EX-10.2






THIS AMENDED AND RESTATED NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY STATE SECURITIES LAWS. THIS AMENDED AND RESTATED NOTE MAY NOT BE SOLD, OFFERED FOR
SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS
AMENDED AND RESTATED NOTE UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO NATURADE, INC. THAT SUCH REGISTRATION IS NOT REQUIRED.



AMENDED AND RESTATED SECURED TERM NOTE




FOR VALUE RECEIVED, NATURADE, INC., a Delaware corporation (the “Company”), promises to pay to
LAURUS MASTER FUND, LTD., c/o M&C Corporate Services Limited, P.O. Box 309 GT, Ugland House, South
Church Street, George Town, Grand Cayman, Cayman Islands, Fax: 345-949-8080 (the “Holder”) or its
registered assigns or successors in interest, the sum of One Million Six Hundred Fifty Thousand
Dollars ($1,650,000), together with any accrued and unpaid interest hereon, on January 6, 2009
(the “Maturity Date”) if not sooner paid.



Capitalized terms used herein without definition shall have the meanings ascribed to such
terms in that certain Security and Purchase Agreement dated as of the date hereof by and between
the Companies and the Holder (as amended, modified and/or supplemented from time to time, the
“Security Agreement”). This amended and restated note amends and restates in its entirety (and is
given in substitution for and not in satisfaction of) that certain $1,000,000 secured convertible
term note made by the Company in favor of Holder on July 26, 2005.



The following terms shall apply to this Secured Term Note (this “Note”):



ARTICLE I




CONTRACT RATE AND AMORTIZATION




1.1 Contract Rate. Subject to Sections 4.2 and 5.10, interest payable on the
outstanding principal amount of this Note (the “Principal Amount”) shall accrue at a rate per annum
equal to the “prime rate” published in The Wall Street Journal from time to time (the
“Prime Rate”), plus two percent (2.0%) (the “Contract Rate”). The Contract Rate shall be increased
or decreased as the case may be for each increase or decrease in the Prime Rate in an amount equal
to such increase or decrease in the Prime Rate; each change to be effective as of the day of the
change in the Prime Rate. Subject to Section 1.2, the Contract Rate shall not at any time be less
than six percent (6.0%) Interest shall be (i) calculated on the basis of a 360 day year, and (ii)
payable monthly, in arrears, commencing on August 1, 2005, on the first business day of each
consecutive calendar month thereafter through and including the Maturity Date, and on the Maturity
Date, whether by acceleration or otherwise.



1.2 Contract Rate Adjustments and Payments. The Contract Rate shall be calculated on
the last business day of each calendar month hereafter (other than for increases or decreases in
the Prime Rate which shall be calculated and become effective in accordance with the terms of
Section 1.1) until the Maturity Date (each a “Determination Date”).



1.3 Principal Payments. Amortizing payments of the aggregate principal amount
outstanding under this Note at any time (the “Principal Amount”) shall be made by the Company on
April 1, 2006 and on the first business day of each succeeding month thereafter through and
including the Maturity Date (each, an “Amortization Date”). Subject to Article III below,
commencing on the first Amortization Date, the Company shall make monthly payments to the Holder on
each Repayment Date, each such payment in the amount of $50,000 together with any accrued and
unpaid interest on such portion of the Principal Amount plus any and all other unpaid amounts which
are then owing under this Note, the Purchase Agreement and/or any other Related Agreement
(collectively, the “Monthly Amount”). Any outstanding Principal Amount together with any accrued
and unpaid interest and any and all other unpaid amounts which are then owing by the Company to the
Holder under this Note, the Purchase Agreement and/or any other Related Agreement shall be due and
payable on the Maturity Date.



ARTICLE II




REDEMPTION




2.1 Optional Redemption in Cash. The Company may prepay this Note (the “Optional
Redemption”) (i) on of before December 31, 2006 by paying to the Holder a sum of money equal to one
hundred five percent (105%) of the Principal Amount outstanding at such time together with accrued
but unpaid interest thereon and any and all other sums due, accrued or payable to the Holder
arising under this Note, the Security Agreement or any other Ancillary Agreement (ii) on or after
January 1, 2007 until December 31, 2007 by paying to the Holder a sum of money equal to one hundred
four percent (104%) of the Principal Amount outstanding at such time together with accrued but
unpaid interest thereon and any and all other sums due, accrued or payable to the Holder arising
under this Note, the Security Agreement or any other Ancillary Agreement and (iii) on or after
December 31, 2007 until the Maturity Date by paying to the Holder a sum of money equal to one
hundred three percent (103%) of the Principal Amount outstanding at such time together with accrued
but unpaid interest thereon and any and all other sums due, accrued or payable to the Holder
arising under this Note, the Security Agreement or any other Ancillary Agreement (each such amount
set forth in 2.3(i), 2.3(ii) and 2.3 (iii) respectively being referred to herein as the
“Redemption Amount”) outstanding on the Redemption Payment Date (as defined below). The Company
shall deliver to the Holder a written notice of redemption (the “Notice of Redemption”) specifying
the date for such Optional Redemption (the “Redemption Payment Date”), which date shall be three
(3) business days after the date of the Notice of Redemption (the “Redemption Period”). On the
Redemption Payment Date, the Redemption Amount must be paid in good funds to the Holder.



ARTICLE III




3.1 .



Issuance of New Note. Upon any partial payment of this Note, a new Note containing the
same date and provisions of this Note shall, at the request of the Holder, be issued by the Company
to the Holder for the principal balance of this Note and interest which shall not have been paid.
Subject to the provisions of Article IV of this Note, the Company shall not pay any costs, fees or
any other consideration to the Holder for the production and issuance of a new Note.



ARTICLE IV




EVENTS OF DEFAULT




4.1 Events of Default. The occurrence of an Event of Default under the Security
Agreement shall constitute an event of default (“Event of Default”) hereunder.



4.2 Default Interest. Following the occurrence and during the continuance of an Event
of Default, the Companies shall, jointly and severally, pay additional interest on the outstanding
principal balance of this Note in an amount equal to two percent (2%) per month, and all
outstanding Obligations, including unpaid interest, shall continue to accrue interest at such
additional interest rate from the date of such Event of Default until the date such Event of
Default is cured or waived.



4.3 Default Payment. Following the occurrence and during the continuance of an Event
of Default, the Holder, at its option, may elect, in addition to all rights and remedies of the
Holder under the Security Agreement and the Ancillary Agreements and all obligations of each
Company under the Security Agreement and the Ancillary Agreements, to require the Companies,
jointly and severally, to make a Default Payment (“Default Payment”). The Default Payment shall be
one hundred twenty five (125%) of the outstanding principal amount of the Note, plus accrued but
unpaid interest, all other fees then remaining unpaid, and all other amounts payable hereunder.
The Default Payment shall be applied first to any fees due and payable to the Holder pursuant to
the Notes and/or the Ancillary Agreements, then to accrued and unpaid interest due on the Notes,
the Security Agreement and then to the outstanding principal balance of the Notes. The Default
Payment shall be due and payable immediately on the date that the Holder has exercised its rights
pursuant to this Section 4.3.



ARTICLE V




MISCELLANEOUS




5.1 Reserved.



5.2 Cumulative Remedies. The remedies under this Note shall be cumulative.



5.3 Failure or Indulgence Not Waiver. No failure or delay on the part of the Holder
hereof in the exercise of any power, right or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such power, right or privilege preclude
other or further exercise thereof or of any other right, power or privilege. All rights and
remedies existing hereunder are cumulative to, and not exclusive of, any rights or remedies
otherwise available.



5.4 Notices. Any notice herein required or permitted to be given shall be in writing
and shall be deemed effectively given: (a) upon personal delivery to the party notified, (b) when
sent by confirmed telex or facsimile if sent during normal business hours of the recipient, if not,
then on the next business day, (c) five days after having been sent by registered or certified
mail, return receipt requested, postage prepaid, or (d) one day after deposit with a nationally
recognized overnight courier, specifying next day delivery, with written verification of receipt.
All communications shall be sent to the Company at the address provided in the Security Agreement
executed in connection herewith, and to the Holder at the address provided in the Security
Agreement for such Holder, with a copy to John E. Tucker, Esq., 825 Third Avenue, 14th
Floor, New York, New York 10022, facsimile number (212) 541-4434, or at such other address as the
Company or the Holder may designate by ten days advance written notice to the other parties hereto.
A Notice of Conversion shall be deemed given when made to the Company pursuant to the Security
Agreement.



5.5 Amendment Provision. The term “Note” and all references thereto, as used
throughout this instrument, shall mean this instrument as originally executed, or if later amended
or supplemented, then as so amended or supplemented, and any successor instrument as such successor
instrument may be amended or supplemented.



5.6 Assignability. This Note shall be binding upon the Company and its successors and
assigns, and shall inure to the benefit of the Holder and its successors and assigns, and may be
assigned by the Holder in accordance with the requirements of the Security Agreement. The Company
may not assign any of its obligations under this Note without the prior written consent of the
Holder, any such purported assignment without such consent being null and void.



5.7 Cost of Collection. In case of any Event of Default under this Note, the Company
shall pay the Holder reasonable costs of collection, including reasonable attorneys’ fees.



5.8 Governing Law, Jurisdiction and Waiver of Jury Trial.



(a) THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.



(b) THE COMPANY HEREBY CONSENTS AND AGREES THAT THE STATE OR FEDERAL COURTS LOCATED IN THE
COUNTY OF NEW YORK, STATE OF NEW YORK SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY
CLAIMS OR DISPUTES BETWEEN THE COMPANY, ON THE ONE HAND, AND THE HOLDER, ON THE OTHER HAND,
PERTAINING TO THIS NOTE OR ANY OF THE OTHER ANCILLARY AGREEMENTS OR TO ANY MATTER ARISING OUT OF OR
ANCILLARY TO THIS NOTE OR ANY OF THE ANCILLARY AGREEMENTS; PROVIDED, THAT THE COMPANY
ACKNOWLEDGES THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF
THE COUNTY OF NEW YORK, STATE OF NEW YORK; AND FURTHER PROVIDED, THAT NOTHING IN
THIS NOTE SHALL BE DEEMED OR OPERATE TO PRECLUDE THE HOLDER FROM BRINGING SUIT OR TAKING OTHER
LEGAL ACTION IN ANY OTHER JURISDICTION TO COLLECT THE OBLIGATIONS, TO REALIZE ON THE COLLATERAL OR
ANY OTHER SECURITY FOR THE OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF
THE HOLDER. THE COMPANY EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH THE COMPANY HEREBY
WAIVES ANY OBJECTION WHICH IT MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR
FORUM NON CONVENIENS. THE COMPANY HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT
AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS,
COMPLAINT AND OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO THE COMPANY AT
THE ADDRESS SET FORTH IN THE SECURITY AGREEMENT AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED
UPON THE EARLIER OF THE COMPANY’S ACTUAL RECEIPT THEREOF OR THREE (3) DAYS AFTER DEPOSIT IN THE
U.S. MAILS, PROPER POSTAGE PREPAID.



(c) THE COMPANY DESIRES THAT ITS DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE
LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF
ARBITRATION, THE COMPANY HERETO WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, SUIT, OR
PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER ARISING IN CONTRACT, TORT, OR OTHERWISE BETWEEN
THE HOLDER AND THE COMPANY ARISING OUT OF, CONNECTED WITH, ANCILLARY OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS NOTE, ANY OTHER ANCILLARY AGREEMENT
OR THE TRANSACTIONS ANCILLARY HERETO OR THERETO.



5.9 Severability. In the event that any provision of this Note is invalid or
unenforceable under any applicable statute or rule of law, then such provision shall be deemed
inoperative to the extent that it may conflict therewith and shall be deemed modified to conform
with such statute or rule of law. Any such provision which may prove invalid or unenforceable
under any law shall not affect the validity or enforceability of any other provision of this Note.



5.10 Maximum Payments. Nothing contained herein shall be deemed to establish or
require the payment of a rate of interest or other charges in excess of the maximum permitted by
applicable law. In the event that the rate of interest required to be paid or other charges
hereunder exceed the maximum rate permitted by such law, any payments in excess of such maximum
rate shall be credited against amounts owed by the Company to the Holder and thus refunded to the
Company.



5.11 Security Interest and Guarantee. The Holder has been granted a security interest
in certain assets of the Parent as more fully described in the Security Agreement dated as of the
date hereof.



5.12 Construction. Each party acknowledges that its legal counsel participated in the
preparation of this Note and, therefore, stipulates that the rule of construction that ambiguities
are to be resolved against the drafting party shall not be applied in the interpretation of this
Note to favor any party against the other.



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IN WITNESS WHEREOF, the Company has caused this Amended and Restated Secured Term Note to be
signed in its name effective as of this 6th day of January 2006.




NATURADE, INC.




By: /s/ Stephen M. Kasprisin

Name: Stephen M. Kasprisin

Title: Chief Financial Officer




WITNESS:



/s/ Bill Stewart










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