Exhibit 10.39


 


IRREVOCABLE PROXY


 


1.                                       Health Holdings & Botanicals, LLC, a
limited liability company organized under the laws of the State of California
(“HHB”), and a stockholder of Naturade, Inc., a Delaware corporation (the
“Company”), hereby irrevocably appoints and constitutes Westgate Group, LLC
(“Westgate Group”), as general partner of Westgate Equity Partners (the
“Proxyholder”), the attorney and proxy of HHB, to the full extent of HHB’s
rights with respect to the number of shares of the common stock, par value
$0.0001 per share, of the Company (the “Common Stock”) beneficially owned by
HHB set forth in Paragraph 2 below, together with any and all other shares
issued or issuable after the date of this Proxy with respect thereof, from the
time of a Triggering Event as defined in Paragraph 7 below until a Termination
Event as defined in Paragraph 8 below. 
On the execution of this Proxy, all prior proxies given by HHB with
respect to the Proxy Shares (as defined below) are hereby revoked, and no
subsequent proxies with respect to the Proxy Shares will be given until a
Termination Event occurs.


 


2.                                       This Proxy entitles the Proxyholder to
vote the number of shares of Common Stock (the “Proxy Shares”) equal to 1.041
times the number of New Option Shares (as defined below) that are issued and
outstanding on the date of any voting event set forth in Paragraph 5.


 


3.                                       “New Option Shares” shall mean, up to a
maximum of 1,250,000 shares (as adjusted for splits, reverse splits, stock
dividends and similar changes in capitalization), the shares of Common Stock
issued on the exercise of options to purchase Common Stock granted by the
Company on or after January 2, 2002 (except for options to purchase shares
subject to cancelled or terminated options that were originally issued before
January 2, 2002, in accordance with the proviso to Section 7.14 of the
Securities Purchase Agreement dated as of December 20, 2001 among
Westgate, the Company and HHB (the “Purchase Agreement”)).  The number of New Option Shares outstanding shall
be deemed to be 1,250,000 unless the Proxyholder receives evidence to the
contrary, which evidence may be a certificate of the secretary of the Company
or of the Company’s transfer agent, a statement made in a report or proxy
statement filed with the Securities and Exchange Commission, or other evidence
reasonably acceptable to Westgate.


 


4.                                       This Proxy is irrevocable to the full
extent permitted by law and is coupled with an interest.


 


5.                                       The Proxyholder will be empowered, at any
time after a Triggering Event and prior to a Termination Event, to exercise all
voting rights (including, without limitation, the power to execute and deliver
written consents with respect to the Shares) over the Proxy Shares at every
annual or special meeting of the stockholders of the Company and at every
continuation or adjournment thereof, and on every action or approval by written
consent of the stockholders of the Company in lieu of any such meeting, and to
vote the Proxy Shares in a manner determined by the Proxyholder in its
exclusive discretion.


 


6.                                       HHB will not exercise, vote or attempt to
exercise or vote the Proxy Shares after a Triggering Event.


 


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7.                                       A “Triggering Event” is the delivery by
Westgate to the Company, with a copy to HHB, of its notice to exercise in full
(or, if a portion thereof has theretofore been exercised, its notice to
exercise the remaining portion thereof) the Westgate Warrants together with its
delivery to the Company of the exercise price therefor as provided in the
Westgate Warrants.  As used herein,
“Westgate Warrants” means the warrants to purchase 33,641,548 shares of Series
B Convertible Preferred Stock purchased by Westgate pursuant to the Securities
Purchase Agreement (the “Westgate Warrants”).


 


8.                                       Any of the following events shall
constitute a “Termination Event”:


 


(a)                                  January 1, 2005, unless prior to that
date Westgate has exercised all of the Westgate Warrants in full.


 


(b)                                 The sale or transfer by Westgate of any
of (i) the Westgate Warrants, (ii) the shares of Series B Convertible
Preferred Stock purchased pursuant to the Purchase Agreement or the exercise of
the Westgate Warrants, or (iii) the Common Stock issued on conversion of
Series B Convertible Preferred Stock, except a transfer to an affiliate of
Westgate, as the term “affiliate” is defined in Rule 405 under the Securities
Exchange Act of 1933.


 


(c)                                  The consummation of a merger or other
business combination transaction involving the Company, except (i) a
transaction exclusively to change the Company’s state of organization or form
of organization in which the stockholders of the surviving entity are identical
to the stockholders of the Company, or (ii) a transaction in which the Company
survives, Westgate continues as a stockholder, and the Company does not issue
additional shares of voting securities.


 


(d)                                 The issuance by the Company (subject to
the consent of Westgate required under Section 7.1.4 of the Purchase Agreement
and the consent of a majority of the Series B Preferred Stock required under
Article B(2) of the Certificate of Designation of the Series B Convertible
Preferred Stock) of additional voting securities or securities convertible into
voting securities (excluding for purposes of this paragraph the New Option Shares
and any shares of Common Stock issued upon conversion in whole or in part of
(i) the  Convertible Secured Promissory
Note dated October 31, 2000, payable (with accrued interest) to Howard Shao, in
the original principal amount of $100,000, 
(ii) the Convertible Secured Promissory Note dated November 30, 2000,
payable (with accrued interest) to Howard Shao, in the original principal
amount of $100,000, and (iii) the Convertible Secured Promissory Note dated
September 12, 2001, in the principal amount of $50,000, payable to David
Weil), in an amount that would reduce Westgate’s total voting power, after
giving effect to the shares of Series B Convertible Preferred Stock originally
sold in the Purchase Agreement and issuable under the Westgate Warrants, and including
the voting power over the Proxy Shares, below a majority of the Common 


 


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Stock
issued and outstanding after the conversion of all other convertible
securities, options, warrants and rights outstanding after the issuance of such
additional voting securities.


 


9.                                       Any obligations of the undersigned
hereunder shall be binding upon the successors and assigns of the undersigned.


 


	
  Dated:  April 14, 2003

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  HEALTH HOLDINGS & BOTANICALS, LLC

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Lionel Boissiere, Jr.

  	
   

  
	
   

  	
   

  	
  Lionel P. Boissiere

  
	
   

  	
   

  	
  President

  
						



 


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