Exhibit 10.37


 


CONSENT AND MUTUAL
RELEASE


 


This
CONSENT AND MUTUAL RELEASE, dated as of April 14, 2003 (this “Agreement”),
is made among Westgate Equity Partners, L.P., a limited partnership organized
under the laws of Delaware (“Westgate”), Health Holdings &
Botanicals, LLC, a limited liability company formed under the laws of
California (“HHB”), and Naturade, Inc., a Delaware corporation (the “Company”).


 


RECITALS


 


A.  Westgate, HHB and the Company are parties to
a Securities Purchase Agreement dated as of December 20, 2001 (the “Purchase
Agreement”), pursuant to which Westgate purchased 13,540,723 shares
of Series B Convertible Preferred Stock of the Company (the “Series B
Preferred”) and warrants to purchase 33,641,548 shares of Series B
Preferred (the “Westgate Warrants”).


 


B.  The Purchase Agreement provided, among other
things, (i) that “[u]pon  exercise of
the [Westgate] Warrants, and assuming that the Purchaser does not dispose of
any Shares and assuming that no additional voting securities are issued after
the Closing Date, the Purchaser will own a majority of the issued and
outstanding voting securities of the Company,” and (ii) that the Company would
not, without the prior consent of Westgate, issue stock options, restricted
stock or other equity linked stock awards or compensation for any equity
securities of the Company, other than Non-Voting Common Stock and the Common
Stock to be issued upon the exercise of stock options and warrants outstanding
as of the date of the Purchase Agreement and listed on Schedule 3.2 of the
Purchase Agreement.


 


C.  A dispute has arisen between Westgate and
the Company concerning the failure of the Company to list in the Purchase
Agreement or the schedules thereto certain notes of the Company convertible at
the option of the holders into shares of the Company’s Common Stock.


 


D.  The parties wish to resolve their dispute
and also permit the Company to grant to its employees options to purchase up to
1,250,000 shares of Common Stock (the “New  Options”).


 


E.  In consideration of an Amendment to the
Company’s Certificate of Designation of Series B Preferred, which will adjust
the conversion ratio of the Series B Preferred to compensate for additional
shares of Common Stock issued on conversion of the Convertible Notes (as defined
below), Westgate has agreed in accordance to the terms hereof to release HHB
and the Company from any liability resulting from the lack of disclosure
concerning the Convertible Notes in the Purchase Agreement.


 


F.  In consideration of an irrevocable proxy
given by HHB, which will grant to Westgate voting rights over 1.041 shares of
Common Stock held by HHB for every share of Common Stock issued upon exercise
of a New Option, Westgate has agreed to consent to the granting by the Company
of the New Options.


 


1

















 


NOW,
THEREFORE, in consideration of the premises and the mutual agreements and
covenants hereinafter set forth, and intending to be legally bound hereby, the
parties to this Agreement hereby agree as follows:


 


1.                                       Amendments.  HHB and
Westgate each agree to vote all of their shares of voting stock of the Company,
by execution and delivery concurrently with this Agreement of the Consent of
Stockholders in the form attached hereto as Exhibit A (the “Stockholder Consent”), to
(i) approve the Certificate of Amendment to Certificate of Designation of
Series B Convertible Preferred Stock of the Company in the form attached to the
Stockholder Consent as Exhibit A thereto, and (ii) to approve the Certificate
of Amendment to Certificate of Incorporation of the Company to increase the
number of shares of Common Stock authorized for issuance by the Company to
150,000,000 in the form of Exhibit B thereto (collectively with the Certificate
of Amendment described in clause (i), the “Amendments”).  The Company agrees to file the Amendments with the Secretary of
State of the State of Delaware immediately after the execution and delivery of
the Stockholder Consent, and to provide prompt notice to the stockholders of the
action taken by the Stockholder Consent.


 


2.                                       Irrevocable Proxy.  Concurrently
with the execution of this Agreement, HHB is delivering to Westgate a proxy in
the form attached hereto as Exhibit B (the “Proxy”), which shall be
irrevocable to the full extent permitted by law, with respect to the number of
shares of the Company’s Common Stock held by HHB specified therein (the “Subject
Shares”).


 


3.                                       Opinion of Counsel.  Concurrently with the execution of this
Agreement, the Company is delivering to Westgate an opinion of counsel in the
form attached hereto as Exhibit C.


 


4.                                       Representations and Warranties of HHB.  HHB hereby represents and warrants to Westgate and the
Company that:


 


(a)                                  This Agreement, the Stockholder Consent
and the Proxy have been duly authorized, executed and delivered by HHB, and are
the legal, valid and binding obligations of HHB, enforceable against HHB in
accordance with their respective terms.


 


(b)                                 No consent of any court, governmental
authority, beneficiary, co-trustee or other person or entity is necessary for
the execution, delivery and performance of this Agreement, the Stockholder
Consent or the Proxy by HHB.


 


(c)                                  HHB has the present power and right to
vote all of the Subject Shares.


 


(d)                                 HHB has not (i) granted any proxy,
power-of-attorney or other authorization or interest with respect to any of the
Subject Shares, except as has been revoked on or before the date hereof,
(ii) deposited any of the Subject Shares into a voting trust or
(iii) entered into any voting agreement or other arrangement with respect
to the voting of any of the Subject Shares.


 


5.                                       Representations and Warranties of the Company. 
The Company hereby represents and warrants to Westgate and HHB that:


 


2

















 


(a)                                  The Company is a corporation duly
organized, validly existing, and in good standing under the laws of the State
of Delaware, and has full power and authority to own and operate its properties
and assets and to carry on its business as presently conducted and to enter
into and consummate the transactions described herein.  The Company is duly qualified and authorized
to do business, and is in good standing as a foreign corporation, in each
jurisdiction where the nature of its activities and of its properties (both owned
and leased) makes such qualification necessary, except where the failure to so
qualify would not have a material adverse effect upon the business and
operations of the Company.


 


(b)                                 This Agreement has been duly authorized,
executed and delivered by the Company, and is the legal, valid and binding
obligation of the Company, enforceable in accordance with its terms.  Upon the execution and delivery to the
Company of the Stockholder Consent by the parties named thereon, the Amendments
will be duly authorized and executed by the Company and, when accepted for
filing by the Secretary of State of the State of Delaware, will be duly filed
and have every legal effect they purport to have.


 


(c)                                  No consent, approval, order or
authorization, or registration or filing with any court, governmental
authority, including without limitation the Securities and Exchange Commission,
beneficiary, co-trustee, stockholder or other person or entity is necessary for
the execution, delivery and performance of this Agreement by the Company and
the consummation of the transactions contemplated hereby, including the
Amendments, other than has been obtained on or before the date hereof and other
than the filing of the Amendments with the Secretary of State of the State of
Delaware.


 


(d)                                 As of the date hereof, the authorized
capital stock of the Company consists of 100,000,000 shares of Common Stock,
2,000,000 shares of Non-Voting Common Stock and 50,000,0000 shares of Preferred
Stock, of which 48,000,000 shares have been designated Series B Convertible
Preferred Stock.  Upon the consummation
of the transaction contemplated hereby, the authorized capital stock of the
Company shall consist of 150,000,000 shares of Common Stock, 2,000,000 shares
of Non-Voting Common Stock and 50,000,0000 shares of Preferred Stock, of which
48,000,000 shares have been designated Series B Convertible Preferred
Stock.  As of the date hereof 44,533,866
shares of Common Stock, 13,540,723 shares of Series B Convertible Preferred
Stock (which shall be convertible into 13,540,723 shares of Common Stock,
subject to possible adjustment as provided in the Certificate of Designation),
Westgate Warrants to purchase 33,641,548 shares of Series B Convertible
Preferred Stock and warrants (the “HHB Warrants”) to purchase 600,000 shares of
Nonvoting Common Stock are issued and outstanding.  Other than stock options representing in the aggregate the right
to purchase no more than 832,000 shares of Common Stock, the Westgate Warrants
and the HHB Warrants, the Convertible Notes in the aggregate principal amount
of $200,000 described in clauses (i) and (ii) of Section 8(a) hereof, and
except for this Agreement, there are no outstanding rights of first refusal,
preemptive rights or other rights, options, warrants, conversion rights,
convertible securities, convertible notes, calls, commitments, undertakings, or
other agreements or arrangements of any kind (whether written or oral) either
directly or indirectly for the issuance by, or purchase or 


 


3

















 


acquisition
from, the Company of any shares of its capital stock, or obligating the Company
to issue, grant, extend or enter into any such rights of first refusal or other
rights, options, warrants, conversion rights, convertible securities,
convertible notes, calls, commitments, undertakings, or other agreements or
arrangements of any kind (whether written or oral).  No bonds, debentures, notes or other indebtedness of the Company
having the right to vote on any matters on which stockholders may vote are
issued or outstanding.  As of the date
of this Agreement, there are no outstanding obligations of the Company to
repurchase, redeem or otherwise acquire any shares of capital stock of the
Company.


 


(e)                                  After the completion of the transactions
contemplated hereby, upon exercise of the Westgate Warrants and giving effect
to Westgate’s right to vote the Subject Shares under the Proxy, and assuming
(i) that Westgate does not dispose of any of its shares of Series B Preferred
purchased under the Purchase Agreement or issuable on exercise of the Westgate
Warrants, and (ii) that no additional voting securities are issued after the
date hereof (other than upon conversion of the Convertible Notes), Westgate
will own and/or have the power to vote a majority of the issued and outstanding
voting securities of the Company .


 


(f)                                    All of the Subject Shares have been duly
authorized and validly issued and are fully paid and nonassessable.


 


(g)                                 The Company has filed all required
registration statements, prospectuses, reports, schedules, forms, statements
and other documents required to be filed by it with the Securities and Exchange
Commission since January 1, 1999 (collectively, including all exhibits thereto,
the “Company SEC Reports”).  The Company
has provided to Westgate true and complete copies of all Company SEC
Reports.  Each Company SEC Report, as of
its date, (i) conformed in all material respects to the requirements of the
Securities Act of 1933, as amended (the “Securities Act”) and the Securities Exchange
Act of 1934, as amended (the “Exchange Act”) and the applicable rules and
regulations promulgated thereunder (the “Rules”), (ii) contained all material
information required to be included therein by the Securities Act and the
Exchange Act and the Rules and (iii) did not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. 
Each of the financial statements (including the related notes) included
in the Company SEC Reports presents fairly, in all material respects, the
financial position and results of operations and cash flows of the Company as
of the respective dates or for the respective periods set forth therein, all in
conformity with generally accepted accounting principles applied on a
consistent basis throughout the periods involved except as otherwise noted
therein, and subject, in the case of the unaudited interim financial
statements, to normal and recurring adjustments that were not or are not
expected to be material in amount and to the lack of footnote disclosure.


 


(h)                                 The David Weil Convertible Note described
in clause (iii) of Section 8(a) hereof has been converted in exchange for
720,392 shares of Common Stock and no additional shares are issuable in respect
thereto or amount payable by the 


 


4

















 


Company
with respect thereto (whether for principal, interest or otherwise).  True and correct copies of each of the
Convertible Notes (and all amendments and modifications thereto) are attached
hereto as Exhibit D.


 


6.                                       Covenants of HHB.  HHB hereby
agrees and covenants that:


 


(a)                                  HHB will not transfer, sell, exchange,
pledge or otherwise dispose of or encumber any of the Subject Shares or make
any offer or agreement relating thereto at any time prior to the termination of
the Proxy unless (i) Westgate has given its prior written consent to such
transfer, sale, exchange or other disposition or encumbrance, such consent not
to be unreasonably withheld, (ii) the subsequent holder agrees to be bound by
the terms of this Agreement and (iii) all of the Subject Shares remain subject
to proxies on the same terms of the Proxy (to be voted by Westgate on a pro
rata basis among all of such proxies).


 


(b)                                 HHB agrees that until termination of the
Proxy, all certificates evidencing the Subject Shares shall bear a legend
substantially in the following form:


 


THE SECURITIES
REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A CONSENT AND RELEASE AND AN
IRREVOCABLE PROXY DATED AS OF APRIL      , 2003
AMONG THE ISSUER OF SUCH SECURITIES (THE “COMPANY”) AND CERTAIN OF THE
COMPANY’S STOCKHOLDERS.  A COPY OF THE
CONSENT AND RELEASE AND THE IRREVOCABLE PROXY WILL BE FURNISHED WITHOUT CHARGE
BY THE COMPANY TO THE HOLDER HEREOF UPON WRITTEN REQUEST.


 


7.                                       Covenants of the Company.  The Company
hereby agrees and covenants that (i) the Company will not, and will cause its
stock transfer agent not to, register the transfer of any of the Subject Shares
bearing the legend set forth in Section 5(b) on the stock transfer ledger of
the Company at any time prior to the termination of the Proxy, unless Westgate
consents to such transfer as provided in Section 5(a), the transferee agrees to
be subject to this Agreement, the transferee delivers a proxy in the form of
the Proxy, and the certificates evidencing the transferred Subject Shares bear
a legend as set forth in Section 5(b); (ii) the Company will cause the
Subject Shares to be voted only as provided in the Proxy. (iii) the Company
will not amend or extend any of the Convertible Notes without the prior written
consent of Westgate, and (iv) the Company will provide prompt notice to
Westgate whenever Common Stock is issued on the exercise of New Options,
including in such notice the number of shares issued.


 


8.                                       Consent to Issuance of Options and Other Voting
Securities.  Westgate hereby consents and permanently
waives any objection to (i) the granting by the Company of options to purchase
up to 1,250,000 shares of voting Common Stock in accordance with the Company’s
1998 Incentive Stock Option Plan; and (ii) the issuance of voting Common Stock
on the exercise of such options and the conversion of the Convertible Notes (as
defined below) in accordance with their terms.


 


5

















 


9.                                       Release.


 


(a)                                  Effective on the filing with the Delaware
Secretary of State of the Amendments, Westgate, for itself and for its
officers, directors, partners, employees, agents, and attorneys and for the
successors and assigns of the foregoing persons and entities hereby fully,
forever and unconditionally releases, exonerates, waives, relinquishes,
discharges, acquits, relieves and covenants not to sue or charge HHB or the
Company and their respective agents, employees, representatives, attorneys,
stockholders, officers, directors, successors and assigns (collectively, “all
related persons”), and all affiliated, parent and subsidiary corporations, and
each of them, and all related persons connected therewith, from any and all
rights, claims, demands, debts, obligations, liabilities, promises, acts,
agreements, costs, expenses (including, but not limited to, attorneys’ fees and
costs), damages, disputes, controversies, actions and causes of action, of
whatever kind or nature, in law or equity, whether known or unknown, suspected
or unsuspected, potential or actual, based on, or arising out of, the existence
and conversion rights of the holders 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 (collectively, the “Convertible Notes”), which were each
outstanding on the date of the Purchase Agreement but which were not listed or
disclosed in the Purchase Agreement or the schedules or exhibits thereto (the “Released
Claims”).


 


(b)                                 Effective on the filing with the Delaware
Secretary of State of the Amendments, the Company and HHB, for themselves and
for their shareholders, officers, directors, members, partners, employees,
agents, and attorneys and for the successors and assigns of the foregoing
persons and entities hereby fully, forever and unconditionally releases,
exonerates, waives, relinquishes, discharges, acquits, relieves and covenants
not to sue or charge Westgate and all related persons of Westgate,  and all affiliated, parent and subsidiary
corporations, and each of them, and all related persons connected therewith,
from any and all Released Claims.


 


(c)                                  The immediately preceding two paragraphs
specifically include any and all claims, demands, obligations, and causes for
compensatory or exemplary damages and other relief based on the Released
Claims, whether or not specifically or particularly described herein.


 


(d)                                 Each party hereto understands and agrees
that this Section 8 extends to all claims of whatever nature and kind, known
and unknown, suspected or unsuspected based on the Released Claims, and they
each expressly waive any and all rights under Section 1542 of the Civil Code of
the State of California based on the Released Claims, which provides as
follows:


 


A
GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT


 


6

















 


TO
EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM
MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.


 


(e)                                  Westgate, the Company and HHB acknowledge
that Section 1542, and any equivalent provision in any other jurisdiction, if
they exist, are designed to protect a party from waiving claims that he does
not know exist or may exist. 
Nonetheless, each of Westgate, the Company and HHB agrees that the
waiver of Section 1542 and its equivalents is a material part of the releases
intended by this Section 8, and each party, therefore, intends to waive
any and all protection provided by Section 1542 or its equivalents with respect
to the release set forth above.


 


(f)                                    Anything herein to the contrary
notwithstanding, the release herein is limited to the Released Claims.  Other than as results from the facts related
to the Convertible Notes, Westgate does not release HHB or the Company, and HHB
and the Company do not release Westgate, from liability for the inaccuracy of
any of the representations and warranties in the Purchase Agreement, and each
of Westgate, the Company and HHB reserves for itself and its successors in
interest all rights and remedies under (i) the Purchase Agreement except as
specifically set forth herein, (ii) this Agreement and (iii) the Proxy.


 


10.                                 Notices.  All notices
and other communications given or made pursuant hereto shall be in writing and
shall be deemed to have been duly given or made as of the date delivered,
mailed or transmitted, and shall be effective upon receipt, if delivered
personally or mailed by registered mail (postage prepaid, return receipt
requested) to the parties at the following addresses (or to such other address
for a party as shall be specified by like change of address), or sent by
electronic transmission with confirmation received, to the telecopy number
specified below, if any.


 


(a)                                  if to Westgate:  


 


Westgate Equity Partners,
L.P.


One Magna Place, Suite
650


1401 South Brentwood Blvd.


St. Louis, MO   63144


Facsimile:  (314) 918-7337


Attention:  Robert V. Vitale


 


with a copy (which shall
not constitute notice) to:


 


Lewis, Rice &
Fingersh L.C.


500 North Broadway, Suite
2000


St. Louis, MO   63102


Facsimile:  (314) 612-7671


Attention:  Thomas C. Erb, Esquire


 


7

















 


(b)                                 If to HHB:


 


Health Holdings & Botanicals, LLC


330 Primrose Road, Suite 500


Burlingame, CA 
94010


Facsimile: 
(650) 685-8711


Attention: 
Lionel P. Boissiere


 


(c)                                  If to the Company:  


 


Naturade, Inc.


14370 Myford Road, Suite 100


Irvine, CA  
92606


Facsimile: 
(714) 573-3494


Attention: 
Bill D. Stewart


 


with a copy (which shall not constitute notice) to:


 


Sheppard, Mullin, Richter & Hampton LLP


333 South Hope Street


Los Angeles, CA 
90071


Facsimile: 
213-620-1780


Attention: 
Charles Kaufman, Esquire


 


11.                                 Headings.  The headings
contained in this Agreement are for reference purposes only and shall not
affect in any way the meaning or interpretation of this Agreement.


 


12.                                 Severability.  If any term
or other provision of this Agreement is invalid, illegal or incapable of being
enforced by any rule of law, or public policy, all other conditions and
provisions of this Agreement shall nevertheless remain in full force and effect
so long as the economic or legal substance of the transactions contemplated
hereby is not affected in any manner adverse to any party.  Upon such determination that any term or
other provision is invalid, illegal or incapable of being enforced, the parties
hereto shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible in an acceptable
manner to the end that transactions contemplated hereby are fulfilled to the
extent possible.


 


13.                                 Entire Agreement.  This
Agreement constitutes the entire agreement and supersedes all prior agreements
and undertakings, both written and oral, among the parties, or any of them,
with respect to the subject matter hereof and, except as otherwise expressly
provided herein, are not intended to confer upon any other person any rights or
remedies hereunder.  This Agreement does
not supersede the Purchase Agreement, except as expressly provided herein.


 


14.                                 Assignment.  This
Agreement shall not be assigned by operation of law or otherwise.


 


8

















 


15.                                 Amendment.  This
Agreement may not be modified, amended or waived in any manner except by an
instrument in writing signed by each of the parties hereto.  Except as is provided in Section 9,
this Agreement may be terminated only by a writing signed by each of the
parties hereto.


 


16.                                 Governing Law.  This
Agreement shall be governed by, and construed accordance with, the laws of the
State of California.


 


17.                                 Specific Performance.  The parties
hereto agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. 
It is accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions hereof in any court of the United States
or any state then having jurisdiction without posting bond, this being in
addition to any other remedy to which they are entitled at law or in equity.


 


18.                                 Counterparts.  This
Agreement may be executed in one or more counterparts, and by the different
parties hereto in separate counterparts, each of which when executed shall be
deemed to be an original but all of which taken together shall constitute one
and the same agreement.


 


The next page is the signature page.


 


9

















 


IN
WITNESS WHEREOF, each of the parties has caused this Consent and Mutual Release
to be executed by its duly authorized officer as of the date first above
written.


 


	
   

  	
  WESTGATE
  EQUITY PARTNERS, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  WESTGATE GROUP, LLC,

  
	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert Vitale

  	
   

  
	
   

  	
   

  	
  Robert Vitale

  
	
   

  	
   

  	
  Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  One Magna Place, Suite 650

  
	
   

  	
   

  	
  1401 South Brentwood Blvd.

  
	
   

  	
   

  	
  St. Louis, MO 
  63144

  
	
   

  	
   

  	
   

  
	
   

  	
  HEALTH
  HOLDINGS & BOTANICALS, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Lionel P. Boissiere

  	
   

  
	
   

  	
   

  	
  Lionel P. Boissiere

  
	
   

  	
   

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  330 Primrose Road, Suite 500

  
	
   

  	
   

  	
  Burlingame, CA 
  94010

  
	
   

  	
   

  	
   

  
	
   

  	
  NATURADE,
  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Bill D. Stewart

  	
   

  
	
   

  	
   

  	
  Bill D. Stewart

  
	
   

  	
   

  	
  President and

  
	
   

  	
   

  	
  Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  14370 Myford Road

  
	
   

  	
   

  	
  Irvine, California 92606

  



 


10

















 


Exhibit A


 


FORM OF


CONSENT


OF THE STOCKHOLDERS


OF


NATURADE, INC.


 


The undersigned, being
the holders of a majority of the voting stock of Naturade, Inc., a Delaware
corporation (the “Corporation”), and the holder of all of the issued and
outstanding Series B Convertible Preferred Stock of the Corporation, do hereby
adopt the following resolutions by written consent pursuant to Sections 228(a),
242(a) and 242(b) of the Delaware General Corporation Law and the Corporation’s
bylaws, which authorize the stockholders so to act:


 


Amendment to 


Certificate of Designation of Series
B Convertible Preferred Stock


 


WHEREAS, the undersigned
stockholders own a majority of the shares entitled to vote on the subject
matter of these resolutions; and


 


WHEREAS, the undersigned
stockholders have agreed that the Certificate of Designation of Series B
Convertible Preferred Stock shall be amended as provided herein;


 


NOW, THEREFORE, BE IT
RESOLVED, that the Certificate of Amendment to the Certificate of Designation
of Series B Convertible Preferred Stock of the Corporation attached hereto as
Exhibit A is hereby approved.


 


RESOLVED FURTHER, that
the officers of the Corporation, and each of them, are hereby authorized to
take, make or cause to be taken, any further actions which they deem to be
necessary and appropriate to consummate and carry out the intent of these
resolutions and the intent of the documents referenced herein and all related
documents and agreements to which the Corporation shall be a party.


 


Amendment to 


Certificate of Incorpotation


 


WHEREAS, the undersigned
stockholders own a majority of the shares entitled to vote on the subject
matter of these resolutions; and


 


11

















 


WHEREAS, the undersigned
stockholders have agreed that the number of authorized shares of Common Stock
of the Corporation shall be increased to permit the full conversion of the
Series B Convertible Preferred Stock, to increase the pool of shares available
for incentives, and for other corporate purposes;


 


NOW, THEREFORE, BE IT
RESOLVED, that the Certificate of Amendment to the Certificate of Incorporation
attached hereto as Exhibit B is hereby approved.


 


RESOLVED FURTHER, that
the officers of the Corporation, and each of them, are hereby authorized to
take, make or cause to be taken, any further actions which they deem to be
necessary and appropriate to consummate and carry out the intent of these
resolutions and the intent of the documents referenced herein and all related
documents and agreements to which the Corporation shall be a party.


 


The next page is the signature page.


 


12

















 


IN WITNESS WHEREOF, each
of the undersigned has consented to this action by written consent as evidenced
by the signature of its officer as of April     ,
2003. 


 


	
   

  	
  WESTGATE EQUITY PARTNERS, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  WESTGATE GROUP, LLC,

  
	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Robert Vitale

  
	
   

  	
   

  	
  Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  One Magna Place, Suite 650

  
	
   

  	
   

  	
  1401 South Brentwood Blvd.

  
	
   

  	
   

  	
  St. Louis, MO 
  63144

  
	
   

  	
   

  	
   

  
	
   

  	
  HEALTH HOLDINGS & BOTANICALS, LLC

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Lionel P. Boissiere

  
	
   

  	
   

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  330 Primrose Road, Suite 500

  
	
   

  	
   

  	
  Burlingame, CA 
  94010

  



 


13

















 


EXHIBIT A


 


FORM OF


CERTIFICATE OF AMENDMENT


OF 


CERTIFICATE OF DESIGNATION OF SERIES B CONVERTIBLE
PREFERRED STOCK 


OF


NATURADE, INC.


 


Naturade, Inc., a corporation duly organized and
existing under the Delaware General Corporation Law (the “Corporation”), does
hereby certify that:


 


The
amendment to the Certificate of Designation of Series B Convertible
Preferred Stock (the “Certificate of Designation”) set forth below was duly
adopted in accordance with the provisions of Section 242 of the Delaware
General Corporation Law (the “DGCL”) and has been consented to by the
stockholders in accordance with Section 228 of the DGCL.


 


Section
F(1) of the Certificate of Designation is amended to read in its entirety as
follows:


 


“1.  Each holder of any shares of Series B
Preferred Stock shall have the right, at such holder’s option, at any time or
from time to time, to convert any of such shares into Common Stock, on the
basis hereinafter provided.  Each share
of Series B Preferred Stock may be converted into such number (which may be a
fraction) of fully paid and non-assessable shares of Common Stock as is equal
to the sum of (i) the quotient obtained by dividing (A) the Original Issuance
Price (as defined in Section I below) by (B) the Series B Conversion Price (as
defined in Section I below) (the “Series B Conversion Ratio”) PLUS (ii) any
Antidilution Shares (as defined in Section I below) .”


 


Section
F(3) of the Certificate of Designation is amended to read in its entirety as
follows:


 


“3.  No fractional shares of Common Stock or
scrip shall be issued upon conversion of shares of Series B Preferred
Stock.  Instead of any fractional shares
of Common Stock which would otherwise be issuable upon conversion of
Series B Preferred Stock, the Corporation shall pay a cash adjustment in
respect of such fractional interest in an amount equal to the then current
market price (as determined in accordance with Section F(4)(f) below) of a
share of Common Stock multiplied by such fractional interest.  Fractional interests shall not be entitled
to dividends, and the holders of fractional interests shall not be entitled to
any rights as stockholders of the Corporation in respect of such fractional
interest.  For purposes of calculating
the number of shares of Common Stock to be issued on conversion of
Series B Preferred Stock, or for purposes of calculating voting or
dividend rights based on the number of shares issuable on conversion of
Series B Preferred Stock, all fractional shares of Common Stock of a
holder resulting from, or that would result from, the conversion of
Series B Preferred Stock, shall be 


 


14

















 


aggregated and combined
into the largest resulting whole number, so that the total number of shares of
Common Stock for which any holder receives settlement in cash as fractional
shares, or which the holder is not entitled to vote or receive dividends upon
as fractional shares, will be less than one.”


 


The
definition of “Additional Shares of Common Stock” in Section I of the
Certificate of Designation shall be amended to read in its entirety as follows:


 


“Additional
Shares of Common Stock” means all shares of Common Stock issued (or, pursuant
to clauses (A) or (B) of Subparagraph (iv) of Section F(4)(a) above,
deemed to be issued) by the Corporation after the Original Issue Date, other
than Excluded Securities.


 


A new
clause shall be added to Section I of the Certificate of Designation,
immediately after the definition of Affiliate, reading in its entirety as
follows:


 


“Antidilution
Shares” shall mean, on any date on which such calculation is required (a
“Calculation Date”), the number of shares resulting from (A) the excess over
537,242 in the number of shares of Common Stock issued and issuable on
conversion of the Convertible Notes (based, as to issuable shares, on the
conversion price of the Convertible Notes on such Calculation Date), multiplied
by (B) 1.041, then divided by 47,182,301.”


 


A new
clause shall be added to Section I of the Certificate of Designation,
immediately after the definition of Common Stock, reading in its entirety as
follows:


 


“Convertible
Notes” means (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.


 


The
reference in clause (B) of Section F(5) of the Certification of Designation to
“Section F(4)” shall be deleted and replaced with a reference to
“Section F(3).”


 


The next page is the signature page.


 


15

















 


IN
WITNESS WHEREOF, Naturade, Inc. has caused this Certificate of Amendment to
Certificate of Designation to be executed by Bill D. Stewart, its authorized
officer, on this      day of April, 2003.


 


	
   

  	
  By

  	
   

  	
   

  
	
   

  	
  Bill D. Stewart,

  
	
   

  	
  President and Chief
  Executive Officer

  



 


16

















 


EXHIBIT B


 


FORM OF


CERTIFICATE OF AMENDMENT


OF 


CERTIFICATE OF INCORPORATION


OF


NATURADE, INC.


 


Naturade,
Inc., a
corporation duly organized and existing under the Delaware General Corporation
Law (the “Corporation”), does hereby certify that:


 


1.  The amendment to the Certificate of
Incorporation set forth below was duly adopted in accordance with the
provisions of Section 242 of the Delaware General Corporation Law (the
“DGCL”) and has been consented to by the stockholders in accordance with
Section 228 of the DGCL.


 


2.  Subsection (a) of Article 5 of the
Corporation’s Certificate of Incorporation is amended to read in its entirety
as follows:


 


“a.  Authorized Stock.  The corporation is authorized to issue two classes of stock to be
designated, respectively, “Common Stock” and “Preferred Stock.”  The total number of shares of stock which
the corporation is authorized to issue is
     ,000,000 shares,
     ,000,000 of which shall be Common Stock with a
par value of $.0001 per share, 2,000,000 of which shall be Non-Voting Common
Stock with a par value of $.0001 per share, and 50,000,000 of which shall be
Preferred Stock with a par value of $.0001 per share.”


 


The next page is the signature page.


 


17

















 


IN
WITNESS WHEREOF, Naturade, Inc. has caused this Certificate of Amendment to
Certificate of Incorporation  to be
executed by Bill D. Stewart, its authorized officer, on this
       day of April, 2003.


 


	
   

  	
  By

  	
   

  	
   

  
	
   

  	
  Bill D. Stewart,

  
	
   

  	
  President and Chief
  Executive Officer

  



 


18

















 


EXHIBIT B


 


FORM OF
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.


 


19

















 


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 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.


 


20

















 


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


 


	
  Dated:  April    ,
  2003

  
	
   

  
	
   

  	
  HEALTH HOLDINGS &
  BOTANICALS, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Lionel P. Boissiere

  
	
   

  	
   

  	
  President

  
					



 


21

















 


EXHIBIT
C 


FORM
OF OPINION OF COUNSEL


 


With
such qualifications, exceptions and additional provisions as required by
counsel.


 


1.                                       The Company is a corporation duly
incorporated and legally existing under, and by virtue of, the laws of the
State of Delaware and is in good standing under such laws.  The Company has the requisite corporate
power and authority to own and operate its properties and assets, and to carry
on its business as presently conducted. 
The Company is qualified to do business as a foreign corporation in
California.


 


2.                                       The Company has all requisite corporate
power and authority to execute and deliver the Agreement and to carry out and
perform its obligations under the terms of the Agreement.


 


3.                                       As of the date hereof, the authorized
capital stock of the Company consists of 100,000,000 shares of Common Stock,
2,000,000 shares of Non-Voting Common Stock and 50,000,0000 shares of Preferred
Stock, of which 48,000,000 shares have been designated Series B Convertible
Preferred Stock.  Upon the acceptance by
the Delaware Secretary of State of the Certificate of Amendment referred to in
paragraph (c), the authorized capital stock of the Company shall consist of
150,000,000 shares of Common Stock, 2,000,000 shares of Non-Voting Common Stock
and 50,000,0000 shares of Preferred Stock, of which 48,000,000 shares have been
designated Series B Convertible Preferred Stock.  As of the date hereof 44,533,866 shares of Common Stock,
13,540,723 shares of Series B Convertible Preferred Stock (the “Series B
Shares”), the Westgate Warrants and warrants (the “HHB Warrants”) to purchase
600,000 shares of Nonvoting Common Stock are issued and outstanding.  To our knowledge, other than stock options
representing in the aggregate the right to purchase no more than 832,000 shares
of Common Stock, the Westgate Warrants and the HHB Warrants, and Convertible
Notes in the aggregate principal amount of $200,000, and except for the
Agreement, there are no outstanding rights of first refusal, preemptive rights
or other rights, options, warrants, conversion rights, convertible securities,
convertible notes, calls, commitments, undertakings, or other agreements or
arrangements of any kind (whether written or oral) either directly or
indirectly for the issuance by, or purchase or acquisition from, the Company of
any shares of its capital stock, or obligating the Company to issue, grant, extend
or enter into any such rights of first refusal, preemptive rights or other
rights, options, warrants, conversion rights, convertible securities,
convertible notes, calls, commitments, undertakings, or other agreements or
arrangements of any kind (whether written or oral).  No bonds, debentures, notes or other indebtedness of the Company
having the right to vote on any matters on which stockholders may vote are
issued or outstanding.  As of the date
of this Agreement, there are no outstanding obligations of the Company to
repurchase, redeem or otherwise acquire any shares of capital stock of the
Company.


 


4.                                       The Company has all requisite corporate
power and authority to issue the Common Stock issuable upon conversion of the
Series B Shares, to issue the Westgate Warrant Shares on due exercise of the
Westgate Warrants, and to issue the shares of Common Stock issuable upon
conversion of the Westgate Warrant Shares.


 


22

















 


5.                                       All corporate action on the part of the
Company, its directors and stockholders necessary for (i) the
authorization, execution and delivery and performance of the Agreement and
(ii) the authorization, execution and filing with the Secretary of State
of the State of Delaware of the Certificates of Amendment, has been taken prior
to the date hereof.  The Agreement has
been duly and validly executed and delivered by the Company and constitutes a
valid and binding obligation of the Company, enforceable against the Company in
accordance with its terms.


 


6.                                       The execution, delivery and performance
of the terms of the Agreement, and the execution and filing with the Secretary
of State of the State of Delaware of the Certificates of Amendment, do not
violate any provision of the Certificate of Incorporation or Bylaws of the
Company, or any provision of any applicable federal or state law, rule or
regulation known to us to be applicable to the Company.  The execution, delivery and performance of
the terms of the Agreement, and the execution and filing with the Secretary of
State of the State of Delaware of the Certificates of Amendment, do not
violate, or constitute a default under, any contract or agreement listed in
Schedule A attached to this opinion, which contracts or agreements the Company
has represented to us are the only contracts or agreements material to the
conduct of its business, financial condition or results of operation.


 


7.                                       No consent, approval or authorization of
or designation, declaration or filing with any governmental authority on the part
of the Company is required in connection with the valid execution and delivery
of the Agreement, or the authorization, approval, execution and filing with the
Secretary of State of the State of Delaware of the Certificates of Amendment,
except such filing of the Certificates of Amendment in the office of the
Secretary of State of the State of Delaware.


 


8.                                       The Certificate of Amendment referred to
in paragraph (c) and the Series B Rights (as defined below) do not conflict
with the applicable laws of California.


 


9.                                       In connection with the action by written
consent of the stockholders of the Company approving the Certificates of
Amendment, the Company is not subject to the requirements of Section 14(c) of
the Securities Exchange Act of 1934, as amended, and the regulations of the
Securities and Exchange Commission promulgated thereunder.


 


23

















 


EXHIBIT
D


CONVERTIBLE
NOTES


 


 


24

















 


CONVERTIBLE SECURED PROMISSORY NOTE


 


	
  $100,000

  	
   

  	
   

  	
  Irvine,
  California

  
	
   

  	
   

  	
  October 31, 2000

  



 


FOR
VALUE RECEIVED, NATURADE, INC., a Delaware corporation (“Obligor”), hereby
promises to pay to the order of Howard Shao (“Payee”), in lawful money of the
United States at the address of Payee set forth below, the amount of One
Hundred Thousand Dollars ($100,000), together with interest on the unpaid
principal amount hereof.


 


Interest
shall be paid quarterly in arrears, from the date hereof until paid in full, at
the rate of eight percent (8.00%) per annum, with the first payment of interest
due on December 31, 2000.  Unpaid
principal together with all accrued interest shall be due and payable on August
31, 2003. Capitalized terms not otherwise defined in this Note shall have the
meanings assigned to them in the Loan Agreement (as defined below).


 


This
Note may be prepaid, in whole or in part, upon at least thirty calendar days’
notice to Payee, as further provided in the Loan Agreement.  Payments by Obligor shall be applied first
to any and all accrued interest through the payment date and second to the
principal remaining due hereunder.  Upon
payment in full of all principal and interest payable hereunder, this Note
shall be surrendered to Obligor for cancellation.


 


If
any payment of principal or interest on this Note shall become due on a
Saturday, Sunday, or a public holiday under the laws of the State of
California, such payment shall be made on the next succeeding business day and
such extension of time shall be included in computing interest in connection
with such payment.


 


This
Note is issued pursuant to and entitled to the benefits of the Loan Agreement
and related agreements by and between Obligor and Payee dated August 31, 2000
(“Loan Agreement”), and reference thereto is hereby made for a more complete
statement of the terms under which the loan evidenced hereby is to be repaid,
including the fact that the loan is subject to acceleration and the loan is
subject to Payee’s right to convert, all as set forth in the Loan Agreement.  This Note is secured by certain collateral,
more specifically described in the Loan Agreement.


 


Obligor
waives presentment, demand for performance, notice of nonperformance, protest,
notice of protest, and notice of dishonor. 
No delay on the part of Payee in exercising any right hereunder shall
operate as a waiver of such right under this Note.  This Note is being delivered in the State of California.  This Note shall be governed in all respects
by the laws of the State of California as it applies to contracts between California
residents, which are made and to be performed in California.


 


If
the indebtedness represented by this Note or any part thereof is collected at
law or in equity or in bankruptcy, receivership or other judicial proceedings
or if this Note is placed in the hands of attorneys for collection after
default, Obligor agrees to pay, in addition to the principal and interest
payable herein, reasonable attorneys’ fees and costs incurred by Payee.


 


25

















 


The
Obligor and the Payee intend to comply at all times with applicable usury
laws.  If at any time such laws would
render usurious any amounts due under this Note, then it is the Obligor’s and
the Payee’s express intention that the Obligor not be required to pay interest
on this Note at a rate in excess of the maximum lawful rate, that the
provisions of this paragraph shall control over all other provisions of this
Note which may be in apparent conflict hereunder, that such excess amount shall
be immediately credited to the principal balance of this Note (or, if this Note
has been fully paid, refunded by the Payee to the Obligor), and the provisions
hereof shall be immediately reformed and the amounts thereafter collectible
under this Note reduced, without the necessity of the execution of any further
documents, so as to comply with the then applicable usury law, but so as to
permit the recovery of the fullest amount otherwise due under this Note.  Any such crediting or refund shall not cure
or waive any default by the Obligor under this Note.  The term “applicable law” as used in this Note shall mean the
laws of the State of California or the laws of the United States, whichever
laws allow the greater rate of interest, as such laws now exist or may be
changed or amended or come into effect in the future.


 


No
modification, amendment or waiver of any provision of this Note shall be
effective unless approved in a writing specifically referring to this Note and
signed by the party against whom enforcement of the amendment is sought.  In the event that Obligor fails to make
payment on the date for payment hereinabove specified of all principal and
interest due hereunder on such date, then this Note shall accrue interest at
the highest rate permitted by law, until paid in full.


 


Each
notice or other communication required or permitted hereunder (except payment)
shall be in writing and shall be deemed given or made (a) on the day
delivered if delivered in person to the party to whom it is directed, or by
overnight courier, (b) on the day delivery is confirmed by the recipient’s
signature if deposited in the United States Mail, registered or certified,
return receipt requested, (c) on the day confirmed by the receiving
facsimile machine if sent by facsimile during regular business hours, in each
case addressed to the party to whom it is directed at the address set forth in
the Loan Agreement.  Either party may,
by notice given at any time or from time to time, require that subsequent notices
be given at a different address.  Any payment
shall be deemed made upon receipt by Payee.


 


IN
WITNESS WHEREOF, Obligor has caused this Note to be executed and delivered by
its duly authorized officer as of the date and at the place first written
above.


 


	
   

  	
  OBLIGOR:

  	
  NATURADE,
  INC.,

  
	
   

  	
   

  	
  a
  Delaware corporation

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Lawrence J. Batina

  	
   

  
	
   

  	
  Its:
  

  	
  Chief
  Financial Officer

  
					



 


26

















 


CONVERTIBLE SECURED PROMISSORY NOTE


 


	
  $100,000

  	
   

  	
   

  	
  Irvine,
  California

  
	
   

  	
   

  	
  November 30, 2000

  



 


FOR
VALUE RECEIVED, NATURADE, INC., a Delaware corporation (“Obligor”), hereby
promises to pay to the order of Howard Shao (“Payee”), in lawful money of the
United States at the address of Payee set forth below, the amount of One
Hundred Thousand Dollars ($100,000), together with interest on the unpaid
principal amount hereof.


 


Interest
shall be paid quarterly in arrears, from the date hereof until paid in full, at
the rate of eight percent (8.00%) per annum, with the first payment of interest
due on December 31, 2000.  Unpaid
principal together with all accrued interest shall be due and payable on
August 31, 2003. Capitalized terms not otherwise defined in this Note
shall have the meanings assigned to them in the Loan Agreement (as defined
below).


 


This
Note may be prepaid, in whole or in part, upon at least thirty calendar days’
notice to Payee, as further provided in the Loan Agreement.  Payments by Obligor shall be applied first
to any and all accrued interest through the payment date and second to the
principal remaining due hereunder.  Upon
payment in full of all principal and interest payable hereunder, this Note
shall be surrendered to Obligor for cancellation.


 


If
any payment of principal or interest on this Note shall become due on a
Saturday, Sunday, or a public holiday under the laws of the State of
California, such payment shall be made on the next succeeding business day and
such extension of time shall be included in computing interest in connection
with such payment.


 


This
Note is issued pursuant to and entitled to the benefits of the Loan Agreement
and related agreements by and between Obligor and Payee dated August 31, 2000
(“Loan Agreement”), and reference thereto is hereby made for a more complete
statement of the terms under which the loan evidenced hereby is to be repaid, including
the fact that the loan is subject to acceleration and the loan is subject to
Payee’s right to convert, all as set forth in the Loan Agreement.  This Note is secured by certain collateral,
more specifically described in the Loan Agreement.


 


Obligor
waives presentment, demand for performance, notice of nonperformance, protest,
notice of protest, and notice of dishonor. 
No delay on the part of Payee in exercising any right hereunder shall
operate as a waiver of such right under this Note.  This Note is being delivered in the State of California.  This Note shall be governed in all respects
by the laws of the State of California as it applies to contracts between
California residents, which are made and to be performed in California.


 


If
the indebtedness represented by this Note or any part thereof is collected at
law or in equity or in bankruptcy, receivership or other judicial proceedings
or if this Note is placed in the hands of attorneys for collection after
default, Obligor agrees to pay, in addition to the principal and interest
payable herein, reasonable attorneys’ fees and costs incurred by Payee.


 


27

















 


The
Obligor and the Payee intend to comply at all times with applicable usury
laws.  If at any time such laws would
render usurious any amounts due under this Note, then it is the Obligor’s and
the Payee’s express intention that the Obligor not be required to pay interest
on this Note at a rate in excess of the maximum lawful rate, that the provisions
of this paragraph shall control over all other provisions of this Note which
may be in apparent conflict hereunder, that such excess amount shall be
immediately credited to the principal balance of this Note (or, if this Note
has been fully paid, refunded by the Payee to the Obligor), and the provisions
hereof shall be immediately reformed and the amounts thereafter collectible
under this Note reduced, without the necessity of the execution of any further
documents, so as to comply with the then applicable usury law, but so as to
permit the recovery of the fullest amount otherwise due under this Note.  Any such crediting or refund shall not cure
or waive any default by the Obligor under this Note.  The term “applicable law” as used in this Note shall mean the
laws of the State of California or the laws of the United States, whichever
laws allow the greater rate of interest, as such laws now exist or may be
changed or amended or come into effect in the future.


 


No
modification, amendment or waiver of any provision of this Note shall be
effective unless approved in a writing specifically referring to this Note and
signed by the party against whom enforcement of the amendment is sought.  In the event that Obligor fails to make
payment on the date for payment hereinabove specified of all principal and
interest due hereunder on such date, then this Note shall accrue interest at
the highest rate permitted by law, until paid in full.


 


Each
notice or other communication required or permitted hereunder (except payment)
shall be in writing and shall be deemed given or made (a) on the day
delivered if delivered in person to the party to whom it is directed, or by
overnight courier, (b) on the day delivery is confirmed by the recipient’s
signature if deposited in the United States Mail, registered or certified,
return receipt requested, (c) on the day confirmed by the receiving
facsimile machine if sent by facsimile during regular business hours, in each
case addressed to the party to whom it is directed at the address set forth in
the Loan Agreement.  Either party may,
by notice given at any time or from time to time, require that subsequent
notices be given at a different address. 
Any payment shall be deemed made upon receipt by Payee.


 


IN
WITNESS WHEREOF, Obligor has caused this Note to be executed and delivered by
its duly authorized officer as of the date and at the place first written
above.


 


	
   

  	
  OBLIGOR:

  	
  NATURADE,
  INC.,

  
	
   

  	
   

  	
  a
  Delaware corporation

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Lawrence J. Batina

  	
   

  
	
   

  	
  Its:

  	
  Chief
  Financial Officer

  
					



 


28

















 


THIS
CONVERTIBLE SECURED PROMISSORY NOTE IS SUBORDINATED IN RIGHT OF PAYMENT, AS SET
FORTH IN THAT CERTAIN SUBORDINATION AGREEMENT DATED AUGUST 31, 2000 BETWEEN
PAYEE AND WELLS FARGO BUSINESS CREDIT INC. (“BANK”) AND ACKNOWLEDGED BY
OBLIGOR, TO THE OBLIGATIONS OF OBLIGOR TO BANK UNDER (AND AS DEFINED IN) THAT
CERTAIN CREDIT AGREEMENT, DATED AS OF JANUARY 27, 2000, BETWEEN OBLIGOR, AS
BORROWER, AND BANK, AS LENDER, AS AT ANY TIME AMENDED, SUPPLEMENTED OR OTHERWISE
MODIFIED OR RESTATED.


 


CONVERTIBLE SECURED PROMISSORY NOTE


 


	
  $50,000

  	
   

  	
   

  	
  Irvine,
  California

  
	
   

  	
   

  	
  September 12, 2001

  



 


FOR
VALUE RECEIVED, NATURADE, INC., a Delaware corporation (“Obligor”), hereby
promises to pay to the order of WALD HOLDINGS, LLC, a Missouri limited
liability company (“Payee”), in lawful money of the United States at the
address of Payee set forth below, the amount of FIFTY THOUSAND DOLLARS
($50,000), together with interest on the unpaid principal amount hereof.


 


Interest
shall be paid at maturity at the rate of eight percent (8.00%) per annum.  Notwithstanding anything to the contrary in
the Loan Agreement (as defined bleow), unpaid principal together with all
accrued interest shall be due and payable on the earlier of (a) September 12,
2002 or (b) the date that Mr. David Weil is removed as a Director of the
Obligor.  CaCapitalized terms not
otherwise defined in this Note shall have the meanings assigned to them in the
Loan Agreement (as defined below).


 


This
Note may be prepaid, in whole or in part, upon at least thirty calendar days’
notice to Payee, as further provided in the Loan Agreement.  Payments by Obligor shall be applied first
to any and all accrued interest through the payment date and second to the
principal remaining due hereunder.  Upon
payment in full of all principal and interest payable hereunder, this Note
shall be surrendered to Obligor for cancellation.


 


If
any payment of principal or interest on this Note shall become due on a
Saturday, Sunday, or a public holiday under the laws of the State of
California, such payment shall be made on the next succeeding business day and
such extension of time shall be included in computing interest in connection
with such payment.


 


This
Note is issued pursuant to and entitled to the benefits of the Loan Agreement
and related agreements by and between Obligor and Payee dated August 31, 2000
(“Loan Agreement”), and reference thereto is hereby made for a more complete
statement of the terms under which the loan evidenced hereby is to be repaid,
including the fact that the loan is subject to acceleration and the loan is
subject to Payee’s right to convert, all as set forth in the Loan
Agreement.  This Note is secured by
certain collateral, more specifically described in the Loan Agreement.


 


29

















 


Obligor
waives presentment, demand for performance, notice of nonperformance, protest,
notice of protest, and notice of dishonor. 
No delay on the part of Payee in exercising any right hereunder shall
operate as a waiver of such right under this Note.  This Note is being delivered in the State of California.  This Note shall be governed in all respects
by the laws of the State of California as it applies to contracts between
California residents, which are made and to be performed in California.


 


If
the indebtedness represented by this Note or any part thereof is collected at
law or in equity or in bankruptcy, receivership or other judicial proceedings
or if this Note is placed in the hands of attorneys for collection after
default, Obligor agrees to pay, in addition to the principal and interest
payable herein, reasonable attorneys’ fees and costs incurred by Payee.


 


The
Obligor and the Payee intend to comply at all times with applicable usury
laws.  If at any time such laws would
render usurious any amounts due under this Note, then it is the Obligor’s and
the Payee’s express intention that the Obligor not be required to pay interest
on this Note at a rate in excess of the maximum lawful rate, that the provisions
of this paragraph shall control over all other provisions of this Note which
may be in apparent conflict hereunder, that such excess amount shall be
immediately credited to the principal balance of this Note (or, if this Note
has been fully paid, refunded by the Payee to the Obligor), and the provisions
hereof shall be immediately reformed and the amounts thereafter collectible
under this Note reduced, without the necessity of the execution of any further
documents, so as to comply with the then applicable usury law, but so as to
permit the recovery of the fullest amount otherwise due under this Note.  Any such crediting or refund shall not cure
or waive any default by the Obligor under this Note.  The term “applicable law” as used in this Note shall mean the
laws of the State of California or the laws of the United States, whichever
laws allow the greater rate of interest, as such laws now exist or may be
changed or amended or come into effect in the future.


 


No
modification, amendment or waiver of any provision of this Note shall be
effective unless approved in a writing specifically referring to this Note and
signed by the party against whom enforcement of the amendment is sought.  In the event that Obligor fails to make
payment on the date for payment hereinabove specified of all principal and
interest due hereunder on such date, then this Note shall accrue interest at
the highest rate permitted by law, until paid in full.


 


Each
notice or other communication required or permitted hereunder (except payment)
shall be in writing and shall be deemed given or made (a) on the day
delivered if delivered in person to the party to whom it is directed, or by
overnight courier, (b) on the day delivery is confirmed by the recipient’s
signature if deposited in the United States Mail, registered or certified,
return receipt requested, (c) on the day confirmed by the receiving
facsimile machine if sent by facsimile during regular business hours, in each
case addressed to the party to whom it is directed at the address set forth in
the Loan Agreement.  Either party may,
by notice given at any time or from time to time, require that subsequent
notices be given at a different address. 
Any payment shall be deemed made upon receipt by Payee.


 


IN
WITNESS WHEREOF, Obligor has caused this Note to be executed and delivered by
its duly authorized officer as of the date and at the place first written
above.


 


30

















 


	
   

  	
  OBLIGOR:

  	
  NATURADE,
  INC.,

  
	
   

  	
   

  	
  a
  Delaware corporation

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Lawrence J. Batina

  	
   

  
	
   

  	
  Its:

  	
  Chief
  Financial Officer

  
					



 


31