ex10_8.htm


    
      

    

    Exhibit
      10.8

    
      VOTING
        AGREEMENT

      


      This
        Voting Agreement (this “Agreement”) is made and
        entered into as of March 30, 2007 (the “Effective
        Date”), by and among Baywood International Inc., a Nevada
        corporation (the “Company”), and the individuals
        listed as stockholders on Exhibit A attached hereto (the
“Shareholders”).

      


      A.           Concurrently
        herewith, the Company is issuing to certain investors (the
“Investors”) in a private placement pursuant to Rule
        506 of Regulation D promulgated under the Securities Act of 1933, as amended,
        units (the “Units”) consisting of (i) 5,000 shares of
        Series I 8% cumulative convertible preferred stock and (ii) 250,000 common
        stock
        purchase warrants (the “Private
        Placement”).

      


      B.           Northeast
        Securities, Inc. (“NESC”) acted as the exclusive
        placement agent with respect to the Private Placement.

      


      C.           As
        an inducement to the Investors to purchase the Units, the Company, NESC and
        the
        Shareholders desire to enter into this Agreement to set forth their agreements
        and understandings with respect to how shares of the Company’s capital stock
        held by the Shareholders will be voted on certain matters.

      NOW
        THEREFORE, in consideration of the above recitals and the mutual
        covenants made herein, the parties hereby agree as follows:

      


      1.           ELECTION
        OF THE NESC DESIGNEES TO THE COMPANY'S BOARD OF
        DIRECTORS.

      


      1.1           Voting
        Board Composition.  During the term of this Agreement,
        each Shareholder agrees to vote all shares of capital stock of the Company
        now
        or hereafter directly or indirectly owned (of record or beneficially) by
        such
        Shareholder, in such manner as may be necessary to elect (and maintain in
        office) a five-person Board of Directors (the “Board”)
        consisting of, in part, two (2) individuals designated from time to time
        in a
        writing delivered to the Company and signed by NESC (the “NESC
        Designees”).

      


      1.2           Initial
        NESC Designees.  The initial NESC Designees shall be as
        set forth on Schedule A hereto.

      


      1.3           Changes
        in NESC Designees.  From time to time during the term of
        this Agreement NESC may, in its sole discretion:

      


      (a)           elect
        to remove from the Board any incumbent NESC Designee who occupies a Board
        seat
        for which NESC is entitled to designate one of the two NESC Designees under
        Section 1.1, by a writing signed by NES and delivered to the Company and
        the NESC Designee being removed; and/or


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      (b)           designate
        one or more new NESC Designees for election to the Board seats for which
        NESC is
        entitled to designate the NESC Designees under Section 1.1 (whether to
        replace one or more prior NESC Designees or to fill a vacancy in such Board
        seat(s)); provided, however, that such removal and/or designation
        is approved in a writing signed by NESC.  In the event of such a
        removal and/or designation of the NESC Designees under this Section 1.3,
        the Shareholders shall vote their shares of the Company’s capital stock as
        provided in Section 1.1 to cause:  (a) the removal from the Board of
        the NESC Designee(s) so designated for removal by NESC; and (b) the election
        to
        the Board of any new NESC Designees so designated for election to the Board
        by
        NESC.

      


      1.4           Notice;
        Covenant to Vote in Accord.  The Company shall promptly
        give each of the Shareholders written notice of any change in composition
        of the
        Board and of any proposal by NESC to remove or elect one or more NESC
        Designee(s).  In any election of directors of the Board, the
        Shareholders shall vote their shares in a manner sufficient to elect to the
        Board the individuals to be elected thereto as provided in this Section
        1.

      


      2.           FURTHER
        ASSURANCES. Each of the Shareholders and the
        Company agree not to vote any shares of the Company’s capital stock, or to take
        any other actions, that would in any manner defeat, impair, be inconsistent
        with
        or adversely affect the stated intentions of the parties under Section 1
        of this
        Agreement.

      


      3.           TRANSFEREES;
        LEGENDS ON CERTIFICATES.

      


      3.1           Effect
        on Transferees.  Each and every transferee or assignee of
        any shares of capital stock of the Company from any Shareholder shall be
        bound
        by and subject to the terms and conditions of this Agreement that are applicable
        to the transferor or assignor of such shares, and the Company shall require,
        as
        a condition precedent to the transfer of any shares of capital stock of the
        Company subject to this Agreement, that the transferee agrees in writing
        to be
        bound by, and subject to, all the terms and conditions of this Agreement;
        provided, however, that this Section 3.1 shall not apply to
        transferees who purchase such shares of capital stock of the Company (a)
        in
        connection with a transaction that results in a Change of Control or (b)
        in a
        transaction involving a national securities exchange or the over-the-counter
        bulletin board.

      


      3.2           Legend.  The
        Shareholders agree that all Company share certificates now or hereafter held
        by
        them that represent shares of capital stock of the Company subject to this
        Agreement will be stamped or otherwise imprinted with a legend to read as
        follows, and the Shareholders and the Company agree to take all necessary
        action
        in order to stamp or imprint such legend on existing share certificates held
        by
        the Shareholders; provided, however, that this Section 3.2 shall
        not apply to share certificates that represent shares of capital stock of
        the
        Company that are registered with the Securities and Exchange Commission and
        are
        therefore freely tradable without restriction:


      
        
          
          

        

        
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      “THE
        SHARES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO AGREEMENTS AND RESTRICTIONS
        WITH REGARD TO THE VOTING OF SUCH SHARES AND THEIR TRANSFER, AS PROVIDED
        IN THE
        PROVISIONS OF A VOTING AGREEMENT, A COPY OF WHICH IS ON FILE IN THE OFFICE
        OF
        THE SECRETARY OF THE COMPANY.”

       

      4.           ENFORCEMENT
        OF AGREEMENT.  Each of the Shareholders and the Company
        acknowledge and agree that any breach by any of them of this Agreement shall
        cause NESC irreparable harm which may not be adequately compensable by money
        damages.  Accordingly, in the event of a breach or threatened breach
        by a Shareholder or the Company of any provision of this Agreement, NESC
        shall
        be entitled to the remedies of specific performance, injunction or other
        preliminary or equitable relief, including the right to compel any such
        breaching Shareholder to vote such Shareholder’s shares of capital stock of the
        Company in accordance with the provisions of this Agreement, in addition
        to such
        other rights remedies as may be available to NESC for any such breach or
        threatened breach, including but not limited to the recovery of money
        damages.

      


      5.           TERM.  This
        Agreement shall commence on the Effective Date and shall terminate upon the
        first to occur of the following:

      


      (a)           The
        third anniversary of the Effective Date;

      


      (b)           The
        execution by NESC of a written agreement to terminate this
        Agreement;

      


      (c)           Immediately
        prior to the closing of (i) any consolidation or merger of the Company with
        or
        into any other corporation(s) in which the holders of the Company’s issued and
        outstanding shares immediately before such consolidation or merger do not,
        immediately after such consolidation or merger, retain stock representing
        a
        majority of the voting power of the surviving corporation of such consolidation
        or merger or stock representing a majority of the voting power of a corporation
        that wholly owns, directly or indirectly, the surviving corporation of such
        consolidation or merger; or (ii) the sale, transfer or assignment of securities
        of the Company representing a majority of the voting power of all the Company’s
        issued and outstanding voting securities by the holders thereof to an acquiring
        party in a single transaction or series of related transactions (each a
“Change of Control”).


      
        
          
          

        

        
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      6.           GENERAL
        PROVISIONS.

      


      6.1           Notices.  Any
        and all notices required or permitted to be given to a party pursuant to
        the
        provisions of this Agreement will be in writing and will be effective and
        deemed
        to provide such party sufficient notice under this Agreement on the earliest
        of
        the following:  (i) at the time of personal delivery, if delivery
        is in person; (ii) at the time of transmission by facsimile, addressed to
        the
        other party at its facsimile number specified herein (or hereafter modified
        by
        subsequent notice to the parties hereto), with confirmation of receipt made
        by
        both telephone and printed confirmation sheet verifying successful transmission
        of the facsimile; (iii) one (1) business day after deposit with an express
        overnight courier for United States deliveries, or two (2) business days
        after
        such deposit for deliveries outside of the United States, with proof of delivery
        from the courier requested; or (iv) three (3) business days after deposit
        in the
        United States mail by certified mail (return receipt requested) for United
        States deliveries.  All notices for delivery outside the United States
        will be sent by facsimile or by express courier.  Notices by facsimile
        shall be machine verified as received.  All notices not delivered
        personally or by facsimile will be sent with postage and/or other charges
        prepaid and properly addressed to the party to be notified at the address
        or
        facsimile number as follows, or at such other address or facsimile number
        as
        such other party may designate by one of the indicated means of notice herein
        to
        the other parties hereto as follows:

      


      (a)           if
        to the Shareholders, at each such Shareholder’s address on Exhibit A
        hereto;

      


      (b)           if
        to NESC, marked “Attention: David Tsiang”, at Northeast Securities, Inc., 100
        Wall Street, 8th Floor,
        New York,
        NY 10005; and

      


      (c)           if
        to the Company, marked “Attention:  President”, at Baywood
        International, Inc., 14950 North 83rd Place,
        Suite 1,
        Scottsdale, AZ 85260.

      


      6.2           Entire
        Agreement.  This Agreement and the documents referred to
        herein, together with all the Exhibits hereto, constitute the entire agreement
        and understanding of the parties with respect to the subject matter of this
        Agreement, and supersede any and all prior understandings and agreements,
        whether oral or written, between or among the parties hereto with respect
        to the
        specific subject matter hereof.

      


      6.3           Governing
        Law.  This Agreement will be governed by and construed in
        accordance with the laws of the State of New York, without giving effect
        to that
        body of laws pertaining to conflict of laws.

      


      6.4           Severability.  If
        any provision of this Agreement is determined by any court or arbitrator
        of
        competent jurisdiction to be invalid, illegal or unenforceable in any respect,
        such provision will be enforced to the maximum extent possible given the
        intent
        of the parties hereto.  If such clause or provision cannot be so
        enforced, such provision shall be stricken from this Agreement and the remainder
        of this Agreement shall be enforced as if such invalid, illegal or unenforceable
        clause or provision had (to the extent not enforceable) never been contained
        in
        this Agreement.  Notwithstanding the foregoing, if the value of this
        Agreement based upon the substantial benefit of the bargain for any party
        is
        materially impaired, which determination as made by the presiding court or
        arbitrator of competent jurisdiction shall be binding, then both parties
        agree
        to substitute such provision(s) through good faith
        negotiations.


      
        
          
          

        

        
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      6.5           Third
        Parties.  Nothing in this Agreement, express or implied,
        is intended to confer upon any person, other than the parties hereto and
        their
        successors and assigns, any rights or remedies under or by reason of this
        Agreement.

      


      6.6           Successors
        And Assigns.  Except as otherwise provided in this
        Agreement, this Agreement, and the rights and obligations of the parties
        hereunder, will be binding upon and inure to the benefit of their respective
        successors, assigns, heirs, executors, administrators and legal
        representatives.

      


      6.7           Titles
        and Headings.  The titles, captions and headings of this
        Agreement are included for ease of reference only and will be disregarded
        in
        interpreting or construing this Agreement.  Unless otherwise
        specifically stated, all references herein to “sections” and “exhibits” will
        mean “sections” and “exhibits” to this Agreement.

      


      6.8           Counterparts.  This
        Agreement may be executed in any number of counterparts, each of which when
        so
        executed and delivered will be deemed an original, and all of which together
        shall constitute one and the same agreement.

      


      6.9           Adjustments
        for Stock Splits, Etc.  Wherever in this Agreement there
        is a reference to a specific number of shares of capital stock of the Company
        of
        any class or series, then, upon the occurrence of any subdivision, combination
        or stock dividend of such class or series of stock, the specific number of
        shares so referenced in this Agreement shall automatically be proportionally
        adjusted to reflect the effect on the outstanding shares of such class or
        series
        of stock by such subdivision, combination or stock dividend.

      


      6.10           Aggregation
        of Stock.  For purposes of this Agreement, all shares
        held or acquired by affiliated entities or persons shall be aggregated together
        for the purpose of determining the availability of any rights under this
        Agreement.

      


      6.11           Further
        Assurances.  The parties agree to execute such further
        documents and instruments and to take such further actions as may be reasonably
        necessary to carry out the purposes and intent of this Agreement.

      


      6.12           Facsimile
        Signatures.  This Agreement may be executed and delivered
        by facsimile and upon such delivery the facsimile signature will be deemed
        to
        have the same effect as if the original signature had been delivered to the
        other party.  The original signature copy shall be delivered to the
        other party by express overnight delivery.  The failure to deliver the
        original signature copy and/or the nonreceipt of the original signature copy
        shall have no effect upon the binding and enforceable nature of this
        Agreement.


      
        
          
          

        

        
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      6.13           Amendment
        and Waivers.  This Agreement may be amended only by a
        written agreement executed by the Company, NESC and a majority-in-interest
        of
        the Shareholders (calculated on the basis of the number of votes then entitled
        to be cast by each Shareholder for the election of directors of the Company);
        provided, however, that from time to time additional new investors
        in the Company's capital stock may be added as "Shareholders" to this Agreement,
        without obtaining the signature, consent or permission of any of the
        Shareholders, immediately upon execution and delivery to the Company of
        counterpart signature pages to this Agreement, at which time such additional
        new
        shareholders shall become party to and bound by this Agreement, it being
        understood that upon receipt of such counterpart signature pages the Company
        shall promptly amend and furnish to the Shareholders a revised Exhibit A
        hereto.  No amendment of or waiver of, or modification of any
        obligation under this Agreement will be enforceable against the Company,
        NESC or
        any Shareholders unless set forth in a writing signed as provided in the
        preceding sentence by the party or parties against whom enforcement is
        sought.  Any amendment effected in accordance with this Section 6.13
        will be binding upon all parties hereto and each of their respective successors
        and assigns.  No delay or failure to require performance of any
        provision of this Agreement shall constitute a waiver of that provision as
        to
        that or any other instance.  No waiver granted under this Agreement as
        to any one provision herein shall constitute a subsequent waiver of such
        provision or of any other provision herein, nor shall it constitute the waiver
        of any performance other than the actual performance specifically
        waived.


      
        
          
          

        

        
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      IN
        WITNESS WHEREOF, the parties have executed this Voting Agreement on the
        date and year first written above.

      


      
        	
                BAYWOOD
                  INTERNATIONAL, INC. 

              	 	
                NORTHEAST
                  SECURITIES, INC. 

              
	 	 	 	 	 
	 	 	 	 	 
	
                By:

              	 	 	
                By:

              	 
	
                Name:
                  Neil T. Reithinger 

              	 	
                Name:
                  David Tsiang 

              
	
                Title:  Chief
                  Executive Officer 

              	 	
                Title:
                  Senior Vice President 

              


      

      


       

      
 

      
        	 	
                SHAREHOLDERS:

              
	 	 
	 	 
	 	 
	 	
                Neil
                  Reithinger, in his personal capacity

              
	 	 
	 	 
	 	
                Karl
                  Rullich

              
	 	 
	 	 
	 	
                O.
                  Lee Tawes, III

              
	 	 
	 	 
	 	
                Thomas
                  Pinkowski

              
	 	 
	 	 
	 	
                Lorraine
                  DiPaolo

              
	 	 
	 	 
	 	
                Richard
                  Zorn

              


      

      

        
          
            
            

          

          
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      SCHEDULE
        A – INITIAL DESIGNEES

      


      O.
        Lee
        Tawes, III

      David
        Tsiang

       

      
        
          
          

        

        
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      EXHIBIT
        A – Schedule of Shareholders

       

      
        	
                Shareholder
                  and Address

              	 	
                Number
                  and Description of Shares of Capital Stock Subject to Voting
                  Agreement

              	 	
                Percent

              
	 	 	 	 	 
	
                Neil
                  Reithinger

              	 	 	 	 
	
                c/o
                  Baywood International, Inc.

              	 	 	 	 
	
                14950
                  N. 83rd
                  Place, Suite 1

              	 	 	 	 
	
                Scottsdale,
                  AZ 85260

              	 	 	 	 
	 	 	 	 	 
	
                Karl
                  Rullich

              	 	 	 	 
	
                c/o
                  Baywood International, Inc.

              	 	 	 	 
	
                14950
                  N. 83rd
                  Place, Suite 1

              	 	 	 	 
	
                Scottsdale,
                  AZ 85260

              	 	 	 	 
	 	 	 	 	 
	
                O.
                  Lee Tawes, III

              	 	 	 	 
	
                c/o
                  Northeast Securities, Inc.

              	 	 	 	 
	
                100
                  Wall Street, 8th
                  Floor

              	 	 	 	 
	
                New
                  York, NY 10005

              	 	 	 	 
	 	 	 	 	 
	
                Thomas
                  Pinkowski

              	 	 	 	 
	
                3703
                  Calle Fino Clarete

              	 	 	 	 
	
                San
                  Clemente, CA 92673

              	 	 	 	 
	 	 	 	 	 
	
                Lorraine
                  DiPaolo

              	 	 	 	 
	
                c/o
                  Northeast Securities, Inc.

              	 	 	 	 
	
                100
                  Wall Street, 8th
                  Floor

              	 	 	 	 
	
                New
                  York, NY 10005

              	 	 	 	 
	 	 	 	 	 
	
                Richard
                  Zorn

              	 	 	 	 
	
                c/o
                  Northeast Securities, Inc.

              	 	 	 	 
	
                100
                  Wall Street, 8th
                  Floor

              	 	 	 	 
	
                New
                  York, NY 10005

              	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	
                TOTALS:

              	 	 	 	 


      

       

       

    

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