth  above)  or  the  adjusted  exercise  price  per  share.

     As used herein, the term "this Warrant" shall mean and include this Warrant
and any Warrant or Warrants hereafter issued as a consequence of the exercise or
transfer  of  this  Warrant  in  whole  or  in  part. Each share of Common Stock
issuable upon the exercise hereof shall be hereinafter referred to as a "Warrant
Share".


                                        1
<PAGE>
     1.     This  Warrant may be exercised during the Exercise Period, either in
whole  or in part, by the surrender of this Warrant (with the completed Election
to  Exercise  in  the form set forth in Schedule 1 attached hereto and forming a
                                        ----------
part  hereof,  duly  executed)  to  the Company at its office at 1490 North 83rd
Place,  Suite  1,  Scottsdale,  Arizona  852601,  or  at  such other place as is
designated  in  writing by the Company, together with payment of an amount equal
to  the product of the Exercise Price and the number of Warrant Shares for which
this  Warrant  is  being exercised in the form of, at the Holder's option, (A) a
certified or bank cashier's check payable to the Company, or (B) a wire transfer
of  funds  to  an  account  designated  by  the Company.  If this Warrant is not
registered  in  the  name  of  the  initial  registered  Holder,  an  assignment
evidencing the assignment of this Warrant to the current Holder, in the form set
forth  in  Schedule  2  attached  hereto  and forming part hereof, shall also be
presented  to  the  Company  at  the  time  of  exercise.

     2.     Upon  each  exercise  of  the  Holder's  rights  to purchase Warrant
Shares,  the  Holder  shall  be deemed to be the holder of record of the Warrant
Shares,  notwithstanding  that  the  transfer books of the Company shall then be
closed  or  certificates  representing  the Warrant Shares with respect to which
this  Warrant  was  exercised shall not then have been actually delivered to the
Holder.  As  soon  as  practicable after each such exercise of this Warrant, the
Company  shall  issue  and  deliver  to the Holder a certificate or certificates
representing  the  Warrant Shares issuable upon such exercise, registered in the
name  of the Holder or its designee. If this Warrant should be exercised in part
only,  the  Company  shall,  upon  surrender  of  this Warrant for cancellation,
execute and deliver a Warrant evidencing the right of the Holder to purchase the
balance  of  the  aggregate number of Warrant Shares purchasable hereunder as to
which  this  Warrant  has  not  been  exercised  or  assigned.

     3.     Any  Warrants  issued  upon the transfer or exercise in part of this
Warrant  shall  be  numbered  and shall be registered in a warrant register (the
"Warrant  Register") as they are issued.  The Company shall be entitled to treat
the  registered  holder  of  any Warrant on the Warrant Register as the owner in
fact thereof for all purposes, and shall not be bound to recognize any equitable
or other claim to, or interest in, such Warrant on the part of any other person,
and  shall  not be liable for any registration of transfer of Warrants which are
registered  or  to  be registered in the name of a fiduciary or the nominee of a
fiduciary  unless  made with the actual knowledge that a fiduciary or nominee is
committing  a  breach  of  trust in requesting such registration or transfer, or
with  the  knowledge of such facts that its participation therein amounts to bad
faith.  This Warrant shall be transferable on the books of the Company only upon
delivery thereof, duly endorsed by the Holder or by his duly authorized attorney
or  representative, or accompanied by proper evidence of succession, assignment,
or  authority to transfer, together with an assignment evidencing the assignment
of this Warrant, in the form set forth in Schedule 2 attached hereto and forming
a part hereof. In all cases of transfer by an attorney, executor, administrator,
guardian,  or  other  legal  representative, duly authenticated evidence of his,
her,  or its authority shall be produced. Upon any registration of transfer, the
Company  shall deliver a new Warrant or Warrants to the person entitled thereto.
This  Warrant may be exchanged, at the option of the Holder thereof, for another
Warrant,  or  other  Warrants  of  different  denominations,  of  like tenor and
representing  in  the  aggregate  the right to purchase a like number of Warrant
Shares  (or  portions  thereof),  upon  surrender  to  the  Company  or its duly
authorized  agent.  Notwithstanding  the  foregoing,  the  Company shall have no
obligation  to  cause  Warrants  to  be


                                        2
<PAGE>
transferred  on  its  books  to  any person if, in the opinion of counsel to the
Company, such transfer does not comply with the provisions of the Securities Act
of  1933,  as  amended  (the  "Securities  Act"),  and the rules and regulations
thereunder.

     4.     (a)     The  Company  shall  at all times reserve and keep available
out  of  its  authorized  and  unissued  Common Stock, solely for the purpose of
providing  for  the  exercise  of  the Warrants, such number of shares of Common
Stock as shall, from time to time, be sufficient therefor. The Company covenants
that  all  Warrant  Shares which may be issued upon the exercise of the purchase
rights  represented  by  this Warrant will, upon exercise of the purchase rights
represented  by this Warrant, be duly authorized, validly issued, fully paid and
non-assessable  and  free  from  all  taxes, liens and charges in respect of the
issue  thereof  (other  than  taxes  in  respect  of  any  transfer  occurring
contemporaneously  with such issue), without any personal liability attaching to
the  ownership  thereof and will not be issued in violation of any preemptive or
similar  rights of stockholders. The Company further covenants that its issuance
of  this Warrant shall constitute full authority to its officers who are charged
with the duty of executing stock certificates to execute and issue the necessary
certificates  for  the  Warrant  Shares upon the exercise of the purchase rights
under  this  Warrant. The Company will take all such reasonable action as may be
necessary  to  assure  that such Warrant Shares may be issued as provided herein
without violation of any applicable law or regulation, or of any requirements of
the  trading  market  upon  which  the  Common  Stock  may  be  listed.

          (b)     The  transfer  agent for the Common Stock and every subsequent
transfer agent for any of the Company's securities issuable upon the exercise of
this  Warrant  shall  be  irrevocably  authorized  and  directed at all times to
reserve  such  number  of  authorized  securities  as shall be required for such
purpose.  The  Company  shall  keep  a  copy  of  this  Warrant on file with the
transfer agent for the Common Stock and with every subsequent transfer agent for
shares  of  the Company's securities issuable upon the exercise of this Warrant.
The  Company  shall  supply  such transfer agent with duly executed certificates
representing  the  Common  Stock  or  other  securities  for  such  purposes.

     5.     (a)     (i)     The  Exercise  Price for the Warrants in effect from
time to time, and the number of shares of Common Stock issuable upon exercise of
the  Warrants, shall be subject to adjustment, as follows: in the event that the
Company  shall  at  any time after the date hereof (A) declare a dividend on the
outstanding  Common  Stock payable in shares of its capital stock, (B) subdivide
the  outstanding  Common Stock, (C) combine (including by way of a reverse stock
split)  the  outstanding  Common  Stock  into a smaller number of shares, or (D)
issue  any  shares  of its capital stock by reclassification of the Common Stock
(including  any  such  reclassification  in  connection  with a consolidation or
merger  in which the Company is the continuing corporation), then, in each case,
the  Exercise  Price  per Warrant Share in effect at the time of the record date
for  the  determination  of  stockholders  entitled  to receive such dividend or
distribution  or  of  the  effective  date  of such subdivision, combination, or
reclassification  shall  be adjusted so that it shall equal the price determined
by  multiplying  such Exercise Price by a fraction, the numerator of which shall
be  the  number  of shares of Common Stock outstanding immediately prior to such
action,  and  the  denominator  of which shall be the number of shares of Common
Stock  outstanding  after giving effect to such action. Such adjustment shall be
made  successively  whenever any event listed above shall occur and shall become
effective  at  the  close


                                        3
<PAGE>
of  business  on  such  record  date  or  at  the  close of business on the date
immediately  preceding  such  effective  date,  as  applicable.

               (ii)     (A)     If  at  any  time or from time to time after the
original  issuance  date  of  this  Warrant,  the Company issues or sells, or is
deemed  by the express provisions of this subsection (i) to have issued or sold,
Additional  Shares  of  Common  Stock  (as defined in subsection (ii)(D) below),
other  than  as  a  result  of,  or in connection with, any action referenced in
Section  5(a)(i)  hereof,  for  an  Effective  Price  (as  defined in subsection
(a)(ii)(D) below) less than the then effective Exercise Price, then in each such
case  the  then  existing  Exercise Price shall be reduced, as of the opening of
business on the date of such issue or sale, to a price determined by multiplying
the then effective Exercise Price by a fraction (i) the numerator of which shall
be  (A)  the  number  of  shares  of Common Stock deemed outstanding (as defined
below) immediately prior to such issue or sale, plus (B) the number of shares of
Common  Stock  which  the  aggregate  consideration  received  (as  defined  in
subsection  (a)(ii)(B)) by the Company for the total number of Additional Shares
of  Common  Stock  so  issued would purchase at such Exercise Price and (ii) the
denominator  of  which  shall  be  the  number  of shares of Common Stock deemed
outstanding  (as defined below) immediately prior to such issue or sale plus the
total number of Additional Shares of Common Stock so issued. For the purposes of
the  preceding  sentence,  the  number  of  shares  of Common Stock deemed to be
outstanding  as of a given date shall equal the number of shares of Common Stock
actually  outstanding.  No  adjustment shall be made to the Exercise Price in an
amount  less  than  one  percent per share. Any adjustment otherwise required by
this  Section  5(a)(ii)(A)  that is not required to be made due to the preceding
sentence  shall  be included in any subsequent adjustment to the Exercise Price.

               (B)     For  the  purpose of making any adjustment required under
this  Section  5(a)(ii), the consideration received by the Company for any issue
or  sale  of securities shall (1) to the extent it consists of cash, be computed
at  the  net  amount  of  cash  received  by  the Company after deduction of any
underwriting or similar commissions, compensation or concessions paid or allowed
by  the  Company  in connection with such issue or sale but without deduction of
any  expenses  payable by the Company, (2) to the extent it consists of property
other than cash, be computed at the fair value of that property as determined in
good  faith  by  the  Board of Directors, and (3) if Additional Shares of Common
Stock, Convertible Securities (as defined in subsection (a)(ii)(C)) or rights or
options  to  purchase  either  Additional  Shares of Common Stock or Convertible
Securities  are  issued or sold together with other stock or securities or other
assets  of the Company for a consideration which covers both, be computed as the
portion  of  the  consideration so received that may be reasonably determined in
good  faith  by the Board of Directors to be allocable to such Additional Shares
of  Common  Stock,  Convertible  Securities  or  rights  or  options.

               (C)     For  the  purpose  of  the adjustment required under this
Section  5(a)(ii),  if the Company issues or sells (i) stock or other securities
convertible  into,  Additional Shares of Common Stock (such convertible stock or
securities being herein referred to as "Convertible Securities"), or (ii) rights
or  options for the purchase of Additional Shares of Common Stock or Convertible
Securities  and if the Effective Price of such Additional Shares of Common Stock
is  less  than  the Exercise Price the Company shall be deemed to have issued at
the time of the issuance of such rights or options or Convertible Securities the
maximum  number


                                        4
<PAGE>
of  Additional  Shares  of  Common  Stock  issuable  upon exercise or conversion
thereof and to have received as consideration for the issuance of such shares an
amount  equal  to the total amount of the consideration, if any, received by the
Company  for  the  issuance of such rights or options or Convertible Securities,
plus,  in  the  case  of  such  rights  or  options,  the  minimum  amounts  of
consideration,  if  any, payable to the Company upon the exercise of such rights
or  options, plus, in the case of Convertible Securities, the minimum amounts of
consideration,  if  any,  payable  to the Company (other than by cancellation of
liabilities  or  obligations  evidenced by such Convertible Securities) upon the
conversion  thereof;  provided that if in the case of Convertible Securities the
                      -------------
minimum  amounts of such consideration cannot be ascertained, but are a function
of  antidilution  or  similar protective clauses, the Company shall be deemed to
have  received  the  minimum  amounts of consideration without reference to such
clauses; provided further that if the minimum amount of consideration payable to
         ----------------
the  Company  upon  the exercise or conversion of rights, options or Convertible
Securities  is  reduced  over  time  or  on  the occurrence or non-occurrence of
specified events other than by reason of antidilution adjustments, the Effective
Price  shall  be  recalculated  using the figure to which such minimum amount of
consideration  is  reduced;  provided  further  that  if  the  minimum amount of
                             -----------------
consideration  payable  to  the  Company upon the exercise or conversion of such
rights,  options  or  Convertible  Securities  is  subsequently  increased,  the
Effective  Price  shall be again recalculated using the increased minimum amount
of  consideration payable to the Company upon the exercise or conversion of such
rights, options or Convertible Securities. No further adjustment of the Exercise
Price,  as  adjusted  upon  the  issuance of such rights, options or Convertible
Securities,  shall  be  made  as  a  result of the actual issuance of Additional
Shares  of  Common  Stock  on  the exercise of any such rights or options or the
conversion  of any such Convertible Securities. If any such rights or options or
the  conversion  privilege  represented by any such Convertible Securities shall
expire  without having been fully exercised, the Exercise Price as adjusted upon
the  issuance  of  such  rights,  options  or  Convertible  Securities  shall be
readjusted  to  the  Exercise  Price  which  would  have  been  in effect had an
adjustment  been  made  on  the  basis that the only Additional Shares of Common
Stock  so  issued  were  the Additional Shares of Common Stock, if any, actually
issued or sold on the exercise of such rights or options or rights of conversion
of  such  Convertible Securities, and such Additional Shares of Common Stock, if
any,  were issued or sold for the consideration actually received by the Company
upon  such  exercise,  plus  the consideration, if any, actually received by the
Company  for  the  granting  of  all  such  rights  or  options,  whether or not
exercised,  plus  the  consideration  received  for  issuing  or  selling  the
Convertible  Securities  actually  converted,  plus  the  consideration, if any,
actually  received  by the Company (other than by cancellation of liabilities or
obligations  evidenced by such Convertible Securities) on the conversion of such
Convertible  Securities.

               (D)     "Additional Shares of Common Stock" shall mean all shares
of  Common  Stock  issued by the Company or deemed to be issued pursuant to this
Section  5(a)(ii),  other than (1) shares of Common Stock issued upon conversion
of  the  Convertible  Preferred Stock or exercise of the Warrants, (2) shares of
Common Stock issued as a result of, or in connection with, any action referenced
in  Section  5(a)(i)  hereof,  (3)  securities  issued  upon  the exercise of or
conversion of convertible securities, options or warrants issued and outstanding
on  the  date  of this Warrant, provided, however, that such securities have not
been  amended  since  the  date  of  this Warrant to increase the number of such
securities  or  to  decrease  the  exercise  or  conversion  price  of  any such
securities  (other  than  by  the  antidilution  provisions  thereof,  if  any),


                                        5
<PAGE>
and  (4)  issuances of equity securities to employees, consultants, landlords or
suppliers of or to the Company in one or more transactions approved by the Board
of  Directors  or  in  mergers,  consolidations, acquisitions, joint ventures or
strategic  alliances  approved  by  the Board of Directors. References to Common
Stock  in  the  subsections  of  this  clause (D) above shall mean all shares of
Common  Stock  issued  by  the  Company  or deemed to be issued pursuant to this
Section  5(a)(ii).  The  "Effective  Price" of Additional Shares of Common Stock
shall  mean  the  quotient determined by dividing the total number of Additional
Shares  of Common Stock issued or sold, or deemed to have been issued or sold by
the  Company  under  this  Section  5(a)(ii),  into  the aggregate consideration
received,  or  deemed  to have been received by the Company for such issue under
this  Section  5(a)(ii)(D),  for  such  Additional  Shares  of  Common  Stock.

          (b)     If the Company, at any time while this Warrant is outstanding,
shall distribute to all or substantially all holders of Common Stock (and not to
the  Holder)  evidence  of  its  indebtedness or assets (including cash and cash
dividends) or rights or warrants to subscribe for or purchase any security other
than  the  Common  Stock  (which shall be subject to Section 5(a)), then in each
such case the Exercise Price shall be adjusted by multiplying the Exercise Price
in  effect  immediately  prior  to  the  record  date fixed for determination of
stockholders  entitled  to  receive such distribution by a fraction of which (i)
the  denominator  shall  be  the  Current Market Price per share of Common Stock
determined as of the record date mentioned above and (ii) the numerator shall be
such Current Market Price per share of Common Stock on such record date less the
then  per  share  fair  market  value at such record date of the portion of such
evidence of indebtedness or assets (including cash and cash dividends) or rights
or  warrants  to  subscribe  for  or purchase any security other than the Common
Stock  so  distributed  applicable to one outstanding share of the Common Stock,
which  fair  market  value  shall  be  reduced  by  the  fair  market  value  of
consideration,  if  any,  paid  to  the  Company  by  holders of Common Stock in
exchange  for  such  evidence of indebtedness or assets or rights or warrants so
distributed,  in  each case as such fair market value is determined by the Board
of  Directors  of  the  Company in good faith.   In either case, the adjustments
shall  be  described  in  a  statement  provided to the Holder of the portion of
evidences  of  indebtedness  or  assets  (including  cash and cash dividends) or
rights  or  warrants  to  subscribe  for or purchase any security other than the
Common  Stock so distributed or such subscription rights applicable to one share
of  Common  Stock.  Such adjustment shall be made whenever any such distribution
is  made  and shall become effective immediately after the record date mentioned
above.

          (c)     Further,  in  the  event of any adjustment pursuant to Section
5(a)  or  Section  5(b), the number of Warrant Shares shall be adjusted to equal
the  quotient  of (1) divided by (2), where (1) equals the product of the number
of  Warrant  Shares issuable upon the exercise of this Warrant immediately prior
to  such  adjustment  multiplied  by  the  Exercise  Price  per  Warrant  Share
immediately  prior  to  such adjustment, and where (2) equals the Exercise Price
immediately  following  such  adjustment.

          (d)     As  used  herein, the Current Market Price per share of Common
Stock  on any date shall be deemed to be the average of the daily closing prices
for  the 30 consecutive trading days immediately preceding the date in question.
The  closing  price  for each day shall be the last reported sales price regular
way  or,  in case no such reported sale takes place on such day, the closing bid
price  regular way, in either case on the principal national securities exchange
(including,  for


                                        6
<PAGE>
purposes hereof, the Nasdaq National Market) on which the Common Stock is listed
or  admitted  to  trading  or,  if the Common Stock is not listed or admitted to
trading  on any national securities exchange, the highest reported bid price for
the Common Stock as furnished by the National Association of Securities Dealers,
Inc.  through the Nasdaq SmallCap Market or a similar organization if the Nasdaq
SmallCap  Market  is no longer reporting such information. If, on any such date,
the Common Stock is not listed or admitted to trading on any national securities
exchange  and  is  not  quoted  on  the  Nasdaq  SmallCap  Market or any similar
organization, the Current Market Price shall be deemed to be the fair value of a
share  of Common Stock on such date, as determined in good faith by the Board of
Directors  of  the  Company,  absent  manifest  error.

          (e)     All  calculations  under  this  Section 5 shall be made to the
nearest  cent  or  to  the nearest one-hundredth of a share, as the case may be.

          (f)     In  any  case  in  which  this Section 5 shall require that an
adjustment in the number of Warrant Shares be made effective as of a record date
for  a  specified event, the Company may elect to defer, until the occurrence of
such  event,  issuing  to the Holder, if the Holder exercised this Warrant after
such  record  date, the Warrant Shares, if any, issuable upon such exercise over
and  above the number of Warrant Shares issuable upon such exercise on the basis
of  the  number of shares of Common Stock outstanding or in effect prior to such
adjustment;  provided,  however,  that the Company shall deliver to the Holder a
             -------------------
due  bill  or  other  appropriate  instrument  evidencing  the Holder's right to
receive  such additional shares of Common Stock upon the occurrence of the event
requiring  such  adjustment.

          (g)     Whenever  there  shall  be  an  adjustment as provided in this
Section  5,  the  Company  shall  within 15 days thereafter cause written notice
thereof  to be sent in accordance with Section 13 hereunder to the Holder, which
notice shall be accompanied by an officer's certificate setting forth the number
of  Warrant Shares issuable and the Exercise Price thereof after such adjustment
and  setting  forth a brief statement of the facts requiring such adjustment and
the  computation  thereof,  which  officer's  certificate  shall  be  conclusive
evidence  of  the  correctness  of  any  such  adjustment absent manifest error.

          (h)     The Company shall not be required to issue fractions of shares
of  Common Stock or other capital stock of the Company upon the exercise of this
Warrant.  If  any  fraction of a share of capital stock would be issuable on the
exercise  of  this  Warrant  (or  specified portions thereof), the Company shall
purchase  such  fraction for an amount in cash equal to the same fraction of the
Current  Market  Price  of such share of Common Stock on the date of exercise of
this  Warrant.

          (i)     No adjustment in the Exercise Price per Warrant Share shall be
required  if  such  adjustment  is  less than $.005; provided, however, that any
                                                     ------------------
adjustments  which by reason of this Section 5 are not required to be made shall
be  carried  forward  and  taken  into  account  in  any  subsequent adjustment.

     6.     (a)     In  case  of  any  capital reorganization, other than in the
cases  referred  to  in  Sections  5(a)  and (b) hereof, or the consolidation or
merger  of  the  Company  with  or  into  another


                                        7
<PAGE>
corporation  (other  than  a merger or consolidation in which the Company is the
continuing  corporation and which does not result in any reclassification of the
outstanding  shares of Common Stock or the conversion of such outstanding shares
of  Common Stock into shares of other stock or other securities or property), or
in  the  case  of  any  sale, lease, or conveyance to another corporation of the
property and assets of any nature of the Company as an entirety or substantially
as  an  entirety  (such  actions  being  hereinafter collectively referred to as
"Reorganizations"),  there shall thereafter be deliverable upon exercise of this
Warrant  (in  lieu  of the number of Warrant Shares theretofore deliverable) the
number  of  shares of stock or other securities or property to which a holder of
the  respective  number  of  Warrant  Shares  which  would  otherwise  have been
deliverable upon the exercise of this Warrant would have been entitled upon such
Reorganization  if  this Warrant had been exercised in full immediately prior to
such  Reorganization.  In case of any Reorganization, appropriate adjustment, as
determined in good faith by the Board of Directors of the Company, shall be made
in the application of the provisions herein set forth with respect to the rights
and  interests  of  the  Holder  so  that  the provisions set forth herein shall
thereafter  be  applicable,  as nearly as possible, in relation to any shares or
other  property thereafter deliverable upon exercise of this Warrant.   Any such
adjustment  shall be made by, and set forth in, a supplemental agreement between
the  Company,  or  any  successor  thereto, and the Holder, with respect to this
Warrant,  and  shall  for  all  purposes  hereof conclusively be deemed to be an
appropriate  adjustment.  The  Company  shall not effect any such Reorganization
unless,  upon  or  prior to the consummation thereof, the successor corporation,
or, if the Company shall be the surviving corporation in any such Reorganization
and  is not the issuer of the shares of stock or other securities or property to
be  delivered  to  holders  of  shares  of  the  Common Stock outstanding at the
effective time thereof, then such issuer, shall assume by written instrument the
obligation  to  deliver to the Holder such shares of stock, securities, cash, or
other  property  as such holder shall be entitled to purchase in accordance with
the  foregoing  provisions.  In the event of sale, lease, or conveyance or other
transfer  of  all or substantially all of the assets of the Company as part of a
plan  for  liquidation of the Company, all rights to exercise this Warrant shall
terminate  30 days after the Company gives written notice to the Holder and each
registered  holder  of  a Warrant that such sale or conveyance or other transfer
has  been  consummated.

          (b)      In  case  of  any reclassification or change of the shares of
Common  Stock issuable upon exercise of this Warrant (other than a change in par
value  or  from  a  specified  par  value  to  no par value, or as a result of a
subdivision  or  combination, but including any change in the shares into two or
more  classes or series of shares), or in case of any consolidation or merger of
another  corporation  into  the  Company  in which the Company is the continuing
corporation  and  in  which  there  is a reclassification or change (including a
change  to  the right to receive cash or other property) of the shares of Common
Stock (other than a change in par value, or from no par value to a specified par
value,  or as a result of a subdivision or combination, but including any change
in  the  shares  into  two  or  more classes or series of shares), the Holder or
holders of this Warrant shall have the right thereafter to receive upon exercise
of  this  Warrant  solely  the  kind  and  amount  of  shares of stock and other
securities,  property,  cash,  or  any  combination thereof receivable upon such
reclassification,  change, consolidation, or merger by a holder of the number of
Warrant  Shares  for  which  this  Warrant might have been exercised immediately
prior  to  such  reclassification, change, consolidation, or merger. Thereafter,
appropriate  provision  shall  be  made for adjustments which shall be as nearly
equivalent  as  practicable  to  the  adjustments  in  Section  5.


                                        8
<PAGE>
          (c)     The  above  provisions of this Section 6 shall similarly apply
to  successive  reclassifications  and  changes of shares of Common Stock and to
successive  consolidations,  mergers,  sales,  leases,  or  conveyances.

     7.     In  case  at  any  time  the  Company  shall  propose:

          (a)     to  pay  any  dividend  or  make any distribution on shares of
Common  Stock  in  shares  of Common Stock or make any other distribution (other
than  regularly  scheduled  cash dividends which are not in a greater amount per
share  than  the most recent such cash dividend) to all holders of Common Stock;
or

          (b)     to  issue  any  rights,  warrants,  or other securities to all
holders  of  Common  Stock  entitling  them to purchase any additional shares of
Common  Stock  or  any  other  rights,  warrants,  or  other  securities;  or

          (c)     to effect any reclassification or change of outstanding shares
of  Common  Stock  or  any  consolidation, merger, sale, lease, or conveyance of
property,  as  described  in  Section  6;  or

          (d)     to  effect  any liquidation, dissolution, or winding-up of the
Company;  or

          (e)     to  take  any  other action which would cause an adjustment to
the  Exercise  Price  per  Warrant  Share;  then, and in any one or more of such
cases,  the Company shall give written notice thereof in accordance with Section
13  hereunder  at least 15 days prior to (i) the date as of which the holders of
record  of  shares  of Common Stock to be entitled to receive any such dividend,
distribution,  rights,  warrants, or other securities are to be determined, (ii)
the  date  on  which  any such reclassification, change of outstanding shares of
Common  Stock,  consolidation,  merger,  sale,  lease,  conveyance  of property,
liquidation,  dissolution, or winding-up is expected to become effective and the
date as of which it is expected that holders of record of shares of Common Stock
shall  be entitled to exchange their shares for securities or other property, if
any,  deliverable  upon  such  reclassification,  change  of outstanding shares,
consolidation,  merger,  sale,  lease,  conveyance  of  property,  liquidation,
dissolution, or winding-up, or (iii) the date of such action which would require
an  adjustment  to  the  Exercise  Price  per  Warrant  Share.

     8.     The  issuance of any shares or other securities upon the exercise of
this  Warrant and the delivery of certificates or other instruments representing
such  shares  or other securities shall be made without charge to the Holder for
any  tax  or  other  charge in respect of such issuance.  The Company shall not,
however,  be  required  to  pay  any  tax which may be payable in respect of any
transfer  involved  in the issue and delivery of any certificate in a name other
than  that  of  the  Holder,  and  the Company shall not be required to issue or
deliver  any  such certificate unless and until the person or persons requesting
the issue thereof shall have paid to the Company the amount of such tax or shall
have established to the satisfaction of the Company that such tax has been paid.


                                        9
<PAGE>
     9.     The  Company  shall  not  amend  its  Articles of Incorporation, its
By-laws or participate in any reorganization, transfer of assets, consolidation,
merger,  dissolution,  issue or sale of securities or any other voluntary action
for the purpose of avoiding or seeking to avoid the observance or performance of
any  of the terms to be observed or performed by the Company pursuant to Section
5  hereof,  but shall at all times in good faith assist in carrying out all such
action  as  may  be  reasonably necessary or appropriate in order to protect the
rights of the Investor against dilution or other impairment as provided therein.

     10.     The Company will (a) obtain and keep effective any and all permits,
consents and approvals of Federal or state governmental agencies and authorities
and  make all filings under Federal and state securities laws, that are required
in  connection  with  the issuance and delivery of this Warrant, the exercise of
this  Warrant,  and  the issuance and delivery of the Warrant Shares issued upon
exercise  of  this Warrant, and (b) have the Warrant Shares, upon their issuance
and  eligibility  for  listing,  listed on each securities exchange on which the
Common  Stock  are  then  listed.

     11.     Unless  registered,  the  Warrant  Shares issued on exercise of the
Warrants  shall  be  subject  to  a  stop  transfer order and the certificate or
certificates  representing  the  Warrant Shares shall bear the following legend:

     THE  SECURITIES  REPRESENTED  HEREBY  HAVE  NOT  BEEN  REGISTERED UNDER THE
     SECURITIES  ACT  OF  1933,  AS  AMENDED  (THE  "SECURITIES  ACT"),  OR  ANY
     STATE  SECURITIES  LAWS AND MAY NOT BE OFFERED, SOLD, PLEDGED, ASSIGNED, OR
     OTHERWISE  TRANSFERRED  UNLESS  (1)  A  REGISTRATION STATEMENT WITH RESPECT
     THERETO  IS  EFFECTIVE  UNDER  THE  SECURITIES ACT AND ANY APPLICABLE STATE
     SECURITIES  LAWS,  OR (2) THE COMPANY RECEIVES AN OPINION OF COUNSEL TO THE
     HOLDER  OF  THIS  WARRANT OR SUCH SECURITIES, WHICH COUNSEL AND OPINION ARE
     REASONABLY  SATISFACTORY  TO  THE  COMPANY,  THAT  THIS  WARRANT  OR  SUCH
     SECURITIES,  AS  APPLICABLE,  MAY  BE  OFFERED, SOLD, PLEDGED, ASSIGNED, OR
     OTHERWISE  TRANSFERRED  IN  THE  MANNER  CONTEMPLATED  WITHOUT AN EFFECTIVE
     REGISTRATION  STATEMENT  UNDER  THE  SECURITIES  ACT  OR  APPLICABLE  STATE
     SECURITIES  LAWS.

     12.     Promptly  upon  the appointment of any subsequent transfer agent of
the  Common  Stock,  or  any other securities issuable upon the exercise of this
Warrant,  the  Company  will deliver to the Holder a statement setting forth the
name  and  address  of  such  subsequent  transfer  agent.

     13.     All  notices  that  are required or permitted hereunder shall be in
writing  and  shall  be sufficient if personally delivered, sent by facsimile in
the  case of notice to the Company only, or sent by registered or certified mail
or  Federal  Express  or other nationally recognized overnight delivery service.
Any notices shall be deemed given upon the earlier of the date when received at,
the  day  when delivered via facsimile or the third day after the date when sent
by  registered  or


                                       10
<PAGE>
certified  mail  or  the day after the date when sent by Federal Express to, the
address  set  forth below, unless such address is changed by notice to the other
party  hereto:

     if to the Company:

     Baywood International, Inc.
     14950 North 83rd Place
     Suite 1
     Scottsdale, Arizona 85260
     Attention:  Chief Executive Officer
     Facsimile: (480) 483-2168

     if to the Holder:  As set forth in the Warrant Register of the Company.

The  Company or the Holder by notice to the other party may designate additional
or  different  addresses  as  shall  be  furnished  in  writing  by  such party.

     14.     The  Company covenants that upon receipt by the Company of evidence
reasonably  satisfactory  to it of the loss, theft, destruction or mutilation of
this  Warrant  or  any  stock certificate relating to the Warrant Shares, and in
case  of  loss,  theft  or  destruction,  of  indemnity  or  security reasonably
satisfactory  to  it  (which,  in the case of the Warrant, shall not include the
posting  of  any  bond),  and upon surrender and cancellation of such Warrant or
stock certificate, if mutilated, the Company will make and deliver a new Warrant
or  stock  certificate  of  like  date, tenor and denomination , in lieu of such
Warrant  or  stock  certificate

     15.     (a)     The Holder of any Warrant shall not have, solely on account
of  such status, any rights of a stockholder of the Company, either at law or in
equity, or to any notice of meetings of stockholders or of any other proceedings
of  the  Company,  except  as  provided  in  this  Warrant.

          (b)     No  provision  hereof, in the absence of affirmative action by
Holder  to Warrant Shares, and no enumeration herein of the rights or privileges
of  Holder  hereof,  shall  give  rise  to  any liability of such Holder for the
purchase  price of any Common Stock or as a stockholder of Company, whether such
liability  is  asserted  by  Company  or  by  creditors  of  Company.

     16.     The  provisions  of  this  Warrant  may not be amended, modified or
changed except by an instrument in writing signed by each of the Company and the
Holder.

     17.     All  the  covenants  and  provisions  of this Warrant by or for the
benefit  of  the  Company or the Holder shall be binding upon and shall inure to
the  benefit  of  their  respective  permitted successors and assigns hereunder.

     18.     The  Company  agrees  to take such further action and to deliver or
cause  to  be  delivered  to  each  other  after the date hereof such additional
agreements  or  instruments  as  any  of


                                       11
<PAGE>
them may reasonably request for the purpose of carrying out this Warrant and the
agreements  and  transactions  contemplated  hereby  and  thereby.

     19.     Each  party  hereto  acknowledges and agrees that irreparable harm,
for which there may be no adequate remedy at law and for which the ascertainment
of damages would be difficult, would occur in the event any of the provisions of
this  Warrant  were  not performed in accordance with its specific terms or were
otherwise  breached.  Each party hereto accordingly agrees that each other party
hereto  shall be entitled to an injunction or injunctions to prevent breaches of
the  provisions of this Warrant, or any agreement contemplated hereunder, and to
enforce  specifically the terms and provisions hereof or thereof in any court of
the  United  States  or  any state thereof having jurisdiction, in each instance
without  being  required  to post bond or other security and in addition to, and
without  having  to  prove  the  inadequacy  of,  other  remedies  at  law.

     20.     (a)     This Warrant shall be construed in accordance with the laws
of  the State of New York applicable to contracts made and performed within such
State,  without  regard  to  principles  of  conflicts  of  law.

          (b)     EACH  OF  THE  PARTIES  HEREBY IRREVOCABLY AND UNCONDITIONALLY
SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND
OF  THE  FEDERAL  COURTS  SITTING  IN  THE  STATE  OF NEW YORK IN ALL ACTIONS OR
PROCEEDINGS  ARISING  OUT  OF OR RELATING TO THIS AGREEMENT. EACH OF THE PARTIES
AGREES  THAT  ALL  ACTIONS  OR  PROCEEDINGS  ARISING  OUT OF OR RELATING TO THIS
AGREEMENT  MUST  BE  LITIGATED  EXCLUSIVELY  IN ANY SUCH STATE OR, TO THE EXTENT
PERMITTED  BY  LAW,  FEDERAL  COURT  THAT  SITS  IN  THE COUNTY OF NEW YORK, AND
ACCORDINGLY,  EACH  PARTY  IRREVOCABLY  WAIVES ANY OBJECTION WHICH IT MAY NOW OR
HEREAFTER  HAVE  TO  THE LAYING OF THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN
ANY SUCH COURT. EACH PARTY FURTHER IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN
THE  MANNER PROVIDED FOR NOTICES IN SECTION 13 HEREOF. NOTHING IN THIS AGREEMENT
OR  ANY  OTHER  TRANSACTION  DOCUMENT WILL AFFECT THE RIGHT OF ANY PARTY TO THIS
AGREEMENT  TO  SERVE  PROCESS  IN  ANY  OTHER  MANNER  PERMITTED  BY  LAW.

          (c)     EACH  PARTY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN
ANY  LEGAL  PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS
AGREEMENT,  OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON
CONTRACT,  TORT  OR ANY OTHER THEORY). EACH OF THE PARTIES (1) CERTIFIES THAT NO
REPRESENTATIVE,  AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR  OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO  ENFORCE  THE  FOREGOING  WAIVER  AND  (2) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES  HERETO  HAVE  BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS,  THE  MUTUAL  WAIVERS  AND  CERTIFICATIONS  IN  THIS  SECTION  20.


                                       12
<PAGE>
Dated: March 30, 2007

                                        BAYWOOD INTERNATIONAL, INC.


                                        By:  /s/ Neil Reithinger
                                             ------------------------------
                                             Name: Neil Reithinger
                                             Title: President & C.E.O.


[Seal]

/s/ Karl H. Rullich
-----------------------------------
Secretary


                                       13
<PAGE>
                                                                      Schedule 1
                                                                      ----------

                              ELECTION TO EXERCISE


To:     Baywood  International,  Inc.

     The undersigned hereby exercises his, her, or its rights to purchase shares
of  Common  Stock,  par  value $0.001 per share (the "Common Stock"), of Baywood
International, Inc., a Nevada corporation (the "Company"), covered by the within
Warrant  and  tenders  payment  herewith  in the amount of $_____________ by (i)
certified  or bank cashier's check payable to the order of the Company ; or (ii)
a  wire  transfer  of such funds to an account designated by the Company  (check
applicable  box)  in  accordance  with  the  terms  thereof,  and  requests that
certificates  for  the  securities  constituting  such shares of Common Stock be
issued  in  the  name  of,  and  delivered  to:




(Print  Name,  Address,  and  Social  Security  or  Tax  Identification  Number)


and,  if  such  number  of  shares of Common Stock shall not constitute all such
shares of Common Stock covered by the within Warrant, that a new Warrant for the
balance  of  the  shares  of Common Stock covered by the within Warrant shall be
registered  in  the  name  of,  and delivered to, the undersigned at the address
stated  below.


Dated:___________________               Name__________________________
                                             (Print)
Address:




                                        ______________________________
                                             Signature


                                       14
<PAGE>
                                                                      Schedule 2
                                                                      ----------


                               FORM OF ASSIGNMENT

     (To be executed by the registered holder if such holder desires to transfer
the  attached  Warrant.)

     FOR  VALUE  RECEIVED,________________________  hereby  sells,  assigns, and
transfers  unto_____________  a  Warrant  to purchase _________ shares of Common
Stock,  par  value  $0.001  per share, of  Baywood International, Inc., a Nevada
corporation  (the  "Company"),  and  does  hereby  irrevocably  constitute  and
appoint_______________  attorney  to  transfer  such Warrant on the books of the
Company,  with  full  power  of  substitution.

Dated:___________________


                                        Signature_____________________


                                     NOTICE

The signature on the foregoing Assignment must correspond to the name as written
upon  the  face  of  this  Warrant  in  every  particular, without alteration or
enlargement  or  any  change  whatsoever.


                                       15