ex4_31.htm


    
      

    


    EXHIBIT
      4.31

    SUBSCRIPTION
      AGREEMENT

    


    THE
      SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
      OF
      1933, AS AMENDED OR UNDER ANY STATE ACTS AND MAY NOT BE SOLD, TRANSFERRED,
      PLEDGED, OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
      UNDER SUCH ACTS OR AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY TO THE EFFECT
      THAT REGISTRATION IS NOT REQUIRED.

    


    THIS
      AGREEMENT DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER
      TO BUY ANY SECURITY OTHER THAN THE SECURITIES OFFERED HEREBY, NOR DOES IT
      CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES
      BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT
      AUTHORIZED, OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT
      QUALIFIED TO DO SO.

    


    
      	
              To
                the Board of Directors

            	
              Dated
                as of

            
	
              Baywood
                International, Inc.

            	
              December
                ____, 2005

            


    

    14950
      North 83rd Place, Suite 1

    Scottsdale,
      Arizona  85260

    


    Ladies
      and Gentlemen:

    


    1.  Subscription
      and Payment.  The undersigned hereby subscribes for and
      agrees to accept the issuance of the number of shares of Series H
      Preferred Stock (the “Shares”) of Baywood International, Inc., a
      Nevada corporation (the “Company”), at the price of $1.00 per Share or an
      aggregate purchase price as set forth on the signature page hereof (“Purchase
      Price”).  Additionally, if the subscription agreement is accepted
      by the Company, the undersigned will receive a three-year warrant entitling
      the
      undersigned to purchase up to that number of shares of the Company’s common
      stock that is equal to the number of such shares of common stock that could
      be
      purchased under the following graduated exercise price schedule and equal to
      50%
      of the Purchase Price:

    


    
      	
               

            	
              ·

            	
              25%
                of warrant shares at exercise price of
                $0.02

            


    

    
      	
               

            	
              ·

            	
              25%
                of warrant shares at exercise price of
                $0.04

            


    

    
      	
               

            	
              ·

            	
              25%
                of warrant shares at exercise price of
                $0.08

            


    

    
      	
               

            	
              ·

            	
              25%
                of warrant shares at exercise price of
                $0.12

            


    

    


    For
      example, if the undersigned subscribes for $200,000 of Shares, the undersigned
      would receive 200,000 Shares and a warrant entitling the undersigned to purchase
      1,250,000 shares of common stock at an exercise price of $0.02 per share (50%
      x
      $200,000 x 25% / $0.02), 625,000 shares of common stock at $0.04 per share
      (50%
      x $200,000 x 25% / $0.04), 312,500 shares of common stock at $0.08 per share
      (50% x $200,000 x 25% / $0.08) and 208,333 shares of common stock at $0.12
      per
      share (50% x $200,000 x 25% / $0.12).

    


    The
      common stock underlying the warrants would be redeemable in tranches for $0.01
      per share of common stock by the Company at the Company’s discretion if the
      Company’s common stock as listed on the OTCBB or another national exchange has a
      closing price equal to 300% of the then-current exercise price for 30
      consecutive trading days for that particular tranche of the common shares
      underlying the warrant.  Using the same example above, if the
      Company’s closing price on the OTCBB was $0.12 for 30 consecutive trading days,
      the Company would be entitled, if not previously exercised, to redeem 50% of
      the
      total common shares underlying the warrant (i.e., the 25% at $0.02 exercise
      price tranche and the 25% at $0.04 exercise price tranche) for a total
      redemption price of $18,750 (1,250,000 + 625,000 x $0.01).

    


    The
      undersigned is delivering, with this subscription agreement, payment for the
      Shares by check payable to “Baywood International, Inc.” or by wire transfer
      payable against delivery of the certificate representing the
      Shares.  The undersigned understands and agrees that the Company has
      the right to accept or reject this subscription, in whole or in part, and this
      subscription shall be deemed accepted only when signed by a representative
      of
      the Company.  The undersigned agrees that the Company need not accept
      subscriptions in the order received.  If the Company learns after the
      undersigned has been admitted as a stockholder of the Company that the
      undersigned has misrepresented any information in any of the documents the
      undersigned submitted to the Company in connection with this subscription,
      then
      in addition to other rights available to the Company, the Company will have
      the
      right to acquire the undersigned’s Shares for a price equal to the undersigned’s
      subscription payment.


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    2.  Cancellation
      of Subscription Agreement.  The undersigned has no right to
      cancel, revoke or withdraw this subscription, except as may be provided under
      applicable securities laws.

    


    3.  Conditions.  This
      offer is made subject to the condition that the Shares, when issued, will be
      validly issued, fully paid, and non-assessable and that the Company is duly
      organized, validly existing, and in good standing under the laws of
      Nevada.

    


    4.  Representations,
      Warranties, Covenants, and Acknowledgements.  To induce the
      Company to accept this subscription and to issue the Shares to the undersigned
      and knowing that the Company is relying upon the truth and accuracy of the
      following in issuing the Shares and establishing compliance with applicable
      federal, provincial and state securities laws, the undersigned hereby
      represents, warrants, covenants, and acknowledges to the Company
      that:

    


    (A)           The
      undersigned has full power and capacity to execute, deliver, and perform under
      this subscription agreement.  This subscription agreement is the legal
      and binding obligation of and is enforceable against the undersigned in
      accordance with its terms.  The execution and delivery of this
      subscription agreement, the consummation of the transactions contemplated
      hereby, and the fulfillment of the terms hereof, will not result in the breach
      of any term or provision of, or constitute a default under, or conflict with,
      or
      cause the acceleration of any obligation under, any agreement or other
      instrument of any description to which the undersigned is a party or by which
      the undersigned is bound, or any judgment, decree, order or award of any court,
      governmental body, or arbitrator, or any applicable law, rule or
      regulation.

    


    (B)           The
      undersigned understands and has been advised by the Company that the business
      activities of the Company and an investment in the Company is speculative and
      subject to substantial risks, including the risks set forth in the Company’s
      Securities and Exchange Commission (“SEC”) filings, including, without
      limitation, the Company’s Form 10-KSB dated May 12, 2005 and Form 10-QSB dated
      November 21, 2005 (the “SEC Filings”) and there can be no guaranty of the
      amount of or type of profit or loss to be realized, if any, as a result in
      an
      investment in the shares.

    


    (C)           The
      undersigned has been given access to full and complete information regarding
      the
      Company and has utilized such access to the undersigned’s satisfaction for the
      purpose of obtaining such information regarding the Company as the undersigned
      has reasonably requested.  In particular, the undersigned has received
      and thoroughly read and evaluated the (i) Company’s SEC Filings, including the
      exhibits thereto, and (ii) has been given reasonable opportunity to review
      such
      documents as the undersigned has requested and to ask questions of, and to
      receive answers from, representatives of the Company concerning the terms and
      conditions of the Shares and the business and affairs of the Company and to
      obtain any additional information concerning the Company’s business to the
      extent reasonably available so as to understand more fully the nature of the
      investment and to verify the accuracy of the information supplied.

    


    (D)           The
      undersigned represents that they have consulted with a qualified attorney,
      tax
      advisor, or accountant or have elected not to do so, and understands the income
      tax aspects of its investment in the Shares.  The undersigned, in
      determining to purchase the Shares, and if the undersigned consulted the
      undersigned’s legal counsel, tax advisor, accountants or other advisors (i) has
      been encouraged and has had the opportunity to rely upon the advice of the
      undersigned’s legal counsel, accountants, tax advisor and other advisors with
      respect to the purchase of the Shares, and (ii) has relied solely upon the
      advice of the undersigned’s legal counsel, accountants, tax advisors or other
      financial advisors with respect to the financial, tax, and other considerations
      relating to the purchase of the Shares.  The undersigned acknowledges
      that neither the Company nor anyone on behalf of the Company has made any
      representations to the undersigned regarding the tax consequences of an
      investment in the Shares.


    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    


    (E)           The
      undersigned and his, her, or its personal advisors have received from the
      Company all requested documents, records, and books pertaining to the investment
      in the Shares so as to enable them to evaluate the merits and risks of this
      investment.  The undersigned understands and acknowledges that all
      documents were prepared by the Company and that no independent legal counsel,
      accountant, or financial advisor has passed upon or assumed any responsibility
      for the accuracy, completeness or fairness of information provided to the
      undersigned and no independent legal counsel, accountant, or financial advisor
      has independently verified or investigated in any way the accuracy, completeness
      or fairness of such information.

    


    (F)           The
      undersigned was not offered or sold the Shares, directly or indirectly, by
      means
      of any form of general advertising or general solicitation, including, but
      not
      limited to (i) any advertisement, article, notice, or other communication
      published in a newspaper, magazine, or similar medium of communication or
      broadcast over television or radio; or (ii) any seminar or meeting whose
      attendees have been invited by any general solicitation or general
      advertising.

    


    (G)           The
      undersigned (i) can bear the economic risk of the purchase of the Shares,
      including the total loss of the undersigned’s investment; (ii) has such
      knowledge and experience in business and financial matters as to be capable
      of
      evaluating the merits and risks of an investment in the Shares, or the
      undersigned is being advised by others (acknowledged by the undersigned as
      being
      the “Purchaser Representative(s)” of the undersigned) such that they and the
      undersigned together are capable of making such evaluation; and (iii)
      understands the non-liquid nature of an investment in the Shares.  The
      undersigned acknowledges and understands that the Shares are a speculative
      investment that involves a high degree of risk and there can be no guarantee
      of
      the amount of or type of consideration, profit or loss to be realized, if any,
      as a result of an investment in the Shares.

    


    (H)           The
      undersigned is presently a bona fide resident of the state listed below and
      has
      no present intention of becoming a resident of any other state or jurisdiction,
      and the address and Social Security Number or Employer Identification Number
      set
      forth below are the undersigned’s true and correct residential or business
      address and Social Security Number or Employer Identification
      Number.

    


    (I)           The
      undersigned (i) if an individual, is at least 21 years of age; (ii) if an
      individual, is a resident of the United States; (iii) has adequate means of
      providing for the undersigned’s current needs and personal contingencies; (iv)
      has no need for liquidity in the undersigned’s investments; (v) maintains the
      undersigned’s principle residence or business at the address shown below; (vi)
      warrants that all investments in and commitments to non-liquid investments
      are,
      and after the undersigned’s purchase of the Shares will be, reasonable in
      relation to the undersigned’s net worth and current needs; and (vii) warrants
      that any financial information that is provided herewith by the undersigned,
      or
      is subsequently submitted by the undersigned at the request of the Company,
      does
      or will accurately reflect the undersigned’s financial condition with respect to
      which the undersigned does not anticipate any material adverse
      change.

    


    (J)           The
      undersigned acknowledges that the Company, based upon representations made
      by
      the undersigned, is relying on exemptions from the registration requirements
      of
      the Securities Act of 1933, as amended (the “Securities Act”), and
      afforded by applicable state statutes and regulations.

    


    (K)           The
      undersigned certifies that he, she or it is an “accredited investor” as that
      term is defined under Rule 501(a) of Regulation D promulgated under the
      Securities Act of 1933.  At the option of the Company, the undersigned
      agrees to complete and deliver to the Company evidence in order to enable the
      Company to verify the undersigned’s status as an accredited investor under the
      Securities Act.

    


    (L)           The
      undersigned understands that the Shares have not been and will not be registered
      under the Securities Act or the securities laws of any state and are subject
      to
      substantial restrictions on transfer.

    


    (M)   The
      undersigned
      acknowledges and agrees that the Shares are being acquired for the undersigned’s
      own account without a view to public distribution, transfer, resale, or
      assignment and that the undersigned has no contract, undertaking, agreement,
      or
      arrangement to sell or otherwise transfer or dispose of the Shares or any
      portion thereof to any other person.


    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    


    (N)           The
      undersigned (i) agrees that the undersigned will not sell or otherwise transfer
      or dispose of the Shares or any portion thereof unless such Shares are
      registered under the Securities Act and any applicable state securities laws
      or
      the undersigned obtains an opinion of counsel that is satisfactory to the
      Company that such Shares may be sold in reliance on an exemption from such
      registration requirements, and (ii) understands that the certificate(s)
      evidencing the Shares, if any, will be endorsed with a legend to that
      effect.

    


    (O)           The
      undersigned understands that (i) the Company has no obligation or intention
      to
      register the Shares for resale or transfer under the Securities Act or any
      state
      securities laws, or to take any action (including the filing of reports or
      the
      publication of information as required by Rule 144 under the Securities Act)
      which would make available any exemption from the registration requirements
      of
      any such laws; and (ii) the undersigned therefore may be precluded from selling
      or otherwise transferring or disposing of the Shares for an indefinite period
      of
      time or at any particular time.

    


    (P)           The
      undersigned understands that, except upon certain limited circumstances, the
      restrictions on the sale, transfer, and disposition of the Shares will also
      apply to any and all shares of capital stock or other securities issued or
      otherwise acquired with respect to the Shares including, without limitation,
      any
      other shares or securities issued or acquired as a result of any stock dividend,
      stock split or exchange or any distribution of shares or securities pursuant
      to
      any corporate reorganization, reclassification or similar event.

    


    (Q)           The
      undersigned understands that no federal or state agency, including the SEC
      or
      the securities commission or authorities of any other state, has approved or
      disapproved the Shares, passed upon or endorsed the merits of the offering,
      or
      made any finding or determination as to the fairness of the Shares for
      investment.

    


    (R)           The
      undersigned is not subject to back-up withholding provisions of Section
      3406(a)(1) of the Internal Revenue Code.

    


    (S)           If
      subject to the Employee Retirement Income Security Act (“ERISA”), the
      undersigned is aware of and has taken into consideration the diversification
      requirements of Section 404(a)(3) of ERISA in determining to purchase the Shares
      and the undersigned has concluded that the purchase of the Shares is
      prudent.

    


    (T)           The
      undersigned represents, warrants and agrees that, if the undersigned is
      acquiring the Shares in a fiduciary capacity, (i) these representations,
      warranties, agreements, acknowledgments, and understandings shall be deemed
      to
      have been made on behalf of the person or persons for whose benefit such Shares
      are being acquired, (ii) the name of such person or persons is indicated below
      under the subscriber’s name, and (iii) such further information as the Company
      deems appropriate shall be furnished regarding such person or
      persons.

    


    (U)           Neither
      the Company nor any person representing or acting on behalf of the Company,
      or
      purportedly representing or acting on behalf of the Company, has made any
      representations, warranties, agreements or statements other than those contained
      herein that influenced or affected the undersigned’s decision to purchase the
      Shares, nor has the undersigned relied on any representations, warranties,
      agreements or statements in the belief that they were made on behalf of any
      of
      the forgoing, nor has the undersigned relied on the absence of any such
      representations, warranties, agreements or statements in reaching the decision
      to purchase the Shares.

    


    (V)           The
      foregoing representations and warranties are true and accurate as of the date
      hereof and shall survive the delivery of payment for the Shares.  The
      undersigned understands that the Shares are being offered and sold in reliance
      on specific exemptions from the registration requirements of federal and state
      laws and that the Company is relying upon the truth and accuracy of the
      representations, warranties, agreements, acknowledgements and understandings
      set
      forth herein in order to determine the suitability of the undersigned to acquire
      Shares.  The undersigned agrees promptly to notify the Company of any
      changes to any of the foregoing.

    


    (W)           The
      undersigned acknowledges that the Company has the unconditional right to accept
      or reject this subscription and that (i) if Company accepts this subscription,
      the funds received by the Company will be deposited into an ordinary checking
      account of the Company and not an escrow account and may become commingled
      with
      other funds of the Company and the Company has the unconditional right to apply
      the proceeds thereof in any manner, and (ii) if the Company rejects this
      subscription or if the offering is terminated or withdrawn prior to acceptance
      of this subscription, the funds deposited by the undersigned will be refunded
      promptly without interest.


    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    


    5. Covenants
      and Indemnity.

    


    (A)           The
      foregoing representations and warranties, together with all other
      representations and warranties made or given by the undersigned to the Company
      in connection with the transactions contemplated hereby, shall be true and
      correct in all respects on the date of closing of the purchase hereunder as
      if
      made on such date and shall survive such date.

    


    (B)           The
      undersigned agrees to indemnify and hold harmless the Company from and against
      any loss, damage or liability due to or arising out of a breach of any of the
      representations and warranties set forth in Section 4 of this
      subscription agreement.

    


    6.  Miscellaneous.

    


    (A)           This
      subscription agreement will be deemed to have been executed and delivered in,
      and will be governed by and construed in accordance with, the internal laws
      of
      the State of Arizona, notwithstanding any Arizona or other conflicts-of-law
      provisions to the contrary.  The undersigned acknowledges and agrees
      that any action or proceeding of any kind against the undersigned arising out
      of
      or by reason of this subscription may be brought in any federal or state court
      of competent jurisdiction located in the State of Arizona, and hereby
      irrevocably consents to the jurisdiction of any such court.

    


    (B)           This
      subscription agreement and the rights, powers and duties set forth herein will
      be binding upon the undersigned, the undersigned’s heirs, estate, legal
      representatives, successors, and permitted assigns and will inure to the benefit
      of the Company, its successors and assigns.

    


    (C)           If
      any provision of this subscription agreement is invalid or unenforceable under
      any applicable statute or rule of law, then such provision will be deemed
      inoperative to the extent that it may conflict therewith and will be deemed
      modified to conform with such statute or rule of law, but such provision will
      not affect the validity or enforceability of any other provision
      hereof.

    


    (D)           This
      subscription agreement may be executed through the use of separate signature
      pages or in any number of counterparts, and each of such counterparts shall,
      for
      all purposes, constitute one agreement binding on all parties, notwithstanding
      that all parties are not signatories to the same counterpart.

    


    (E)           This
      subscription agreement contains the entire agreement of the parties with respect
      to its subject matter and supersedes all prior agreements, understandings or
      arrangements between the parties, whether written or oral, with respect to
      the
      subject matter hereof and there are no representations, warranties, covenants
      or
      other agreements except as stated or referred to herein with regard to its
      subject matter.

    


    7.  Right
      of First Offer.  In the event the Company issues equity
      securities, the undersigned will be permitted to participate in such issuance
      in
      order to maintain the undersigned’s fully-diluted percentage interest
      immediately prior to the offering.  This right will not apply to
      equity issuances to employees or consultants for compensatory purposes pursuant
      to a plan or agreement approved by the board of directors or for issuances
      in
      connection with strategic partnerships or any issuance that is not intended
      for
      capital raising purposes.

    


    8. Registration
      Rights.  The Company will use its best efforts to register,
      within a reasonable time following the closing of the sale of the Shares to
      all
      parties, the shares of common stock underlying the Shares and the warrant for
      resale with the Securities and Exchange Commission using a registration
      statement on Form SB-2 or a then-applicable form that the Company is eligible
      to
      use provided that such efforts do not subject the Company to federal or state
      securities law violations.


    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    


    BAYWOOD
      INTERNATIONAL, INC.

    SUBSCRIPTION
      AGREEMENT SIGNATURE PAGE

    


    IN
      WITNESS WHEREOF, intending to irrevocably bind the undersigned and the
      personal representatives, successors, and assigns of the undersigned and to
      be
      bound by this, the undersigned is executing this document on December ____,
      2005.

    


    The
      undersigned subscribes to purchase ____________ shares of Series H Preferred
      Stock, $1.00 par value per share, of the Company, in consideration for an
      aggregate purchase price of $_____________.

    


    
      	
              Name(s)
                in which Shares are to be registered:

            	 


    

    Check
      One:

     

    
      
        	 	
                 ̈

              	
                Individual
                  ownership

              


      

      
        	 	
                 ̈

              	
                Corporation,
                  Partnership, or Limited Liability
                  Company

              


      

      
        	 	
                 ̈

              	
                Trust

              	 


      

      
        	 	
                 ̈

              	
                Other
                  (describe)

              	 


      

    

     

    Each
      Co-Subscriber (other than a spouse) must complete and sign a separate
      Agreement.

    


    If
      the subscriber has a United States Social Security Number or a United States
      Employer Identification Number, please list the applicable number for each
      such
      Subscriber: _______________________________

    


    
      	
              Country
                of Residence or Principal Place of Business:

            	 


    

     

    
      	
              Residence
                or Principal Place of Business Address:

            	 


    

    


    
      	 	 	 
	
              PRINT
                name of individual who, or entity that, is subscribing.

            	 	
              Signature

            


    

    
      	 	 	 
	 	 	
              Title
                (if fiduciary, etc.)

            
	 	 	 
	 	 	 
	
              PRINT
                name of Co-Subscriber if the Shares are to be held as joint tenants,
                community property, or tenants in common.

            	 	
              Signature
                of Co-Subscriber

            
	 	 	 
	 	 	
              Title
                (if fiduciary, etc.)

            


    

     

     

    
      
        	
                _____

              	
                (Please
                  Initial)

              	
                By
                  signing above and initialing to the left, the subscriber (and any
                  co-subscriber) represents and warrants to the Company that they
                  have read,
                  understood and acknowledged the risks and uncertainties involved
                  in an
                  investment in the Shares as described and set forth in the Company’s SEC
                  Filings.

              


      

      


      
        	
                _____

              	
                (Please
                  Initial)

              	
                By
                  signing above and initialing to the left, the subscriber (and any
                  co-subscriber) represents and warrants to the Company that they
                  have read
                  and understood the Company’s Certificate of Incorporation and the
                  Company’s Bylaws attached as exhibits to the Company’s SEC
                  Filings.

              


      

    

     

    


    
      	
              ACCEPTED
                ON __________________ ___, 200___.

            	 
	
              BAYWOOD
                INTERNATIONAL, INC.

            	 
	
              By:

            	 	 
	
              Name:

            	 	 
	
              Title:

            	 	 


    

     

     

    6