Document:

Exhibit 10.1

NAVIOS MARITIME HOLDINGS INC.

2006 EMPLOYEE, DIRECTOR AND CONSULTANT STOCK PLAN

		
	1. 	DEFINITIONS.

Unless otherwise specified or unless the context otherwise requires, the following terms, as used in this Navios Maritime Holdings Inc. 2006 Employee, Director and Consultant Stock Plan, have the following meanings:

Administrator means the Board of Directors, unless it has delegated power to act on its behalf to the Committee, in which case the Administrator means the Committee.

Affiliate means a corporation which, for purposes of Section 424 of the Code, is a parent or subsidiary of the Company, direct or indirect.

Agreement means an agreement between the Company and a Participant delivered pursuant to the Plan, in such form as the Administrator shall approve.

Board of Directors means the Board of Directors of the Company.

Change of Control means the occurrence of any of the following events:

			
		(i) 	Ownership.    Any ‘‘Person’’ (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) becomes the ‘‘Beneficial Owner’’ (as defined in Rule 13d-3 under said Act), directly or indirectly, of securities of the Company representing 50% or more of the total voting power represented by the Company’s then outstanding voting securities (excluding for this purpose any such voting securities held by the Company or its Affiliates or by any employee benefit plan of the Company) pursuant to a transaction or a series of related transactions which the Board of Directors does not approve; or

			
		(ii) 	Merger/Sale of Assets.    (A) A merger or consolidation of the Company whether or not approved by the Board of Directors, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or the parent of such corporation) at least 50% of the total voting power represented by the voting securities of the Company or such surviving entity or parent of such corporation, as the case may be, outstanding immediately after such merger or consolidation; or (B) the stockholders of the Company approve an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets; or

			
		(iii) 	Change in Board Composition.    A change in the composition of the Board of Directors, as a result of which fewer than a majority of the directors are Incumbent Directors. ‘‘Incumbent Directors’’ shall mean directors who either (A) are directors of the Company as of November 13, 2006, or (B) are elected, or nominated for election, to the Board of Directors with the affirmative votes of at least a majority of the Incumbent Directors at the time of such election or nomination (but shall not include an individual whose election or nomination is in connection with an actual or threatened proxy contest relating to the election of directors to the Company).

Code means the United States Internal Revenue Code of 1986, as amended.

Committee means the committee of the Board of Directors to which the Board of Directors has delegated power to act under or pursuant to the provisions of the Plan.

Common Stock means shares of the Company’s common stock, $.0001 par value per share.

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Company means Navios Maritime Holdings Inc., a Marshall Islands corporation.

Disability or Disabled means permanent and total disability as defined in Section 22(e)(3) of the Code.

Employee means any employee of the Company or of an Affiliate (including, without limitation, an employee who is also serving as an officer or director of the Company or of an Affiliate), designated by the Administrator to be eligible to be granted one or more Stock Rights under the Plan.

Fair Market Value of a Share of Common Stock means:

			
		(1) 	If the Common Stock is listed on a national securities exchange or traded in the over-the-counter market and sales prices are regularly reported for the Common Stock, the closing or last price of the Common Stock on the composite tape or other comparable reporting system for the trading day on the applicable date and if such applicable date is not a trading day, the last market trading day prior to such date;

			
		(2) 	If the Common Stock is not traded on a national securities exchange but is traded on the over-the-counter market, if sales prices are not regularly reported for the Common Stock for the trading day referred to in clause (1), and if bid and asked prices for the Common Stock are regularly reported, the mean between the bid and the asked price for the Common Stock at the close of trading in the over-the-counter market for the trading day on which Common Stock was traded on the applicable date and if such applicable date is not a trading day, the last market trading day prior to such date; and

			
		(3) 	If the Common Stock is neither listed on a national securities exchange nor traded in the over-the-counter market, such value as the Administrator , in good faith, shall determine.

ISO means an option meant to qualify as an incentive stock option under Section 422 of the Code.

Non-Qualified Option means an option which is not intended to qualify as an ISO.

Option means an ISO or Non-Qualified Option granted under the Plan.

Participant means an Employee, director or consultant of the Company or an Affiliate to whom one or more Stock Rights are granted under the Plan. As used herein, ‘‘Participant’’ shall include ‘‘Participant’s Survivors’’ where the context requires.

Plan means this Navios Maritime Holdings Inc. 2006 Employee, Director and Consultant Stock Plan.

Shares means shares of the Common Stock as to which Stock Rights have been or may be granted under the Plan or any shares of capital stock into which the Shares are changed or for which they are exchanged within the provisions of Paragraph 3 of the Plan. The Shares issued under the Plan may be authorized and unissued shares or shares held by the Company in its treasury, or both.

Stock-Based Award means a grant by the Company under the Plan of an equity award or an equity based award which is not an Option or a Stock Grant.

Stock Grant means a grant by the Company of Shares under the Plan.

Stock Right means a right to Shares or the value of Shares of the Company granted pursuant to the Plan — an ISO, a Non-Qualified Option, a Stock Grant or a Stock-Based Award.

Survivor means a deceased Participant’s legal representatives and/or any person or persons who acquired the Participant’s rights to a Stock Right by will or by the laws of descent and distribution.

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	2. 	PURPOSES OF THE PLAN.

The Plan is intended to encourage ownership of Shares by Employees and directors of and certain consultants to the Company in order to attract and retain such people, to induce them to work for the benefit of the Company or of an Affiliate and to provide additional incentive for them to promote the success of the Company or of an Affiliate. The Plan provides for the granting of ISOs, Non-Qualified Options, Stock Grants and Stock-Based Awards.

		
	3. 	SHARES SUBJECT TO THE PLAN.

			
		(a) 	The number of Shares which may be issued from time to time pursuant to this Plan shall be 10,000,000, or the equivalent of such number of Shares after the Administrator, in its sole discretion, has interpreted the effect of any stock split, stock dividend, combination, recapitalization or similar transaction in accordance with Paragraph 24 of the Plan.

			
		 (b) 	If an Option ceases to be ‘‘outstanding’’, in whole or in part (other than by exercise), or if the Company shall reacquire (at not more than its original issuance price) any Shares issued pursuant to a Stock Grant or Stock-Based Award, or if any Stock Right expires or is forfeited, cancelled, or otherwise terminated or results in any Shares not being issued, the unissued Shares which were subject to such Stock Right shall again be available for issuance from time to time pursuant to this Plan. Notwithstanding the foregoing, if a Stock Right is exercised, in whole or in part, by tender of Shares or if the Company’s tax withholding obligation is satisfied by withholding Shares, the number of Shares deemed to have been issued under the Plan for purposes of the limitation set forth in Paragraph 3(a) above shall be the number of Shares that were subject to the Stock Right or portion thereof, and not the net number of Shares actually issued.

		
	4. 	ADMINISTRATION OF THE PLAN.

The Administrator of the Plan will be the Board of Directors, except to the extent the Board of Directors delegates its authority to the Committee, in which case the Committee shall be the Administrator. Subject to the provisions of the Plan, the Administrator is authorized to:

			
		a. 	Interpret the provisions of the Plan and all Stock Rights and to make all rules and determinations which it deems necessary or advisable for the administration of the Plan;

			
		b. 	Determine which Employees, directors and consultants shall be granted Stock Rights;

			
		c. 	Determine the number of Shares for which a Stock Right or Stock Rights shall be granted, provided, however, that in no event shall Stock Rights with respect to more than 500,000 Shares be granted to any Participant in any fiscal year;

			
		d. 	Specify the terms and conditions upon which a Stock Right or Stock Rights may be granted; and

			
		e. 	Adopt any sub-plans applicable to residents of any specified jurisdiction as it deems necessary or appropriate in order to comply with or take advantage of any tax or other laws applicable to the Company or to Plan Participants or to otherwise facilitate the administration of the Plan, which sub-plans may include additional restrictions or conditions applicable to Stock Rights or Shares issuable pursuant to a Stock Right;

provided, however, that all such interpretations, rules, determinations, terms and conditions shall be made and prescribed in the context of preserving the tax status under Section 422 of the Code of those Options which are designated as ISOs. Subject to the foregoing, the interpretation and construction by the Administrator of any provisions of the Plan or of any Stock Right granted under it shall be final, unless otherwise determined by the Board of Directors, if the Administrator is the Committee. In addition, if the Administrator is the Committee, the Board of Directors may take any action under the Plan that would otherwise be the responsibility of the Committee.

To the extent permitted under applicable law, the Board of Directors or the Committee may allocate all or any portion of its responsibilities and powers to any one or more of its members and 

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may delegate all or any portion of its responsibilities and powers to any other person selected by it. The Board of Directors or the Committee may revoke any such allocation or delegation at any time.

		
	5. 	ELIGIBILITY FOR PARTICIPATION.

The Administrator will, in its sole discretion, name the Participants in the Plan, provided, however, that each Participant must be an Employee, director or consultant of the Company or of an Affiliate at the time a Stock Right is granted. Notwithstanding the foregoing, the Administrator may authorize the grant of a Stock Right to a person not then an Employee, director or consultant of the Company or of an Affiliate; provided, however, that the actual grant of such Stock Right shall be conditioned upon such person becoming eligible to become a Participant at or prior to the time of the execution of the Agreement evidencing such Stock Right. ISOs may be granted only to Employees. Non-Qualified Options, Stock Grants and Stock-Based Awards may be granted to any Employee, director or consultant of the Company or an Affiliate. The granting of any Stock Right to any individual shall neither entitle that individual to, nor disqualify him or her from, participation in any other grant of Stock Rights.

6.    TERMS AND CONDITIONS OF OPTIONS.

Each Option shall be set forth in writing in an Option Agreement, duly executed by the Company and, to the extent required by law or requested by the Company, by the Participant. The Administrator may provide that Options be granted subject to such terms and conditions, consistent with the terms and conditions specifically required under this Plan, as the Administrator may deem appropriate including, without limitation, subsequent approval by the shareholders of the Company of this Plan or any amendments thereto. The Option Agreements shall be subject to at least the following terms and conditions:

			
		a. 	Non-Qualified Options:    Each Option intended to be a Non-Qualified Option shall be subject to the terms and conditions which the Administrator determines to be appropriate and in the best interest of the Company, subject to the following minimum standards for any such Non-Qualified Option:

			
		i. 	Option Price:    Each Option Agreement shall state the option price (per share) of the Shares covered by each Option, which option price shall be determined by the Administrator but shall not be less than the Fair Market Value per share of Common Stock.

			
		ii. 	Number of Shares:    Each Option Agreement shall state the number of Shares to which it pertains.

			
		iii. 	Option Periods:    Each Option Agreement shall state the date or dates on which it first is exercisable and the date after which it may no longer be exercised, and may provide that the Option rights accrue or become exercisable in installments over a period of months or years, or upon the occurrence of certain conditions or the attainment of stated goals or events.

			
		iv. 	Option Conditions:    Exercise of any Option may be conditioned upon the Participant’s execution of a Share purchase agreement in form satisfactory to the Administrator providing for certain protections for the Company and its other shareholders, including requirements that:

			
		A. 	The Participant’s or the Participant’s Survivors’ right to sell or transfer the Shares may be restricted; and

			
		B. 	The Participant or the Participant’s Survivors may be required to execute letters of investment intent and must also acknowledge that the Shares will bear legends noting any applicable restrictions.

			
		b. 	ISOs:    Each Option intended to be an ISO shall be issued only to an Employee and be subject to the following terms and conditions, with such additional restrictions or changes as the Administrator determines are appropriate but not in conflict with Section 422 of the Code and relevant regulations and rulings of the Internal Revenue Service:

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		i. 	Minimum standards:    The ISO shall meet the minimum standards required of Non-Qualified Options, as described in Paragraph 6(a) above.

			
		ii. 	Option Price:    Immediately before the ISO is granted, if the Participant owns, directly or by reason of the applicable attribution rules in Section424(d) of the Code:

			
		A. 	10% or less of the total combined voting power of all classes of stock of the Company or an Affiliate, the Option price per share of the Shares covered by each ISO shall not be less than 100% of the Fair Market Value per share of the Shares on the date of the grant of the Option; or

			
		B. 	More than 10% of the total combined voting power of all classes of stock of the Company or an Affiliate, the Option price per share of the Shares covered by each ISO shall not be less than 110% of the Fair Market Value on the date of grant.

			
		iii. 	Term of Option:    For Participants who own:

			
		A. 	10% or less of the total combined voting power of all classes of stock of the Company or an Affiliate, each ISO shall terminate not more than ten years from the date of the grant or at such earlier time as the Option Agreement may provide; or

			
		B. 	More than 10% of the total combined voting power of all classes of stock of the Company or an Affiliate, each ISO shall terminate not more than five years from the date of the grant or at such earlier time as the Option Agreement may provide.

			
		iv. 	Limitation on Yearly Exercise:    The Option Agreements shall restrict the amount of ISOs which may become exercisable in any calendar year (under this or any other ISO plan of the Company or an Affiliate) so that the aggregate Fair Market Value (determined at the time each ISO is granted) of the stock with respect to which ISOs are exercisable for the first time by the Participant in any calendar year does not exceed $100,000.

		
	7. 	TERMS AND CONDITIONS OF STOCK GRANTS.

Each offer of a Stock Grant to a Participant shall state the date prior to which the Stock Grant must be accepted by the Participant, and the principal terms of each Stock Grant shall be set forth in an Agreement, duly executed by the Company and, to the extent required by law or requested by the Company, by the Participant. The Agreement shall be in a form approved by the Administrator and shall contain terms and conditions which the Administrator determines to be appropriate and in the best interest of the Company, subject to the following minimum standards:

			
		(a) 	Each Agreement shall state the purchase price (per share), if any, of the Shares covered by each Stock Grant, which purchase price shall be determined by the Administrator but shall not be less than the minimum consideration required by the Marshall Islands Corporation Law, if any, on the date of the grant of the Stock Grant;

			
		(b) 	Each Agreement shall state the number of Shares to which the Stock Grant pertains; and

			
		(c) 	Each Agreement shall include the terms of any right of the Company to restrict or reacquire the Shares subject to the Stock Grant, including the time and events upon which such rights shall accrue and the purchase price therefor, if any.

		
	8. 	TERMS AND CONDITIONS OF OTHER STOCK-BASED AWARDS.

The Administrator shall have the right to grant other Stock-Based Awards based upon the Common Stock having such terms and conditions as the Administrator may determine, including, without limitation, the grant of Shares based upon certain conditions, the grant of securities convertible into Shares and the grant of stock appreciation rights, phantom stock awards or stock units. The principal terms of each Stock-Based Award shall be set forth in an Agreement, duly executed by the Company and, to the extent required by law or requested by the Company, by the Participant. The Agreement shall be in a form approved by the Administrator and shall contain terms and conditions which the Administrator determines to be appropriate and in the best interest of the Company.

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	9. 	EXERCISE OF OPTIONS AND ISSUE OF SHARES.

An Option (or any part or installment thereof) shall be exercised by giving written notice to the Company or its designee, together with provision for payment of the full purchase price in accordance with this Paragraph for the Shares as to which the Option is being exercised, and upon compliance with any other condition(s) set forth in the Option Agreement. Such notice shall be signed by the person exercising the Option, shall state the number of Shares with respect to which the Option is being exercised and shall contain any representation required by the Plan or the Option Agreement. Payment of the purchase price for the Shares as to which such Option is being exercised shall be made (a) in United States dollars in cash or by check, or (b) at the discretion of the Administrator, through delivery of shares of Common Stock having a Fair Market Value equal as of the date of the exercise to the cash exercise price of the Option and held for at least six months, or (c) at the discretion of the Administrator, by having the Company retain from the shares otherwise issuable upon exercise of the Option, a number of shares having a Fair Market Value equal as of the date of exercise to the exercise price of the Option, or (d) at the discretion of the Administrator, in accordance with a cashless exercise program established with a securities brokerage firm, and approved by the Administrator, or (e) at the discretion of the Administrator, by any combination of (a), (b), (c) and (d) above or (f) above at the discretion of the Administrator, payment of such other lawful consideration as the Administrator may determine. Notwithstanding the foregoing, the Administrator shall accept only such payment on exercise of an ISO as is permitted by Section 422 of the Code.

The Company shall then reasonably promptly deliver the Shares as to which such Option was exercised to the Participant (or to the Participant’s Survivors, as the case may be). In determining what constitutes ‘‘reasonably promptly,’’ it is expressly understood that the issuance and delivery of the Shares may be delayed by the Company in order to comply with any law or regulation (including, without limitation, state securities or ‘‘blue sky’’ laws) which requires the Company to take any action with respect to the Shares prior to their issuance. The Shares shall, upon delivery, be fully paid, non-assessable Shares.

The Administrator shall have the right to accelerate the date of exercise of any installment of any Option; provided that the Administrator shall not accelerate the exercise date of any installment of any Option granted to an Employee as an ISO (and not previously converted into a Non-Qualified Option pursuant to Paragraph 27) without the prior approval of the Employee if such acceleration would violate the annual vesting limitation contained in Section 422(d) of the Code, as described in Paragraph 6(b)(iv).

The Administrator may, in its discretion, amend any term or condition of an outstanding Option provided (i) such term or condition as amended is permitted by the Plan, (ii) any such amendment shall be made only with the consent of the Participant to whom the Option was granted, or in the event of the death of the Participant, the Participant’s Survivors, if the amendment is adverse to the Participant, and (iii) any such amendment of any Option shall be made only after the Administrator determines whether such amendment would constitute a ‘‘modification’’ of any Option which is an ISO (as that term is defined in Section 424(h) of the Code) or would cause any adverse tax consequences for the holder of such Option including, but not limited to, pursuant to Section 409A of the Code.

		
	10. 	ACCEPTANCE OF STOCK GRANTS AND STOCK-BASED AWARDS AND ISSUE OF SHARES.

A Stock Grant or Stock-Based Award (or any part or installment thereof) shall be accepted by executing the applicable Agreement and delivering it to the Company or its designee, together with provision for payment of the full purchase price, if any, in accordance with this Paragraph for the Shares as to which such Stock Grant or Stock-Based Award is being accepted, and upon compliance with any other conditions set forth in the applicable Agreement. Payment of the purchase price for the Shares as to which such Stock Grant or Stock-Based Award is being accepted shall be made (a) in United States dollars in cash or by check, or (b) at the discretion of the Administrator, through delivery of shares of Common Stock held for at least six months and having a Fair Market Value 

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equal as of the date of acceptance of the Stock Grant or Stock Based-Award to the purchase price of the Stock Grant or Stock-Based Award, or (c) at the discretion of the Administrator, by any combination of (a) and (b) abovem, or (d) at the discretion of the Administrator, payment of such other lawful consideration as the Administrator may determine.

The Company shall then, if required by the applicable Agreement, reasonably promptly deliver the Shares as to which such Stock Grant or Stock-Based Award was accepted to the Participant (or to the Participant’s Survivors, as the case may be), subject to any escrow provision set forth in the applicable Agreement. In determining what constitutes ‘‘reasonably promptly,’’ it is expressly understood that the issuance and delivery of the Shares may be delayed by the Company in order to comply with any law or regulation (including, without limitation, state securities or ‘‘blue sky’’ laws) which requires the Company to take any action with respect to the Shares prior to their issuance.

The Administrator may, in its discretion, amend any term or condition of an outstanding Stock Grant, Stock-Based Award or applicable Agreement provided (i) such term or condition as amended is permitted by the Plan, and (ii) any such amendment shall be made only with the consent of the Participant to whom the Stock Grant or Stock-Based Award was made, if the amendment is adverse to the Participant.

		
	11. 	RIGHTS AS A SHAREHOLDER.

No Participant to whom a Stock Right has been granted shall have rights as a shareholder with respect to any Shares covered by such Stock Right, except after due exercise of the Option or acceptance of the Stock Grant or as set forth in any Agreement, and tender of the full purchase price, if any, for the Shares being purchased pursuant to such exercise or acceptance and registration of the Shares in the Company’s share register in the name of the Participant.

		
	12. 	ASSIGNABILITY AND TRANSFERABILITY OF STOCK RIGHTS.

By its terms, a Stock Right granted to a Participant shall not be transferable by the Participant other than (i) by will or by the laws of descent and distribution, or (ii) as approved by the Administrator in its discretion and set forth in the applicable Agreement. Notwithstanding the foregoing, an ISO transferred except in compliance with clause (i) above shall no longer qualify as an ISO. The designation of a beneficiary of a Stock Right by a Participant, with the prior approval of the Administrator and in such form as the Administrator shall prescribe, shall not be deemed a transfer prohibited by this Paragraph. Except as provided above, a Stock Right shall only be exercisable or may only be accepted, during the Participant’s lifetime, by such Participant (or by his or her legal representative) and shall not be assigned, pledged or hypothecated in any way (whether by operation of law or otherwise) and shall not be subject to execution, attachment or similar process. Any attempted transfer, assignment, pledge, hypothecation or other disposition of any Stock Right or of any rights granted thereunder contrary to the provisions of this Plan, or the levy of any attachment or similar process upon a Stock Right, shall be null and void.

	13.	EFFECT ON OPTIONS OF TERMINATION OF SERVICE OTHER THAN ‘‘FOR CAUSE’’ OR DEATH OR DISABILITY.

Except as otherwise provided in a Participant’s Option Agreement, in the event of a termination of service (whether as an employee, director or consultant) with the Company or an Affiliate before the Participant has exercised an Option, the following rules apply:

			
		a. 	A Participant who ceases to be an employee, director or consultant of the Company or of an Affiliate (for any reason other than termination ‘‘for cause’’, Disability, or death for which events there are special rules in Paragraphs 14, 15, and 16, respectively), may exercise any Option granted to him or her to the extent that the Option is exercisable on the date of such termination of service, but only within such term as the Administrator has designated in a Participant’s Option Agreement.

			
		b. 	Except as provided in Subparagraph (c) below, or Paragraph 15 or 16, in no event may an Option intended to be an ISO, be exercised later than three months after the Participant’s termination of employment.

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		c. 	The provisions of this Paragraph, and not the provisions of Paragraph 15 or 16, shall apply to a Participant who subsequently becomes Disabled or dies after the termination of employment, director status or consultancy; provided, however, in the case of a Participant’s Disability or death within three months after the termination of employment, director status or consultancy, the Participant or the Participant’s Survivors may exercise the Option within one year after the date of the Participant’s termination of service, but in no event after the date of expiration of the term of the Option.

			
		d. 	Notwithstanding anything herein to the contrary, if subsequent to a Participant’s termination of employment, termination of director status or termination of consultancy, but prior to the exercise of an Option, the Board of Directors determines that, either prior or subsequent to the Participant’s termination, the Participant engaged in conduct which would constitute ‘‘cause’’, then such Participant shall forthwith cease to have any right to exercise any Option.

			
		e. 	A Participant to whom an Option has been granted under the Plan who is absent from the Company or an Affiliate because of temporary disability (any disability other than a Disability as defined in Paragraph 1 hereof), or who is on leave of absence for any purpose, shall not, during the period of any such absence, be deemed, by virtue of such absence alone, to have terminated such Participant’s employment, director status or consultancy with the Company or with an Affiliate, except as the Administrator may otherwise expressly provide.

			
		f. 	Except as required by law or as set forth in a Participant’s Option Agreement, Options granted under the Plan shall not be affected by any change of a Participant’s status within or among the Company and any Affiliates, so long as the Participant continues to be an employee, director or consultant of the Company or any Affiliate.

		
	14. 	EFFECT ON OPTIONS OF TERMINATION OF SERVICE ‘‘FOR CAUSE’’.

Except as otherwise provided in a Participant’s Option Agreement, the following rules apply if the Participant’s service (whether as an employee, director or consultant) with the Company or an Affiliate is terminated ‘‘for cause’’ prior to the time that all his or her outstanding Options have been exercised:

			
		a. 	All outstanding and unexercised Options as of the time the Participant is notified his or her service is terminated ‘‘for cause’’ will immediately be forfeited.

			
		b. 	For purposes of this Plan, ‘‘cause’’ shall include (and is not limited to) dishonesty with respect to the Company or any Affiliate, insubordination, substantial malfeasance or non-feasance of duty, unauthorized disclosure of confidential information, breach by the Participant of any provision of any employment, consulting, advisory, nondisclosure, non-competition or similar agreement between the Participant and the Company, and conduct substantially prejudicial to the business of the Company or any Affiliate. The determination of the Administrator as to the existence of ‘‘cause’’ will be conclusive on the Participant and the Company.

			
		c. 	‘‘Cause’’ is not limited to events which have occurred prior to a Participant’s termination of service, nor is it necessary that the Administrator’s finding of ‘‘cause’’ occur prior to termination. If the Administrator determines, subsequent to a Participant’s termination of service but prior to the exercise of an Option, that either prior or subsequent to the Participant’s termination the Participant engaged in conduct which would constitute ‘‘cause’’, then the right to exercise any Option is forfeited.

			
		d. 	Any provision in an agreement between the Participant and the Company or an Affiliate, which contains a conflicting definition of ‘‘cause’’ for termination and which is in effect at the time of such termination, shall supersede the definition in this Plan with respect to that Participant.

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	15. 	EFFECT ON OPTIONS OF TERMINATION OF SERVICE FOR DISABILITY.

Except as otherwise provided in a Participant’s Option Agreement:

			
		a. 	A Participant who ceases to be an employee, director or consultant of the Company or of an Affiliate by reason of Disability may exercise any Option granted to such Participant:

			
		(i) 	To the extent that the Option has become exercisable but has not been exercised on the date of Disability; and

			
		(ii) 	In the event rights to exercise the Option accrue periodically, to the extent of a pro rata portion through the date of Disability of any additional vesting rights that would have accrued on the next vesting date had the Participant not become Disabled. The proration shall be based upon the number of days accrued in the current vesting period prior to the date of Disability.

			
		b. 	A Disabled Participant may exercise such rights only within the period ending one year after the date of the Participant’s Disability, notwithstanding that the Participant might have been able to exercise the Option as to some or all of the Shares on a later date if the Participant had not become Disabled and had continued to be an employee, director or consultant or, if earlier, within the originally prescribed term of the Option.

			
		c. 	The Administrator shall make the determination both of whether Disability has occurred and the date of its occurrence (unless a procedure for such determination is set forth in another agreement between the Company and such Participant, in which case such procedure shall be used for such determination). If requested, the Participant shall be examined by a physician selected or approved by the Administrator, the cost of which examination shall be paid for by the Company.

		
	16. 	EFFECT ON OPTIONS OF DEATH WHILE AN EMPLOYEE, DIRECTOR OR CONSULTANT.

Except as otherwise provided in a Participant’s Option Agreement:

			
		a. 	In the event of the death of a Participant while the Participant is an employee, director or consultant of the Company or of an Affiliate, such Option may be exercised by the Participant’s Survivors:

			
		(i) 	To the extent that the Option has become exercisable but has not been exercised on the date of death; and

			
		(ii) 	In the event rights to exercise the Option accrue periodically, to the extent of a pro rata portion through the date of death of any additional vesting rights that would have accrued on the next vesting date had the Participant not died. The proration shall be based upon the number of days accrued in the current vesting period prior to the Participant’s date of death.

			
		b. 	If the Participant’s Survivors wish to exercise the Option, they must take all necessary steps to exercise the Option within one year after the date of death of such Participant, notwithstanding that the decedent might have been able to exercise the Option as to some or all of the Shares on a later date if he or she had not died and had continued to be an employee, director or consultant or, if earlier, within the originally prescribed term of the Option.

		
	17. 	EFFECT OF TERMINATION OF SERVICE ON UNACCEPTED STOCK GRANTS.

In the event of a termination of service (whether as an employee, director or consultant) with the Company or an Affiliate for any reason before the Participant has accepted a Stock Grant, such offer shall terminate.

For purposes of this Paragraph 17 and Paragraph 18 below, a Participant to whom a Stock Grant has been offered and accepted under the Plan who is absent from work with the Company or with an 

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Affiliate because of temporary disability (any disability other than a Disability as defined in Paragraph 1 hereof), or who is on leave of absence for any purpose, shall not, during the period of any such absence, be deemed, by virtue of such absence alone, to have terminated such Participant’s employment, director status or consultancy with the Company or with an Affiliate, except as the Administrator may otherwise expressly provide.

In addition, for purposes of this Paragraph 17 and Paragraph 18 below, any change of employment or other service within or among the Company and any Affiliates shall not be treated as a termination of employment, director status or consultancy so long as the Participant continues to be an employee, director or consultant of the Company or any Affiliate.

		
	18. 	EFFECT ON STOCK GRANTS OF TERMINATION OF SERVICE OTHER THAN ‘‘FOR CAUSE’’ OR DEATH OR DISABILITY.

Except as otherwise provided in a Participant’s Stock Grant Agreement, in the event of a termination of service (whether as an employee, director or consultant), other than termination ‘‘for cause,’’ Disability, or death for which events there are special rules in Paragraphs 19, 20, and 21, respectively, before all forfeiture provisions or Company rights of repurchase shall have lapsed, then the Company shall have the right to cancel or repurchase that number of Shares subject to a Stock Grant as to which the Company’s forfeiture or repurchase rights have not lapsed.

		
	19. 	EFFECT ON STOCK GRANTS OF TERMINATION OF SERVICE ‘‘FOR CAUSE’’.

Except as otherwise provided in a Participant’s Stock Grant Agreement, the following rules apply if the Participant’s service (whether as an employee, director or consultant) with the Company or an Affiliate is terminated ‘‘for cause’’:

			
		a. 	All Shares subject to any Stock Grant that remain subject to forfeiture provisions or as to which the Company shall have a repurchase right shall be immediately forfeited to the Company as of the time the Participant is notified his or her service is terminated for Cause.

			
		b. 	For purposes of this Plan, ‘‘cause’’ shall include (and is not limited to) dishonesty with respect to the employer, insubordination, substantial malfeasance or non-feasance of duty, unauthorized disclosure of confidential information, breach by the Participant of any provision of any employment, consulting, advisory, nondisclosure, non-competition or similar agreement between the Participant and the Company, and conduct substantially prejudicial to the business of the Company or any Affiliate. The determination of the Administrator as to the existence of ‘‘cause’’ will be conclusive on the Participant and the Company.

			
		c. 	‘‘Cause’’ is not limited to events which have occurred prior to a Participant’s termination of service, nor is it necessary that the Administrator’s finding of ‘‘cause’’ occur prior to termination. If the Administrator determines, subsequent to a Participant’s termination of service, that either prior or subsequent to the Participant’s termination the Participant engaged in conduct which would constitute ‘‘cause,’’ then the Company’s right to repurchase all of such Participant’s Shares shall apply.

			
		d. 	Any provision in an agreement between the Participant and the Company or an Affiliate, which contains a conflicting definition of ‘‘cause’’ for termination and which is in effect at the time of such termination, shall supersede the definition in this Plan with respect to that Participant.

		
	20. 	EFFECT ON STOCK GRANTS OF TERMINATION OF SERVICE FOR DISABILITY.

Except as otherwise provided in a Participant’s Stock Grant Agreement, the following rules apply if a Participant ceases to be an employee, director or consultant of the Company or of an Affiliate by reason of Disability: to the extent the forfeiture provisions or the Company’s rights of repurchase have not lapsed on the date of Disability, they shall be exercisable; provided, however, that in the event such forfeiture provisions or rights of repurchase lapse periodically, such provisions or rights shall lapse to the extent of a pro rata portion of the Shares subject to such Stock Grant through the date of Disability as would have lapsed had the Participant not become Disabled. The proration shall be based upon the number of days accrued prior to the date of Disability.

10

The Administrator shall make the determination both of whether Disability has occurred and the date of its occurrence (unless a procedure for such determination is set forth in another agreement between the Company and such Participant, in which case such procedure shall be used for such determination). If requested, the Participant shall be examined by a physician selected or approved by the Administrator, the cost of which examination shall be paid for by the Company.

		
	21. 	EFFECT ON STOCK GRANTS OF DEATH WHILE AN EMPLOYEE, DIRECTOR OR CONSULTANT.

Except as otherwise provided in a Participant’s Stock Grant Agreement, the following rules apply in the event of the death of a Participant while the Participant is an employee, director or consultant of the Company or of an Affiliate: to the extent the forfeiture provisions or the Company’s rights of repurchase have not lapsed on the date of death, they shall be exercisable; provided, however, that in the event such forfeiture provisions or rights of repurchase lapse periodically, such provisions or rights shall lapse to the extent of a pro rata portion of the Shares subject to such Stock Grant through the date of death as would have lapsed had the Participant not died. The proration shall be based upon the number of days accrued prior to the Participant’s death.

		
	22. 	PURCHASE FOR INVESTMENT.

Unless the offering and sale of the Shares to be issued upon the particular exercise or acceptance of a Stock Right shall have been effectively registered under the Securities Act of 1933, as now in force or hereafter amended (the ‘‘1933 Act’’), the Company shall be under no obligation to issue the Shares covered by such exercise unless and until the following conditions have been fulfilled:

			
		a. 	The person(s) who exercise(s) or accept(s) such Stock Right shall warrant to the Company, prior to the receipt of such Shares, that such person(s) are acquiring such Shares for their own respective accounts, for investment, and not with a view to, or for sale in connection with, the distribution of any such Shares, in which event the person(s) acquiring such Shares shall be bound by the provisions of the following legend which shall be endorsed upon the certificate(s) evidencing their Shares issued pursuant to such exercise or such grant:

‘‘The shares represented by this certificate have been taken for investment and they may not be sold or otherwise transferred by any person, including a pledgee, unless (1) either (a) a Registration Statement with respect to such shares shall be effective under the Securities Act of 1933, as amended, or (b) the Company shall have received an opinion of counsel satisfactory to it that an exemption from registration under such Act is then available, and (2) there shall have been compliance with all applicable state securities laws.’’

			
		b. 	At the discretion of the Administrator, the Company shall have received an opinion of its counsel that the Shares may be issued upon such particular exercise or acceptance in compliance with the 1933 Act without registration thereunder.

		
	23. 	DISSOLUTION OR LIQUIDATION OF THE COMPANY.

Upon the dissolution or liquidation of the Company, all Options granted under this Plan which as of such date shall not have been exercised and all Stock Grants and Stock-Based Awards which have not been accepted will terminate and become null and void; provided, however, that if the rights of a Participant or a Participant’s Survivors have not otherwise terminated and expired, the Participant or the Participant’s Survivors will have the right immediately prior to such dissolution or liquidation to exercise or accept any Stock Right to the extent that the Stock Right is exercisable or subject to acceptance as of the date immediately prior to such dissolution or liquidation. Upon the dissolution or liquidation of the Company, any outstanding Stock-Based Awards shall immediately terminate unless otherwise determined by the Administrator or specifically provided in the applicable Agreement.

		
	24. 	ADJUSTMENTS.

Upon the occurrence of any of the following events, a Participant’s rights with respect to any Stock Right granted to him or her hereunder shall be adjusted as hereinafter provided, unless otherwise specifically provided in a Participant’s Agreement:

11

a.    Stock Dividends and Stock Splits.    If (i) the shares of Common Stock shall be subdivided or combined into a greater or smaller number of shares or if the Company shall issue any shares of Common Stock as a stock dividend on its outstanding Common Stock, or (ii) additional shares or new or different shares or other securities of the Company or other non-cash assets are distributed with respect to such shares of Common Stock, the number of shares of Common Stock deliverable upon the exercise of an Option or acceptance of a Stock Grant shall be appropriately increased or decreased proportionately, and appropriate adjustments shall be made including, in the purchase price per share, to reflect such events. The number of Shares subject to the limitations in Paragraph 4(c) shall also be proportionately adjusted upon the occurrence of such events.

b.    Corporate Transactions.    If the Company is to be consolidated with or acquired by another entity in a merger, sale of all or substantially all of the Company’s assets other than a transaction to merely change the state of incorporation (a ‘‘Corporate Transaction’’), the Administrator or the board of directors of any entity assuming the obligations of the Company hereunder (the ‘‘Successor Board’’), shall, as to outstanding Options, either (i) make appropriate provision for the continuation of such Options by substituting on an equitable basis for the Shares then subject to such Options either the consideration payable with respect to the outstanding shares of Common Stock in connection with the Corporate Transaction or securities of any successor or acquiring entity; or (ii) upon written notice to the Participants, provide that all Options must be exercised (all Options shall for purpose of this clause (ii) be made fully vested and immediately exercisable prior to their termination), within a specified number of days of the date of such notice, at the end of which period the Options shall terminate; or (iii) terminate all Options in exchange for a cash payment equal to the excess of the Fair Market Value of the Shares subject to such Options (all Options shall for purpose of this clause (iii) be made fully vested and immediately exercisable immediately prior to their termination) over the exercise price thereof.

With respect to outstanding Stock Grants, the Administrator or the Successor Board, shall either (i) make appropriate provisions for the continuation of such Stock Grants on the same terms and conditions by substituting on an equitable basis for the Shares then subject to such Stock Grants either the consideration payable with respect to the outstanding Shares of Common Stock in connection with the Corporate Transaction or securities of any successor or acquiring entity; or (ii) terminate all Stock Grants in exchange for a cash payment equal to the excess of the Fair Market Value of the Shares subject to such Stock Grants (without regard to forfeiture or repurchase rights of the Company) over the purchase price thereof, if any. In addition, in the event of a Corporate Transaction, the Administrator may waive any or all Company forfeiture or repurchase rights with respect to outstanding Stock Grants.

c.    Recapitalization or Reorganization.    In the event of a recapitalization or reorganization of the Company other than a Corporate Transaction pursuant to which securities of the Company or of another corporation are issued with respect to the outstanding shares of Common Stock, a Participant upon exercising an Option or accepting a Stock Grant after the recapitalization or reorganization shall be entitled to receive for the purchase price paid upon such exercise or acceptance of the number of replacement securities which would have been received if such Option had been exercised or Stock Grant accepted prior to such recapitalization or reorganization.

d.    Adjustments to Stock-Based Awards.    Upon the happening of any of the events described in Subparagraphs a, b or c above, any outstanding Stock-Based Award shall be appropriately adjusted to reflect the events described in such Subparagraphs. The Administrator or the Successor Board shall determine the specific adjustments to be made under this Paragraph 24, including, but not limited to the effect if any, of a Change of Control and, subject to Paragraph 4, its determination shall be conclusive.

e.    Modification of ISOs.    Notwithstanding the foregoing, any adjustments made pursuant to Subparagraph a, b or c above with respect to ISOs shall be made only after the Administrator determines whether such adjustments would constitute a ‘‘modification’’ of such ISOs (as that term is defined in Section 424(h) of the Code) or would cause any adverse tax consequences for the holders of such ISOs. If the Administrator determines that such adjustments made with respect to ISOs would 

12

constitute a modification of such ISOs, it may refrain from making such adjustments, unless the holder of an ISO specifically requests in writing that such adjustment be made and such writing indicates that the holder has full knowledge of the consequences of such ‘‘modification’’ on his or her income tax treatment with respect to the ISO. This paragraph shall not apply to the acceleration of the vesting of any ISO that would cause any portion of the ISO to violate the annual vesting limitation contained in Section 422(d) of the Code, as described in Paragraph 6b(iv).

f.    Change of Control.    In the event of either

			
		(A) 	a Corporate Transaction that also constitutes a Change of Control, where outstanding options are assumed or substituted in accordance with the first paragraph of Subparagraph B clause (i) above and, with respect to Stock Grants, in accordance with the second paragraph of Subparagraph B clause (i); or

			
		(B) 	a Change of Control that does not also constitute a Corporate Transaction all of such Participant’s Options outstanding under the Plan shall become fully vested and immediately exercisable as of the date of the Change of Control and any forfeiture or repurchase rights of the Company with respect to outstanding Stock Grants that have not lapsed or expired prior to such Change of Control shall terminate as of the date of the Change of Control.

		
	25. 	ISSUANCES OF SECURITIES.

Except as expressly provided herein, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares subject to Stock Rights. Except as expressly provided herein, no adjustments shall be made for dividends paid in cash or in property (including without limitation, securities) of the Company prior to any issuance of Shares pursuant to a Stock Right.

		
	26. 	FRACTIONAL SHARES.

No fractional shares shall be issued under the Plan and the person exercising a Stock Right shall receive from the Company cash in lieu of such fractional shares equal to the Fair Market Value thereof.

		
	27. 	CONVERSION OF ISOs INTO NON-QUALIFIED OPTIONS; TERMINATION OF ISOs.

The Administrator, at the written request of any Participant, may in its discretion take such actions as may be necessary to convert such Participant’s ISOs (or any portions thereof) that have not been exercised on the date of conversion into Non-Qualified Options at any time prior to the expiration of such ISOs, regardless of whether the Participant is an employee of the Company or an Affiliate at the time of such conversion. At the time of such conversion, the Administrator (with the consent of the Participant) may impose such conditions on the exercise of the resulting Non-Qualified Options as the Administrator in its discretion may determine, provided that such conditions shall not be inconsistent with this Plan. Nothing in the Plan shall be deemed to give any Participant the right to have such Participant’s ISOs converted into Non-Qualified Options, and no such conversion shall occur until and unless the Administrator takes appropriate action. The Administrator, with the consent of the Participant, may also terminate any portion of any ISO that has not been exercised at the time of such conversion.

		
	28. 	WITHHOLDING.

In the event that any federal, state, or local income taxes, employment taxes, Federal Insurance Contributions Act (‘‘F.I.C.A.’’) withholdings or other amounts are required by applicable law or governmental regulation to be withheld from the Participant’s salary, wages or other remuneration in connection with the exercise or acceptance of a Stock Right or in connection with a Disqualifying Disposition (as defined in Paragraph 29) or upon the lapsing of any forfeiture provision or right of repurchase or for any other reason required by law, the Company may withhold from the Participant’s compensation, if any, or may require that the Participant advance in cash to the Company, or to any 

13

Affiliate of the Company which employs or employed the Participant, the statutory minimum amount of such withholdings unless a different withholding arrangement, including the use of shares of the Company’s Common Stock or a promissory note, is authorized by the Administrator (and permitted by law). For purposes hereof, the fair market value of the shares withheld for purposes of payroll withholding shall be determined in the manner provided in Paragraph 1 above, as of the most recent practicable date prior to the date of exercise. If the fair market value of the shares withheld is less than the amount of payroll withholdings required, the Participant may be required to advance the difference in cash to the Company or the Affiliate employer. The Administrator in its discretion may condition the exercise of an Option for less than the then Fair Market Value on the Participant’s payment of such additional withholding.

		
	29. 	NOTICE TO COMPANY OF DISQUALIFYING DISPOSITION.

Each Employee who receives an ISO must agree to notify the Company in writing immediately after the Employee makes a Disqualifying Disposition of any shares acquired pursuant to the exercise of an ISO. A Disqualifying Disposition is defined in Section 424(c) of the Code and includes any disposition (including any sale or gift) of such shares before the later of (a) two years after the date the Employee was granted the ISO, or (b) one year after the date the Employee acquired Shares by exercising the ISO, except as otherwise provided in Section 424(c) of the Code. If the Employee has died before such stock is sold, these holding period requirements do not apply and no Disqualifying Disposition can occur thereafter.

		
	30. 	TERMINATION OF THE PLAN.

The Plan will terminate on November 13, 2016, the date which is ten years from the earlier of the date of its adoption by the Board of Directors and the date of its approval by the shareholders of the Company. The Plan may be terminated at an earlier date by vote of the shareholders or the Board of Directors of the Company; provided, however, that any such earlier termination shall not affect any Agreements executed prior to the effective date of such termination.

		
	31. 	AMENDMENT OF THE PLAN AND AGREEMENTS.

The Plan may be amended by the shareholders of the Company. The Plan may also be amended by the Administrator, including, without limitation, to the extent necessary to qualify any or all outstanding Stock Rights granted under the Plan or Stock Rights to be granted under the Plan for favorable federal income tax treatment (including deferral of taxation upon exercise) as may be afforded incentive stock options under Section 422 of the Code, and to the extent necessary to qualify the shares issuable upon exercise or acceptance of any outstanding Stock Rights granted, or Stock Rights to be granted, under the Plan for listing on any national securities exchange or quotation in any national automated quotation system of securities dealers. Any amendment approved by the Administrator which the Administrator determines is of a scope that requires shareholder approval shall be subject to obtaining such shareholder approval. Any modification or amendment of the Plan shall not, without the consent of a Participant, adversely affect his or her rights under a Stock Right previously granted to him or her. With the consent of the Participant affected, the Administrator may amend outstanding Agreements in a manner which may be adverse to the Participant but which is not inconsistent with the Plan. In the discretion of the Administrator, outstanding Agreements may be amended by the Administrator in a manner which is not adverse to the Participant.

		
	32. 	EMPLOYMENT OR OTHER RELATIONSHIP.

Nothing in this Plan or any Agreement shall be deemed to prevent the Company or an Affiliate from terminating the employment, consultancy or director status of a Participant, nor to prevent a Participant from terminating his or her own employment, consultancy or director status or to give any Participant a right to be retained in employment or other service by the Company or any Affiliate for any period of time.

		
	33. 	GOVERNING LAW.

This Plan shall be construed and enforced in accordance with the laws of the Marshall Islands.

14AMENDMENT TO CREDIT AND SECURITY AGREEMENT

         THIS AMENDMENT (the "Amendment"), dated May 10, 2007, is entered into
by and among MISONIX, INC., Acoustic Marketing Research, Inc. d/b/a Sonora
Medical Systems, and Hearing Innovations Incorporated (collectively, the
"Borrowers"), and WELLS FARGO BANK, NATIONAL ASSOCIATION (the "Lender"), acting
through its Wells Fargo Business Credit operating division.

                                    RECITALS

         The Borrowers and the Lender are parties to a Credit and Security
Agreement dated December 29, 2006 (as amended from time to time, the "Credit
Agreement"). Capitalized terms used in these recitals have the meanings given to
them in the Credit Agreement unless otherwise specified.

         The Borrowers have requested that certain amendments be made to the
Credit Agreement, which the Lender is willing to make pursuant to the terms and
conditions set forth herein.

         NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements herein contained, it is agreed as follows:

                  1.   The following definitions set forth in Section 1.1 of the
Credit Agreement shall be added or modified as follows:

                  The definition of "Borrowing Base" shall be amended by
         deleting subparagraph (b)(vii) in its entirety and replacing it with
         the following:

                  "(vii) Indebtedness that the Borrowers owe to the Lender that
                  has not yet been advanced on the Revolving Note, including,
                  without limitation, the L/C Amount and the dollar amount that
                  the Lender in its discretion believes is a reasonable
                  determination of the Borrowers' credit exposure with respect
                  to any swap, derivative, foreign exchange, hedge, deposit,
                  treasury management or other similar transaction or
                  arrangement offered to Borrowers by Lender that is not
                  described in Article II of this Agreement."

                  The definition of "Collateral" shall be amended by deleting
         subparagraphs (vii), (viii), and (ix) and adding the following:

                  "(vii) all sums on deposit in the Special Account; (viii)
                  proceeds of any and all of the foregoing; (ix) books and
                  records of the Borrowers, including all mail or electronic
                  mail addressed to the Borrowers; and (x) all of the foregoing,
                  whether now owned or existing or hereafter acquired or arising
                  or in which the Borrowers now have or hereafter acquire any
                  rights."

                                       1

                  The following definition for "Commercial Letter of Credit
Agreement" shall be added:

                  "Commercial Letter of Credit Agreement" means an agreement
                  governing the issuance of documentary letters of credit by the
                  Lender, entered into between the Borrower as applicant and the
                  Lender as issuer.

                  The definition of "Commitment" shall be deleted in its
entirety and replaced with the following:

                  "Commitment" means the Lender's commitment to make Advances,
                  and to issue Letters of Credit for the account of, the
                  Borrower.

                  The definition of "Credit Facility" shall be deleted in its
entirety and replaced with the following:

                  "Credit Facility" means the credit facility under which
                  Revolving Advances and Letters of Credit may be made available
                  to the Borrowers by the Lender under Article II.

                  The following definition for "L/C Amount" shall be added:

                  "L/C Amount" means the sum of (i) the aggregate face amount of
                  any issued and outstanding Letters of Credit and (ii) the
                  unpaid amount of the Obligation of Reimbursement.

                  The following definition for "L/C Application" shall be added:

                  "L/C Application" means an application for the issuance of
                  standby or documentary letters of credit pursuant to the terms
                  of a Standby Letter of Credit Agreement or a Commercial Letter
                  of Credit Agreement, in form acceptable to the Lender.

                  The following definition for "Letter of Credit" shall be
added:

                  "Letter of Credit" is defined in Section 2.4(a).

                  The definition of "Loan Documents" shall be deleted in its
entirety and replaced with the following:

                  "Loan Documents" means this Agreement, the Revolving Note,
                  each Guaranty, the Foreign Credit Agreement, each L/C
                  Application, and the Security Documents, together with every
                  other agreement, note, document, contract or instrument to
                  which the Borrowers now or in the future may be a party and
                  which is required by the Lender.

                  The following definition for "Obligation of Reimbursement"
shall be added:

                                       2

                  "Obligation of Reimbursement" means the obligation of the
                  Borrower to reimburse the Lender pursuant to the terms of the
                  Standby Letter of Credit Agreement and the Commercial Letter
                  of Credit Agreement and any applicable L/C Application.

                  The definition of "Overadvance" shall be deleted in its
entirety and replaced with the following:

                  "Overadvance" means the amount, if any, by which the
                  outstanding principal balance of the Revolving Note, plus the
                  L/C Amount, is in excess of the then-existing Borrowing Base.

                  The following definition for "Special Account" shall be added:

                  "Special Account" means a specified cash collateral account
                  maintained with Lender or another financial institution
                  acceptable to the Lender in connection with Letters of Credit,
                  as contemplated by Section 2.5.

                  The following definition for "Standby Letter of Credit
Agreement" shall be added:

                  "Standby Letter of Credit Agreement" means an agreement
                  governing the issuance of standby letters of credit by Lender
                  entered into between the Borrower as applicant and Lender as
                  issuer.

                  2.    Section 2.4 of the Credit Agreement shall be deleted in
         its entirety and restated as follows:

         "Section 2.4   Letters of Credit.
                        ------------------

                  (a) The Lender agrees, subject to the terms and conditions of
this Agreement, to issue, at any time after the Funding Date and prior to the
Termination Date, one or more irrevocable standby or documentary letters of
credit (each, a "Letter of Credit") for the Borrower's account. The Lender will
not issue any Letter of Credit if the face amount of the Letter of Credit to be
issued would exceed the lesser of:

                  (i) $700,000 less the L/C Amount, or

                  (ii) Availability.

Each Letter of Credit, if any, shall be issued pursuant to a separate L/C
Application made by the Borrower to the Lender, which must be completed in a
manner satisfactory to the Lender. The terms and conditions set forth in each
such L/C Application shall supplement the terms and conditions of the Standby
Letter of Credit Agreement or the Commercial Letter of Credit Agreement, as
applicable.

                                       3

                 (b) No Letter of Credit shall be issued (i) with an expiry
date later than one (1) year from the date of issuance or the Maturity Date in
effect as of the date of issuance, whichever is earlier, nor (ii) to a
beneficiary which is located outside the United States.

                  (c) Any request for issuance of a Letter of Credit shall be
deemed to be a representation by the Borrower that the conditions set forth in
Section 4.2 have been satisfied as of the date of the request.

                  (d) If a draft is submitted under a Letter of Credit when the
Borrower is unable, because a Default Period exists or for any other reason, to
obtain a Revolving Advance to pay the Obligation of Reimbursement, the Borrower
shall pay to the Lender on demand and in immediately available funds, the amount
of the Obligation of Reimbursement together with interest, accrued from the date
of the draft until payment in full at the Default Rate. Notwithstanding the
Borrower's inability to obtain a Revolving Advance for any reason, the Lender is
irrevocably authorized, in its sole discretion, to make a Revolving Advance in
an amount sufficient to discharge the Obligation of Reimbursement and all
accrued but unpaid interest thereon."

                  3.   Section 2.5 of the Credit Agreement shall be deleted in
its entirety and restated as follows:

                  "Section 2.5 Special Account. If the Credit Facility is
         terminated for any reason while any Letter of Credit is outstanding,
         the Borrower shall thereupon pay the Lender in immediately available
         funds for deposit in the Special Account an amount equal to the L/C
         Amount plus any anticipated fees and costs. If the Borrower fails to
         promptly make any such payment in the amount required hereunder, then
         the Lender may make a Revolving Advance against the Credit Facility in
         an amount sufficient to fulfill this obligation and deposit the
         proceeds to the Special Account. The Special Account shall be an
         interest bearing account either maintained with the Lender or with a
         financial institution acceptable to the Lender. Any interest earned on
         amounts deposited in the Special Account shall be credited to the
         Special Account. The Lender may apply amounts on deposit in the Special
         Account at any time or from time to time to the Indebtedness in the
         Lender's sole discretion. The Borrower may not withdraw any amounts on
         deposit in the Special Account as long as the Lender maintains a
         security interest therein. The Lender agrees to transfer any balance in
         the Special Account to the Borrower when the Lender is required to
         release its security interest in the Special Account under applicable
         law."

                  4.  Section 2.7 of the Credit Agreement shall be amended by
deleting subsections (b), (c), and (f) in their entirety and replacing them with
the following:

                           "(b) Unused Line Fee. For the purposes of this
                  Section 2.7(b), "Unused Amount" means the Maximum Line Amount
                  reduced by the greater of (a) the Minimum Loan Amount and (b)
                  outstanding Revolving Advances and the L/C Amount. The
                  Borrowers agree to pay to the Lender an unused line fee at the
                  rate of one half of one percent (.50%) per annum on the
                  average daily Unused Amount from the date of this Agreement to
                  and including the Termination Date,

                                       4

                  due and payable monthly in arrears on the first day of the
                  month and on the Termination Date."

                          "(c) Letter of Credit Fees. The Borrower shall pay to
                  the Lender a fee with respect to each Letter of Credit that
                  has been issued, if any, which fee shall be calculated on a
                  per diem basis at an annual rate equal to one and three
                  quarters of one percent (1.75%) of the aggregate amount that
                  may then be drawn under the Letter of Credit, assuming
                  compliance with all conditions for drawing (the "Aggregate
                  Face Amount"), from and including the date of issuance of the
                  Letter of Credit until the date that the Letter of Credit
                  terminates or is returned to the Lender, which fee shall be
                  due and payable monthly in arrears on the first day of each
                  month and on the date that the Letter of Credit terminates or
                  is returned to the Lender; provided, however, effective as of
                  the first day of the fiscal quarter month in which any Default
                  Period begins through the last day of such Default Period, or
                  any shorter time period that the Lender may determine, in the
                  Lender's sole discretion and without waiving any of its other
                  rights and remedies, such fee shall increase to five percent
                  (5.0%) of the Aggregate Face Amount. The foregoing fee shall
                  be in addition to any and all other fees, commissions and
                  charges imposed by Lender with respect to or in connection
                  with such Letter of Credit."

                           "(f) Letter of Credit Administrative Fees. The
                  Borrower shall pay all administrative fees charged by Lender
                  in connection with the honoring of drafts under any Letter of
                  Credit, amendments thereto, transfers thereof and all other
                  activity with respect to the Letters of Credit at the then -
                  current rates published by Lender for such services rendered
                  on behalf of customers of Lender generally."

                  5.       Section 2.11 of the Credit Agreement shall be deleted
in its entirety and restated as follows:

                           "Section 2.11 Mandatory Prepayment. Without notice or
                  demand, if the sum of the outstanding principal balance of the
                  Revolving Advances plus the L/C Amount shall at any time
                  exceed the Borrowing Base, the Borrowers shall (i) first,
                  immediately prepay the Revolving Advances to the extent
                  necessary to eliminate such excess; and (ii) if prepayment in
                  full of the Revolving Advances is insufficient to eliminate
                  such excess, pay to the Lender in immediately available funds
                  for deposit in the Special Account an amount equal to the
                  remaining excess. Any voluntary or mandatory prepayment
                  received by the Lender may be applied to the Indebtedness, in
                  such order and in such amounts as the Lender in its sole
                  discretion may determine from time to time."

                  6.       Section 2.13 of the Credit Agreement shall be deleted
in its entirety and restated as follows:

                                       5

                           "Section 2.13 Use of Proceeds. The Borrowers shall
                  use the proceeds of Advances and each Letter of Credit for
                  ordinary working capital purposes, except that Advances in an
                  amount not to exceed One Million Two Hundred Thousand Dollars
                  ($1,200,000) may be used for the redemption of shares of
                  Acoustic Marketing Research, Inc.
                  from William H. Phillips."

                  7.       Section 4.2 of the Credit Agreement shall be deleted
in its entirety and restated as follows:

                           "Section 4.2 Conditions Precedent to All Advances and
                  Letters of Credit. The Lender's obligation to make each
                  Advance or to cause the issuance of a Letter of Credit shall
                  be subject to the further conditions precedent that:

                           (a) the representations and warranties contained in
                           Article V are correct on and as of the date of such
                           Advance or issuance of a Letter of Credit as though
                           made on and as of such date, except to the extent
                           that such representations and warranties relate
                           solely to an earlier date; and

                           (b) no event has occurred and is continuing, or would
                           result from such Advance or issuance of a Letter of
                           Credit which constitutes a Default or an Event of
                           Default.

                  8.       Section 7.1(a) of the Credit Agreement shall be
deleted in its entirety and restated as follows:

                           "(a) Default in the payment of the Revolving Note,
                           any Obligation of Reimbursement, or any default with
                           respect to any other Indebtedness due from Borrowers
                           to Lender as such Indebtedness becomes due and
                           payable;"

                  9.       Section 7.2(e) of the Credit Agreement shall be
deleted in its entirety and restated as follows:

                           "(e) The Lender may make demand upon the Borrower
                           and, forthwith upon such demand, the Borrower will
                           pay to the Lender in immediately available funds for
                           deposit in the Special Account pursuant to Section
                           2.5 an amount equal to the aggregate maximum amount
                           available to be drawn under all Letters of Credit
                           then outstanding, assuming compliance with all
                           conditions for drawing thereunder;"

                                       6

                  10. No Other Changes. Except as explicitly amended by this
Amendment, all of the terms and conditions of the Credit Agreement shall remain
in full force and effect and shall apply to any advance or letter of credit
thereunder.

                  11. Conditions Precedent. This Amendment shall be effective
when the Lender shall have received an executed original hereof, together with
each of the following, each in substance and form acceptable to the Lender in
its sole discretion:

                  (a) A Certificate of the Secretary of the Borrowers certifying
as to (i) the resolutions of the board of directors of the Borrowers approving
the execution and delivery of this Amendment, (ii) the fact that the articles of
incorporation and bylaws of the Borrowers, which were certified and delivered to
the Lender pursuant to the respective Certificate of Authority of each
Borrower's secretary or assistant secretary dated December 29, 2006, continue in
full force and effect and have not been amended or otherwise modified except as
set forth in the Certificate to be delivered, and (iii) certifying that the
officers and agents of the Borrowers who have been certified to the Lender,
pursuant to the respective Certificate of Authority of Borrower's secretary or
assistant secretary dated December 29, 2006, as being authorized to sign and to
act on behalf of the Borrowers continue to be so authorized or setting forth the
sample signatures of each of the officers and agents of the Borrowers authorized
to execute and deliver this Amendment and all other documents, agreements and
certificates on behalf of the Borrowers.

                  (b) Such other matters as the Lender may require.

                  12. Representations and Warranties. The Borrowers hereby
represent and warrant to the Lender as follows:

                  (a) The Borrowers have all requisite power and authority to
execute this Amendment and any other agreements or instruments required
hereunder and to perform all of its obligations hereunder, and this Amendment
and all such other agreements and instruments have been duly executed and
delivered by the Borrowers and constitute the legal, valid and binding
obligation of the Borrowers, enforceable in accordance with their terms.

                  (b) The execution, delivery and performance by the Borrowers
of this Amendment and any other agreements or instruments required hereunder
have been duly authorized by all necessary corporate action and do not (i)
require any authorization, consent or approval by any governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign, (ii)
violate any provision of any law, rule or regulation or of any order, writ,
injunction or decree presently in effect, having applicability to the Borrowers,
or the articles of incorporation or by-laws of the Borrowers, or (iii) result in
a breach of or constitute a default under any indenture or loan or credit
agreement or any other agreement, lease or instrument to which the Borrowers are
a party or by which they or their properties may be bound or affected.

                                       7

                  (c) All of the representations and warranties contained in
Article V of the Credit Agreement are correct on and as of the date hereof as
though made on and as of such date, except to the extent that such
representations and warranties relate solely to an earlier date.

                  13. References. All references in the Credit Agreement to
"this Agreement" shall be deemed to refer to the Credit Agreement as amended
hereby; and any and all references in the Security Documents to the Credit
Agreement shall be deemed to refer to the Credit Agreement as amended hereby.

                  14. No Waiver. The execution of this Amendment and the
acceptance of all other agreements and instruments related hereto shall not be
deemed to be a waiver of any Default or Event of Default under the Credit
Agreement or a waiver of any breach, default or event of default under any
Security Document or other document held by the Lender, whether or not known to
the Lender and whether or not existing on the date of this Amendment.

                  15. Release. The Borrowers hereby absolutely and
unconditionally release and forever discharge the Lender, and any and all
participants, parent corporations, subsidiary corporations, affiliated
corporations, insurers, indemnitors, successors and assigns thereof, together
with all of the present and former directors, officers, agents and employees of
any of the foregoing, from any and all claims, demands or causes of action of
any kind, nature or description, whether arising in law or equity or upon
contract or tort or under any state or federal law or otherwise, which the
Borrowers have had, now have or have made claim to have against any such person
for or by reason of any act, omission, matter, cause or thing whatsoever arising
from the beginning of time to and including the date of this Amendment, whether
such claims, demands and causes of action are matured or unmatured or known or
unknown.

                  16. Costs and Expenses. The Borrowers hereby reaffirm their
agreement under the Credit Agreement to pay or reimburse the Lender on demand
for all costs and expenses incurred by the Lender in connection with the Loan
Documents, including without limitation all reasonable fees and disbursements of
legal counsel. Without limiting the generality of the foregoing, the Borrowers
specifically agree to pay all fees and disbursements of counsel to the Lender
for the services performed by such counsel in connection with the preparation of
this Amendment and the documents and instruments incidental hereto. The
Borrowers hereby agree that the Lender may, at any time or from time to time in
its sole discretion and without further authorization by the Borrowers, make a
loan to the Borrowers under the Credit Agreement, or apply the proceeds of any
loan, for the purpose of paying any such fees, disbursements, costs and
expenses.

                   17. Miscellaneous. This Amendment may be executed in any
number of counterparts, each of which when so executed and delivered shall be
deemed an original and all of which counterparts, taken together, shall
constitute one and the same instrument.

                                       8

         IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the date first above written.

WELLS FARGO BANK,                        MISONIX, INC.
  NATIONAL ASSOCIATION

                                         By: /s/ Richard Zaremba
                                             -----------------------------------
                                             Richard Zaremba, Sr. Vice President
By: /s/ Jay M. Oliner
    -----------------------------
    Jay M. Oliner, Vice President

                                         ACOUSTIC MARKETING RESEARCH INC.
                                         d/b/a SONORA MEDICAL SYSTEMS

                                         By: /s/ Richard Zaremba
                                             -----------------------------------
                                             Richard Zaremba, Sr. Vice President

                                         HEARING INNOVATIONS
                                         INCORPORATED

                                         By: /s/ Richard Zaremba
                                             -----------------------------------
                                             Richard Zaremba, Sr. Vice President

                                       9

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