Exhibit 10.2
LOCK-UP AGREEMENT
This Lock-Up Agreement
(“Agreement”) is made and entered into effective as of
December 5, 2005 (“Effective Date”), by and
between Natural Alternatives International, Inc., a Delaware
corporation (“NAI”), and
(“Stockholder”).
RECITALS
A. On the Effective Date, NAI,
William H. Bunten II and/or Elizabeth W. Bunten, as the trustees of
The Bunten Family Trust dated April 14, 2001, John F. Dullea
and Carolyn A. Dullea, as the trustees of The John F. and Carolyn
A. Dullea Trust dated June 20, 2001, Lincoln Fish, and Michael
L. Irwin, as trustee of The Michael L. Irwin Trust u/t/a
June 25, 1991 (collectively, the “Selling
Stockholders”), entered into a Stock Purchase Agreement,
effective as of December 5, 2005 (“Stock Purchase
Agreement”), pursuant to which NAI agreed to purchase the
outstanding common stock of Real Health Laboratories, Inc., a
California corporation (“RHL”), pursuant to the terms
of the Stock Purchase Agreement. Capitalized terms used but not
defined herein shall have the meaning specified in the Stock
Purchase Agreement.
B. Pursuant to
Section 2.4(a)(vi) of the Stock Purchase Agreement, as a
condition precedent to NAI’s obligations under the Stock
Purchase Agreement, NAI shall have received one or more executed
lock-up agreements covering in the aggregate the Five Hundred Ten
Thousand (510,000) shares of NAI common stock to be issued to
the Selling Stockholders pursuant to the Stock Purchase
Agreement.
C. At the Closing, the Stockholder
will own
shares of common stock of NAI, par value $0.01 per share
(“Common Stock”).
D. The parties hereto desire to
enter into this Agreement in accordance with the requirements of
Section 2.4(a)(vi) of the Stock Purchase Agreement.
NOW, THEREFORE, incorporating the
above recitals and in consideration of the obligations contained
herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
AGREEMENT
1. Restrictions on Transfer .
a. The Stockholder hereby agrees
that, during the period commencing on the Effective Date and
continuing to and including the earlier of (i) the date 180
days after the Effective Date, or (ii) the effective date of
the “resale” registration statement first filed by NAI
with the United States Securities and Exchange Commission
(“SEC”) after the Closing and as described in
Section 3 herein below (the “Lock-Up Period”),
such Stockholder will not offer, sell, contract to sell, pledge,
hypothecate, assign, announce the intention to sell, or otherwise
transfer or dispose of any shares of Common Stock, whether now
owned or hereafter acquired by the Stockholder or with respect to
which the Stockholder would be considered to have beneficial
ownership within the meaning of Rule 13d-3 promulgated under the
Securities Act of 1934, as
amended (collectively, the “Lock-Up
Shares”), or any interest therein, or any options, warrants
or other rights to purchase or otherwise acquire any of the Lock-Up
Shares, or any securities convertible into, exchangeable for or
that represent the right to receive Lock-Up Shares.
b. The foregoing restriction is
expressly agreed to preclude the Stockholder from engaging in any
hedging or other transaction that is designed to or which
reasonably could be expected to lead to or result in a sale or
disposition of the Lock-Up Shares even if such Lock-Up Shares would
be disposed of by someone other than the Stockholder. Such
prohibited hedging or other transactions would include, without
limitation, any short sale or any purchase, sale or grant of any
right (including without limitation any put or call option) with
respect to any of the Lock-Up Shares or with respect to any
securities that include, relate to, or derive any significant part
of their value from, or otherwise transfer to any other person any
or all of the economic consequences of ownership of the Lock-Up
Shares.
c. The Stockholder agrees and
consents to the entry of stop transfer instructions with
NAI’s transfer agent and registrar against any transfer of
the Lock-Up Shares prohibited by this Agreement.
d. The Stockholder understands that
the restrictions imposed by this Agreement are in addition to any
other restrictions imposed on the transfer of the Lock-Up Shares by
applicable federal and state securities laws.
2. Permitted Transfers . Notwithstanding
the restrictions set forth in Section 1, the Stockholder may
transfer the Lock-Up Shares (i) as a bona fide gift or gifts,
provided that the donee or donees thereof agree in writing to be
bound by the restrictions set forth herein; (ii) if the
Stockholder is an individual, to any trust for the direct or
indirect benefit of the Stockholder or the immediate family of the
Stockholder, provided that the trustee of the trust agrees in
writing to be bound by the restrictions set forth herein, and
provided further that any such transfer shall not involve a
disposition for value; or (iii) with the prior written consent
of NAI. For purposes of the foregoing, “immediate
family” shall mean the Stockholder’s spouse, parents,
siblings and lineal descendants. For purposes of this Agreement,
the term “Stockholder” shall also include a permitted
transferee.
3. Registration of NAI Stock; Rule 144
.
a. Resale Registration
Statement . NAI shall use its Best Efforts to file with the SEC
not later than 90 days after the Closing (the “Filing
Date”) a registration statement (“Registration
Statement”) under the Securities Act of 1933, as amended (the
“Securities Act”), covering all of the shares of NAI
Stock and permitting the continuous resale from time to time of the
NAI Stock by the Sellers. NAI shall use its Best Efforts to have
the Registration Statement declared effective by the SEC as soon as
reasonably practicable and, in any event, within 180 days after the
Closing (the “Effective Date”). NAI will only be
obligated to file and maintain the effectiveness of one
registration statement pursuant to this Agreement. The Selling
Stockholders and their permitted transferees and assigns may be
referred to in this Section 3 as
“Sellers.”
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b. Registration Procedures .
In connection with its obligations pursuant to Section 3(a)
above, NAI will:
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i.
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subject to the
timelines provided in this Agreement, prepare and file with the SEC
the Registration Statement, with respect to the NAI Stock and use
its Best Efforts to cause the Registration Statement to become and
remain effective for the period of the distribution contemplated
thereby (determined as herein provided), promptly notify the
Stockholder of all filings and SEC letters of comment with respect
to the Registration Statement, and make available to the
Stockholder copies of all such filings and SEC letters of comment
to the extent such filings and letters are not publicly available
on the SEC’s EDGAR system;
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ii.
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prepare and
file with the SEC such amendments and supplements to the
Registration Statement and the prospectus contained therein as may
be necessary to keep the Registration Statement continuously
effective pursuant to Rule 415 until such time as all shares
registered under the Registration Statement have been sold or are
otherwise able to be sold under Rule 144 of the Securities Act
without regard to volume limitations, whichever is earlier (the
“Registration Effective Period”), and comply with the
provisions of the Securities Act with respect to the disposition of
all of the Stockholder’s NAI Stock covered by the
Registration Statement in accordance with the Stockholder’s
intended method of disposition set forth in the Registration
Statement for the Registration Effective Period;
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iii.
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make available
to the Stockholder such number of copies of the Registration
Statement and the prospectus included therein (including each
preliminary prospectus) as the Stockholder reasonably may request
to facilitate the public sale or disposition of the securities
covered by the Registration Statement to the extent such documents
are not publicly available on the SEC’s EDGAR
system;
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iv.
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before any
resale of the Stockholder’s NAI Stock registered under the
Registration Statement, use its Best Efforts to register or qualify
(or exempt therefrom) such NAI Stock for resale under the
securities or “blue sky” laws of such jurisdictions as
the Stockholder shall reasonably request in writing, provided,
however, that NAI shall not for any such purpose be required to
qualify generally to transact business as a foreign corporation in
any jurisdiction where it is not then so qualified, consent to
general service of process in any such jurisdiction, or become
subject to any material tax in any such jurisdiction;
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v.
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if applicable,
use its Best Efforts to list the NAI Stock covered by the
Registration Statement with any securities exchange on which the
Common Stock of NAI is then listed; and
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vi.
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as promptly as practicable after
becoming aware of such event, notify the Stockholder of the
happening of any event of which NAI has knowledge as a result of
which the prospectus contained in the Registration Statement, as
then in effect, includes an untrue statement of a material
fact
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or omits to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances then existing.
The Stockholder agrees that, upon receipt of such notice, the
Stockholder will immediately discontinue the disposition of NAI
Stock pursuant to the Registration Statement until NAI has notified
the Stockholder that it has filed with the SEC a supplement or
amendment to the Registration Statement or the prospectus contained
therein to correct such untrue statement or omission; provided
that, for not more than twenty (20) consecutive days, NAI may
delay the disclosure of material, non-public information concerning
NAI (as well as prospectus or Registration Statement updating) the
disclosure of which at the time is not, in the good faith opinion
of NAI, in the best interest of NAI (an “Allowed
Delay”); provided further, that NAI shall promptly
(i) notify the Stockholder in writing of the existence of (but
in no event, without the prior written consent of the Stockholder,
shall NAI disclose to the Stockholder any of the facts or
circumstances regarding) material non-public information giving
rise to an Allowed Delay and (ii) advise the Stockholder in
writing to cease all sales under the Registration Statement until
the end of the Allowed Delay, provided the above actions do not
violate and are otherwise consistent with the requirements of the
Securities Act and/or the Securities Exchange Act of 1934, as
amended (“Exchange Act”) or other applicable law. NAI
shall file with the SEC on or prior to the end of the period
covered by the Allowed Delay a supplement or amendment to the
Registration Statement or the prospectus contained therein to
correct any untrue statement or omission and shall promptly notify
the Stockholder in writing of such filing and the
Stockholder’s ability to resume sales under the Registration
Statement. Notwithstanding the foregoing, NAI may not exercise an
Allowed Delay more than twice in any twelve (12) month
period.
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c. Provision of Documents .
In connection with the registration described in this
Section 3, the Stockholder agrees to furnish to NAI in writing
such information and representation letters with respect to itself
and the proposed distribution by it as may be reasonably requested
by NAI. The Stockholder further agrees to cooperate as reasonably
requested by NAI in connection with the preparation of the
Registration Statement with respect to such registration, and for
so long as NAI is obligated to file and keep effective such
Registration Statement, shall provide NAI, in writing, for use in
the Registration Statement, all such information regarding the
Stockholder and its plan of distribution of the NAI Stock included
in such registration as may be reasonably necessary to enable NAI
to prepare the Registration Statement, to maintain the currency and
effectiveness thereof and otherwise to comply with all applicable
requirements of federal and state law in connection
therewith.
d. Expenses . NAI shall bear
all fees and expenses incurred by NAI in complying with this
Section 3, including, without limitation, all registration and
filing fees, reasonable printing expenses, fees and disbursements
of legal counsel and independent public accountants for NAI, fees
and expenses (including reasonable counsel fees of NAI) incurred in
connection with complying with state securities or “blue
sky” laws, fees of transfer agents and registrars
and
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costs of insurance. In addition, NAI shall bear
or reimburse Sellers for the reasonable fees and disbursements of
one firm of legal counsel for Sellers. All underwriting discounts
and selling commissions applicable to the sale of NAI Stock shall
be borne by the Sellers and may be apportioned among the Sellers in
proportion to the number of shares sold by each Seller relative to
the number of shares sold under the Registration Statement or as
all Sellers thereunder may agree.
e. Indemnification and
Contribution .
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i.
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To the extent
permitted by law, NAI will indemnify and hold harmless the
Stockholder, the partners, officers, directors and legal counsel of
the Stockholder, and each person, if any, who controls the
Stockholder within the meaning of the Securities Act or the
Exchange Act, against any losses, claims, damages, or liabilities
(joint or several) to which the Stockholder becomes subject under
the Securities Act, the Exchange Act or other federal or state law,
insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon any of the
following statements, omissions or violations (collectively a
“Violation”) by NAI: (i) any untrue statement or
alleged untrue statement of a material fact contai
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