ex4_23.htm


    
      

    

    
      Exhibit
        4.23

    

    
      


    

    
      


    

    
      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, ___________________________,
        a
        _________________ (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 ________ (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 __________
        shares of common stock, par value $0.001 per share (the "Common Stock”),
of the Company. This Warrant is initially exercisable at $0.04
        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

        
          

        

      

      
        
        

      

    


    
      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 withpayment 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 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.

    


    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    


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

    


    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    


    
      (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 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.

    


    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    


    
      (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), (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, and
        (5) issuances of equity securities to commercial banks or other institutional
        lenders in connection with the Company obtaining loan financing in one or
        more
        transactions approved by the Board of Directors.

    


    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    


    
      (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.

    


    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    


    
      (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 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.

    


    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    


    
      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 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 hereof.

    


    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    


    
      (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 hereof; 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

        
          

        

      

      
        
        

      

    


    
      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 Holder 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.


    


    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    


    
      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 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 the Holder to Warrant
        Shares, and no enumeration herein of the rights or privileges of the 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.

    


    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    


    
      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 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 WARRANT.
        EACH
        OF THE PARTIES AGREES THAT ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR RELATING
        TO THIS WARRANT 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 WARRANT
        OR
        ANY OTHER TRANSACTION DOCUMENT WILL AFFECT THE RIGHT OF ANY PARTY TO THIS
        WARRANT 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 WARRANT, 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 WARRANT BY, AMONG OTHER THINGS, THE MUTUAL
        WAIVERS AND CERTIFICATIONS IN THIS SECTION 20.

    

    
      


    

    
      


    

    
      Dated:
        _________ _____, 2007

    

    
      


    

    
      	 	
              BAYWOOD
                INTERNATIONAL, INC.

            
	 	 
	 	 
	 	
              By:

            	
               

            
	 	 	
              Name:
                Neil Reithinger

            
	 	 	
              Title:
                President

            


    

    
       

    

    
      


    

    
      [Seal]

    

    
      


    

    
      


    

    
      	
               

            	 
	
              Secretary

            	 


    


    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    


    
      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 o;
        or
        (ii) a wire transfer of such funds to an account designated by the Company
o
        (check
        applicable box) in accordance with the terms 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

            


    


    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    


    
      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.

    

    
       

       

      14