UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
January 4, 2007 (December 29, 2006)
MISONIX, INC.
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(Exact name of registrant as specified in its charter)
New York 1-10986 11-2148932
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(State or other jurisdiction of (Commission File Number) (IRS Employer
incorporation) Identification No.)
1938 New Highway, Farmingdale, NY 11735
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (631) 694-9555
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(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation
under an Off-Balance Sheet Arrangement of a Registrant.
On December 29, 2006 MISONIX, INC. (the "Company") and its
subsidiaries, Acoustic Marketing Research, Inc. d/b/a Sonora
Medical Systems ("Sonora") and Hearing Innovations
Incorporated ("Hearing Innovations" and together with the
Company and Sonora, the "Borrowers"), and Wells Fargo Bank,
National Association ("Wells Fargo"), acting through its Wells
Fargo Business Credit operating division, entered into a (i)
Credit and Security Agreement (the "Credit Agreement") and
(ii) Credit and Security Agreement (Ex-Im Subfacility) (the
"Ex-Im Agreement"). Unless the context otherwise requires, the
Credit Agreement and the Ex-Im Agreement are hereinafter
referred to as the "Credit Agreements."
The aggregate credit limit under the Credit Agreements is
$8,000,000 consisting of a revolving facility in the amount of
up to $8,000,000. Up to $1,000,000 of the revolving facility
is available under the Ex-Im Agreement as a subfacility for
Ex-Im working capital financing.
All credit facilities under the Credit Agreements mature on
December 29, 2009. Payment of amounts outstanding under the
Credit Agreements may be accelerated upon the occurrence of an
Event of Default (as defined in the Credit Agreements).
All loans and advances under the Credit Agreements are secured
by a first priority security interest in all of the Borrowers'
accounts, chattel paper, documents, deposit accounts,
equipment, general intangibles, instruments, intellectual
property, inventory, investment property, letter-of-credit
rights, real estate, and all other business assets.
The Borrowers have the right to terminate or reduce the credit
facility prior to December 29, 2009 by paying a fee based on
the aggregate credit limit (or reduction, as the case may be)
as follows: (i) during year one of the Credit Agreements, 3%;
(ii) during year two of the Credit Agreements, 2%; and (iii)
during year three of the Credit Agreements, 1%.
The available amount under the Credit Agreement is the lesser
of $8,000,000 or the amount calculated under the Borrowing
Base (as defined in the Credit Agreement). The Borrowers must
maintain a minimum outstanding amount of $1,250,000 under the
Credit Agreement at all times and shall pay a fee equal to the
interest rate set forth below on any such shortfall.
The Borrowers may use amounts drawn under the Credit Agreement
for (i) ongoing working capital needs and (ii) redemption of
the shares of Sonora held by a minority shareholder in an
amount not to exceed $1,200,000.
Interest on amounts borrowed under the Credit Agreement is
payable at Wells Fargo's prime rate of interest plus 1% per
annum floating, payable monthly in arrears. The default rate
of interest is 3% higher than the rate otherwise payable. A
fee of 1/2% per annum on the Unused Amount (as defined in the
Credit Agreement) is payable monthly in arrears.
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The Ex-Im Agreement provides for a maximum $1,000,000
revolving credit line. The amount available under the Ex-Im
Agreement is the lesser of $1,000,000 or the amount calculated
under the Borrowing Base (as defined in the Ex-Im Agreement).
Amounts drawn under the Ex-Im Agreement may be used to provide
working capital to fulfill export orders or contracts from
customers outside the United States purchasing goods or
services from the Borrowers.
Interest under the Ex-Im Agreement will be charged at the same
rate as under the Credit Agreement. In addition, the Borrowers
will be charged an annual fee of 1.5% of the maximum facility
provided under the Ex-Im Agreement commencing on December 29,
2006 and on each anniversary thereafter.
The Borrowers, in addition to out-of-pocket expenses, paid
Wells Fargo an (i) origination fee of $35,000 upon execution
of the Credit Agreement and (ii) Ex-Im fee of $15,000. The
total principal balance outstanding to Wells Fargo on December
29, 2006 was $2,684,958.86.
The foregoing description of the Credit Agreements is
qualified in its entirety by reference to the provisions of
the Credit Agreements attached to this report as Exhibits
10(eee) and 10(fff), respectively.
Item 1.02 Termination of a Material Definitive Agreement.
The Company and Fleet National Bank, a Bank of America Company
(the "Bank") are parties to the Loan and Security Agreement
dated as of January 18, 2002, as amended by Amendment No. 1 to
the Loan and Security Agreement dated as of November 12, 2002,
as further amended by Amendment No. 2 to the Loan and Security
Agreement dated June 20, 2003, as further amended by Amendment
No. 3 to the Loan and Security Agreement dated as of January
18, 2005, as further amended by Amendment No. 4 to the Loan
and Security Agreement dated as of February 18, 2005, as
further amended by Amendment No. 5 to the Loan and Security
Agreement dated as of February 14, 2006, as further amended by
Amendment No. 6 to the Loan and Security Agreement dated on or
about May 11, 2006 and as further amended by Amendment No. 7
to the Loan and Security Agreement dated as of September 12,
2006 (collectively, the "Agreement").
On December 29, 2006, the Company terminated the Agreement by
(i) paying principal and accrued interest of $2,005,958.86 and
(ii) delivering to the Bank cash collateral in the amount of
$629,000 (the "LC Cash Collateral") to secure an outstanding
Standby Letter of Credit (the "SBLC"). The Company granted the
Bank a security interest in the LC Cash Collateral. In the
event the SBLC is not drawn upon, the Bank agreed to return
the LC Cash Collateral to the Company: (a) in the event the
original SBLC is not returned to the Bank no later than thirty
days following the expiry date of the SBLC or (b) within a
reasonable lesser amount of time following the return of the
original SBLC.
The foregoing description of the collateralization of the SBLC
is qualified in its entirety by the provisions of the Letter
Agreement attached to this report as Exhibit 10(jjj).
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit 10(eee) Credit and Security Agreement, dated December
29, 2006, By and Between MISONIX, INC., Acoustic Marketing
Research, Inc. d/b/a Sonora Medical
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Systems and Hearing Innovations Incorporated and Wells Fargo
Bank, National Association Acting through its Wells Fargo
Business Credit operating division.
Exhibit 10(fff) Credit and Security Agreement (Ex-Im
Subfacility), dated December 29, 2006, By and Between MISONIX,
INC., Acoustic Marketing Research, Inc. d/b/a Sonora Medical
Systems and Hearing Innovations Incorporated and Wells Fargo
Bank, National Association Acting through its Wells Fargo
Business Credit operating division.
Exhibit 10(ggg) Export-Import Bank of the United States
Working Capital Guarantee Program, Borrower Agreement, dated
December 29, 2006, made by MISONIX, INC., Acoustic Marketing
Research, Inc. d/b/a Sonora Medical Systems and Hearing
Innovations Incorporated.
Exhibit 10(hhh) Security Agreement, dated as of December 29,
2006, by and between MISONIX, INC. and Wells Fargo Bank,
National Association Acting through its Wells Fargo Business
Credit operating division.
Exhibit 10(iii) Patent and Security Agreement, dated as of
December 29, 2006, by and between MISONIX, INC. and Wells
Fargo Bank, National Association Acting through its Wells
Fargo Business Credit operating division.
Exhibit 10(jjj) Letter Agreement, dated December 29, 2006, by
and between MISONIX, INC. and Bank of America, N.A.
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SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: January 4, 2007 MISONIX, INC.
By: /s/ Richard Zaremba
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Richard Zaremba
Senior Vice President and
Chief Financial Officer
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EXHIBIT INDEX
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Exhibit No. Description
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Exhibit 10(eee) Credit and Security Agreement, dated December 29, 2006, By
and Between MISONIX, INC., Acoustic Marketing Research, Inc.
d/b/a Sonora Medical Systems and Hearing Innovations
Incorporated and Wells Fargo Bank, National Association
Acting through its Wells Fargo Business Credit operating
division
Exhibit 10(fff) Credit and Security Agreement (Ex-Im Subfacility), dated
December 29, 2006, By and Between MISONIX, INC., Acoustic
Marketing Research, Inc. d/b/a Sonora Medical Systems and
Hearing Innovations Incorporated and Wells Fargo Bank,
National Association Acting through its Wells Fargo Business
Credit operating division
Exhibit 10(ggg) Export-Import Bank of the United States Working Capital
Guarantee Program, Borrower Agreement, dated December 29,
2006, made by MISONIX, INC., Acoustic Marketing Research,
Inc. d/b/a Sonora Medical Systems and Hearing Innovations
Incorporated
Exhibit 10(hhh) Security Agreement, dated as of December 29, 2006, by and
between MISONIX, INC. and Wells Fargo Bank, National
Association Acting through its Wells Fargo Business Credit
operating division
Exhibit 10(iii) Patent and Security Agreement, dated as of December 29,
2006, by and between MISONIX, INC. and Wells Fargo Bank,
National Association Acting through its Wells Fargo Business
Credit operating division
Exhibit 10(jjj) Letter Agreement, dated December 29, 2006, by and between
MISONIX, INC. and Bank of America, N.A.
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