ex4_34.htm


    
      

    

    Exhibit
      4.34

    PROMISSORY
      NOTE

    October
      25, 2005

    


    
      	
              U.S.
                $100,000

            	
                  Scottsdale,
                Arizona

            


    

     

    For
      consideration received, the receipt and sufficiency of which is hereby
      acknowledged, the undersigned, Baywood International, Inc. (hereinafter
“Borrower”), promises to pay to Ronald E. Patterson (hereinafter “Lender”), at
      the location here below set forth, the principal sum of One Hundred Thousand
      and
      00/100 U.S. Dollars (U.S. $100,000), with interest on the outstanding unpaid
      principal balance as hereinafter set forth.  Borrower’s execution of
      this Promissory Note (the “Note”) shall evidence Borrower’s receipt on the date
      hereinabove set forth of funds in the foregoing amount.

    


    1.           Maturity.  The
      maturity date (“Maturity Date”) of this Note shall be July 1, 2007.

    


    2.           Interest.  In
      addition to the principal sum of this Note, Borrower promises to pay Lender
      basic interest.  The basic interest rate (the “Contract Rate”) shall
      be twelve (12%) per annum, compounded, and all due and payable of One Hundred
      Twenty Thousand and 00/100 U.S. Dollars (U.S. $120,000) (principal and interest)
      on or before Maturity Date.  If prepaid early, all accrued interest
      through date of prepayment shall be due and payable to Lender.  Should
      it be necessary to calculate interest for a partial month, such amount shall
      be
      calculated by dividing a full month’s interest by the total number of days in
      that particular month and then multiplying the resulting daily interest amount
      by the number of days in that particular month that interest has
      accrued.

    


    3.           Payment.  The
      entire unpaid balance of principal owing on this Note and accrued and unpaid
      interest thereon shall be due and payable in full on or before Maturity
      Date.

    


    4.           Manner
      and Place of Payments.  Unless notified otherwise, Borrower shall
      make all payments due under this Note to Lender in monthly payments that include
      principal and interest starting on December 1, 2005 and ending July 1, 2007,
      each in the amount of $6,000.  Lender agrees that Borrower may mail
      such payments via regular U.S. mail to the following address:

     

    Ronald
      E.
      Patterson

    12343
      Fairway Pointe Row

    San
      Diego, CA  92128

    


    5.           U.S.
      Dollars.  All payments shall be in U.S. Dollars and be made via
      check drawn on a U.S. bank.

    


    6.           Prepayment
      Privilege.  Borrower shall have the privilege to prepay and,
      conditioned as hereinafter set forth, Lender shall have an obligation to accept
      tendered prepayments of all of the principal balance of this Note together
      with
      the accrued interest to the Maturity Date of the Note.

    


    7.           Equity
      Kicker.  As additional interest to Lender under this Note, Company
      agrees to issue and Lender agrees to accept a warrant for Five Hundred Thousand
      (500,000) shares of the Company’s common stock at an exercise price of $0.02
      (the “Warrant”).  Such Warrant is attached to this Note as Exhibit
      A.  Lender understands that the availability of the Company’s common
      stock underlying the Warrant is subject to the increase in the Company’s
      authorized common stock as contemplated in the Company’s 2005 Proxy Statement
      and that such increase will not take place until the Company’s Annual Meeting on
      November 17, 2005.


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    8.           Event
      of Default.  Should Borrower fail to make payments to Lender as
      per Section 4 of this Note, Borrower shall have five (5) days by which to cure
      such default.  If such default is not cured within five days, Lender
      shall give notice to Borrower of such default via facsimile or regular
      mail.  Unless notified otherwise, Lender shall send any notices to
      Borrower via facsimile or U.S. mail to the following address:

    


    Baywood
      International, Inc.

    Attn:  Neil
      Reithinger

    14950
      North 83rd
      Place, Suite 1

    Scottsdale,
      AZ  85260

    Fax:  (480)
      483-2168

    


    9.           Lender’s
      Rights Cumulative.  The rights and remedies of Lender as provided
      in this Note and/or under applicable law shall be cumulative and concurrent,
      and
      may be pursued singly, successively, or together against Borrower, and any
      other
      funds, property of security held by Lender for the payment hereof or otherwise
      at the sole, absolute and unfettered discretion of Lender, subject to any
      limitations imposed by applicable law.  The failure to exercise any
      such right or remedy shall in no event be construed as a waiver or release
      of
      said rights or remedies or of the right to exercise them at any later
      time.

    


    10.          Consents
      and Waiver of Defenses.  Except as otherwise provided herein,
      Borrower, endorsers, guarantors, sureties, accommodation parties, assuming
      parties hereof, and all other persons liable or to become liable for all or
      any
      part of this indebtedness, jointly and severally waive all applicable exemption
      rights, whether under the state constitution, homestead laws or otherwise,
      and
      also jointly and severally waive diligence, presentment, protest and demand,
      and
      also notice of protest, of demand, of nonpayment, of dishonor and of maturity
      and also recourse to suretyship defenses generally, marshaling of assets,
      laches, estoppels and equitable defenses generally; and they also jointly and
      severally hereby consent to any and all renewals, extensions or modifications
      of
      the terms hereof, including time of payment, and further agree that any such
      renewal, extension or modification of the terms hereof, or the release or
      substitution of any security for the indebtedness evidenced hereby or any other
      indulgences agreed upon by Borrower shall not affect the liability of any of
      said parties for the indebtedness evidenced by this Note.  Any such
      medications agreed upon by Borrower and Lender may be made without notice to
      any
      said parties.  All said parties hereby specifically consent to any
      future action whereby with Borrower’s and Lender’s consent:

     

            (a)           This
      Note may from time-to-time be extended or renewed or its terms (including the
      terms of payment of principal or interest or both or any part thereof) otherwise
      modified;

     

            (b)           Any
      of the provisions of this Note may be amended or any requirement hereof or
      default hereunder waived or any departure there from consented to or any other
      forbearance or indulgence exercised with respect hereto; and

     

            (c)           Any
      collateral now or hereafter securing this Note may be exchanged, substituted,
      realized upon, released, extended or otherwise dealt with or disposed
      of.


    
      
        
        

      

      
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    11.          Fees
      and Expenses.  Borrower, indemnitors, endorsers, guarantors,
      sureties, accommodation parties, assuming parties hereof and all persons liable
      or to become liable on this Note, agree jointly and severally, to pay or
      reimburse Lender for, as the case may be, all costs of collection, including
      reasonable attorneys’ fees as determined by the judge of the court and all costs
      of suit, in the event that the unpaid principal sum of this Note, or any payment
      of interest or principal and interest thereon, late charge or premium, is not
      paid when due, or in the event that it becomes necessary to protect any security
      for the indebtedness evidenced hereby, or for the foreclosure or other
      enforcement by Lender or on behalf of Lender of any lien or document providing
      such security, or in the event that Lender is made party to any litigation
      because of the existence of the indebtedness evidenced by this Note, or because
      of the existence of any security, whether suit be brought or not, and whether
      through courts of original jurisdiction, as well as courts of appellate
      jurisdiction, or through a Bankruptcy Court or other legal
      proceedings.

    


    12.          Amendment
      and Modification.  This Note may not be amended, modified or
      changed, nor shall any waiver of any provision hereof be effective, except
      only
      by an instrument in writing and signed by the party against whom enforcement
      of
      any waiver, amendment, change, modification or discharge is sought; provided,
      however, that this paragraph shall in no way be a limitation on the provisions
      of the consents and waivers set forth in Paragraph 10 hereof.

    


    13.          Interest
      Not to Exceed Legal Maximum.  Notwithstanding any provision herein
      or in any instrument now or hereafter securing this Note, the total liability
      for payments in the nature of interest shall not exceed the limits imposed
      by
      the usury laws of the State of Arizona.  If Lender receives as
      interest an amount which would exceed such limits, such amount which would
      be
      excessive interest shall be applied to the reduction of the unpaid principal
      balance and not to the payment of interest; and if a surplus remains after
      full
      payment of principal and lawful interest, the surplus shall be remitted to
      Borrower by Lender, and Borrower hereby agrees to accept such
      remittance.  If the preceding sentence becomes operative, the total
      unpaid principal balance of this Note, if any, shall bear interest at the
      maximum rate then permitted by the usury laws of the State of Arizona until
      all
      the then obligations of this Note, as modified by this paragraph, are paid
      and
      performed in full.

    


    14.          Additional
      Sums.  All fees (including origination fees), points, charges,
      goods, things in action or any other sums or things of value (collectively,
      the
“Additional Sums”) paid by Borrower to Lender, whether pursuant to this Note or
      otherwise howsoever with respect to the indebtedness evidenced hereby, or with
      respect to any other document or agreement securing this Note, which, under
      the
      law of the State of Arizona, are deemed to be interest with respect to this
      Note
      or such indebtedness, shall, for the purpose of any laws of the State of Arizona
      which may limit the maximum rate of interest to be charged with respect to
      this
      Note or such indebtedness, be payable by Borrower as, and shall be deemed to
      be,
      additional interest, and for such purposes only, the agreed upon and contracted
      rate of interest described above shall be deemed to be increased by the
      Additional Sums.

    


    15.          Successors
      and Assigns.  Whenever used herein, the words “Borrower” and
“Lender” shall be deemed to include their respective heirs, personal
      representatives, successors and assigns.  This paragraph shall not be
      construed as Lender’s consent to Borrower’s assignment or transfer of any
      property securing payment hereof or any rights, powers, obligations or duties
      of
      Borrower.


    
      
        
        

      

      
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    16.          Governing
      Law.  Except where preempted by the laws of the United States, or
      regulations promulgated there under, this Note shall be interpreted and
      construed in accordance with and be governed by the substantive laws of the
      State of Arizona.

    


    17.          Notices.  All
      notices or other communications required or permitted to be given or delivered
      under this Note shall be in writing and shall be delivered (a) by hand in
      exchange for a receipt, or (b) by certified or registered mail, return receipt
      requested, postage prepaid, and addressed or delivered to the respective
      addresses as herein provided.

    


    18.          Attorneys
      Fees.  Notwithstanding any provision hereof to the contrary, if
      any dispute arising under the terms of this Note shall result in litigation,
      the
      prevailing party shall, in addition to any other relief to which it is entitled,
      be entitled to an award of its reasonable attorneys’ fees as determined by the
      court, together with an award of all of its costs of litigation.

    


    19.          Controlling
      Agreement.  This Note embodies the entire agreement and
      understanding between the Borrower and Lender with respect to the repayment
      of
      the indebtedness evidenced hereby.  In the event of a conflict between
      the terms of this Note and the terms of any other documents, the terms of this
      Note shall control.

    


    20.          Severability.  If
      any provision of this Note or the application thereof to any person or
      circumstances shall be held invalid or unenforceable by any court or other
      governmental authority to any extent, the remainder of this Note and the
      application of such provisions to other persons or circumstances shall not
      be
      affected thereby and shall remain enforceable.

    


    DATED
      as
      of the day first hereinabove set forth.

     

    
      
        	
                BORROWER:

              	 	
                LENDER:

              
	
                 

              	 	 
	
                BAYWOOD
                  INTERNATIONAL, INC.

              	 	
                RONALD
                  E. PATTERSON

              
	
                A
                  Nevada Corporation

              	 	
                 

              
	 	 	 	 
	
                By:

              	 	 	
                By:

              	 
	 	 	 	 	 
	
                Its:

              	 	 	
                Its:

              	 
	 	 	 	 	 
	
                Date:

              	 	 	
                Date:

              	 


      

    

     

    
      
        
          
          

        

        
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    EXHIBIT
      A

     

     

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