ex4_26.htm


    
      
        
          
            

          

        

        Exhibit
          4.26

      

      
        


      

      
        


      

      
        


      

      
        	 	
                Northeast
                  Securities, Inc.

              
	 	
                100
                  Wall Street, S'" Floor

              
	 	
                New
                  York, NY 10005

              


      

      
        


      

      
        As
          of
          September 7, 2006

      

      
        


      

      
        


      

      
        Baywood
          International, Inc.

      

      
        14950
          North 83rd
          Place Suite 1

      

      
        Scottsdale,
          Arizona 85260

      

      
        


      

      
        Ladies
          and Gentlemen:

      

      
        


      

      
        Reference
          is made to the Engagement Letter (the "Engagement Letter") dated August
          21, 2006 between Baywood International, Inc. (the "Company") and
          Northeast Securities, Inc. ('NESC") in which the Company has engaged NESC
          as
          exclusive placement agent in connection with two separate private
          offerings and sales of securities of the Company. The Company proposes
          to complete an offering (the "Offering") to issue and sell (i)
          $250,000 principal amount of 10% senior convertible notes and (ii) five-year
          warrants to purchase common stock of the Company, all as described in a
          Subscription Agreement (the "Subscription Agreement") between the
          Company and each of the investors in the Offering, and various other transaction
          documents, in which NESC will act as placement agent.

      

      
        


      

      
        Pursuant
          to this letter agreement, the Company confirms and makes certain
          representations, warranties, agreements and covenants to and for the benefit
          of
          NESC as follows:

      

      
        


      

      
        
          	
                  1.

                	
                  The
                    Company and NESC confirm that the terms of the Engagement Letter
                    shall
                    remain in full force and effect. In connection therewith, the
                    Company
                    hereby confirms its representations, warranties, agreements and
                    covenants contained therein, including, without limitation, its
                    obligations to indemnify and hold harmless NESC as set forth
                    in Exhibit A
                    to the Engagement Letter. In the event of any conflict between
                    this letter
                    agreement and the Engagement Letter, the terms of the Engagement
                    Letter
                    shall be binding and shall supersede the terms of this letter
                    agreement.

                


        

      

      
        


      

      
        
          	
                  2.

                	
                  In
                    each Subscription Agreement entered into by the Company with
                    investors in
                    the Offering, the Company will make to such investors certain
                    representations, warranties, agreements and covenants. Without
                    limiting
                    the Company's obligations to NESC under the Engagement Letter,
                    the Company
                    hereby (i) makes to NESC those representations, warranties, agreements
                    and
                    covenants contained in Section 4 (the '"Company
                    Representations") and Section 5 (the "Company Covenants")
                    of each Subscription Agreement and (ii) confirms that NESC
                    shall receive the benefits of and be entitled to rely upon the
                    Company Representations and the Company Covenants, as well as those
                    representations and warranties made by investors in Section 2 of the
                    Subscription Agreement.

                


        

      

      
        
        

        


        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        
        

        


        
          	
                  3.

                	
                  The
                    Company understands that NESC shall not have any obligation or
                    responsibility to verify (i) the accuracy or completeness of
                    any
                    information contained in the Subscription Agreements or any other
                    documents or agreements provided by or to investors in the Offering
                    or
                    (ii) the authenticity, sufficiency or validity of any check or
                    other
                    payment made by such investors in the
                    Offering.

                


        

      

      
        


      

      
        
          	
                  4.

                	
                  This
                    Agreement shall be governed by and construed in accordance with
                    the laws
                    of the State of New York, without giving effect to such state's
                    rules
                    concerning conflicts of laws. This Agreement may be executed
                    in
                    counterparts, each of which together shall be considered a single
                    document.

                


        

      

      
        


      

      
        
          	
                  5.

                	
                  If
                    is understood and agreed that NESC and its affiliates may from
                    time to
                    time effect transactions for customer accounts and for their
                    own accounts
                    in the securities of, or perform investment banking or other
                    services for,
                    the Company and other
                    entities.

                


        

      

      
         

         

        
          
            	 	
                    Very
                      truly yours,

                  	 
	 	 	 	 
	 	
                    NORTHEAST SECURITIES, INC.

                  	 
	 	 	 	 
	 	 	 	 
	 	
                    By: 
                      

                  	
                    /s/
                      David Tsiang

                  	 
	 	 	
                    Name:
                      David Tsiang

                  	 
	 	 	
                    Title:   Senior
                      Vice-President

                  	 


          

          
            


          

          
            	
                    ACCEPTED
                      AND AGREED:

                  	 	 
	 	 	 	 
	
                    BAYWOOD INTERNATIONAL, INC.

                  	 	 
	 	 	 	 
	 	 	 	 
	
                    By: 
                      

                  	
                    /s/
                      Neil Reithinger

                  	 	 
	 	
                    Name:
                      Neil Reithinger

                  	 	 
	 	
                    Title:   President
                      & C.E.O.

                  	 	 


          

        

      

      
        
 

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