exhibit.htm


     

     
      
        

      

    

    
       

      EMPLOYMENT
        AGREEMENT

      


      This
        EMPLOYMENT AGREEMENT (“Agreement”)
        is made as of July 11, 2007 (“Effective Date”), by and between Baywood
        International, Inc., a Nevada corporation (the “Company”), and Neil Reithinger,
        an individual, (“Employee”).

      


      W
        I T N E S S E T H:

      


      WHEREAS,
        the Company wishes to ensure that it will continue to have the benefits of
        Employee’s services on the terms and conditions hereinafter set forth;
        and

      


      WHEREAS,
        Employee desires to work for the Company on the terms and conditions hereinafter
        set forth.

      


      NOW,
        THEREFORE, in consideration of the mutual covenants and agreements hereinafter
        set forth, the parties hereto hereby agree as follows:

      


      1.            
        Employment; Term.  The Company hereby employs Employee, and
        Employee hereby accepts employment with the Company, in accordance with and
        subject to the terms and conditions set forth herein.  The term of
        employment shall commence upon the Effective Date and shall continue for
        a
        period of five (5) years (the “Term”), unless earlier terminated in accordance
        with Section 5 hereof.

      


      2.           
         Employment.

       

       

      (a)           The
        Company hereby agrees to employ Employee as a President and Chief Executive
        Officer for the Term.  Employee agrees to serve in such capacity and
        shall have primary responsibility for the operation and strategic direction
        of
        the Company and its subsidiaries and such other duties, responsibilities
        and
        authority, commensurate with such position as shall be assigned to him by
        the
        Board of Directors (the “Board”).

      


      (b)           Employee
        shall devote Employee’s full business time and attention to Employee’s duties on
        the Company’s behalf.

      


      3.            
        Compensation.

      


      (a)           The
        Company shall pay Employee a base salary of One Hundred Fifty Thousand Dollars
        ($150,000) per annum (the “Base Salary”), payable bi-weekly, in accordance with
        the Company’s then existing payroll practices and subject to all legally
        required or customary withholdings and other applicable taxes.  The
        Base Salary will be retroactive to April 1, 2007.  Amounts due between
        April 1, 2007 and the date of this Agreement will be due in one payment within
        30 days following the date of this Agreeement.  Executive shall be
        entitled to an increase in Base Salary of five percent (5%) per annum upon
        meeting performance standards reasonably established by the Board or otherwise
        based on performance as reasonably determined by the Board.

      


      (b)           Employee
        shall be entitled to receive an annual bonus award (“Annual Bonus”) based on the
        achievement of established financial goals or as reasonably determined by
        the
        Board, commencing fiscal year 2007.  Employee’s Annual Bonus shall be
        subject to review and approval each year by the Board.

      


      (c)           As
        of the Effective Date, the Company shall grant to Employee, pursuant to the
        Company’s 2004 Stock Option Plan as may be amended from time to time (the
“Plan”), options (the

      “Options”)
        to purchase ten million (10,000,000) shares of Common Stock, par value $0.001
        per share, of the Company (the “Common Stock”) at an exercise price equal to the
        Current Market Price (as hereinafter defined) on the date of
        grant.  The Options will vest as of the Effective Date and will expire
        if not exercised within ten (10) years after the date of
        vesting.  Subject to the foregoing, the terms and provision of the
        Options shall be consistent with the Plan and all exhibits thereto.

      


      
        
           

        

        
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      For
        purposes of this Agreement,
“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 for that purpose, or if not so
        available, a price determined in good faith by the Board as being equal to
        the
        fair market value thereof, as the case may be.

      


      4.            
        Benefits.

      


      (a)           The
        Company agrees to reimburse Employee for all reasonable out-of-pocket business
        expenses incurred by Employee in the normal course of business in connection
        with the performance of Employee’s duties under this Agreement in accordance
        with the Company’s policy as it may be amended from time to time.  The
        Company shall make such reimbursements within a reasonable amount of time
        after
        submission by Employee of vouchers, receipts, credit card bills or other
        documentation in accordance with the Company’s then applicable policies and
        procedures.  In addition, the Company shall pay Employee’s monthly
        cellular telephone bill.

      


      (b)           Employee
        shall be entitled to participate in any and all medical insurance, group
        health
        care programs, disability insurance, pension and other benefit plans (“Medical
        Benefits”) which are made generally available by the Company (“Medical
        Benefits”) to other similarly situated senior level employees of the Company
        performing similar functions as Employee.  The costs of such Medical
        Benefits for the Employee as well as any of Employee’s dependents, not including
        Employee’s spouse, shall be borne by the Company.  The Company, in its
        sole discretion, may at any time amend or terminate its benefit plans or
        programs.

      


      (c)           The
        Company shall match Employee’s contributions, if any, made to the Company’s
        401(k) plan, dollar for dollar, up to 6% of Employee’s Base Salary per
        annum.

      


      (d)           Employee
        shall be entitled to four (4) weeks paid vacation per annum.  Vacation
        not taken or used shall be deferred or paid in cash to the extent, if at
        all,
        consistent with the Company’s employment polices in effect from time to
        time.

      


      (e)           Employee
        shall be entitled to such other benefits as are generally available to other
        similarly situated senior level employees of the Company performing similar
        functions as Employee.

      


      5.            
        Termination.  Employee’s employment hereunder may be terminated
        under the following circumstances:

      


      (a)           Death.  Employee’s
        employment hereunder shall terminate immediately upon Employee’s
        death.

      


      (b)           Disability.  The
        Company may terminate Employee’s employment hereunder at any time after Employee
        becomes “Disabled.”  For purposes of this Agreement, Employee shall
        be

      “Disabled”
        upon the earlier of (i) the date Employee becomes entitled to receive disability
        benefits under the Company’s long-term disability plan or (ii) Employee’s
        inability to perform the essential functions of the duties and responsibilities
        contemplated under this Agreement for a period of more than ninety (90)
        consecutive days or for more than one hundred twenty (120) days in any 270-day
        period due to physical or mental incapacity or impairment, as determined
        in the
        reasonable judgment of a physician licensed in the State of California, selected
        by the Company.  Such termination shall become effective five (5)
        business days after the Company gives written notice of such termination
        to
        Employee or to his legal representative, in accordance with Section 9
        hereof.

      


      
        
           

        

        
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      (c)           Termination
        by the Company without Cause.  The Company may terminate
        Employee’s employment hereunder without Cause (as hereinafter defined) at any
        time after providing written notice to Employee.

      


      (d)           Termination
        by the Company for Cause.  The Company may terminate Employee’s
        employment hereunder for Cause at any time after providing written notice
        to
        Employee, which notice shall provide in reasonable detail the reason(s) for
        such
        termination.  For purposes of this Agreement, “Cause” shall mean any
        of the following: (i) Employee’s willful or intentional failure or refusal to
        perform or observe any of Employee’s significant duties, responsibilities or
        obligations set forth in, or as contemplated under, this Agreement where
        such
        failure or refusal shall not have ceased or been remedied within thirty (30)
        days following written warning from the Company, provided that such obligation
        to provide written warning and the related right to cure shall not apply
        to (x)
        such matters as are not curable, or (y) repeated violations of this clause
        (i);
        (ii) acts or omissions by Employee involving Employee’s gross negligence related
        to the discharge of Employee’s duties; (iii) any act or failure to act by
        Employee constituting fraud or involving a knowing, willful or intentional
        misrepresentation, theft, embezzlement, dishonesty or moral turpitude
        (collectively, “Fraud”); (iv) conviction of (or a plea of
nolocontendere to) an offense which is a felony in the
        jurisdiction involved or which is a misdemeanor in the jurisdiction involved
        but
        which involves Fraud; (v) any willful or intentional act or omission by Employee
        which is intended to or which materially injures the reputation, business
        or
        business relationships of the Company, or Employee’s reputation or business
        relationships; (vi) alcoholism, drug abuse or other substance abuse having
        a
        material adverse effect on the performance of Employee’s duties hereunder; or
        (vii) Employee’s willful or intentional failure or refusal to comply with any
        reasonable and lawful request or direction of the Company not contrary to
        the
        provisions of this Agreement, where such failure or refusal shall not have
        ceased or been remedied within thirty (30) days following written warning
        from
        the Company, provided that such obligation to provide written warning and
        the
        related right to cure shall not apply to (x) such matters as are not curable,
        or
        (y) repeated violations of this clause (vii).

      


      (e)           Termination
        by Employee for Good Reason.  Employee may terminate Employee’s
        employment hereunder at any time for either of the following reasons (a
        termination for “Good Reason”):  (i) the Company’s breach of any
        material provision of this Agreement, which shall continue unremedied for
        thirty
        (30) days after written notice by Employee to the Company, or (ii)  if
        Employee is relieved by the Company of primary responsibility for the operations
        of the business of the Company, except (x) for Cause, or (y) if Employee
        is
        given other duties of substantially the same responsibility and importance
        to
        the Company.

      


      (f)           Other
        Termination by Employee.  Employee may terminate Employee’s
        employment hereunder at any time, other than for Good Reason, after providing
        thirty (30) days-prior written notice to the Company.

      


      6.            
        Compensation Following Termination Prior to the End of the
        Term.  In the event that Employee’s employment hereunder is
        terminated prior to the end of the Term, Employee shall be entitled only
        to the
        following compensation and benefits upon such termination:

      


      
        
           

        

        
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      (a)           Termination
        by Reason of Death or Disability.  In the event that Employee’s
        employment is terminated by reason of Employee’s death or Disability,
        respectively, the Company shall pay the following amounts to Employee (or
        Employee’s spouse or estate, as applicable):

      


      (i)           Any
        accrued but unpaid Base Salary (as determined pursuant to Section 3(a) hereof)
        for services rendered to the date of termination.

      


      (ii)          Any
        accrued but unpaid expenses required to be reimbursed pursuant to Section
        4(a)
        hereof.

      


      (iii)         A
        pro rata share, based on the portion of the fiscal year in which Employee
        was
        employed at the time of his death or Disability, of the Annual Bonus to which
        Employee would have been entitled had Employee remained employed by the Company
        through the end of the then current fiscal year (as determined pursuant to
        Section 3(b) hereof).  Such amount shall be paid as soon as reasonably
        practicable following the calculation thereof at the end of such fiscal
        year.

      


      Except
        as
        otherwise specifically provided herein, in the event Employee’s employment is
        terminated pursuant to this Section 6(a), the benefits to which Employee
        may be
        entitled upon such termination pursuant to the plans, programs and arrangements
        referred to in Section 4(b) hereof shall be determined and paid in accordance
        with the terms of such plans, programs and arrangements.

      


      (b)           Termination
        by the Company for Cause or by Employee without Good Reason.  In
        the event that Employee’s employment hereunder is terminated by the Company for
        Cause or by Employee without Good Reason, the Company shall pay the following
        amounts to Employee:

      


      (i)           Any
        accrued but unpaid Base Salary (as determined pursuant to Section 3(a) hereof)
        for services rendered to the date of termination.

      


      (ii)          Any
        accrued but unpaid expenses required to be reimbursed pursuant to Section
        4(a)
        hereof.

      


      (c)           Termination
        by the Company Without Cause or by Employee for Good Reason.

      


      (A)           In
        the event that Employee’s employment hereunder is terminated by the Company
        without Cause or by Employee for Good Reason, the Company shall pay the
        following amounts to Employee:

      


      (i)           Any
        accrued but unpaid Base Salary (as determined pursuant to Section 3(a) hereof)
        for services rendered to the date of termination.

      


      (ii)          Any
        accrued but unpaid expenses required to be reimbursed pursuant to Section
        4(a)
        hereof.

      


      (iii)         Base
        Salary for a period of twelve (12) months from the date of
        termination.

       

      (iv)         A
        pro rata share, based on such period of the fiscal year in which Employee
        was
        employed, of Annual Bonus to which Employee would have been entitled had
        Employee remained employed by the Company through the end of the then current
        fiscal year (as determined pursuant to Section 3(b) hereof); provided,
        however, that Employee shall be entitled to the entire Annual Bonus
        to
        which Employee would have been entitled had Employee remained employed by
        the
        Company through the end of the then current fiscal year if, at the time of
        termination of Employee’s employment pursuant to this Section 6(c), Employee was
        employed by the Company for at least the first six (6) months of such fiscal
        year.  Such amount shall be paid as soon as reasonably practicable
        following the calculation thereof at the end of such fiscal year.

      


      
        
           

        

        
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      (B)           Notwithstanding
        the foregoing, the Company shall have no obligation to make any further payments
        pursuant to Section 6(c)(A)(iii) or 6(c)(A)(iv) hereof in the event that
        Employee breaches any of his obligations set forth in Section 7
        hereof.

      


      (C)           Except
        as otherwise specifically provided herein, in the event Employee’s employment is
        terminated pursuant to this Section 6(c), the benefits to which Employee
        may be
        entitled upon such termination pursuant to the plans, programs and arrangements
        referred to in Section 4(b) hereof shall be determined and paid in accordance
        with the terms of such plans, programs and arrangements.

      


      (d)           General.  In
        the event that Employee’s employment is terminated for any reason, Employee
        shall cease to be an employee of the Company for all purposes, and, except
        as
        may be provided under this Agreement or under the terms of any incentive
        compensation, employee benefit or fringe benefit plan applicable to Employee
        at
        the time of Employee’s termination prior to the end of the Term, shall have no
        right to receive any other compensation, employee benefits or perquisites,
        or to
        participate in any other plan, arrangement or benefit, with respect to any
        future period after such termination.  In the event that Employee’s
        employment is terminated for any reason, the Company’s payment of salary and
        other amounts specifically provided for in the applicable previous paragraph
        of
        this Section 6 shall constitute complete satisfaction of all payment obligations
        of the Company to Employee pursuant to this Agreement, and Employee’s rights set
        out in this Section 6 shall constitute Employee’s sole and exclusive rights and
        remedies as a result of any actual or constructive termination of his employment
        hereunder.

      


      7.            
        Non-Competition and Non-Solicitation; Non-Disclosure of Proprietary
        Information; Surrender of Records; Company Property.

      


      (a)           Non-Competition  Employee
        acknowledges and recognizes the highly competitive nature of the Company’s
        business and that Employee’s position with the Company and access to the
        Company’s confidential records and proprietary information renders Employee
        special and unique.  In consideration of payments made and to be made
        by the Company to Employee pursuant to this Agreement (including, without
        limitation, pursuant to Section 3 hereof), Employee agrees that (A) during
        the
        Term and until one year thereafter, or (B) until such time that Employee’s
        employment is terminated by the Company without Cause or by Employee for
        good
        reason prior to the end of the Term, Employee will not, directly or indirectly,
        in the United States or any other place in which the Company then does business,
        engage in, or be affiliated in any manner with any individual, partnership,
        venture, unincorporated association, organization, syndicate, corporation,
        limited liability company, or other entity, trust and trustee, executor,
        administrator or other legal or personal representative, or any government
        or
        agency or political subdivision thereof (any of the foregoing, a “Person”)
        engaged in, the business of manufacturing, marketing, distributing and/or
        selling (A) nutraceutical products, including but not limited to dietary
        supplements and pharmaceuticals; (B) any other product categories the Company
        is
        actively manufacturing, marketing, distributing and/or selling as of the
        date of
        termination or expiration of this Agreement; or (C) any other product categories
        manufactured, marketed, distributed and/or sold by the Company during the
        Term.

      


      (c)           Non-Solicitation.  In
        further consideration of the payments made and to be made by the Company
        to
        Employee pursuant to this Agreement (including, without limitation, pursuant
        to
Section
        3
        hereof), Employee agrees that (A) during the Term and until one year thereafter,
        or (B) until such time that Employee’s employment is terminated by the Company
        without Cause or by Employee for good reason prior to the end of the Term,
        Employee shall not, directly or indirectly, on his own behalf or on behalf
        of
        any Person, (A) advise or encourage any employee, agent, consultant,
        representative, customer, licensor, vendor or supplier of the Company to
        terminate his, her or its relationship with the Company, or (B) solicit or
        attempt to solicit or participate in the solicitation of or employ or otherwise
        engage any employee, agent, consultant or representative of the Company,
        or
        otherwise encourage any such person to become an employee, agent, representative
        or consultant of or to any other Person.

      


      
        
           

        

        
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      (d)           Proprietary
        Information.  Employee acknowledges that during the course of
        Employee’s employment with the Company Employee will necessarily have access to
        and make use of proprietary information and confidential records of the
        Company.  Employee covenants that Employee shall not, during the Term
        or any time thereafter (irrespective of the circumstances under which Employee’s
        employment with the Company terminates), directly or indirectly, use for
        Employee’s own purpose or for the benefit of any person or entity other than the
        Company, nor otherwise disclose, any proprietary information of which Employee
        has knowledge to any person or entity, unless such disclosure has been
        authorized in writing by the Company or is otherwise required by
        law.  Employee acknowledges and understands that the term “proprietary
        information” includes, but is not limited to, patents, copyrights and trade
        secrets, including, without limitation: (i) the proprietary software products,
        programs, applications and processes utilized by or on behalf of the Company
        to
        the extent such information is unique to the Company or is not known to others
        outside the Company; (ii) the name and/or address of any customer, licensor
        or
        vendor of the Company, to the extent confidential, or any proprietary
        information concerning the transactions or relations of any customer of the
        Company with the Company or any of its principals, directors, employees or
        agents; (iii) any proprietary information concerning any product, technology
        or
        procedure employed by or on behalf of the Company but not generally known
        to its
        customers or competitors, or under development by or being tested by or on
        behalf of the Company but not at the time offered generally to customers;
        (iv)
        any information which is generally regarded and treated as confidential or
        proprietary in any line of business engaged in by or on behalf of the Company;
        (v) information belonging to customers or affiliates of the Company or any
        other
        individual or entity which the Company has agreed to hold in confidence
        (provided that Employee has knowledge of the Company’s duty to hold such
        third-party information in confidence); and (vi) all written, graphic or
        other
        material relating to or containing any of the foregoing.  The term
“proprietary information” shall not include information generally available to
        or known by the public or in the industry, or information that is or becomes
        available to Employee on a non-confidential basis from a source other than
        the
        Company or the Company’s stockholders, principals, directors, officers,
        employees or agents (other than as a breach of any obligation of
        confidentiality).

      


      (e)           Confidentiality
        and Surrender of Records.  Employee shall not, during the Term or
        any time thereafter (irrespective of the circumstances under which Employee’s
        employment with the Company terminates), except as required by law or as
        is
        necessary for the performance of Employee’s duties hereunder, directly or
        indirectly, publish, make known or in any fashion disclose any confidential
        records to, or permit any inspection or copying of confidential records by,
        any
        Person, and Employee shall not retain, and shall deliver promptly to the
        Company, any of the same following termination of Employee’s employment for any
        reason or upon request by the Company.  The term “confidential
        records” means all correspondence, memoranda, files, manuals, books, designs,
        sketches, lists, financial, operating or marketing records, magnetic tape,
        or
        electronic or other media or equipment for records of any kind which may
        be in
        Employee’s possession or under Employee’s control or accessible to Employee
        which may contain any proprietary information.  All confidential
        records shall be and remain the sole property of the Company during the Term
        and
        thereafter.

      (f)           Disclosure
        Required by Law.  In the event Employee is required by law or
        court order to disclose any proprietary information or confidential records
        of
        the Company, Employee shall provide the Company with prompt written notice
        so
        that the Company may seek a protective order or other appropriate remedy,
        and if
        such protective order or other remedy is not obtained, Employee shall furnish
        only that portion of the proprietary information that is legally required
        as
        determined by counsel to the Company.

      


      
        
           

        

        
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      (g)           No
        Other Obligations.  Employee represents and warrants to the
        Company that Employee is not precluded or limited in Employee’s ability to
        undertake or perform the duties described herein by any contract, agreement,
        or
        restrictive covenant.  Employee covenants that Employee shall not
        employ the trade secrets or proprietary information of any other Person in
        connection with Employee’s employment by the Company.

      


      (h)           Confidentiality
        of this Agreement.  Employee agrees to keep confidential the terms
        of this Agreement, to the extent public disclosure is not made by the Company
        as
        provided below.  This provision does not prohibit Employee from
        providing this information as required by law or to his attorneys, accountants
        or business advisors for purposes of obtaining legal, tax or business advice;
        provided, however, that Employee shall be responsible for breaches of the
        confidentiality restrictions contained herein by such persons as if Employee
        had
        breached such restrictions.  The Company shall not disclose the terms
        of this Agreement except as necessary in the ordinary course of its business,
        as
        required by law or as required by any governmental or quasi-governmental
        entity
        or any self regulatory organization.

      


      All
        rights (if any) in reports,
        materials, inventions, processes, discoveries, improvements, modifications,
        know-how or trade secrets conceived, developed or otherwise made by Employee
        during the Term, alone or with others, and in any way relating to the present
        or
        future products or business of the Company (collectively, the “Developments”),
        shall be the sole property of the Company.  Employee agrees to, and
        hereby does, assign to the Company for no consideration all of Employee’s right,
        title and interest in and to all Developments.  Employee agrees that
        all such Developments that are copyrightable shall constitute works made
        for
        hire under the copyright laws of the United States and Employee hereby assigns
        to the Company all copyrights and other proprietary rights Employee may have
        in
        any such Developments to the extent that they might not be considered works
        made
        for hire.  Employee shall make and maintain adequate and current
        written records of all Developments, and shall disclose all Developments
        fully
        and in writing to the Company promptly after development of the same, and
        at any
        time upon request.

      


      (i)           Enforcement.  Employee
        acknowledges and agrees that, by virtue of Employee’s position, Employee’s
        services, and access to and use of proprietary information and confidential
        records, any violation by Employee of any of the undertakings contained in
        this
        Section 7 would cause the Company immediate, substantial and irreparable
        injury
        for which it has no adequate remedy at law.  Accordingly, Employee
        agrees that in the event of a breach by Employee of any said undertakings,
        the
        Company will be entitled to seek temporary and permanent injunctive relief
        in
        any court of competent jurisdiction (without the need to post any bond and
        without proving that damages would be inadequate).  Rights and
        remedies provided for in this Section 7 are cumulative and shall be in addition
        to rights and remedies otherwise available to the parties hereunder or under
        applicable law.

      


      8.            
        No Third Party Rights.  The parties do not intend the benefits
        of this Agreement to inure to any person or entity not a party to this Agreement
        (other than to the spouse or estate of Employee in the case of death or
        Disability of Employee, in which case such spouse or estate shall be entitled
        to
        only those rights set forth in Section 6(a) hereof).  Notwithstanding
        anything contained in this Agreement, this Agreement shall not be construed
        as
        creating any right, claim or cause of action against any party by any
person
        or
        entity not a party to this Agreement (other than the spouse or estate of
        Employee in the case of the death or Disability of Employee, in which case
        such
        spouse or estate shall be entitled to only those rights set forth in Section
        6(a) hereof).

      


      
        
           

        

        
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      9.            
        Notices.  Unless otherwise provided herein, any notice required
        or permitted under this Agreement shall be given in writing and shall be
        deemed
        to have been duly given upon personal delivery to the party to be notified
        or
        three (3) days after being mailed by United States certified or registered
        mail,
        postage prepaid, return receipt requested or one (1) day after being sent
        by
        Federal Express or other recognized overnight delivery to the following
        respective addresses, or at such other address as each may specify by notice
        to
        the other:

      


      Notice
        to the Company:

      


      Baywood
        International, Inc.

      14950
        North 83rd
        Place, Suite 1

      Scottsdale,
        Arizona  85260

      Attention:  Secretary

      Facsimile:  (480)
        483-2168

      


      Notice
        to Employee:

      


      Neil
        Reithinger

      


      10.           Assignability;
        Binding Effect.  This Agreement is a personal contract calling for
        the provision of unique services by Employee, and Employee’s obligations
        hereunder may not be sold, transferred, assigned, pledged or
        hypothecated.  In the event of any attempted assignment or transfer of
        obligations hereunder by Employee contrary to the provisions hereof, the
        Company
        will have no further liability for payments hereunder.  The rights and
        obligations of the Company hereunder will be binding upon and inure to the
        benefit of the successors and assigns of the Company.

      


      11.           Entire
        Agreement; Amendment; Waiver.  This Agreement constitutes the
        entire agreement between the parties hereto with respect to the subject matter
        hereof and supersedes all other prior agreements and understandings, both
        written and oral, between the parties with respect to the subject matter
        hereof.  This Agreement shall not be modified or amended except by a
        written instrument duly executed by each of the parties hereto.  Any
        waiver of any term or provision of this Agreement shall be in writing signed
        by
        the party charged with giving such waiver.  Waiver by either party
        hereto of any breach hereunder by the other party shall not operate as a
        waiver
        of any other breach, whether similar to or different from the breach
        waived.  No delay on the part of the Company or Employee in the
        exercise of any of their respective rights or remedies shall operate as a
        waiver
        thereof, and no single or partial exercise by the Company or Employee of
        any
        such right or remedy shall preclude other or further exercise
        thereof.

      


      12.           Severability.  If
        any term or provision of this Agreement shall be held to be invalid or
        unenforceable for any reason, such term or provision shall be ineffective
        to the
        extent of such invalidity or unenforceability without invalidating the remaining
        terms and provisions hereof, and this Agreement shall be construed as if
        such
        invalid or unenforceable term or provision had not been contained
        herein.

      


      13.           Survivability.  The
        provisions of this Agreement, which by their terms call for performance
        subsequent to termination of Employee’s employment hereunder, or of this
        Agreement, shall survive such termination.

       

      14.           Counterparts
        and Headings.  This Agreement may be executed in any number of
        counterparts, each of which shall be deemed an original and all which together
        shall constitute one and the same instrument.  Facsimile signatures
        shall be given the same legal effect as original signatures.  All
        headings are inserted for convenience of reference only and shall not affect
        the
        meaning or interpretation of this Agreement.

      


      
        
           

        

        
          10

          
            

          

        

        
           

        

      

      15.           Governing
        Law. This Agreement shall be construed in accordance with the internal laws
        of the State of Arizona, without regard to principles of conflicts of
        laws.

      


      16.           Waiver
        of Jury Trial.  Each party hereto irrevocably waives, to the
        fullest extent permitted by law, all rights to trial by jury in any action,
        proceeding or counterclaim (whether based upon contract, tort or otherwise)
        arising out of or relating to this Agreement or any of the transactions
        contemplated hereby.

      


      


      


      IN
        WITNESS WHEREOF, the parties hereto have caused this Agreement to be
        duly executed and delivered as of the day and year first above
        written.

      


      
        
          	 	 	
                  BAYWOOD
                    INTERNATIONAL, INC.

                	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	
                  By:

                	
                   

                	 
	 	
                   

                	
                  Name:  Karl
                    H. Rullich

                	 
	 	 	
                  Title:  Secretary
                    & Director

                	 
	 	 	 	 
	 	 	 	 
	 	 	
                  EMPLOYEE

                	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	
                  ______________________________

                	 
	 	 	
                  NEIL
                    REITHINGER