Document:

<PAGE>

                                                                    EXHIBIT 10.7

THIS NOTE AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAWS. THIS NOTE AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF
THIS NOTE MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS 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.

                   SECURED CONVERTIBLE MINIMUM BORROWING NOTE

            FOR VALUE RECEIVED, each of NATURADE, INC., a Delaware corporation
(the "PARENT"), and the other companies listed on Exhibit A attached hereto
(such other companies together with the Parent, each a "COMPANY" and
collectively, the "COMPANIES"), jointly and severally, 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 Five Hundred Thousand Dollars ($500,000), or, if different, the
aggregate principal amount of all Loans (as defined in the Security Agreement
referred to below), together with any accrued and unpaid interest hereon, on
July 26, 2008 (the "MATURITY DATE") if not sooner paid.

            Capitalized terms used herein without definition shall have the
meanings ascribed to such terms in the Security and Purchase Agreement among the
Companies and the Holder dated as of the date hereof (as amended, modified
and/or supplemented from time to time, the "SECURITY AGREEMENT").

            The following terms shall apply to this Minimum Borrowing Note (this
"NOTE"):

                                   ARTICLE I
                                  CONTRACT RATE

            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.

<PAGE>

            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") and shall be subject to adjustment as set
forth herein. If (i) the Parent shall have registered the shares of the Common
Stock underlying the conversion of each Minimum Borrowing Note, each Warrant and
each Option on a registration statement declared effective by the Securities and
Exchange Commission (the "SEC"), and (ii) the market price (the "MARKET PRICE")
of the Common Stock as reported by Bloomberg, L.P. on the Principal Market for
the five (5) trading days immediately preceding a Determination Date exceeds the
then applicable Fixed Conversion Price by at least twenty-five percent (25%),
the Contract Rate for the succeeding calendar month shall automatically be
reduced by 200 basis points (200 b.p.) (2.0%) for each incremental twenty-five
percent (25%) increase in the Market Price of the Common Stock above the then
applicable Fixed Conversion Price. Notwithstanding the foregoing (and anything
to the contrary contained herein), in no event shall the Contract Rate at any
time be less than zero percent (0%).

                                   ARTICLE II
                         LOANS; PAYMENTS UNDER THIS NOTE

            2.1 Loans. All Loans evidenced by this Note shall be made in
accordance with the terms and provisions of the Security Agreement.

            2.2 No Effective Registration. Notwithstanding anything to the
contrary herein, the Holder shall not be required to accept shares of Common
Stock as payment following a conversion by the Holder if there fails to exist an
effective current Registration Statement (as defined in the Registration Rights
Agreement) covering the shares of Common Stock to be issued, or if an Event of
Default hereunder exists and is continuing, unless such requirement is otherwise
waived in writing by the Holder in whole or in part at the Holder's option.

            2.3 Optional Redemption in Cash. The Companies will have the option
of prepaying this Note ("OPTIONAL REDEMPTION") by paying to the Holder a sum of
money equal to one hundred twenty five percent (125%) of the principal amount of
this Note 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 (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 ten (10) days after the date of the Notice
of Redemption (the "REDEMPTION PERIOD"). A Notice of Redemption shall not be
effective with respect to any portion of this Note for which the Holder has
previously delivered a Notice of Conversion (defined below) pursuant to Section
3.1, or for conversions elected to be made by the Holder pursuant to Section 3.1
during the Redemption Period. The Redemption Amount shall be determined as if
such Holder's conversion elections had been completed immediately prior to the
date of the Notice of Redemption. On the Redemption Payment Date, the Redemption
Amount (plus any additional interest and fees accruing on the Notes during the
Redemption Period) must be irrevocably paid in full in immediately available
funds to the Holder. In the event the

                                        2
<PAGE>

Companies fail to pay the Redemption Amount on the Redemption Payment Date, then
such Redemption Notice shall be null and void.

                                  ARTICLE III
                  CONVERSION RIGHTS AND FIXED CONVERSION PRICE

            3.1 Optional Conversion. Subject to the terms of this Article III,
the Holder shall have the right, but not the obligation, at any time until the
Maturity Date, or during an Event of Default (as defined in Article IV), and,
subject to the limitations set forth in Section 3.2 hereof, to convert all or
any portion of the outstanding Principal Amount and/or accrued interest and fees
due and payable into fully paid and nonassessable shares of the Common Stock at
the Fixed Conversion Price. For purposes hereof, subject to Section 3.6 hereof,
the initial "FIXED CONVERSION PRICE" means $0.80. The shares of Common Stock to
be issued upon such conversion are herein referred to as the "CONVERSION
SHARES."

            3.2 Conversion Limitation. Notwithstanding anything contained herein
to the contrary, the Holder shall not be entitled to convert pursuant to the
terms of this Note an amount that would be convertible into that number of
Conversion Shares which would exceed the difference between (i) 4.99% of the
outstanding shares of Common Stock and (ii) the number of shares of Common Stock
beneficially owned by the Holder. For purposes of the immediately preceding
sentence, beneficial ownership shall be determined in accordance with Section
13(d) of the Exchange Act and Regulation 13d-3 thereunder. The Conversion Shares
limitation described in this Section 3.2 shall automatically become null and
void following notice to any Company upon the occurrence and during the
continuance of an Event of Default, or upon 75 days prior notice to the Parent,
except that at no time shall the number of shares of Common Stock beneficially
owned by the Holder exceed 19.99% of the outstanding shares of Common Stock.
Notwithstanding anything contained herein to the contrary, the provisions of
this Section 3.2 are irrevocable and may not be waived by the Holder or any
Company.

            3.3 Mechanics of Holder's Conversion. In the event that the Holder
elects to convert this Note into Common Stock, the Holder shall give notice of
such election by delivering an executed and completed notice of conversion in
substantially the form of Exhibit A hereto (appropriately completed) ("NOTICE OF
CONVERSION") to the Parent and such Notice of Conversion shall provide a
breakdown in reasonable detail of the Principal Amount, accrued interest and
fees that are being converted. On each Conversion Date (as hereinafter defined)
and in accordance with its Notice of Conversion, the Holder shall make the
appropriate reduction to the Principal Amount, accrued interest and fees as
entered in its records and shall provide written notice thereof to the Parent
within two (2) Business Days after the Conversion Date. Each date on which a
Notice of Conversion is delivered or telecopied to the Parent in accordance with
the provisions hereof shall be deemed a Conversion Date (the "CONVERSION DATE").
Pursuant to the terms of the Notice of Conversion, the Parent will issue
instructions to the transfer agent accompanied by an opinion of counsel within
one (1) Business Day of the date of the delivery to the Parent of the Notice of
Conversion and shall cause the transfer agent to transmit the certificates
representing the Conversion Shares to the Holder by crediting the account of the
Holder's designated broker with the Depository Trust Corporation ("DTC") through
its Deposit Withdrawal Agent Commission ("DWAC") system within three (3)
Business Days after receipt by the Parent of the Notice of Conversion (the
"DELIVERY DATE"). In the case of the exercise of

                                        3
<PAGE>

the conversion rights set forth herein the conversion privilege shall be deemed
to have been exercised and the Conversion Shares issuable upon such conversion
shall be deemed to have been issued upon the date of receipt by the Parent of
the Notice of Conversion. The Holder shall be treated for all purposes as the
record holder of the Conversion Shares, unless the Holder provides the Parent
written instructions to the contrary.

            3.4 Late Payments. Each Company understands that a delay in the
delivery of the Conversion Shares in the form required pursuant to this Article
beyond the Delivery Date could result in economic loss to the Holder. As
compensation to the Holder for such loss, in addition to all other rights and
remedies which the Holder may have under this Note, applicable law or otherwise,
the Companies shall, jointly and severally, pay late payments to the Holder for
any late issuance of Conversion Shares in the form required pursuant to this
Article III upon conversion of this Note, in the amount equal to $500 per
Business Day after the Delivery Date. The Companies shall, jointly and
severally, make any payments incurred under this Section in immediately
available funds upon demand.

            3.5 Conversion Mechanics. The number of shares of Common Stock to be
issued upon each conversion of this Note shall be determined by dividing that
portion of the principal and interest and fees to be converted, if any, by the
then applicable Fixed Conversion Price.

            3.6 Adjustment Provisions. The Fixed Conversion Price and number and
kind of shares or other securities to be issued upon conversion determined
pursuant to Section 3.1 shall be subject to adjustment from time to time upon
the occurrence of certain events during the period that this conversion right
remains outstanding, as follows:

                  (a) Reclassification. If the Parent at any time shall, by
reclassification or otherwise, change the Common Stock into the same or a
different number of securities of any class or classes, this Note, as to the
unpaid Principal Amount and accrued interest thereon, shall thereafter be deemed
to evidence the right to purchase an adjusted number of such securities and kind
of securities as would have been issuable as the result of such change with
respect to the Common Stock (i) immediately prior to or (ii) immediately after
such reclassification or other change at the sole election of the Holder.

                  (b) Stock Splits, Combinations and Dividends. If the shares of
Common Stock are subdivided or combined into a greater or smaller number of
shares of Common Stock, or if a dividend is paid on the Common Stock or any
preferred stock issued by the Parent in shares of Common Stock, the Fixed
Conversion Price shall be proportionately reduced in case of subdivision of
shares or stock dividend or proportionately increased in the case of combination
of shares, in each such case by the ratio which the total number of shares of
Common Stock outstanding immediately after such event bears to the total number
of shares of Common Stock outstanding immediately prior to such event.

                  (c) Share Issuances. Subject to the provisions of this Section
3.6, if the Parent shall at any time prior to the conversion or repayment in
full of the Principal Amount issue any shares of Common Stock or securities
convertible into Common Stock to a person other than the Holder (except (i)
pursuant to Sections 3.6(a) or (b) above; (ii) pursuant to options,

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<PAGE>

warrants, or other obligations to issue shares outstanding on the date hereof as
disclosed to the Holder in writing; (iii) pursuant to options that may be issued
under any employee incentive stock option and/or any qualified stock option plan
adopted by the Parent; or (iv) pursuant to issuances of Common Stock in
connection with transactions otherwise permitted pursuant to Section 13(l)(viii)
of the Security Agreement) for a consideration per share (the "OFFER PRICE")
less than the Fixed Conversion Price in effect at the time of such issuance,
then the Fixed Conversion Price shall be immediately reset to such lower Offer
Price. For purposes hereof, the issuance of any security of the Parent
convertible into or exercisable or exchangeable for Common Stock shall result in
an adjustment to the Fixed Conversion Price upon the issuance of such
securities.

                  (d) Computation of Consideration. For purposes of any
computation respecting consideration received pursuant to Section 3.6(c) above,
the following shall apply:

                        (i) in the case of the issuance of shares of Common
      Stock for cash, the consideration shall be the amount of such cash,
      provided that in no case shall any deduction be made for any commissions,
      discounts or other expenses incurred by the Parent for any underwriting of
      the issue or otherwise in connection therewith;

                        (ii) in the case of the issuance of shares of Common
      Stock for a consideration in whole or in part other than cash, the
      consideration other than cash shall be deemed to be the fair market value
      thereof as determined in good faith by the Board of Directors of the
      Parent (irrespective of the accounting treatment thereof); and

                        (iii) upon any such exercise, the aggregate
      consideration received for such securities shall be deemed to be the
      consideration received by the Parent for the issuance of such securities
      plus the additional minimum consideration, if any, to be received by the
      Parent upon the conversion or exchange thereof (the consideration in each
      case to be determined in the same manner as provided in subsections (i)
      and (ii) of this Section 2.5).

            3.7 Reservation of Shares. During the period the conversion right
exists, the Parent will reserve from its authorized and unissued Common Stock a
sufficient number of shares to provide for the issuance of Conversion Shares
upon the full conversion of this Note, the Warrants and the Options. The Parent
represents that upon issuance, the Conversion Shares will be duly and validly
issued, fully paid and non-assessable. The Parent agrees that its issuance of
this Note shall constitute full authority to its officers, agents, and transfer
agents who are charged with the duty of executing and issuing stock certificates
to execute and issue the necessary certificates for the Conversion Shares upon
the conversion of this Note.

            3.8 Registration Rights. The Holder has been granted registration
rights with respect to the Conversion Shares as set forth in a Registration
Rights Agreement.

            3.9 Issuance of New Note. Upon any partial conversion 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 Parent to the Holder for the principal
balance of this Note and interest which shall not have been converted or paid.
Subject to the provisions of Article IV of this Note, the Parent

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<PAGE>

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 AND DEFAULT RELATED PROVISIONS

            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 percent (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 Conversion Privileges. The conversion privileges set forth in
Article III shall remain in full force and effect immediately from the date
hereof until the date this Note is indefeasibly paid in full and irrevocably
terminated.

            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

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<PAGE>

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 respective Company at the addresses provided
for such Company 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
respective Company or the Holder may designate by ten days advance written
notice to the other parties hereto.

            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 each 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. No Company may 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 Companies shall, jointly and severally, pay the Holder's 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) EACH 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 ANY
COMPANY, ON THE ONE HAND, AND THE HOLDER, ON THE OTHER HAND, PERTAINING TO THIS
NOTE, THE SECURITY AGREEMENT OR ANY OF THE OTHER ANCILLARY AGREEMENTS OR TO ANY
MATTER ARISING OUT OF OR RELATED TO THIS NOTE, THE SECURITY AGREEMENT OR ANY OF
THE OTHER ANCILLARY AGREEMENTS; PROVIDED, THAT EACH 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

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A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF THE HOLDER. EACH COMPANY EXPRESSLY
SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT
COMMENCED IN ANY SUCH COURT, AND EACH COMPANY HEREBY WAIVES ANY OBJECTION WHICH
IT MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM
NON CONVENIENS. EACH 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) EACH 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, EACH 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/OR ANY COMPANY ARISING OUT OF, CONNECTED WITH, RELATED OR INCIDENTAL
TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS NOTE, THE
SECURITY AGREEMENT, ANY OTHER ANCILLARY AGREEMENT OR THE TRANSACTIONS RELATED
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 Companies to the Holder and thus refunded
to the Companies.

            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.

            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.

       [Balance of page intentionally left blank; signature page follows]

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<PAGE>

            IN WITNESS WHEREOF, each Company has caused this Secured Convertible
Minimum Borrowing Note to be signed in its name effective as of this 26th day of
July 2005.

                                               NATURADE, INC.

                                               By: /s/ Stephen M. Kasprisin
                                                   Name: Stephen M. Kasprisin
                                                   Title: CFO

WITNESS:

/s/ Kim Kennedy

                                        9
<PAGE>

                                    EXHIBIT A

                                 OTHER COMPANIES

None.

                                       10
<PAGE>

                                    EXHIBIT B

                              NOTICE OF CONVERSION

              (To be executed by the Holder in order to convert the
                   Secured Convertible Minimum Borrowing Note)

            The undersigned hereby elects to convert $_________ of the principal
and $_________ of the interest due on the Secured Convertible Minimum Borrowing
Note dated as of July 26, 2005 (the "NOTE") issued by NATURADE, INC. (the
"PARENT") and the other Companies named and as defined therein into shares of
Common Stock of the Parent in accordance with the terms and conditions set forth
in the Note, as of the date written below.

Date of Conversion:            _________________________________________________

Conversion Price:              _________________________________________________

Shares To Be Delivered:        _________________________________________________

Signature:                     _________________________________________________

Print Name:                    _________________________________________________

Address:                       _________________________________________________

Holder DWAC instructions       _________________________________________________

                                       11exv10w1

 

EXHIBIT 10.1

	 	 	 
	

	 	         Technology
Ltd

Contract of Employment

 

 

 

page 1

 

 

Contract of Employment

STATEMENT OF TERMS OF EMPLOYMENT GIVEN PURSUANT TO THE EMPLOYMENT

PROTECTION (CONSOLIDATION) ACT

	 	 	 	 	 	 	 
	Name of Employer

	 	:
	 	MTI Technology Ltd	 	 
	Name of Employee

	 	:
	 	Mr. Keith Clark
	 	 
	Your position within the Company

	 	:
	 	Senior Vice President Europe
	 	 
	Employment commenced on

	 	:
	 	February 19, 1990
	 	 
	Continuous employment with the

company commenced on

	 	:
	 	February 19, 1990
	 	 

	1.	 	SALARY AND BENEFITS

	 	1.1	 	Your base salary and incentive income are in accordance with the
compensation documentation already supplied to you.
	 
	 	1.2	 	Only the net payment of your salary will be transferred to your bank account after the
appropriate deduction of tax (PAYE), National Insurance contributions and any other benefit
scheme contributions or other statutory deductions which may from time to time be
introduced.
	 
	 	1.3	 	You will be informed of payment of your salary by way of a pay slip.
	 
	 	1.4	 	You will be provided with a Company Car for business and private use in line with the current
company car policy.
	 
	 	1.6	 	You are eligible for inclusion in the Company’s private non contributory health scheme.
Additional family members can be included providing the additional cost is met by the
employee.
	 
	 	1.7	 	The company operates a non contributory group Permanent Health Plan. Membership of the
scheme will be effected once the conditions stipulated by the Assurance Company
(“Phoenix Assurance”) have been met including the completion of your probationary period as
stipulated in paragraph 9. The policy provides for ninety percent (90%) of your salary, less the
state benefit, to be continued to be paid in the event of long term illness or injury.
Salary is based on your previous 12 months gross earnings. The monthly benefit in each subsequent year
of payment will be automatically increased on the anniversary of the commencement of
payment by five per cent (5%) per annum compound for each year of continuous payment of
the claim. The first payment will be made one month after a 28 week waiting period.

 

page 2

 

 

Contract of Employment

 

	 	1.8	 	You are covered with effect from your date of joining the company under the Company’
group life Assurance Scheme. This policy ensures the payment of four (4) times your
basic gross salary to nominated beneficiaries. The policy is currently placed with
“London and Manchester”.

	2.	 	DUTIES

Your job title (specified at the commencement of this Statement) does not define or limit the
work associated with your position and you will perform such duties
as may from time
to time be appropriate to your position and expressly or impliedly assigned to you.

	3.	 	MOBILITY CLAUSE

You shall perform your duties as prescribed in clause two (2) at and from the company’s
principle office in the UK or at such other location of the company’s interest in Europe and
shall undertake such travel within Europe and world-wide as the company shall reasonably
require. It is understood and agreed that you may be required to perform duties outside the UK
(but not reside outside the UK).

	4.	 	HOURS OF WORK

Your normal hours of work are from 9.00 a.m. to 5.30 p.m. Monday to Friday inclusive,
However, you are expected to work such hours as may be necessary to enable you to discharge
your duties properly.

	5.	 	HOLIDAYS AND HOLIDAY PAY

	 	5.1	 	In addition to the usual statutory English holidays you are entitled to twenty (20)
days paid holiday in each complete calendar year of your employment.
	 
	 	5.2	 	The holiday year runs from 1 January to 31 December and holiday accrues at the rate of 1.67
days for each month of full time service. No holiday entitlement may be carried over from one
year to another unless agreed in writing by your Manager. In the first and final years of your
employment, you will be entitled only to such period of holiday as is
proportionate to your
actual period of employment.
	 
	 	5.3	 	Your holiday should be taken at such times as may be agreed with your Manager.
	 
	 	5.4	 	If your employment terminates before you have taken all your full holiday entitlement for the
year concerned, you will be entitled to receive salary in lieu of such holiday entitlement as
may have accrued in accordance with paragraph 5.2. Alternatively a deduction will be made
from your final salary payment on termination of employment where you have taken holiday
which has not accrued due under paragraph 5.2.
	 
	 	5.5	 	Save as provided above, you will not normally be entitled to any salary in lieu of holiday
entitlement not taken up during the holiday year.

 

page 3

 

 

Contract of Employment

 

	6.	 	SICKNESS OR INJURY

	 	6.1	 	If you are absent from work on account of sickness or injury, you, or someone on
your behalf,
must notify the Company (either by telephone or in writing) on the
first day of absence. If you
are absent for between four (4) to seven (7) days you must complete and send to the
Company a self-certification form. On the eighth continuous day of absence you must provide
the Company with a certificate of a registered medical practitioner and provide further
certificates at weekly intervals until you are fit to return to work. You must complete the
Company’s internal Sickness Absence Form on the first day of your return to work.
	 
	 	6.2	 	Provided the notices and medical certificates are received by the Company in accordance
with the preceding clause, the Company will pay you any statutory sick pay benefit to which
you may be entitled in respect of your ill health or incapacity at the appropriate rate, net of
income tax and national insurance contributions through the
Company’s monthly payroll
system. If you are not, or cease or be, eligible to receive statutory sick pay and are absent for
four (4) days or longer, you should claim the appropriate benefit from the Department of
Health and Social Security.
	 
	 	6.3	 	The Company may, at its sole discretion, make salary payments to your during periods of
absence on account of incapacity in addition to any statutory sick pay benefits to which you
may be entitled.
	 
	 	6.4	 	No more than eight (8) days of absence in respect of which you have provided the Company
with a self certification form or medical certificate, nor more than twenty (20) days of
absence (whether certified or not) may be taken in any period of twelve (12) months. Any days
taken in excess of these periods may, at the discretion of the Company, be deducted from your
holiday entitlement.

	7.	 	PENSION SCHEME

	 	7.1	 	The Company does not operate a Company pension scheme and you will be expected to
make your own arrangements to suit your circumstances. No contracting out certificate
under the Social Security Pensions Act 1975 is in force in respect of your employment.

	8.	 	RETIREMENT

The Company’s normal
 retirement age is 65 years for male and female employees.

 

page 4

 

 

Contract of Employment

 

	9.	 	NOTICE

	 	10.1	 	You are entitled to receive six months notice of termination of your employment
from the end
of the calendar quarter in which the notice is given.
	 
	 	10.2	 	if you wish to terminate your employment you will be required to give the Company the same
period of notice as under paragraph 10.1.
	 
	 	10.3	 	Upon termination of your employment, you shall deliver up to the Company or its authorised
agent all documents and records of any kind whatsoever which may be in your possession
or control and relate in any way to the business or affairs of the Company and no copies
shall be retained by you.
	 
	 	10.4	 	Upon termination of your employment, any right you may have to make use of any
credit cards, banks cards, cheque cards or any other similar cards or documents with
which you have been supplied or which you have been authorised to use in connection with
your employment will automatically terminate and be revoked and you will forthwith
return to the Company or its authorised agent any such cards or documents then in your
possession or under your control. You will reimburse the Company on demand for the
amount of any loss suffered by the Company as a result of any failure by you to observe
the preceding provisions of this paragraph.
	 
	 	10.5	 	Without prejudice to any other duty owed to the Company under which you have to
keep secret information given to you or received by you or obtained by you in
confidence, you agree that you will not use, divulge or communicate to any person, firm
or organisation (other than in the course of properly performing your duties or as
required by law) any of the trade secrets or other confidential information of the
Company relating to the business, finance or affairs of the Company (including in
particular names of customers, reports, papers, information and data prepared for the
Company or acquired by the Company) which you may have received or obtained while in the
service of the Company. This restriction shall continue to apply after the termination
of your employment (howsoever occasioned) without limit in point of time but shall cease
to apply to information which may come into the public domain otherwise than through
your unauthorised disclosure. You shall also use your best endeavours to prevent the
unauthorised use, publication or disclosure of any such trade secrets or other
confidential information.

	11.	 	DISCIPLINARY PROCEDURE

	 	11.1	 	The Company may dismiss you without notice if you have been guilty of gross
misconduct.
	 
	 	11.2	 	If circumstances indicate that you have been guilty of gross misconduct, the Company may
also suspend you without pay while enquiries into the apparent misconduct take place.
However, if enquires indicate that no gross misconduct has occurred, the Company will pay
you for the period mentioned.
	 
	 	11.3	 	in the cases where no gross misconduct has occurred, but your capability for your position is
considered by the Company to be unsatisfactory, you will be given an opportunity to
rectify the position but if you fail to do so you may be dismissed. The Company observes the
following disciplinary procedure:

 

page 5

 

 

Contract
of Employment

 

	 	(a)	 	Verbal Warning

You will receive a verbal warning from your manager stating the
reason for the warning, the improvement in conduct required and the
period during which this is to be made.

	 	(b)	 	First Written Warning

If insufficient improvement in conduct or capability occurs, you will
receive a first written warning, stating the reason for the warning,
the improvement required and the period in which it is to be made.

	 	(c)	 	Final Written Warning

If insufficient improvement occurs, you will receive a final written warning, the
improvement required, the period in which it is to be made and the consequences if
no such improvement occurs. If (notwithstanding verbal and written warnings) your
conduct or capability remains unsatisfactory, you will receive written notice of
termination, specifying the period of notice entitlement and the reason for
dismissal.

	 	11.4	 	At any stage in the above procedure, you will be entitled to state your case to a
disciplinary committee. You may be accompanied by a representative of your choice.
Details of each warning (whether verbal or written) will be recorded by the Company.

I acknowledge receipt of a copy of the above statement of terms of employment which I have
fully understood and accept.

	 	 	 	 	 
	EMPLOYER NAME

	 	:
	 	Thomas P. Raimondi
	 
	 	 	 	 
	TITLE

	 	:
	 	President & CEO
	 
	 	 	 	 
	DATE

	 	:
	 	7/5/00
	 
	 	 	 	 
	EMPLOYEE NAME

	 	:
	 	Keith Clark
	 
	 	 	 	 
	DATE

	 	:
	 	June 5 2000

 

page 7

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