Exhibit 10.52

REVOLVING LINE OF CREDIT NOTE

 

$7,500,000.00   San Diego, California   March 16, 2010

FOR VALUE RECEIVED, the undersigned NATURAL ALTERNATIVES INTERNATIONAL, INC.
(“Borrower”) promises to pay to the order of WELLS FARGO BANK, NATIONAL
ASSOCIATION (“Bank”) at its San Diego Regional Commercial Banking Office, 401 B
Street, Suite 2201, San Diego, California, or at such other place as the holder
hereof may designate, in lawful money of the United States of America and in
immediately available funds, the principal sum of Seven Million Five Hundred
Thousand Dollars ($7,500,000.00), or so much thereof as may be advanced and be
outstanding, with interest thereon, to be computed on each advance from the date
of its disbursement as set forth herein.

DEFINITIONS:

As used herein, the following terms shall have the meanings set forth after
each, and any other term defined in this Note shall have the meaning set forth
at the place defined:

(a) “Business Day” means any day except a Saturday, Sunday or any other day on
which commercial banks in California are authorized or required by law to close.

(b) “Daily Three Month LIBOR” means, for any day, the rate of interest equal to
LIBOR then in effect for delivery for a three (3) month period.

(c) “Fixed Rate Term” means a period commencing on a Business Dav and continuing
for 1, 3 or 6 months, as designated by Borrower, during which all or a portion
of the outstanding principal balance of this Note bears interest determined in
relation to LIBOR; provided however, that no Fixed Rate Term may be selected for
a principal amount less than One Hundred Thousand Dollars ($100,000.00); and
provided further, that no Fixed Rate Term shall extend beyond the scheduled
maturity date hereof. If any Fixed Rate Term would end on a day which is not a
Business Day, then such Fixed Rate Term shall be extended to the next succeeding
Business Day.

(d) “LIBOR” means the rate per annum (rounded upward, if necessary, to the
nearest whole  1/8 of 1%) and determined pursuant to the following formula:

 

LIBOR =

   Base LIBOR    100% - LIBOR Base Percentage

(i) “Base LIBOR” means the rate per annum for United States dollar deposits
quoted by Bank (A) for the purpose of calculating effective rates of interest
for loans making reference to LIBOR, as the Inter-Bank Market Offered Rate, with
the understanding that such rate is quoted by Bank for the purpose of
calculating effective rates of interest for loans making reference thereto, on
the first day of a Fixed Rate Term for delivery of funds on said date for a
period of time approximately equal to the number of days in such Fixed Rate Term
and in an amount approximately equal to the principal amount to which such Fixed
Rate Term applies, or (B) for the purpose of calculating effective rates of
interest for loans making reference to the

 

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Daily Three Month LIBOR Rate, as the Inter-Bank Market Offered Rate in effect
from time to time for delivery of funds for three (3) months in amounts
approximately equal to the principal amount of such loans. Borrower understands
and agrees that Bank may base its quotation of the Inter-Bank Market Offered
Rate upon such offers or other market indicators of the lnter-Bank Market as
Bank in its discretion deems appropriate including, but not limited to, the rate
offered for U.S. dollar deposits on the London Inter-Bank Market.

(ii) “LIBOR Reserve Percentage” means the reserve percentage prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for
“Eurocurrency Liabilities” (as defined in Regulation D of the Federal Reserve
Board, as amended), adjusted by Bank for expected changes in such reserve
percentage during the applicable term of this Note.

INTEREST:

(a) Interest. The outstanding principal balance of this Note shall bear interest
(computed on the basis of a 360-day year, actual days elapsed) either (i) at a
fluctuating rate per annum determined by Bank to be two and three-quarters
percent (2.75%) above the Daily Three Month LIBOR Rate in effect from time to
time, or (ii) at a fixed rate per annum determined by Bank to be two and
one-half percent (2.50%) above LIBOR in effect on the first day of the
applicable Fixed Rate Term. When interest is determined in relation to the Daily
Three Month LIBOR Rate, each change in the interest rate shall become effective
each Business Day that the Bank determines that the Daily Three Month LIBOR Rate
has changed. Bank is hereby authorized to note the date, principal amount and
interest rate applicable thereto and any payments made thereon on Bank’s books
and records (either manually or by electronic entry) and/or on any schedule
attached to this Note, which notations shall be prima facie evidence of the
accuracy of the information noted.

(b) Selection of Interest Rate Options. At any time any portion of this Note
bears interest determined in relation to LIBOR for a Fixed Rate Term, it may be
continued by Borrower at the end of the Fixed Rate Term applicable thereto so
that all or a portion thereof bears interest determined in relation to the Daily
Three Month LIBOR Rate or to LIBOR for a new Fixed Rate Term designated by
Borrower. At any time any portion of this Note bears interest determined in
relation to the Daily Three Month LIBOR Rate, Borrower may at any time convert
all or a portion thereof so that it bears interest determined in relation to
LIBOR for a Fixed Rate Term designated by Borrower. At such time as Borrower
requests an advance hereunder or wishes to select an interest rate determined in
relation to the Daily Three Month LIBOR Rate or a Fixed Rate Term for all or a
portion of the outstanding principal balance hereof, and at the end of each
Fixed Rate Term, Borrower shall give Bank notice specifying: (i) the interest
rate option selected by Borrower; (ii) the principal amount subject thereto; and
(iii) for each LIBOR selection for a Fixed Rate Term, the length of the
applicable Fixed Rate Term. Any such notice may be given by telephone (or such
other electronic method as Bank may permit) so long as, with respect to each
LIBOR selection for a Fixed Rate Term, (A) if requested by Bank, Borrower
provides to Bank written confirmation thereof not later than three (3) Business
Days after such notice is given, and (B) such notice is given to Bank prior to
10:00 a.m. on the first day of the Fixed Rate Term, or at a later time during
any Business Day if Bank, at its sole option but without obligation to do so,
accepts Borrower’s notice and quotes a fixed rate to Borrower. If Borrower does
not immediately accept a fixed rate when quoted by Bank, the quoted rate shall
expire and any subsequent LIBOR request from Borrower shall be subject to a
redetermination by Bank of the applicable fixed rate. If no specific designation
of interest is made at the time

 

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any advance is requested hereunder or at the end of any Fixed Rate Term,
Borrower shall be deemed to have made a Daily Three Month LIBOR Rate interest
selection for such advance or the principal amount to which such Fixed Rate Term
applied.

(c) Taxes and Regulatory Costs. Borrower shall pay to Bank immediately upon
demand, in addition to any other amounts due or to become due hereunder, any and
all (i) withholdings, interest equalization taxes, stamp taxes or other taxes
(except income and franchise taxes) imposed by any domestic or foreign
governmental authority and related in any manner to LIBOR, and (ii) future,
supplemental, emergency or other changes in the LIBOR Reserve Percentage,
assessment rates imposed by the Federal Deposit Insurance Corporation, or
similar requirements or costs imposed by any domestic or foreign governmental
authority or resulting from compliance by Bank with any request or directive
(whether or not having the force of law) from any central bank or other
governmental authority and related in any manner to LIBOR to the extent they are
not included in the calculation of LIBOR. In determining which of the foregoing
are attributable to any LIBOR option available to Borrower hereunder, any
reasonable allocation made by Bank among its operations shall be conclusive and
binding upon Borrower.

(d) Payment of Interest. Interest accrued on this Note shall be payable on the
1st day of each month, commencing April 1, 2010.

(e) Default Interest. From and after the maturity date of this Note, or such
earlier date as all principal owing hereunder becomes due and payable by
acceleration or otherwise, or at Bank’s option upon the occurrence, and during
the continuance of an Event of Default, the outstanding principal balance of
this Note shall bear interest at an increased rate per annum (computed on the
basis of a 360-day year, actual days elapsed) equal to four percent (4%) above
the rate of interest from time to time applicable to this Note.

BORROWING AND REPAYMENT:

(a) Borrowing and Repayment. Borrower may from time to time during the term of
this Note borrow, partially or wholly repay its outstanding borrowings, and
reborrow, subject to all of the limitations, terms and conditions of this Note
and of any document executed in connection with or governing this Note; provided
however, that the total outstanding borrowings under this Note shall not at any
time exceed the principal amount stated above. The unpaid principal balance of
this obligation at any time shall be the total amounts advanced hereunder by the
holder hereof less the amount of principal payments made hereon by or for
Borrower, which balance may be endorsed hereon from time to time by the holder.
The outstanding principal balance of this Note shall be due and payable in full
on November 1, 2011.

(c) Advances. Advances hereunder, to the total amount of the principal sum
stated above, may be made by the holder at the oral or written request of
(i) Mark A. LeDoux or Kenneth E. Wolf, any one acting alone, who are authorized
to request advances and direct the disposition of any advances until written
notice of the revocation of such authority is received by the holder at the
office designated above, or (ii) any person, with respect to advances deposited
to the credit of any deposit account of Borrower, which advances, when so
deposited, shall be conclusively presumed to have been made to or for the
benefit of Borrower regardless of the fact that persons other than those
authorized to request advances may have authority to draw against such account.
The holder shall have no obligation to determine whether any person requesting
an advance is or has been authorized by Borrower.

 

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(d) Application of Payments. Each payment made on this Note shall be credited
first, to any interest then due and second, to the outstanding principal balance
hereof.

PREPAYMENT:

(a) Daily Three Month LIBOR Rate. Borrower may prepay principal on any portion
of this Note which bears interest determined in relation to the Daily Three
Month LIBOR Rate at any time, in any amount and without penalty.

(b) LIBOR. Borrower may prepay principal on any portion of this Note which bears
interest determined in relation to LIBOR at any time and in the minimum amount
of One Hundred Thousand Dollars ($100,000.00); provided however, that if the
outstanding principal balance of such portion of this Note is less than said
amount, the minimum prepayment amount shall be the entire outstanding principal
balance thereof. In consideration of Bank providing this prepayment option to
Borrower, or if any such portion of this Note shall become due and payable at
any time prior to the last day of the Fixed Rate Term applicable thereto by
acceleration or otherwise, Borrower shall pay to Bank immediately upon demand a
fee which is the sum of the discounted monthly differences for each month from
the month of prepayment through the month in which such Fixed Rate Term matures,
calculated as follows for each such month:

 

  (i) Determine the amount of interest which would have accrued each month on
the amount prepaid at the interest rate applicable to such amount had it
remained outstanding until the last day of the Fixed Rate Term applicable
thereto.

 

  (ii) Subtract from the amount determined in (i) above the amount of interest
which would have accrued for the same month on the amount prepaid for the
remaining term of such Fixed Rate Term at LIBOR in effect on the date of
prepayment for new loans made for such term and in a principal amount equal to
the amount prepaid.

 

  (iii) If the result obtained in (ii) for any month is greater than zero,
discount that difference by LIBOR used in (ii) above.

Borrower acknowledges that prepayment of such amount may result in Bank
incurring additional costs, expenses and/or liabilities, and that it is
difficult to ascertain the full extent of such costs, expenses and/or
liabilities. Borrower, therefore, agrees to pay the above-described prepayment
fee and agrees that said amount represents a reasonable estimate of the
prepayment costs, expenses and/or liabilities of Bank. If Borrower fails to pay
any prepayment fee when due, the amount of such prepayment fee shall thereafter
bear interest until paid at a rate per annum two percent (2.00%) above the Daily
Three Month LIBOR Rate in effect from time to time (computed on the basis of a
360-day year, actual days elapsed).

EVENTS OF DEFAULT:

This Note is made pursuant to and is subject to the terms and conditions of that
certain Credit Agreement between Borrower and Bank dated as of May 1, 2004, as
amended from time to time (the “Credit Agreement”). Any default in the payment
or performance of any obligation under this Note, or any defined event of
default under the Credit Agreement, shall constitute an “Event of Default” under
this Note.

 

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MISCELLANEOUS:

(a) Remedies. Upon the occurrence of any Event of Default, the holder of this
Note, at the holder’s option, may declare all sums of principal and interest
outstanding hereunder to be immediately due and payable without presentment,
demand, notice of nonperformance, notice of protest, protest or notice of
dishonor, all of which are expressly waived by Borrower, and the obligation, if
any, of the holder to extend any further credit hereunder shall immediately
cease and terminate. Borrower shall pay to the holder immediately upon demand
the full amount of all payments, advances, charges, costs and expenses,
including reasonable attorneys’ fees (to include outside counsel fees and all
allocated costs of the holder’s in-house counsel), expended or incurred by the
holder in connection with the enforcement of the holder’s rights and/or the
collection of any amounts which become due to the holder under this Note, and
the prosecution or defense of any action in any way related to this Note,
including without limitation, any action for declaratory relief, whether
incurred at the trial or appellate level, in an arbitration proceeding or
otherwise, and including any of the foregoing incurred in connection with any
bankruptcy proceeding (including without limitation, any adversary proceeding,
contested matter or motion brought by Bank or any other person) relating to
Borrower or any other person or entity.

(b) Obligations Joint and Several. Should more than one person or entity sign
this Note as a Borrower, the obligations of each such Borrower shall be joint
and several.

(c) Governing Law. This Note shall be governed by and construed in accordance
with the laws of the State of California.

IN WITNESS WHEREOF, the undersigned has executed this Note as of the date first
written above.

NATURAL ALTERNATIVES INTERNATIONAL, INC.

 

By:   /S/ MARK A. LEDOUX  

Mark A. LeDoux

Chairman, Chief Executive Officer

 

By:   /S/ KENNETH E. WOLF  

Kenneth E. Wolf

Chief Financial Officer, Secretary

 

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ADDENDUM TO PROMISSORY NOTE

(LIBOR PRICING ADJUSTMENTS)

THIS ADDENDUM is attached to and made a part of that certain promissory note
executed by NATURAL ALTERNATIVES INTERNATIONAL, INC. (“Borrower”) and payable to
WELLS FARGO BANK, NATIONAL ASSOCIATION (“Bank”), or order, dated as of March 16,
2010, in the principal amount of Seven Million Five Hundred Thousand Dollars
($7,500,000.00) (the “Note”).

The following provisions are hereby incorporated into the Note to reflect the
interest rate adjustments agreed to by Bank and Borrower:

INTEREST RATE ADJUSTMENTS:

(a) Initial LIBOR Margin. The initial LIBOR margin applicable to this Note shall
be as set forth in the “Interest” paragraph herein.

(b) LIBOR Rate Adjustments. Bank shall adjust the (a) annual fee, and (b) LIBOR
margin used to determine the rate of interest applicable to Daily Three Month
LIBOR or the LIBOR options selected by Borrower under this Note on a quarterly
basis, commencing with Borrower’s fiscal quarter ending June 30, 2009, if
required to reflect a change in Borrower’s ratio of Fixed Charge Coverage Ratio
(as defined in the Credit Agreement referenced herein), in accordance with the
following grid:

 

Fixed Charge Coverage Ratio

   Applicable
LIBOR
Margin    Applicable
Daily Three Month LIBOR
Margin    Annual
Fee
Margin

2.5 to 1.0 or greater

   2.50%    2.75%    0.25%

at least 1.75 to 1.0 but

less than 2.5 to 1.0

   3.00%    3.25%    0.50%

at least 1.25 to 1.0 but

less than 1.75 to 1.0

   3.50%    3.75%    1.00%

less than 1.25 to 1.0

   4.00%    4.25%    1.50%

Each such adjustment shall be effective on the first Business Day of Borrower’s
fiscal quarter following the quarter during which Bank receives and reviews
Borrower’s most current quarter-end financial statements in accordance with any
requirements established by Bank for the preparation and delivery thereof.

 

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IN WITNESS WHEREOF, this Addendum has been executed as of the same date as the
Note.

NATURAL ALTERNATIVES INTERNATIONAL, INC.

 

By:   /S/ MARK A. LEDOUX  

Mark A. LeDoux

Chairman, Chief Executive Officer

 

By:   /S/ KENNETH E. WOLF  

Kenneth E. Wolf

Chief Financial Officer, Secretary

 

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