Document:

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
     ACT OF 1933, AS AMENDED (THE "ACT"), OR APPLICABLE STATE SECURITIES LAWS
(COLLECTIVELY, THE "LAWS"). THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND
   MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF
    EITHER (I) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE
   LAWS, OR (II) AN OPINION OF COUNSEL PROVIDED TO THE ISSUER IN FORM, SUBSTANCE
AND SCOPE REASONABLY ACCEPTABLE TO THE ISSUER TO THE EFFECT THAT REGISTRATION IS
  NOT REQUIRED UNDER THE LAWS DUE TO AN AVAILABLE EXCEPTION TO OR EXEMPTION FROM
                   THE REGISTRATION REQUIREMENTS OF THE LAWS.

                           BAYWOOD INTERNATIONAL, INC.
                            BAYWOOD ACQUISITION, INC.

                   8% CONVERTIBLE SUBORDINATED PROMISSORY NOTE

$100,000.00                                               March 30, 2007

     FOR  VALUE RECEIVED, the undersigned, BAYWOOD INTERNATIONAL, INC., a Nevada
corporation  ("Baywood") and BAYWOOD ACQUISITION, INC., a Nevada corporation and
a wholly-owned subsidiary of Baywood ("Buyer"), each located at 14950 North 83rd
Place,  Suite  1,  Scottsdale,  Arizona  85260  (each  of  Baywood and Buyer may
sometimes  be referred to herein as a "Company", and together, the "Companies"),
hereby,  jointly and severally, promise to pay to the order of THOMAS PINKOWSKI,
an individual residing at 3703 Calle Fino Clarete San Clemente, California 92673
("Holder"),  in  lawful  money of the United States, the principal amount of One
Hundred  Thousand  Dollars  ($100,000),  together  with  interest  on the unpaid
principal  amount  hereof, from  the date hereof until the outstanding principal
amount hereof shall be paid in full, at the rate of eight percent (8%) per annum
computed  on  the  basis  of  a  365-day  year.

     1.     Note.  This  subordinated  promissory  note  (this  "Note") is being
            ----
delivered  by  the Companies to Holder in partial consideration for the purchase
of  the Purchased Assets and the LifeTime Business (as such terms are defined in
that  certain  Asset Purchase Agreement, of even date herewith, by and among the
Companies,  LifeTime and the LifeTime Representatives defined therein, including
Holder  (the  "Asset Purchase Agreement")).  Unless otherwise stated herein, all
capitalized terms not defined herein shall have the meanings ascribed to them in
the  Asset  Purchase  Agreement.

     2.     Payment.  The  principal  amount  of  this  Note shall be payable in
            -------
eight  equal  quarterly  installments  of  TWELVE  THOUSAND FIVE HUNDRED DOLLARS
($12,500),  on  the  last day of March, June, September and December, commencing
June  30,  2007  through  March  31,  2009.  Accrued  interest

<PAGE>
shall  be  payable  in  arrears  on  each  such  installment payment date and at
maturity.  All payments shall be made in immediately available funds at Holder's
address  set  forth  in  the  Asset Purchase Agreement, or such other address as
Holder  may  designate  in  writing  to  the  Companies.

     3.     Prepayment.  Subject  to  Holder's prior right to convert all or any
            ----------
portion  of this Note into shares of Common Stock (hereafter defined), this Note
may  be  prepaid  in  whole  or in part at any time or from time to time without
premium  or  penalty  or discount, together with accrued interest to the date of
payment  on  the  principal  amount  prepaid.

     4.     Optional  Conversion  of  Note.
            -------------------------------

          4.1.     Conversion  Procedure.
                   ---------------------

               (a)     At  any  time Holder at his option may convert all or any
     portion  of  this  Note  into  the number of shares (rounded to the nearest
     share) of common stock, par value $0.001 per share, of Baywood (the "Common
     Stock"),  computed  by  dividing  the  principal  amount of this Note to be
     converted  together  with  the accrued interest on such principal amount by
     the  Conversion  Price  (hereafter  defined)  then  in  effect.

               (b)     Holder  shall  effect  a  conversion by surrendering this
     Note  accompanied  by  a  proper  assignment  thereof  to  the  Companies
     together  with  a completed and duly executed conversion notice in the form
     annexed  hereto.  Such  conversion of this Note will be deemed to have been
     effected as of the close of business on the date on which this Note and the
     duly  completed  exercise  notice  have  been  surrendered at the principal
     office of the Companies. At such time as such conversion has been effected,
     the  rights  of Holder to receive payments of principal and interest hereon
     will cease and Holder will be deemed to have become the holder of record of
     the  shares  of  Common  Stock represented thereby. Provisions of this Note
     that  apply to conversion of all of this Note also apply to conversion of a
     portion  of  it.

               (c)     As  soon as possible after a conversion has been effected
     (but  in  any  event  within  five  (5)  days  after  the surrender of this
     Note  and the conversion notice to the Company), the Companies will deliver
     to  Holder:

                         (i)     a  certificate or certificates representing the
     number  of  shares  of  Common  Stock issuable by reason of such conversion
     in  the  name of Holder in such denomination or denominations as Holder has
     specified;  and

                        (ii)     a  new  duly  executed  Note  for the principal
     amount  of  this  Note  which  was delivered to the Companies in connection
     with  such  conversion  but  which  was  not  converted.

               (d)     The  issuance  of certificates for shares of Common Stock
     upon  conversion  of  this  Note  will be made without charge to Holder for
     any  issuance  tax  in respect thereof or other cost incurred by Baywood in
     connection  with  such  conversion  and  the

                                        2
<PAGE>
     related  issuance  of  shares  of  Common  Stock.  Baywood  represents  and
     warrants  that upon conversion of this Note, the Common Stock issuable with
     respect  to  such  conversion  will  be  validly  issued,  fully  paid  and
     nonassessable.

               (e)     The  Companies  will  not  close  their  respective books
     against  the  transfer  of  this  Note  or  of  Common  Stock  issued  or
     issuable  upon  conversion of this Note in any manner which interferes with
     the timely conversion of this Note. Baywood will from time to time take all
     such  action  as may be necessary to assure that the par value per share of
     the  Common  Stock  acquirable upon conversion of this Note is at all times
     equal  to  or  less  than  the  Conversion  Price  then  in  effect.

               (f)     This  Note,  when  delivered  for  conversion,  shall  be
     cancelled  by  the  Companies.

          4.2     Conversion  Price.
                  -----------------

               (a)     The  initial  Conversion  Price  will  be $0.05 per share
     during  the  first  twelve  (12)  months  from  the  date hereof, $0.08 per
     share for months twelve (12) through twenty-four (24) from the date hereof,
     and  $0.10  per share thereafter until the payment in full of this Note. In
     order  to  prevent dilution of the conversion rights granted hereunder, the
     Conversion  Price  will be subject to adjustment from time to time pursuant
     to  this  Section  4.2.

               (b)     Reorganization,  Reclassification,  Merger  or  Sale.  In
                       ----------------------------------------------------
     case  Baywood  shall  effect  a  reorganization,  shall  merge  with  or
     consolidate  into another corporation, or shall sell, transfer or otherwise
     dispose  of  all  or  substantially all of its property, assets or business
     and, pursuant to the terms of such reorganization, merger, consolidation or
     disposition  of  assets,  shares  of stock or other securities, property or
     assets  of  Baywood, successor or transferee or an affiliate thereof are to
     be  received  by or distributed to the holders of Common Stock, then Holder
     shall  be provided with written notice from Baywood informing Holder of the
     terms  of  such  reorganization,  merger,  consolidation  or disposition of
     assets  and  of  the  record  date  thereof  for  any distribution pursuant
     thereto,  at least ten (10) days in advance of such record date, and Holder
     shall  have,  in  addition  to the rights provided for herein, the right to
     receive, at Holder's election, either (i) upon conversion of this Note, the
     number  of  shares  of  stock  or  other  securities, property or assets of
     Baywood, successor, transferee or affiliate thereof or cash receivable upon
     or as a result of such reorganization, merger, consolidation or disposition
     of  assets  by  a  holder of the number of shares of Common Stock for which
     this  Note  is  convertible  immediately  prior  to  such event or (ii) the
     securities  into  which this Note is converted upon, or as a result of such
     reorganization,  merger,  consolidation  or  disposition  of  assets.  The
     provisions  of this paragraph (b) of this Section 4.2 shall similarly apply
     to  successive  reorganizations, mergers, consolidations or dispositions of
     assets.

               (c)     Subdivision  or  Combination of Common Stock.  If Baywood
                       --------------------------------------------
     declares  a  dividend  or  other  distribution  payable in shares of Common
     Stock  or  any  shares  of  a class or series convertible into Common Stock
     (together  with  the  Common  Stock,  "Securities")  or

                                        3
<PAGE>
     subdivides  its  outstanding  shares  of  Common Stock into a larger number
     or  combines  its outstanding shares of Common Stock into a smaller number,
     then  the  Conversion  Price  in effect immediately prior to such dividend,
     other  distribution,  subdivision or combination, as the case may be, shall
     forthwith  be  adjusted  to  that  price  determined  by  multiplying  the
     Conversion  Price  by  a  fraction  (i) the numerator of which shall be the
     total  number  of  outstanding  shares  of such Common Stock and Securities
     immediately  prior  to  such  dividend,  other distribution, subdivision or
     combination  and (ii) the denominator of which shall be the total number of
     outstanding  shares  of  such  Common  Stock  and Securities (including the
     number  of  shares  of Common Stock into which such newly issued Securities
     are then convertible), immediately after such dividend, other distribution,
     subdivision  or  combination.

               (d)     In case Baywood shall distribute to the holders of Common
     Stock  evidences  of  indebtedness  issued  by  Baywood,  or  assets
     (excluding  cash  dividends) then, in each such case, immediately following
     the  record date fixed for the determination of the holders of Common Stock
     entitled  to  receive  such  distribution,  the  Conversion Price in effect
     thereafter  shall  be  determined  by  multiplying  the Conversion Price in
     effect  immediately  prior  to  such  record  date  by  a  fraction (i) the
     numerator  of  which  shall  be an amount equal to the remainder of (A) the
     Current  Market  Price  (as hereafter defined) of one share of Common Stock
     less  (B) the fair value (as determined in good faith by Baywood's board of
     directors)  of  the  evidences  of indebtedness or assets so distributed in
     respect  of  one  share  of  Common Stock, as the case may be, and (ii) the
     denominator  of  which  shall  be  the Current Market Price of one share of
     Common  Stock.  Such adjustment shall be made on the date such distribution
     is  made,  and  shall  become  effective  at the opening of business on the
     business  day  following  the  record  date  for  the  determination  of
     stockholders  entitled  to  such  distribution.

          For  purposes  of  this  Note,  "Current  Market  Price" on any day of
     determination  means  the  closing  price  of  a  share  of Common Stock on
     the  over-the-counter  bulletin board as reported by the National Quotation
     Bureau  Incorporated, or a similar generally accepted reporting service, or
     if  not so available, in such manner as furnished by any Nasdaq member firm
     of  the National Association of Securities Dealers, Inc. selected from time
     to time by the board of directors of Baywood for that purpose, or if not so
     available,  a  price  determined in good faith by the board of directors of
     Buyer  as being equal to the fair market value thereof, as the case may be.

               (e)     Notice  of  Adjustment.  Whenever  the  Conversion  Price
                       ----------------------
     shall  be  adjusted  as  provided  in  this  Section  4.2,  Baywood  shall
     forthwith  send  by  first  class  mail,  postage  prepaid to Holder at his
     address  as  shown  in the records of Baywood a statement, certified by the
     chief  financial  officer of Baywood, showing in detail the facts requiring
     such adjustment and the Conversion Price that shall be in effect after such
     adjustment.

          4.3     Reservation  of  Common  Stock.  Baywood  shall  at  all times
                  ------------------------------
     reserve  and  keep  available  for  issuance  upon  the  conversion of this
     Note  such  number of its authorized but unissued shares of Common Stock as
     will  be  sufficient  to  permit  the  conversion  in  full  of  this

                                        4
<PAGE>
     Note,  and  upon  such  issuance  such  shares  of  Common  Stock  will  be
     validly  issued,  fully  paid and nonassessable. The transfer agent for any
     shares  of Baywood's capital stock issuable upon the exercise of any of the
     rights  of purchase aforesaid, will be authorized and directed at all times
     to  reserve  such  number  of authorized shares of Common Stock as shall be
     requisite  for  such purpose. Baywood will keep a copy of this Note on file
     with  the  transfer  agent  for  the Common Stock and with every subsequent
     transfer  agent for any shares of Baywood's capital stock issuable upon the
     exercise  of the rights of purchase represented by the foregoing conversion
     rights.  Baywood  will  supply  the transfer agent with duly executed stock
     certificates  for issue against exercise of the foregoing conversion rights
     and  will provide or otherwise make available any cash which may be payable
     in  lieu  of  fractional  shares  as  provided  hereinabove.

          4.4     No  Voting  Rights;  Limitations of Liability.  This Note will
                  ----------------------------------------------
     not  entitle  Holder  to  any  voting  rights  or  other  rights  as  a
     stockholder  of  Baywood.  No  provision  of  this  Note, in the absence of
     affirmative  action  by Holder to purchase Common Stock, and no enumeration
     in  this  Note of the rights or privileges of Holder, will give rise to any
     liability  of  such  Holder  for  the  Conversion  Price  of  Common  Stock
     acquirable  by  exercise  hereof  or  as  a  stockholder  of  Baywood.

     5.     Subordination.  The  payment  of  this Note shall be subordinate and
            -------------
     junior  in  right  of  payment  to  the  prior  payment  of  senior  debt
     pursuant  to  a Subordination Agreement of even date herewith, by and among
     Vineyard  Bank,  N.A.,  the  Companies  and  the  LifeTime Representatives,
     including  Holder.

     6.     Events  of  Default;  Remedies.
            ------------------------------

          6.1     The  occurrence  of  any  one  or more of the following events
shall  constitute  an  Event  of  Default  hereunder:

               (a)     Default  by the Companies in the payment of the principal
     of  or  interest  on  this  Note  when and as the same shall become due and
     payable and such default shall continue for fifteen (15) days after written
     notice  thereof  from  Holder;  or

               (b)     (i)  Commencement  by  either Company of a voluntary case
     under  the  federal  bankruptcy  laws  (as  now  of  hereafter  in effect);
     (ii)  either  Company  applying for or consenting to the appointment of, or
     the  taking  of possession by, a receiver, custodian, trustee or liquidator
     of  itself  or  of  a  substantial part of its assets; (iii) either Company
     making  a  general  assignment  for  the  benefit of creditors; or (iv) the
     failure of either Company generally to pay its debts as they become due; or

               (c)     The  entry of a decree or order by any court of competent
     jurisdiction  in  respect  of  either  Company  granting  (i) relief in any
     involuntary  case under the federal bankruptcy laws (as now or hereafter in
     effect);  or  (ii)  appointment  of  a  trustee,  receiver,  custodian  or
     liquidator  for  such  Company or for a substantial part of its assets, and
     such  case

                                        5
<PAGE>
     or  proceeding  shall  continue  undismissed  or  unstayed  for a period of
     one  hundred  twenty  (120)  consecutive  days.

          6.2     Upon  the  happening  of  any  Event of Default hereunder, the
entire  principal  sum and all interest thereon, at the option of Holder, may be
declared  and thereupon shall become immediately due and payable.  In such event
the  Companies  shall  be responsible to pay all of Holder's reasonable costs of
collection,  including  attorney's  fees.

     7.     Notices.  All notices and other communications required or permitted
            -------
under  this  Note  shall  be made in accordance with the provisions of the Asset
Purchase  Agreement.  The  Companies  waive  presentment  for payment, notice of
non-payment, protest, demand, notice of protest, notice of intent to accelerate,
notice of acceleration and dishonor, diligence in enforcement and indulgences of
any  kind.

     8.      Amendment; Waiver.  This Note may not be amended or modified except
             -----------------
by  an  instrument  in  writing  duly  executed  by the Companies and Holder. No
failure  or  delay  on the part of Holder in the exercise of any power, right or
privilege  hereunder  shall operate as a waiver thereof, nor shall any single or
partial exercise of any such power, right or privilege preclude other or further
exercise  thereof  or  of  any  other  right,  power  privilege.  All rights and
remedies  existing hereunder are cumulative to, and not exclusive of, any rights
or  remedies  otherwise  available.

     9.     Severability.  If  any provision hereof shall for any reason be held
            ------------
to  be  invalid,  illegal  or  unenforceable  in  any  respect, such invalidity,
illegality,  or  unenforceability  shall not affect any other provisions hereof,
and  this  Note  shall be construed as if such invalid, illegal or unenforceable
provision  has  never  been  contained  herein.

     10.     Assignment.  This  Note  may  be  assigned,  pledged, negotiated or
             ----------
transferred  by  Holder and shall inure to the benefit of Holder, its successors
and  assigns.

     11.     Governing  Law  Waiver of Jury Trial.  This Note is made under, and
             ------------------------------------
shall  be  construed  and  enforced in accordance with, the internal laws of the
State  of  Arizona,  without  regard  to  principles  of conflicts of laws.  The
Companies  irrevocably  waive, to the maximum extent permitted by law, any right
they  may  have  to  a  trial  by  jury in respect of any litigation directly or
indirectly  at  any  time arising out of, under or in connection with this Note.

                            [Signature Page Follows]

                                        6
<PAGE>
          IN  WITNESS  WHEREOF,  the  undersigned  have  caused  this Note to be
executed as of the 30th day of March, 2007.

                                             BAYWOOD  INTERNATIONAL,  INC.

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

                                             BAYWOOD  ACQUISITION,  INC.

                                        By:  /s/ Neil Reithinger
                                             ------------------------------
                                             Name:  Neil Reithinger
                                             Title: President

                                        7
<PAGE>
                           [FORM OF CONVERSION NOTICE]
Baywood International, Inc.
Baywood Acquisition, Inc.
14950 North 83rd Place, Suite 1
Scottsdale, Arizona 85260

     The undersigned Holder of the 8% Subordinated Convertible Note of the
Companies dated March __, 2007 hereby irrevocably exercises its option to
convert [$_______] of unpaid principal and [$_______] of accrued interest on the
Note into shares of Common Stock of Baywood International, Inc., in accordance
with the terms of the Note. The undersigned hereby delivers the Note to the
Companies for such conversion. The undersigned hereby instructs the Companies to
convert the amount of money specified above into shares of Common Stock at the
Conversion Price in accordance with Section 4.2 of the Note. The undersigned
directs that the Common Stock issuable and certificates therefor deliverable
upon conversion be issued in the name of and delivered to the undersigned unless
otherwise indicated below. If the full unpaid amount of the Note is not being
converted, the undersigned also hereby instructs the Companies to deliver a new
Note to the undersigned in the amount which is not being converted. All
capitalized terms not defined herein shall have the meanings ascribed to them in
the Note.

Dated:
      -------------------------------------------------

Signature:
          ---------------------------------------------

Print Name:
           --------------------------------------------

Information for Issuance of Stock and Delivery of Stock Certificates:

Name:
     --------------------------------------------------

Address:
        -----------------------------------------------

----------------------------------------

No. of shares to be issued:
                           ----------------------------

Amount of new Note to be issued:
                                -----------------------

                                        8
<PAGE>
 THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
     ACT OF 1933, AS AMENDED (THE "ACT"), OR APPLICABLE STATE SECURITIES LAWS
(COLLECTIVELY, THE "LAWS"). THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND
   MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF
    EITHER (I) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE
   LAWS, OR (II) AN OPINION OF COUNSEL PROVIDED TO THE ISSUER IN FORM, SUBSTANCE
AND SCOPE REASONABLY ACCEPTABLE TO THE ISSUER TO THE EFFECT THAT REGISTRATION IS
  NOT REQUIRED UNDER THE LAWS DUE TO AN AVAILABLE EXCEPTION TO OR EXEMPTION FROM
                   THE REGISTRATION REQUIREMENTS OF THE LAWS.

                           BAYWOOD INTERNATIONAL, INC.
                            BAYWOOD ACQUISITION, INC.

                   8% CONVERTIBLE SUBORDINATED PROMISSORY NOTE

$250,000.00                                               March 30, 2007

     FOR  VALUE RECEIVED, the undersigned, BAYWOOD INTERNATIONAL, INC., a Nevada
corporation  ("Baywood") and BAYWOOD ACQUISITION, INC., a Nevada corporation and
a wholly-owned subsidiary of Baywood ("Buyer"), each located at 14950 North 83rd
Place,  Suite  1,  Scottsdale,  Arizona  85260  (each  of  Baywood and Buyer may
sometimes  be referred to herein as a "Company", and together, the "Companies"),
hereby,  jointly  and  severally, promise to pay to the order of CHARLES UNG, an
individual  residing  at  210  Crescent  Glen  Drive, Glendora, California 91741
("Holder"),  in  lawful  money of the United States, the principal amount of Two
Hundred  Fifty Thousand Dollars ($250,000), together with interest on the unpaid
principal  amount  hereof, from  the date hereof until the outstanding principal
amount hereof shall be paid in full, at the rate of eight percent (8%) per annum
computed  on  the  basis  of  a  365-day  year.

     1.     Note.  This  subordinated  promissory  note  (this  "Note") is being
            ----
delivered  by  the Companies to Holder in partial consideration for the purchase
of  the Purchased Assets and the LifeTime Business (as such terms are defined in
that  certain  Asset Purchase Agreement, of even date herewith, by and among the
Companies,  LifeTime and the LifeTime Representatives defined therein, including
Holder  (the  "Asset Purchase Agreement")).  Unless otherwise stated herein, all
capitalized terms not defined herein shall have the meanings ascribed to them in
the  Asset  Purchase  Agreement.

     2.     Payment.  The  principal  amount  of  this  Note shall be payable in
            -------
eight  equal  quarterly  installments  of  THIRTY ONE THOUSAND TWO HUNDRED FIFTY
DOLLARS  ($31,250),  on  the  last  day  of March, June, September and December,
commencing  June  30,  2007  through  March  31,  2009.

<PAGE>
Accrued  interest  shall  be payable in arrears on each such installment payment
date and at maturity.  All payments shall be made in immediately available funds
at  Holder's  address  set  forth in the Asset Purchase Agreement, or such other
address  as  Holder  may  designate  in  writing  to  the  Companies.

     3.     Prepayment.  Subject  to  Holder's prior right to convert all or any
            ----------
portion  of this Note into shares of Common Stock (hereafter defined), this Note
may  be  prepaid  in  whole  or in part at any time or from time to time without
premium  or  penalty  or discount, together with accrued interest to the date of
payment  on  the  principal  amount  prepaid.

     4.     Optional  Conversion  of  Note.
            -------------------------------

          4.1.     Conversion  Procedure.
                   ---------------------

               (a)     At  any  time Holder at his option may convert all or any
     portion  of  this  Note  into  the number of shares (rounded to the nearest
     share) of common stock, par value $0.001 per share, of Baywood (the "Common
     Stock"),  computed  by  dividing  the  principal  amount of this Note to be
     converted  together  with  the accrued interest on such principal amount by
     the  Conversion  Price  (hereafter  defined)  then  in  effect.

               (b)     Holder  shall  effect  a  conversion by surrendering this
     Note  accompanied  by  a  proper  assignment  thereof  to  the  Companies
     together  with  a completed and duly executed conversion notice in the form
     annexed  hereto.  Such  conversion of this Note will be deemed to have been
     effected as of the close of business on the date on which this Note and the
     duly  completed  exercise  notice  have  been  surrendered at the principal
     office of the Companies. At such time as such conversion has been effected,
     the  rights  of Holder to receive payments of principal and interest hereon
     will cease and Holder will be deemed to have become the holder of record of
     the  shares  of  Common  Stock represented thereby. Provisions of this Note
     that  apply to conversion of all of this Note also apply to conversion of a
     portion  of  it.

               (c)     As  soon as possible after a conversion has been effected
     (but  in  any  event  within  five  (5)  days  after  the surrender of this
     Note  and the conversion notice to the Company), the Companies will deliver
     to  Holder:

                         (i)     a  certificate or certificates representing the
     number  of  shares  of  Common  Stock issuable by reason of such conversion
     in  the  name of Holder in such denomination or denominations as Holder has
     specified;  and

                        (ii)     a  new  duly  executed  Note  for the principal
     amount  of  this  Note  which  was delivered to the Companies in connection
     with  such  conversion  but  which  was  not  converted.

               (d)     The  issuance  of certificates for shares of Common Stock
     upon  conversion  of  this  Note  will be made without charge to Holder for
     any  issuance  tax  in respect thereof or other cost incurred by Baywood in
     connection  with  such  conversion  and  the

                                        2
<PAGE>
     related  issuance  of  shares  of  Common  Stock.  Baywood  represents  and
     warrants  that upon conversion of this Note, the Common Stock issuable with
     respect  to  such  conversion  will  be  validly  issued,  fully  paid  and
     nonassessable.

               (e)     The  Companies  will  not  close  their  respective books
     against  the  transfer  of  this  Note  or  of  Common  Stock  issued  or
     issuable  upon  conversion of this Note in any manner which interferes with
     the timely conversion of this Note. Baywood will from time to time take all
     such  action  as may be necessary to assure that the par value per share of
     the  Common  Stock  acquirable upon conversion of this Note is at all times
     equal  to  or  less  than  the  Conversion  Price  then  in  effect.

               (f)     This  Note,  when  delivered  for  conversion,  shall  be
     cancelled  by  the  Companies.

          4.2     Conversion  Price.
                  -----------------

               (a)     The  initial  Conversion  Price  will  be $0.05 per share
     during  the  first  twelve  (12)  months  from  the  date hereof, $0.08 per
     share for months twelve (12) through twenty-four (24) from the date hereof,
     and  $0.10  per share thereafter until the payment in full of this Note. In
     order  to  prevent dilution of the conversion rights granted hereunder, the
     Conversion  Price  will be subject to adjustment from time to time pursuant
     to  this  Section  4.2.

               (b)     Reorganization,  Reclassification,  Merger  or  Sale.  In
                       ----------------------------------------------------
     case  Baywood  shall  effect  a  reorganization,  shall  merge  with  or
     consolidate  into another corporation, or shall sell, transfer or otherwise
     dispose  of  all  or  substantially all of its property, assets or business
     and, pursuant to the terms of such reorganization, merger, consolidation or
     disposition  of  assets,  shares  of stock or other securities, property or
     assets  of  Baywood, successor or transferee or an affiliate thereof are to
     be  received  by or distributed to the holders of Common Stock, then Holder
     shall  be provided with written notice from Baywood informing Holder of the
     terms  of  such  reorganization,  merger,  consolidation  or disposition of
     assets  and  of  the  record  date  thereof  for  any distribution pursuant
     thereto,  at least ten (10) days in advance of such record date, and Holder
     shall  have,  in  addition  to the rights provided for herein, the right to
     receive, at Holder's election, either (i) upon conversion of this Note, the
     number  of  shares  of  stock  or  other  securities, property or assets of
     Baywood, successor, transferee or affiliate thereof or cash receivable upon
     or as a result of such reorganization, merger, consolidation or disposition
     of  assets  by  a  holder of the number of shares of Common Stock for which
     this  Note  is  convertible  immediately  prior  to  such event or (ii) the
     securities  into  which this Note is converted upon, or as a result of such
     reorganization,  merger,  consolidation  or  disposition  of  assets.  The
     provisions  of this paragraph (b) of this Section 4.2 shall similarly apply
     to  successive  reorganizations, mergers, consolidations or dispositions of
     assets.

               (c)     Subdivision  or  Combination of Common Stock.  If Baywood
                       --------------------------------------------
     declares  a  dividend  or  other  distribution  payable in shares of Common
     Stock  or  any  shares  of  a class or series convertible into Common Stock
     (together  with  the  Common  Stock,  "Securities")  or

                                        3
<PAGE>
     subdivides  its  outstanding  shares  of  Common Stock into a larger number
     or  combines  its outstanding shares of Common Stock into a smaller number,
     then  the  Conversion  Price  in effect immediately prior to such dividend,
     other  distribution,  subdivision or combination, as the case may be, shall
     forthwith  be  adjusted  to  that  price  determined  by  multiplying  the
     Conversion  Price  by  a  fraction  (i) the numerator of which shall be the
     total  number  of  outstanding  shares  of such Common Stock and Securities
     immediately  prior  to  such  dividend,  other distribution, subdivision or
     combination  and (ii) the denominator of which shall be the total number of
     outstanding  shares  of  such  Common  Stock  and Securities (including the
     number  of  shares  of Common Stock into which such newly issued Securities
     are then convertible), immediately after such dividend, other distribution,
     subdivision  or  combination.

               (d)     In case Baywood shall distribute to the holders of Common
     Stock  evidences  of  indebtedness  issued  by  Baywood,  or  assets
     (excluding  cash  dividends) then, in each such case, immediately following
     the  record date fixed for the determination of the holders of Common Stock
     entitled  to  receive  such  distribution,  the  Conversion Price in effect
     thereafter  shall  be  determined  by  multiplying  the Conversion Price in
     effect  immediately  prior  to  such  record  date  by  a  fraction (i) the
     numerator  of  which  shall  be an amount equal to the remainder of (A) the
     Current  Market  Price  (as hereafter defined) of one share of Common Stock
     less  (B) the fair value (as determined in good faith by Baywood's board of
     directors)  of  the  evidences  of indebtedness or assets so distributed in
     respect  of  one  share  of  Common Stock, as the case may be, and (ii) the
     denominator  of  which  shall  be  the Current Market Price of one share of
     Common  Stock.  Such adjustment shall be made on the date such distribution
     is  made,  and  shall  become  effective  at the opening of business on the
     business  day  following  the  record  date  for  the  determination  of
     stockholders  entitled  to  such  distribution.

          For  purposes  of  this  Note,  "Current  Market  Price" on any day of
     determination  means  the  closing  price of a share of Common Stock on the
     over-the-counter  bulletin  board  as  reported  by  the National Quotation
     Bureau  Incorporated, or a similar generally accepted reporting service, or
     if  not so available, in such manner as furnished by any Nasdaq member firm
     of  the National Association of Securities Dealers, Inc. selected from time
     to time by the board of directors of Baywood for that purpose, or if not so
     available,  a  price  determined in good faith by the board of directors of
     Buyer  as being equal to the fair market value thereof, as the case may be.

               (e)     Notice  of  Adjustment.  Whenever  the  Conversion  Price
                       ----------------------
     shall  be  adjusted  as  provided  in  this  Section  4.2,  Baywood  shall
     forthwith  send  by  first  class  mail,  postage  prepaid to Holder at his
     address  as  shown  in the records of Baywood a statement, certified by the
     chief  financial  officer of Baywood, showing in detail the facts requiring
     such adjustment and the Conversion Price that shall be in effect after such
     adjustment.

          4.3     Reservation  of  Common  Stock.  Baywood  shall  at  all times
                  ------------------------------
     reserve  and  keep  available  for  issuance  upon  the  conversion of this
     Note  such  number of its authorized but unissued shares of Common Stock as
     will  be  sufficient  to  permit  the  conversion  in  full  of  this

                                        4
<PAGE>
     Note,  and  upon  such  issuance  such  shares  of  Common  Stock  will  be
     validly  issued,  fully  paid and nonassessable. The transfer agent for any
     shares  of Baywood's capital stock issuable upon the exercise of any of the
     rights  of purchase aforesaid, will be authorized and directed at all times
     to  reserve  such  number  of authorized shares of Common Stock as shall be
     requisite  for  such purpose. Baywood will keep a copy of this Note on file
     with  the  transfer  agent  for  the Common Stock and with every subsequent
     transfer  agent for any shares of Baywood's capital stock issuable upon the
     exercise  of the rights of purchase represented by the foregoing conversion
     rights.  Baywood  will  supply  the transfer agent with duly executed stock
     certificates  for issue against exercise of the foregoing conversion rights
     and  will provide or otherwise make available any cash which may be payable
     in  lieu  of  fractional  shares  as  provided  hereinabove.

          4.4     No  Voting  Rights;  Limitations of Liability.  This Note will
                  ----------------------------------------------
     not  entitle  Holder  to  any  voting  rights  or  other  rights  as  a
     stockholder  of  Baywood.  No  provision  of  this  Note, in the absence of
     affirmative  action  by Holder to purchase Common Stock, and no enumeration
     in  this  Note of the rights or privileges of Holder, will give rise to any
     liability  of  such  Holder  for  the  Conversion  Price  of  Common  Stock
     acquirable  by  exercise  hereof  or  as  a  stockholder  of  Baywood.

     5.     Subordination.  The  payment  of  this Note shall be subordinate and
            -------------
     junior  in  right  of  payment  to  the  prior  payment  of  senior  debt
     pursuant  to  a Subordination Agreement of even date herewith, by and among
     Vineyard  Bank,  N.A.,  the  Companies  and  the  LifeTime Representatives,
     including  Holder.

     6.     Events  of  Default;  Remedies.
            ------------------------------

          6.1     The  occurrence  of  any  one  or more of the following events
shall  constitute  an  Event  of  Default  hereunder:

               (a)     Default  by the Companies in the payment of the principal
     of  or  interest  on  this  Note  when and as the same shall become due and
     payable and such default shall continue for fifteen (15) days after written
     notice  thereof  from  Holder;  or

               (b)     (i)  Commencement  by  either Company of a voluntary case
     under  the  federal  bankruptcy  laws  (as  now  of  hereafter  in effect);
     (ii)  either  Company  applying for or consenting to the appointment of, or
     the  taking  of possession by, a receiver, custodian, trustee or liquidator
     of  itself  or  of  a  substantial part of its assets; (iii) either Company
     making  a  general  assignment  for  the  benefit of creditors; or (iv) the
     failure of either Company generally to pay its debts as they become due; or

               (c)     The  entry of a decree or order by any court of competent
     jurisdiction  in  respect  of  either  Company  granting  (i) relief in any
     involuntary  case under the federal bankruptcy laws (as now or hereafter in
     effect);  or  (ii)  appointment  of  a  trustee,  receiver,  custodian  or
     liquidator  for  such  Company or for a substantial part of its assets, and
     such  case

                                        5
<PAGE>
     or  proceeding  shall  continue  undismissed  or  unstayed  for a period of
     one  hundred  twenty  (120)  consecutive  days.

          6.2     Upon  the  happening  of  any  Event of Default hereunder, the
entire  principal  sum and all interest thereon, at the option of Holder, may be
declared  and thereupon shall become immediately due and payable.  In such event
the  Companies  shall  be responsible to pay all of Holder's reasonable costs of
collection,  including  attorney's  fees.

     7.     Notices.  All notices and other communications required or permitted
            -------
under  this  Note  shall  be made in accordance with the provisions of the Asset
Purchase  Agreement.  The  Companies  waive  presentment  for payment, notice of
non-payment, protest, demand, notice of protest, notice of intent to accelerate,
notice of acceleration and dishonor, diligence in enforcement and indulgences of
any  kind.

     8.      Amendment; Waiver.  This Note may not be amended or modified except
             -----------------
by  an  instrument  in  writing  duly  executed  by the Companies and Holder. No
failure  or  delay  on the part of Holder in the exercise of any power, right or
privilege  hereunder  shall operate as a waiver thereof, nor shall any single or
partial exercise of any such power, right or privilege preclude other or further
exercise  thereof  or  of  any  other  right,  power  privilege.  All rights and
remedies  existing hereunder are cumulative to, and not exclusive of, any rights
or  remedies  otherwise  available.

     9.     Severability.  If  any provision hereof shall for any reason be held
            ------------
to  be  invalid,  illegal  or  unenforceable  in  any  respect, such invalidity,
illegality,  or  unenforceability  shall not affect any other provisions hereof,
and  this  Note  shall be construed as if such invalid, illegal or unenforceable
provision  has  never  been  contained  herein.

     10.     Assignment.  This  Note  may  be  assigned,  pledged, negotiated or
             ----------
transferred  by  Holder and shall inure to the benefit of Holder, its successors
and  assigns.

     11.     Governing  Law  Waiver of Jury Trial.  This Note is made under, and
             ------------------------------------
shall  be  construed  and  enforced in accordance with, the internal laws of the
State  of  Arizona,  without  regard  to  principles  of conflicts of laws.  The
Companies  irrevocably  waive, to the maximum extent permitted by law, any right
they  may  have  to  a  trial  by  jury in respect of any litigation directly or
indirectly  at  any  time arising out of, under or in connection with this Note.

                            [Signature Page Follows]

                                        6
<PAGE>

          IN  WITNESS  WHEREOF,  the  undersigned  have  caused  this Note to be
executed as of the 30th day of March, 2007.

                                             BAYWOOD  INTERNATIONAL,  INC.

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

                                             BAYWOOD  ACQUISITION,  INC.

                                        By:  /s/ Neil Reithinger
                                             ------------------------------
                                             Name:  Neil Reithinger
                                             Title: President

                                        7
<PAGE>
                           [FORM OF CONVERSION NOTICE]
Baywood International, Inc.
Baywood Acquisition, Inc.
14950 North 83rd Place, Suite 1
Scottsdale, Arizona 85260

     The undersigned Holder of the 8% Subordinated Convertible Note of the
Companies dated March __, 2007 hereby irrevocably exercises its option to
convert [$_______] of unpaid principal and [$_______] of accrued interest on the
Note into shares of Common Stock of Baywood International, Inc., in accordance
with the terms of the Note. The undersigned hereby delivers the Note to the
Companies for such conversion. The undersigned hereby instructs the Companies to
convert the amount of money specified above into shares of Common Stock at the
Conversion Price in accordance with Section 4.2 of the Note. The undersigned
directs that the Common Stock issuable and certificates therefor deliverable
upon conversion be issued in the name of and delivered to the undersigned unless
otherwise indicated below. If the full unpaid amount of the Note is not being
converted, the undersigned also hereby instructs the Companies to deliver a new
Note to the undersigned in the amount which is not being converted. All
capitalized terms not defined herein shall have the meanings ascribed to them in
the Note.

Dated:
      ----------------------------------------------

Signature:
          ------------------------------------------

Print Name:
           -----------------------------------------

Information for Issuance of Stock and Delivery of Stock Certificates:

Name:
     -----------------------------------------------

Address:
        --------------------------------------------

------------------------------------

No. of shares to be issued:
                           -------------------------

Amount of new Note to be issued:
                                --------------------

                                        8
<PAGE>
 THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
     ACT OF 1933, AS AMENDED (THE "ACT"), OR APPLICABLE STATE SECURITIES LAWS
(COLLECTIVELY, THE "LAWS"). THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND
   MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF
    EITHER (I) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE
   LAWS, OR (II) AN OPINION OF COUNSEL PROVIDED TO THE ISSUER IN FORM, SUBSTANCE
AND SCOPE REASONABLY ACCEPTABLE TO THE ISSUER TO THE EFFECT THAT REGISTRATION IS
  NOT REQUIRED UNDER THE LAWS DUE TO AN AVAILABLE EXCEPTION TO OR EXEMPTION FROM
                   THE REGISTRATION REQUIREMENTS OF THE LAWS.

                           BAYWOOD INTERNATIONAL, INC.
                            BAYWOOD ACQUISITION, INC.

                   8% CONVERTIBLE SUBORDINATED PROMISSORY NOTE

$250,000.00                                                March 30, 2007

     FOR  VALUE RECEIVED, the undersigned, BAYWOOD INTERNATIONAL, INC., a Nevada
corporation  ("Baywood") and BAYWOOD ACQUISITION, INC., a Nevada corporation and
a wholly-owned subsidiary of Baywood ("Buyer"), each located at 14950 North 83rd
Place,  Suite  1,  Scottsdale,  Arizona  85260  (each  of  Baywood and Buyer may
sometimes  be referred to herein as a "Company", and together, the "Companies"),
hereby,  jointly  and severally, promise to pay to the order of M. AMIRUL KARIM,
an  individual  residing  at  12921  Berkhamsted  Street,
Cerritos,  California  90703-7235  ("Holder"),  in  lawful  money  of the United
States,  the  principal amount of Two Hundred Fifty Thousand Dollars ($250,000),
together  with  interest  on  the unpaid principal amount hereof, from  the date
hereof  until  the outstanding principal amount hereof shall be paid in full, at
the  rate  of  eight  percent  (8%) per annum computed on the basis of a 365-day
year.

     1.     Note.  This  subordinated  promissory  note  (this  "Note") is being
            ----
delivered  by  the Companies to Holder in partial consideration for the purchase
of  the Purchased Assets and the LifeTime Business (as such terms are defined in
that  certain  Asset Purchase Agreement, of even date herewith, by and among the
Companies,  LifeTime and the LifeTime Representatives defined therein, including
Holder  (the  "Asset Purchase Agreement")).  Unless otherwise stated herein, all
capitalized terms not defined herein shall have the meanings ascribed to them in
the  Asset  Purchase  Agreement.

     2.     Payment.  The  principal  amount  of  this  Note shall be payable in
            -------
eight  equal  quarterly  installments  of  THIRTY ONE THOUSAND TWO HUNDRED FIFTY
DOLLARS  ($31,250),  on  the  last  day  of March, June, September and December,
commencing  June  30,  2007  through  March  31,  2009.

<PAGE>
Accrued  interest  shall  be payable in arrears on each such installment payment
date and at maturity.  All payments shall be made in immediately available funds
at  Holder's  address  set  forth in the Asset Purchase Agreement, or such other
address  as  Holder  may  designate  in  writing  to  the  Companies.

     3.     Prepayment.  Subject  to  Holder's prior right to convert all or any
            ----------
portion  of this Note into shares of Common Stock (hereafter defined), this Note
may  be  prepaid  in  whole  or in part at any time or from time to time without
premium  or  penalty  or discount, together with accrued interest to the date of
payment  on  the  principal  amount  prepaid.

     4.     Optional  Conversion  of  Note.
            -------------------------------

          4.1.     Conversion  Procedure.
                   ---------------------

               (a)     At  any  time Holder at his option may convert all or any
     portion  of  this  Note  into  the number of shares (rounded to the nearest
     share) of common stock, par value $0.001 per share, of Baywood (the "Common
     Stock"),  computed  by  dividing  the  principal  amount of this Note to be
     converted  together  with  the accrued interest on such principal amount by
     the  Conversion  Price  (hereafter  defined)  then  in  effect.

               (b)     Holder  shall  effect  a  conversion by surrendering this
     Note  accompanied  by  a  proper  assignment  thereof  to  the  Companies
     together  with  a completed and duly executed conversion notice in the form
     annexed  hereto.  Such  conversion of this Note will be deemed to have been
     effected as of the close of business on the date on which this Note and the
     duly  completed  exercise  notice  have  been  surrendered at the principal
     office of the Companies. At such time as such conversion has been effected,
     the  rights  of Holder to receive payments of principal and interest hereon
     will cease and Holder will be deemed to have become the holder of record of
     the  shares  of  Common  Stock represented thereby. Provisions of this Note
     that  apply to conversion of all of this Note also apply to conversion of a
     portion  of  it.

               (c)     As  soon as possible after a conversion has been effected
     (but  in  any  event  within  five  (5)  days  after  the surrender of this
     Note  and the conversion notice to the Company), the Companies will deliver
     to  Holder:

                         (i)     a  certificate or certificates representing the
     number  of  shares  of  Common  Stock issuable by reason of such conversion
     in  the  name of Holder in such denomination or denominations as Holder has
     specified;  and

                        (ii)     a  new  duly  executed  Note  for the principal
     amount  of  this  Note  which  was delivered to the Companies in connection
     with  such  conversion  but  which  was  not  converted.

               (d)     The  issuance  of certificates for shares of Common Stock
     upon  conversion  of  this  Note  will be made without charge to Holder for
     any  issuance  tax  in respect thereof or other cost incurred by Baywood in
     connection  with  such  conversion  and  the

                                        2
<PAGE>
     related  issuance  of  shares  of  Common  Stock.  Baywood  represents  and
     warrants  that upon conversion of this Note, the Common Stock issuable with
     respect  to  such  conversion  will  be  validly  issued,  fully  paid  and
     nonassessable.

               (e)     The  Companies  will  not  close  their  respective books
     against  the  transfer  of  this  Note  or  of  Common  Stock  issued  or
     issuable  upon  conversion of this Note in any manner which interferes with
     the timely conversion of this Note. Baywood will from time to time take all
     such  action  as may be necessary to assure that the par value per share of
     the  Common  Stock  acquirable upon conversion of this Note is at all times
     equal  to  or  less  than  the  Conversion  Price  then  in  effect.

               (f)     This  Note,  when  delivered  for  conversion,  shall  be
     cancelled  by  the  Companies.

          4.2     Conversion  Price.
                  -----------------

               (a)     The  initial  Conversion  Price  will  be $0.05 per share
     during  the  first  twelve  (12)  months  from  the  date hereof, $0.08 per
     share for months twelve (12) through twenty-four (24) from the date hereof,
     and  $0.10  per share thereafter until the payment in full of this Note. In
     order  to  prevent dilution of the conversion rights granted hereunder, the
     Conversion  Price  will be subject to adjustment from time to time pursuant
     to  this  Section  4.2.

               (b)     Reorganization,  Reclassification,  Merger  or  Sale.  In
                       ----------------------------------------------------
     case  Baywood  shall  effect  a  reorganization,  shall  merge  with  or
     consolidate  into another corporation, or shall sell, transfer or otherwise
     dispose  of  all  or  substantially all of its property, assets or business
     and, pursuant to the terms of such reorganization, merger, consolidation or
     disposition  of  assets,  shares  of stock or other securities, property or
     assets  of  Baywood, successor or transferee or an affiliate thereof are to
     be  received  by or distributed to the holders of Common Stock, then Holder
     shall  be provided with written notice from Baywood informing Holder of the
     terms  of  such  reorganization,  merger,  consolidation  or disposition of
     assets  and  of  the  record  date  thereof  for  any distribution pursuant
     thereto,  at least ten (10) days in advance of such record date, and Holder
     shall  have,  in  addition  to the rights provided for herein, the right to
     receive, at Holder's election, either (i) upon conversion of this Note, the
     number  of  shares  of  stock  or  other  securities, property or assets of
     Baywood, successor, transferee or affiliate thereof or cash receivable upon
     or as a result of such reorganization, merger, consolidation or disposition
     of  assets  by  a  holder of the number of shares of Common Stock for which
     this  Note  is  convertible  immediately  prior  to  such event or (ii) the
     securities  into  which this Note is converted upon, or as a result of such
     reorganization,  merger,  consolidation  or  disposition  of  assets.  The
     provisions  of this paragraph (b) of this Section 4.2 shall similarly apply
     to  successive  reorganizations, mergers, consolidations or dispositions of
     assets.

               (c)     Subdivision  or  Combination of Common Stock.  If Baywood
                       --------------------------------------------
     declares  a  dividend  or  other  distribution  payable in shares of Common
     Stock  or  any  shares  of  a class or series convertible into Common Stock
     (together  with  the  Common  Stock,  "Securities")  or

                                        3
<PAGE>
     subdivides  its  outstanding  shares  of  Common Stock into a larger number
     or  combines  its outstanding shares of Common Stock into a smaller number,
     then  the  Conversion  Price  in effect immediately prior to such dividend,
     other  distribution,  subdivision or combination, as the case may be, shall
     forthwith  be  adjusted  to  that  price  determined  by  multiplying  the
     Conversion  Price  by  a  fraction  (i) the numerator of which shall be the
     total  number  of  outstanding  shares  of such Common Stock and Securities
     immediately  prior  to  such  dividend,  other distribution, subdivision or
     combination  and (ii) the denominator of which shall be the total number of
     outstanding  shares  of  such  Common  Stock  and Securities (including the
     number  of  shares  of Common Stock into which such newly issued Securities
     are then convertible), immediately after such dividend, other distribution,
     subdivision  or  combination.

               (d)     In case Baywood shall distribute to the holders of Common
     Stock  evidences  of  indebtedness  issued  by  Baywood,  or  assets
     (excluding  cash  dividends) then, in each such case, immediately following
     the  record date fixed for the determination of the holders of Common Stock
     entitled  to  receive  such  distribution,  the  Conversion Price in effect
     thereafter  shall  be  determined  by  multiplying  the Conversion Price in
     effect  immediately  prior  to  such  record  date  by  a  fraction (i) the
     numerator  of  which  shall  be an amount equal to the remainder of (A) the
     Current  Market  Price  (as hereafter defined) of one share of Common Stock
     less  (B) the fair value (as determined in good faith by Baywood's board of
     directors)  of  the  evidences  of indebtedness or assets so distributed in
     respect  of  one  share  of  Common Stock, as the case may be, and (ii) the
     denominator  of  which  shall  be  the Current Market Price of one share of
     Common  Stock.  Such adjustment shall be made on the date such distribution
     is  made,  and  shall  become  effective  at the opening of business on the
     business  day  following  the  record  date  for  the  determination  of
     stockholders  entitled  to  such  distribution.

          For  purposes  of  this  Note,  "Current  Market  Price" on any day of
     determination  means  the  closing  price of a share of Common Stock on the
     over-the-counter  bulletin  board  as  reported  by  the National Quotation
     Bureau  Incorporated, or a similar generally accepted reporting service, or
     if  not so available, in such manner as furnished by any Nasdaq member firm
     of  the National Association of Securities Dealers, Inc. selected from time
     to time by the board of directors of Baywood for that purpose, or if not so
     available,  a  price  determined in good faith by the board of directors of
     Buyer  as being equal to the fair market value thereof, as the case may be.

               (e)     Notice  of  Adjustment.  Whenever  the  Conversion  Price
                       ----------------------
     shall  be  adjusted  as  provided  in  this  Section  4.2,  Baywood  shall
     forthwith  send  by  first  class  mail,  postage  prepaid to Holder at his
     address  as  shown  in the records of Baywood a statement, certified by the
     chief  financial  officer of Baywood, showing in detail the facts requiring
     such adjustment and the Conversion Price that shall be in effect after such
     adjustment.

          4.3     Reservation  of  Common  Stock.  Baywood  shall  at  all times
                  ------------------------------
     reserve  and  keep  available  for  issuance  upon  the  conversion of this
     Note  such  number of its authorized but unissued shares of Common Stock as
     will  be  sufficient  to  permit  the  conversion  in  full  of  this

                                        4
<PAGE>
     Note,  and  upon  such  issuance  such  shares  of  Common  Stock  will  be
     validly  issued,  fully  paid and nonassessable. The transfer agent for any
     shares  of Baywood's capital stock issuable upon the exercise of any of the
     rights  of purchase aforesaid, will be authorized and directed at all times
     to  reserve  such  number  of authorized shares of Common Stock as shall be
     requisite  for  such purpose. Baywood will keep a copy of this Note on file
     with  the  transfer  agent  for  the Common Stock and with every subsequent
     transfer  agent for any shares of Baywood's capital stock issuable upon the
     exercise  of the rights of purchase represented by the foregoing conversion
     rights.  Baywood  will  supply  the transfer agent with duly executed stock
     certificates  for issue against exercise of the foregoing conversion rights
     and  will provide or otherwise make available any cash which may be payable
     in  lieu  of  fractional  shares  as  provided  hereinabove.

          4.4     No  Voting  Rights;  Limitations of Liability.  This Note will
                  ----------------------------------------------
     not  entitle  Holder  to  any  voting  rights  or  other  rights  as  a
     stockholder  of  Baywood.  No  provision  of  this  Note, in the absence of
     affirmative  action  by Holder to purchase Common Stock, and no enumeration
     in  this  Note of the rights or privileges of Holder, will give rise to any
     liability  of  such  Holder  for  the  Conversion  Price  of  Common  Stock
     acquirable  by  exercise  hereof  or  as  a  stockholder  of  Baywood.

     5.     Subordination.  The  payment  of  this Note shall be subordinate and
            -------------
     junior  in  right  of  payment  to  the  prior  payment  of  senior  debt
     pursuant  to  a Subordination Agreement of even date herewith, by and among
     Vineyard  Bank,  N.A.,  the  Companies  and  the  LifeTime Representatives,
     including  Holder.

     6.     Events  of  Default;  Remedies.
            ------------------------------

          6.1     The  occurrence  of  any  one  or more of the following events
shall  constitute  an  Event  of  Default  hereunder:

               (a)     Default  by the Companies in the payment of the principal
     of  or  interest  on  this  Note  when and as the same shall become due and
     payable and such default shall continue for fifteen (15) days after written
     notice  thereof  from  Holder;  or

               (b)     (i)  Commencement  by  either Company of a voluntary case
     under  the  federal  bankruptcy  laws  (as  now  of  hereafter  in effect);
     (ii)  either  Company  applying for or consenting to the appointment of, or
     the  taking  of possession by, a receiver, custodian, trustee or liquidator
     of  itself  or  of  a  substantial part of its assets; (iii) either Company
     making  a  general  assignment  for  the  benefit of creditors; or (iv) the
     failure of either Company generally to pay its debts as they become due; or

               (c)     The  entry of a decree or order by any court of competent
     jurisdiction  in  respect  of  either  Company  granting  (i) relief in any
     involuntary  case under the federal bankruptcy laws (as now or hereafter in
     effect);  or  (ii)  appointment  of  a  trustee,  receiver,  custodian  or
     liquidator  for  such  Company or for a substantial part of its assets, and
     such  case

                                        5
<PAGE>
     or  proceeding  shall  continue  undismissed  or  unstayed  for a period of
     one  hundred  twenty  (120)  consecutive  days.

          6.2     Upon  the  happening  of  any  Event of Default hereunder, the
entire  principal  sum and all interest thereon, at the option of Holder, may be
declared  and thereupon shall become immediately due and payable.  In such event
the  Companies  shall  be responsible to pay all of Holder's reasonable costs of
collection,  including  attorney's  fees.

     7.     Notices.  All notices and other communications required or permitted
            -------
under  this  Note  shall  be made in accordance with the provisions of the Asset
Purchase  Agreement.  The  Companies  waive  presentment  for payment, notice of
non-payment, protest, demand, notice of protest, notice of intent to accelerate,
notice of acceleration and dishonor, diligence in enforcement and indulgences of
any  kind.

     8.      Amendment; Waiver.  This Note may not be amended or modified except
             -----------------
by  an  instrument  in  writing  duly  executed  by the Companies and Holder. No
failure  or  delay  on the part of Holder in the exercise of any power, right or
privilege  hereunder  shall operate as a waiver thereof, nor shall any single or
partial exercise of any such power, right or privilege preclude other or further
exercise  thereof  or  of  any  other  right,  power  privilege.  All rights and
remedies  existing hereunder are cumulative to, and not exclusive of, any rights
or  remedies  otherwise  available.

     9.     Severability.  If  any provision hereof shall for any reason be held
            ------------
to  be  invalid,  illegal  or  unenforceable  in  any  respect, such invalidity,
illegality,  or  unenforceability  shall not affect any other provisions hereof,
and  this  Note  shall be construed as if such invalid, illegal or unenforceable
provision  has  never  been  contained  herein.

     10.     Assignment.  This  Note  may  be  assigned,  pledged, negotiated or
             ----------
transferred  by  Holder and shall inure to the benefit of Holder, its successors
and  assigns.

     11.     Governing  Law  Waiver of Jury Trial.  This Note is made under, and
             ------------------------------------
shall  be  construed  and  enforced in accordance with, the internal laws of the
State  of  Arizona,  without  regard  to  principles  of conflicts of laws.  The
Companies  irrevocably  waive, to the maximum extent permitted by law, any right
they  may  have  to  a  trial  by  jury in respect of any litigation directly or
indirectly  at  any  time arising out of, under or in connection with this Note.

                            [SIGNATURE PAGE FOLLOWS]

                                        6
<PAGE>
          IN  WITNESS  WHEREOF,  the  undersigned  have  caused  this Note to be
executed as of the 30th day of March, 2007.

                                             BAYWOOD  INTERNATIONAL,  INC.

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

                                             BAYWOOD  ACQUISITION,  INC.

                                        By:  /s/ Neil Reithinger
                                             ------------------------------
                                             Name:  Neil Reithinger
                                             Title: President

                                        7
<PAGE>
                           [FORM OF CONVERSION NOTICE]
Baywood International, Inc.
Baywood Acquisition, Inc.
14950 North 83rd Place, Suite 1
Scottsdale, Arizona 85260

     The undersigned Holder of the 8% Subordinated Convertible Note of the
Companies dated March __, 2007 hereby irrevocably exercises its option to
convert [$_______] of unpaid principal and [$_______] of accrued interest on the
Note into shares of Common Stock of Baywood International, Inc., in accordance
with the terms of the Note. The undersigned hereby delivers the Note to the
Companies for such conversion. The undersigned hereby instructs the Companies to
convert the amount of money specified above into shares of Common Stock at the
Conversion Price in accordance with Section 4.2 of the Note. The undersigned
directs that the Common Stock issuable and certificates therefor deliverable
upon conversion be issued in the name of and delivered to the undersigned unless
otherwise indicated below. If the full unpaid amount of the Note is not being
converted, the undersigned also hereby instructs the Companies to deliver a new
Note to the undersigned in the amount which is not being converted. All
capitalized terms not defined herein shall have the meanings ascribed to them in
the Note.

Dated:
      ---------------------------------------------

Signature:
          -----------------------------------------

Print Name:
           ----------------------------------------

Information for Issuance of Stock and Delivery of Stock Certificates:

Name:
     ----------------------------------------------

Address:
        -------------------------------------------

---------------------------------------

No. of shares to be issued:
                           ------------------------

Amount of new Note to be issued:
                                -------------------

                                       8BAYWOOD INTERNATIONAL, INC.
                            BAYWOOD ACQUISITION, INC.

                         8% SUBORDINATED PROMISSORY NOTE

$350,000.00                                                 March 30, 2007

     FOR  VALUE  RECEIVED,  the  undersigned,  BAYWOOD  INTERNATIONAL,  INC. and
BAYWOOD ACQUISITION, INC., each a Nevada corporation located at 14950 North 83rd
Place,  Suite  1, Scottsdale, Arizona 85260 (each, a "Company" and together, the
"Companies"),  hereby,  jointly  and  severally,  promise to pay to the order of
THOMAS  PINKOWSKI,  an  individual  residing  at  3703  Calle  Fino  Clarete San
Clemente, California 92673 ("Holder"), in lawful money of the United States, the
principal  amount  of  Three Hundred Fifty Thousand Dollars ($350,000), together
with  interest on the unpaid principal amount hereof, from the date hereof until
the  outstanding  principal  amount hereof shall be paid in full, at the rate of
eight  percent  (8%)  per  annum  computed  on  the  basis  of  a  365-day year.

     1.     Note.  This  subordinated  promissory  note  (the  "Note")  is being
            ----
delivered  by  the Companies to Holder in partial consideration for the purchase
of  the Purchased Assets and the LifeTime Business (as such terms are defined in
that  certain  Asset Purchase Agreement, of even date herewith, by and among the
Companies,  LifeTime and the LifeTime Representatives defined therein, including
Holder  (the  "Asset Purchase Agreement")).  Unless otherwise stated herein, all
capitalized terms not defined herein shall have the meanings ascribed to them in
the  Asset  Purchase  Agreement.

     2.     Payment.  The  principal  amount  of  this  Note shall be payable in
            -------
eight  equal  quarterly installments of Forty-Three Thousand Seven Hundred Fifty
Dollars  ($43,750)  each on the last day of March, June, September and December,
commencing  June  30,  2007  through  March 31, 2009.  Accrued interest shall be
payable  in  arrears  on  each  such  installment  payment date and at maturity.

     3.     Prepayment.  This  Note  may  be  prepaid in whole or in part at any
            ----------
time  or from time to time without premium or penalty or discount, together with
accrued  interest  to  the  date  of  payment  on  the principal amount prepaid.

     4.     Right  to  Offset.
            -----------------

     (a)     Subject to the terms of the Asset Purchase Agreement, the Companies
shall  have  the right to offset against this Note any and all damages sustained
by  either  or  both  of them caused by or resulting from any default, breach or
violation  by  LifeTime  or  any of the LifeTime Representatives of any of their
representations,  warranties,  covenants  or  agreements  set forth in the Asset
Purchase  Agreement.

<PAGE>
     (b)     All  amounts  which  the  Companies  shall be entitled to offset as
provided  above  shall  by  applied, first, to all interest then accrued on this
Note,  and thereafter, to the outstanding principal amount hereof in the inverse
order  of  the  quarterly  maturities  hereof.

     (c)     This  Note  shall  be  held in escrow for the period, and under the
terms  and  conditions, set forth in that certain Escrow Agreement, of even date
herewith, by and among the Companies, LifeTime, the LifeTime Representatives and
Meltzer,  Lippe,  Goldstein  &  Breitstone,  LLP,  as  escrow agent (the "Escrow
Agreement").

     5.     Subordination.  The  payment  of  this Note shall be subordinate and
            -------------
junior  in  right  of  payment to the prior payment of senior debt pursuant to a
Subordination Agreement of even date herewith, by and among Vineyard Bank, N.A.,
the  Companies  and  the  LifeTime  Representatives,  including  Holder.

     6.     Events  of  Default;  Remedies.
            ------------------------------

          6.1     The  occurrence  of  any  one  or more of the following events
shall  constitute  an  Event  of  Default  hereunder:

               (a)     Default  by the Companies in the payment of the principal
of  or  interest  on this Note when and as the same shall become due and payable
and  such  default  shall  continue  for  fifteen (15) days after written notice
thereof  from  Holder;  or

               (b)     (i)  Commencement  by  either Company of a voluntary case
under  the  federal bankruptcy laws (as now of hereafter in effect); (ii) either
Company  applying  for  or  consenting  to  the appointment of, or the taking of
possession  by,  a  receiver, custodian, trustee or liquidator of itself or of a
substantial part of its assets; (iii) either Company making a general assignment
for the benefit of creditors; or (iv) the failure of either Company generally to
pay  its  debts  as  they  become  due;  or

               (c)     The  entry of a decree or order by any court of competent
jurisdiction in respect of either Company granting (i) relief in any involuntary
case  under the federal bankruptcy laws (as now or hereafter in effect); or (ii)
appointment  of  a trustee, receiver, custodian or liquidator for either Company
or  for  a  substantial  part  of  its assets, and such case or proceeding shall
continue  undismissed  or  unstayed  for  a  period  of one hundred twenty (120)
consecutive  days.

          6.2     Upon  the  happening  of  any  Event of Default hereunder, the
entire  principal  sum and all interest thereon, at the option of Holder, may be
declared  and thereupon shall become immediately due and payable.  In such event
the  Companies  shall  be responsible to pay all of Holder's reasonable costs of
collection,  including  attorney's  fees.

     7.     Notices.  All notices and other communications required or permitted
            -------
under  this  Note  shall  be made in accordance with the provisions of the Asset
Purchase  Agreement.  The  Companies  waive  presentment  for payment, notice of
non-payment,  protest,  demand,  notice  of  protest,  notice  of

                                       2
<PAGE>
intent  to  accelerate,  notice  of  acceleration  and  dishonor,  diligence  in
enforcement  and  indulgences  of  any  kind.

     8.      Amendment; Waiver.  This Note may not be amended or modified except
             -----------------
by  an  instrument  in  writing  duly  executed  by the Companies and Holder. No
failure  or  delay  on the part of Holder in the exercise of any power, right or
privilege  hereunder  shall operate as a waiver thereof, nor shall any single or
partial exercise of any such power, right or privilege preclude other or further
exercise  thereof  or  of  any  other  right,  power  privilege.  All rights and
remedies  existing hereunder are cumulative to, and not exclusive of, any rights
or  remedies  otherwise  available.

     9.     Severability.  If  any provision hereof shall for any reason be held
            ------------
to  be  invalid,  illegal  or  unenforceable  in  any  respect, such invalidity,
illegality,  or  unenforceability  shall not affect any other provisions hereof,
and  this  Note  shall be construed as if such invalid, illegal or unenforceable
provision  has  never  been  contained  herein.

     10.     Assignment.  This  Note may not be assigned, pledged, negotiated or
             ----------
transferred  by  Holder  and  shall  inure  solely  to  the  benefit  of Holder.

     11.     Governing  Law; Waiver of Jury Trial.  This Note is made under, and
             ------------------------------------
shall  be  construed  and  enforced in accordance with, the internal laws of the
State  of  Arizona,  without  regard  to  principles  of conflicts of laws.  The
Companies  irrevocably  waive, to the maximum extent permitted by law, any right
they  may  have  to  a  trial  by  jury in respect of any litigation directly or
indirectly  at  any  time arising out of, under or in connection with this Note.

                            [SIGNATURE PAGE FOLLOWS]

                                       3
<PAGE>
     IN WITNESS WHEREOF, the undersigned have caused this Note to be executed as
of  the  30th day  of  March,  2007.

                                         BAYWOOD  INTERNATIONAL,  INC.

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

                                         BAYWOOD  ACQUISITION,  INC.

                                    By:  /s/ Neil Reithinger
                                         ------------------------------
                                         Name:  Neil Reithinger
                                         Title: President

                                       4
<PAGE>
                                   SCHEDULE A

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------
Date  Principal  Interest   Amount     Adjustment   Adjustment   Principal  Interest
                           of Offset  to Principal  to Interest   Balance   Balance
                                      Installment
----  ---------  --------  ---------  ------------  -----------  ---------  --------
<S>   <C>        <C>       <C>        <C>           <C>          <C>        <C>

----  ---------  --------  ---------  ------------  -----------  ---------  --------

----  ---------  --------  ---------  ------------  -----------  ---------  --------

----  ---------  --------  ---------  ------------  -----------  ---------  --------

----  ---------  --------  ---------  ------------  -----------  ---------  --------

----  ---------  --------  ---------  ------------  -----------  ---------  --------

----  ---------  --------  ---------  ------------  -----------  ---------  --------

----  ---------  --------  ---------  ------------  -----------  ---------  --------

----  ---------  --------  ---------  ------------  -----------  ---------  --------

Total amount of principal and interest due on March 31, 2009:
------------------------------------------------------------------------------------
</TABLE>

                                       5
<PAGE>
                           BAYWOOD INTERNATIONAL, INC.
                            BAYWOOD ACQUISITION, INC.

                         8% SUBORDINATED PROMISSORY NOTE

$175,000.00                                             March 30, 2007

     FOR  VALUE  RECEIVED,  the  undersigned,  BAYWOOD  INTERNATIONAL,  INC. and
BAYWOOD ACQUISITION, INC., each a Nevada corporation located at 14950 North 83rd
Place,  Suite  1, Scottsdale, Arizona 85260 (each, a "Company" and together, the
"Companies"),  hereby,  jointly  and  severally,  promise to pay to the order of
CHARLES  UNG,  an  individual  residing  at  210  Crescent Glen Drive, Glendora,
California  91741("Holder"), in lawful money of the United States, the principal
amount  of  One  Hundred Seventy Five Thousand Dollars ($175,000), together with
interest  on  the unpaid principal amount hereof, from the date hereof until the
outstanding  principal amount hereof shall be paid in full, at the rate of eight
percent  (8%)  per  annum  computed  on  the  basis  of  a  365-day  year.

     1.     Note.  This  subordinated  promissory  note  (the  "Note")  is being
            ----
delivered  by  the Companies to Holder in partial consideration for the purchase
of  the Purchased Assets and the LifeTime Business (as such terms are defined in
that  certain  Asset Purchase Agreement, of even date herewith, by and among the
Companies,  LifeTime and the LifeTime Representatives defined therein, including
Holder  (the  "Asset Purchase Agreement")).  Unless otherwise stated herein, all
capitalized terms not defined herein shall have the meanings ascribed to them in
the  Asset  Purchase  Agreement.

     2.     Payment.  The  principal  amount  of  this  Note shall be payable in
            -------
eight  equal quarterly installments of Twenty One Thousand Eight Hundred Seventy
Five  Dollars  ($21,875)  each  on  the  last  day of March, June, September and
December,  commencing  June  30,  2007 through March 31, 2009.  Accrued interest
shall  be  payable  in  arrears  on  each  such  installment payment date and at
maturity.

     3.     Prepayment.  This  Note  may  be  prepaid in whole or in part at any
            ----------
time  or from time to time without premium or penalty or discount, together with
accrued  interest  to  the  date  of  payment  on  the principal amount prepaid.

     4.     Right  to  Offset.
            -----------------

     (a)     Subject to the terms of the Asset Purchase Agreement, the Companies
shall  have  the right to offset against this Note any and all damages sustained
by  either  or  both  of them caused by or resulting from any default, breach or
violation  by  LifeTime  or  any of the LifeTime Representatives of any of their
representations,  warranties,  covenants  or  agreements  set forth in the Asset
Purchase  Agreement.

<PAGE>
     (b)     All  amounts  which  the  Companies  shall be entitled to offset as
provided  above  shall  by  applied, first, to all interest then accrued on this
Note,  and thereafter, to the outstanding principal amount hereof in the inverse
order  of  the  quarterly  maturities  hereof.

     (c)     This  Note  shall  be  held in escrow for the period, and under the
terms  and  conditions, set forth in that certain Escrow Agreement, of even date
herewith, by and among the Companies, LifeTime, the LifeTime Representatives and
Meltzer,  Lippe,  Goldstein  &  Breitstone,  LLP,  as  escrow agent (the "Escrow
Agreement").

     5.     Subordination.  The  payment  of  this Note shall be subordinate and
            -------------
junior  in  right  of  payment to the prior payment of senior debt pursuant to a
Subordination Agreement of even date herewith, by and among Vineyard Bank, N.A.,
the  Companies  and  the  LifeTime  Representatives,  including  Holder.

     6.     Events  of  Default;  Remedies.
            ------------------------------

          6.1     The  occurrence  of  any  one  or more of the following events
shall  constitute  an  Event  of  Default  hereunder:

               (a)  Default  by the Companies in the payment of the principal of
          or  interest  on  this  Note when and as the same shall become due and
          payable  and  such  default shall continue for fifteen (15) days after
          written  notice  thereof  from  Holder;  or

               (b)  (i) Commencement by either Company of a voluntary case under
          the  federal  bankruptcy  laws  (as  now of hereafter in effect); (ii)
          either  Company  applying  for or consenting to the appointment of, or
          the  taking  of  possession  by,  a  receiver,  custodian,  trustee or
          liquidator  of  itself  or  of a substantial part of its assets; (iii)
          either  Company  making  a  general  assignment  for  the  benefit  of
          creditors;  or (iv) the failure of either Company generally to pay its
          debts  as  they  become  due;  or

               (c)  The  entry  of  a  decree or order by any court of competent
          jurisdiction  in  respect of either Company granting (i) relief in any
          involuntary  case  under  the  federal  bankruptcy  laws  (as  now  or
          hereafter  in  effect);  or  (ii)  appointment of a trustee, receiver,
          custodian  or  liquidator for either Company or for a substantial part
          of  its assets, and such case or proceeding shall continue undismissed
          or unstayed for a period of one hundred twenty (120) consecutive days.

          6.2     Upon  the  happening  of  any  Event of Default hereunder, the
entire  principal  sum and all interest thereon, at the option of Holder, may be
declared  and thereupon shall become immediately due and payable.  In such event
the  Companies  shall  be responsible to pay all of Holder's reasonable costs of
collection,  including  attorney's  fees.

     7.     Notices.  All notices and other communications required or permitted
            -------
under  this  Note  shall  be made in accordance with the provisions of the Asset
Purchase  Agreement.  The  Companies

                                       2
<PAGE>
waive presentment for payment, notice of non-payment, protest, demand, notice of
protest,  notice  of  intent to accelerate, notice of acceleration and dishonor,
diligence  in  enforcement  and  indulgences  of  any  kind.

     8.      Amendment; Waiver.  This Note may not be amended or modified except
             -----------------
by  an  instrument  in  writing  duly  executed  by the Companies and Holder. No
failure  or  delay  on the part of Holder in the exercise of any power, right or
privilege  hereunder  shall operate as a waiver thereof, nor shall any single or
partial exercise of any such power, right or privilege preclude other or further
exercise  thereof  or  of  any  other  right,  power  privilege.  All rights and
remedies  existing hereunder are cumulative to, and not exclusive of, any rights
or  remedies  otherwise  available.

     9.     Severability.  If  any provision hereof shall for any reason be held
            ------------
to  be  invalid,  illegal  or  unenforceable  in  any  respect, such invalidity,
illegality,  or  unenforceability  shall not affect any other provisions hereof,
and  this  Note  shall be construed as if such invalid, illegal or unenforceable
provision  has  never  been  contained  herein.

     10.     Assignment.  This  Note may not be assigned, pledged, negotiated or
             ----------
transferred  by  Holder  and  shall  inure  solely  to  the  benefit  of Holder.

     11.     Governing  Law; Waiver of Jury Trial.  This Note is made under, and
             ------------------------------------
shall  be  construed  and  enforced in accordance with, the internal laws of the
State  of  Arizona,  without  regard  to  principles  of conflicts of laws.  The
Companies  irrevocably  waive, to the maximum extent permitted by law, any right
they  may  have  to  a  trial  by  jury in respect of any litigation directly or
indirectly  at  any  time arising out of, under or in connection with this Note.

                            [SIGNATURE PAGE FOLLOWS]

                                       3
<PAGE>

          IN  WITNESS  WHEREOF,  the  undersigned  have  caused  this Note to be
executed as of the 30th day of March, 2007.

                                             BAYWOOD  INTERNATIONAL,  INC.

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

                                             BAYWOOD  ACQUISITION,  INC.

                                        By:  /s/ Neil Reithinger
                                             ------------------------------
                                             Name:  Neil Reithinger
                                             Title: President

                                       4
<PAGE>
                                   SCHEDULE A

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------
Date  Principal  Interest   Amount     Adjustment   Adjustment   Principal  Interest
                           of Offset  to Principal  to Interest   Balance   Balance
                                      Installment
----  ---------  --------  ---------  ------------  -----------  ---------  --------
<S>   <C>        <C>       <C>        <C>           <C>          <C>        <C>

----  ---------  --------  ---------  ------------  -----------  ---------  --------

----  ---------  --------  ---------  ------------  -----------  ---------  --------

----  ---------  --------  ---------  ------------  -----------  ---------  --------

----  ---------  --------  ---------  ------------  -----------  ---------  --------

----  ---------  --------  ---------  ------------  -----------  ---------  --------

----  ---------  --------  ---------  ------------  -----------  ---------  --------

----  ---------  --------  ---------  ------------  -----------  ---------  --------

----  ---------  --------  ---------  ------------  -----------  ---------  --------

Total amount of principal and interest due on March 31, 2009:
------------------------------------------------------------------------------------
</TABLE>

                                       5
<PAGE>
                           BAYWOOD INTERNATIONAL, INC.
                            BAYWOOD ACQUISITION, INC.

                         8% SUBORDINATED PROMISSORY NOTE

$175,000.00                                                    March 30, 2007

     FOR  VALUE  RECEIVED,  the  undersigned,  BAYWOOD  INTERNATIONAL,  INC. and
BAYWOOD ACQUISITION, INC., each a Nevada corporation located at 14950 North 83rd
Place,  Suite  1, Scottsdale, Arizona 85260 (each, a "Company" and together, the
"Companies"),  hereby,  jointly and severally, promise to pay to the order of M.
AMIRUL  KARIM,  an  individual  residing  at  12921Berkhamsted Street, Cerritos,
California  90703-7235  ("Holder"),  in  lawful  money of the United States, the
principal  amount  of  One  Hundred  Seventy  Five  Thousand Dollars ($175,000),
together  with  interest  on  the  unpaid principal amount hereof, from the date
hereof  until  the outstanding principal amount hereof shall be paid in full, at
the  rate  of  eight  percent  (8%) per annum computed on the basis of a 365-day
year.

     1.     Note.  This  subordinated  promissory  note  (the  "Note")  is being
            ----
delivered  by  the Companies to Holder in partial consideration for the purchase
of  the Purchased Assets and the LifeTime Business (as such terms are defined in
that  certain  Asset Purchase Agreement, of even date herewith, by and among the
Companies,  LifeTime and the LifeTime Representatives defined therein, including
Holder  (the  "Asset Purchase Agreement")).  Unless otherwise stated herein, all
capitalized terms not defined herein shall have the meanings ascribed to them in
the  Asset  Purchase  Agreement.

     2.     Payment.  The  principal  amount  of  this  Note shall be payable in
            -------
eight  equal quarterly installments of Twenty One Thousand Eight Hundred Seventy
Five  Dollars  ($21,875)  each  on  the  last  day of March, June, September and
December,  commencing  June  30,  2007 through March 31, 2009.  Accrued interest
shall  be  payable  in  arrears  on  each  such  installment payment date and at
maturity.

     3.     Prepayment.  This  Note  may  be  prepaid in whole or in part at any
            ----------
time  or from time to time without premium or penalty or discount, together with
accrued  interest  to  the  date  of  payment  on  the principal amount prepaid.

     4.     Right  to  Offset.
            -----------------

     (a)     Subject to the terms of the Asset Purchase Agreement, the Companies
shall  have  the right to offset against this Note any and all damages sustained
by  either  or  both  of them caused by or resulting from any default, breach or
violation  by  LifeTime  or  any of the LifeTime Representatives of any of their
representations,  warranties,  covenants  or  agreements  set forth in the Asset
Purchase  Agreement.

<PAGE>
     (b)     All  amounts  which  the  Companies  shall be entitled to offset as
provided  above  shall  by  applied, first, to all interest then accrued on this
Note,  and thereafter, to the outstanding principal amount hereof in the inverse
order  of  the  quarterly  maturities  hereof.

     (c)     This  Note  shall  be  held in escrow for the period, and under the
terms  and  conditions, set forth in that certain Escrow Agreement, of even date
herewith, by and among the Companies, LifeTime, the LifeTime Representatives and
Meltzer,  Lippe,  Goldstein  &  Breitstone,  LLP,  as  escrow agent (the "Escrow
Agreement").

     5.     Subordination.  The  payment  of  this Note shall be subordinate and
            -------------
junior  in  right  of  payment to the prior payment of senior debt pursuant to a
Subordination Agreement of even date herewith, by and among Vineyard Bank, N.A.,
the  Companies  and  the  LifeTime  Representatives,  including  Holder.

     6.     Events  of  Default;  Remedies.
            ------------------------------

          6.1     The  occurrence  of  any  one  or more of the following events
shall  constitute  an  Event  of  Default  hereunder:

               (a)  Default  by the Companies in the payment of the principal of
          or  interest  on  this  Note when and as the same shall become due and
          payable  and  such  default shall continue for fifteen (15) days after
          written  notice  thereof  from  Holder;  or

               (b)  (i) Commencement by either Company of a voluntary case under
          the  federal  bankruptcy  laws  (as  now of hereafter in effect); (ii)
          either  Company  applying  for or consenting to the appointment of, or
          the  taking  of  possession  by,  a  receiver,  custodian,  trustee or
          liquidator  of  itself  or  of a substantial part of its assets; (iii)
          either  Company  making  a  general  assignment  for  the  benefit  of
          creditors;  or (iv) the failure of either Company generally to pay its
          debts  as  they  become  due;  or

               (c)  The  entry  of  a  decree or order by any court of competent
          jurisdiction  in  respect of either Company granting (i) relief in any
          involuntary  case  under  the  federal  bankruptcy  laws  (as  now  or
          hereafter  in  effect);  or  (ii)  appointment of a trustee, receiver,
          custodian  or  liquidator for either Company or for a substantial part
          of  its assets, and such case or proceeding shall continue undismissed
          or unstayed for a period of one hundred twenty (120) consecutive days.

          6.2     Upon  the  happening  of  any  Event of Default hereunder, the
entire  principal  sum and all interest thereon, at the option of Holder, may be
declared  and thereupon shall become immediately due and payable.  In such event
the  Companies  shall  be responsible to pay all of Holder's reasonable costs of
collection,  including  attorney's  fees.

     7.     Notices.  All notices and other communications required or permitted
            -------
under  this  Note  shall  be made in accordance with the provisions of the Asset
Purchase  Agreement.  The  Companies

                                       2
<PAGE>
waive presentment for payment, notice of non-payment, protest, demand, notice of
protest,  notice  of  intent to accelerate, notice of acceleration and dishonor,
diligence  in  enforcement  and  indulgences  of  any  kind.

     8.     Amendment;  Waiver.  This Note may not be amended or modified except
            ------------------
by  an  instrument  in  writing  duly  executed  by the Companies and Holder. No
failure  or  delay  on the part of Holder in the exercise of any power, right or
privilege  hereunder  shall operate as a waiver thereof, nor shall any single or
partial exercise of any such power, right or privilege preclude other or further
exercise  thereof  or  of  any  other  right,  power  privilege.  All rights and
remedies  existing hereunder are cumulative to, and not exclusive of, any rights
or  remedies  otherwise  available.

     9.     Severability.  If  any provision hereof shall for any reason be held
            ------------
to  be  invalid,  illegal  or  unenforceable  in  any  respect, such invalidity,
illegality,  or  unenforceability  shall not affect any other provisions hereof,
and  this  Note  shall be construed as if such invalid, illegal or unenforceable
provision  has  never  been  contained  herein.

     10.     Assignment.  This  Note may not be assigned, pledged, negotiated or
             ----------
transferred  by  Holder  and  shall  inure  solely  to  the  benefit  of Holder.

     11.     Governing  Law; Waiver of Jury Trial.  This Note is made under, and
             ------------------------------------
shall  be  construed  and  enforced in accordance with, the internal laws of the
State  of  Arizona,  without  regard  to  principles  of conflicts of laws.  The
Companies  irrevocably  waive, to the maximum extent permitted by law, any right
they  may  have  to  a  trial  by  jury in respect of any litigation directly or
indirectly  at  any  time arising out of, under or in connection with this Note.

                            [SIGNATURE PAGE FOLLOWS]

                                       3
<PAGE>

          IN  WITNESS  WHEREOF,  the  undersigned  have  caused  this Note to be
executed as of the 30th day of March, 2007.

                                             BAYWOOD  INTERNATIONAL,  INC.

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

                                             BAYWOOD  ACQUISITION,  INC.

                                        By:  /s/ Neil Reithinger
                                             ------------------------------
                                             Name:  Neil Reithinger
                                             Title: President

                                       4
<PAGE>
                                   SCHEDULE A

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------
Date  Principal  Interest   Amount     Adjustment   Adjustment   Principal  Interest
                           of Offset  to Principal  to Interest   Balance   Balance
                                      Installment
----  ---------  --------  ---------  ------------  -----------  ---------  --------
<S>   <C>        <C>       <C>        <C>           <C>          <C>        <C>

----  ---------  --------  ---------  ------------  -----------  ---------  --------

----  ---------  --------  ---------  ------------  -----------  ---------  --------

----  ---------  --------  ---------  ------------  -----------  ---------  --------

----  ---------  --------  ---------  ------------  -----------  ---------  --------

----  ---------  --------  ---------  ------------  -----------  ---------  --------

----  ---------  --------  ---------  ------------  -----------  ---------  --------

----  ---------  --------  ---------  ------------  -----------  ---------  --------

----  ---------  --------  ---------  ------------  -----------  ---------  --------

Total amount of principal and interest due on March 31, 2009:
------------------------------------------------------------------------------------
</TABLE>

                                       5
<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. W-46

     THIS  CERTIFIES  that,  for  consideration,  the receipt and sufficiency of
which  are  hereby  acknowledged, and other value received, Thomas Pinkowski, 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  the  date  hereof  (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 350,000 shares of common stock, par
value  $0.001  per  share  (the "Common Stock"), of the Company. This Warrant is
initially  exercisable  at  $0.05  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".

<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 transferred on its books to any person if, in
the  opinion  of  counsel  to  the  Company,  such  transfer

<PAGE>
does  not  comply  with  the  provisions of 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)     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

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

          (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 (i) divided by (ii), where (i) 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 (ii) 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 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

<PAGE>
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 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

<PAGE>
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.

          (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:

<PAGE>
     (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.     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.

<PAGE>
     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 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

<PAGE>
     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.

     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

<PAGE>
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
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
WARRANT,  OR  THE  TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON
CONTRACT,  TORT  OR ANY OTHER THEORY). EACH OF THE PARTIES (i) 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 (ii) 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.

                  [Remainder of Page Intentionally Left Blank]
<PAGE>
Dated:  March 30, 2007

                                             BAYWOOD  INTERNATIONAL,  INC.

                                        By:  /s/ Neil Reithinger
                                             ------------------------------
                                             Name: Neil Reithinger
                                             Title: President & CEO

[Seal]

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

<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

<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.

<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. W-48

     THIS  CERTIFIES  that,  for  consideration,  the receipt and sufficiency of
which  are  hereby  acknowledged,  and  other  value  received,  Charles Ung, 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  the  date  hereof  (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 175,000 shares of common stock, par
value  $0.001  per  share  (the "Common Stock"), of the Company. This Warrant is
initially  exercisable  at  $0.05  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".

<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 transferred on its books to any person if, in
the  opinion  of  counsel  to  the  Company,  such  transfer

<PAGE>
does  not  comply  with  the  provisions of 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)     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

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

          (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 (i) divided by (ii), where (i) 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 (ii) 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 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

<PAGE>
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 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

<PAGE>
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.

          (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:

<PAGE>
     (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.     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.

<PAGE>
     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 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

<PAGE>
     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.

     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

<PAGE>
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
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
WARRANT,  OR  THE  TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON
CONTRACT,  TORT  OR ANY OTHER THEORY). EACH OF THE PARTIES (i) 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 (ii) 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.

                  [Remainder of Page Intentionally Left Blank]
<PAGE>
Dated:  March 30, 2007

                                        BAYWOOD  INTERNATIONAL,  INC.

                                        By:  /s/ Neil Reithinger
                                             ------------------------------
                                             Name: Neil Reithinger
                                             Title: President & CEO

[Seal]

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

<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

<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.

<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. W-47

     THIS  CERTIFIES  that,  for  consideration,  the receipt and sufficiency of
which  are  hereby  acknowledged,  and other value received, M. Amirul Karim, 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  the  date  hereof  (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 175,000 shares of common stock, par
value  $0.001  per  share  (the "Common Stock"), of the Company. This Warrant is
initially  exercisable  at  $0.05  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".

<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 transferred on its books to any person if, in
the  opinion  of  counsel  to  the  Company,  such  transfer

<PAGE>
does  not  comply  with  the  provisions of 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)     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

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

          (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 (i) divided by (ii), where (i) 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 (ii) 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 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

<PAGE>
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 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

<PAGE>
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.

          (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:

<PAGE>
     (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.     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.

<PAGE>
     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 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

<PAGE>
     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.

     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

<PAGE>
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
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
WARRANT,  OR  THE  TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON
CONTRACT,  TORT  OR ANY OTHER THEORY). EACH OF THE PARTIES (i) 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 (ii) 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.

                  [Remainder of Page Intentionally Left Blank]
<PAGE>
Dated:  March 30, 2007

                                        BAYWOOD  INTERNATIONAL,  INC.

                                        By:  /s/ Neil Reithinger
                                             ------------------------------
                                             Name: Neil Reithinger
                                             Title: President & CEO

[Seal]

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

<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

<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.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00121-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00121-of-00352.parquet"}]]