UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1996
Commission file number 0-12547
Steritek, Inc.
(Exact name of registrant as specified in its charter)
New Jersey 22-2243703
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
121 Moonachie Avenue
Moonachie, NJ 07074
(Address of principal executive offices)
(Zip Code)
(201) 460-0500
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year, if changed
since last report)
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days.
Yes [X] No [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all
documents and reports required to be filed by Sections 12, 13, or
15(d) of the Securities Exchange act of 1934 subsequent to the
distribution of securities under a plan confirmed by a court.
Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable
date: 3,586,285 shares of Common Stock on March 1, 1996
<PAGE>
<PAGE>
INDEX
Page
Part I - Financial Information
Item 1. Financial Statements:
Consolidated Balance Sheets..................... 3
Consolidated Statements of Operations........... 4
Consolidated Statements of Cash Flows........... 6
Notes to Consolidated Financial Statements...... 7
Item 2. Management's Discussion and Analysis............. 8
Part II - Other Information....................................12
Signatures.....................................................13
<PAGE>
<PAGE>
<TABLE>
PART I -- FINANCIAL INFORMATION
Item 1. Financial Statements.
STERITEK, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
<CAPTION>
March 31, June 30,
1996 1995
----------- -------------
(Unaudited) (Derived from
Audited
Financial
Statements)
<S> <C> <C>
ASSETS
Current Assets:
Cash $487,073 $263,662
Trade accounts receivable, less allowance for
doubtful accounts of $4,895 413,923 765,455
Inventories 114,145 302,869
Prepaid expenses and other assets 258,384 138,918
Deferred tax asset 114,698 168,600
---------- ----------
Total current assets 1,388,223 1,639,504
Machinery and equipment 2,679,314 2,673,869
Less: accumulated depreciation and
amortization 1,602,802 1,481,151
---------- ----------
1,076,512 1,192,718
---------- ----------
Other assets
Note Receivable 296,216
Physicians' fax database 125,198 200,316
Patents, net 27,309
---------- ----------
421,414 227,625
---------- ----------
$2,886,149 $3,059,847
========== ==========
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES AND SHAREHOLDERS' EQUITY
<S> <C> <C>
Current liabilities:
Accounts payable trade $231,138 $322,638
Accrued expenses 33,824 79,653
State taxes payable 5,127 0
Current maturities of long-term debt 45,000 440,000
Current maturities of capital lease obligations 26,812 103,201
---------- ---------
Total current liabilities 341,901 945,492
---------- ----------
Long-term debt, excluding current maturities 581,667 291,667
---------- ----------
Capital lease obligations, less current maturities 134,516 134,516
---------- ----------
</TABLE>
<TABLE>
<S> <C> <C>
Shareholders' equity:
Preferred stock, no par value, authorized
2,000,000 shares; none issued
Common stock, no par value, authorized
5,000,000 shares; issued and outstanding
3,586,285 shares 640,844 640,844
Retained earnings 1,187,221 1,047,328
---------- ----------
Total shareholders' equity 1,828,065 1,688,172
---------- ----------
$2,886,149 $3,059,847
========== ==========
</TABLE>
<PAGE>
<TABLE>
STERITEK, INC. AND SUBSIDIARIES
(UNAUDITED)
CONSOLIDATED STATEMENTS OF OPERATIONS
<CAPTION>
Nine Months Ended
March 31,
-----------------------
1996 1995
---------- ----------
<S> <C> <C>
Sales $3,943,713 $3,958,864
Cost of sales 1,987,562 1,866,267
---------- ----------
Gross profit 1,956,151 2,092,597
Selling, general and administrative expenses 1,992,194 1,818,183
----------- -----------
Operating income (36,043) 274,414
Gain on Sale of Assets 276,098
Interest expense (46,259) (60,390)
---------- ----------
Income before provision for income taxes 193,796 214,024
---------- ----------
Provision for income taxes:
Provision for federal income taxes - deferred 36,460 59,207
Provision for state income taxes - deferred 17,443 19,262
---------- ----------
53,903 78,469
---------- ----------
Net income $139,893 $135,555
=========== ==========
Weighted-average number of common shares
outstanding 3,972,885 3,956,285
=========== ==========
Net income per common share $0.04 $0.03
=========== ==========
</TABLE>
<TABLE>
STERITEK, INC. AND SUBSIDIARIES
(UNAUDITED)
CONSOLIDATED STATEMENTS OF OPERATIONS
<CAPTION>
Three Months Ended
March 31,
------------------------
1996 1995
----------- -----------
<S> <C> <C>
Sales $989,847 $1,370,451
Cost of sales 545,056 690,136
---------- ----------
Gross profit 444,791 680,315
Selling, general and administrative expenses 706,921 615,298
---------- ----------
Operating income (262,130) 65,017
Other income
Interest expense (14,418) (16,341)
---------- ----------
Income before provision for income taxes (276,548) 48,676
---------- ----------
Provision for income taxes:
Provision for federal income taxes - deferred 6,644
Provision for state income taxes - deferred 4,381
---------- ----------
11,025
---------- ----------
Net income ($276,548) $37,651
========== ==========
Weighted-average number of common shares
outstanding 3,962,885 3,956,285
=========== ==========
Net income per common share ($0.07) $0.01
=========== ==========
</TABLE>
<TABLE>
STERITEK, INC. AND SUBSIDIARIES
(UNAUDITED)
CONSOLIDATED STATEMENTS OF CASH FLOWS
<CAPTION>
Nine Months Ended
March 31,
-----------------------
1996 1995
---------- ----------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $139,893 $135,555
Adjustments to reconcile net income (loss)
to net cash provided by (used in) operating
activities:
Depreciation and amortization of machinery
and equipment 241,099 185,819
Amortization of physicians fax database 75,119 75,119
Amortization of patents and excess of cost
over net assets of business acquired 3,087
Gain on sale of subsidiary (39,998)
Gain on sale of asset (236,099)
Changes in operating assets and liabilities
(net of sale of subsidiary):
Decrease (increase) in trade accounts
receivable 215,419 (117,650)
Decrease (increase) in inventories 29,982 (4,815)
(Increase) decrease in prepaid expenses
and other assets (120,891) (40,313)
Decrease in deferred tax asset 53,902 78,469
(Decrease) increase in accounts payable
and accrued expenses (108,524) 371,439
Increase (decrease) in state income
taxes payable 5,127
---------- ----------
Net cash provided by (used in) operating
activities 255,029 686,710
---------- ----------
Cash flows from investing activities:
Proceeds from sale of subsidiary 300,000
Collections on note receivable 3,784
Expenditures for purchase of machinery
and equipment (154,013) (420,735)
---------- ----------
Net cash provided by (used in) investing activities 149,771 (420,735)
---------- ----------
Cash flows from financing activities:
Principal payments on long-term debt (405,000) (105,000)
Principal payments on capital lease obligations (76,839)
Borrowings of long-term debt (300,000) (300,000)
---------- ----------
</TABLE>
<TABLE>
<S> <C> <C>
Net cash (used in) provided by financing
activities (181,389) (405,000)
---------- ----------
Net increase (decrease) in cash 223,411 (139,025)
Cash at beginning of period 263,662 402,342
---------- ----------
Cash at end of period $487,073 $263,317
========== ==========
Supplemental disclosures of cash flow
information:
Interest paid $46,259 $60,390
========== ==========
Supplemental schedule of non-cash financing
activities:
Sale of assets in exchange for note receivable $300,000
Net assets exchanged (63,901)
__________
Gain on sale of assets $236,099
==========
</TABLE>
<PAGE>
STERITEK, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
March 31, 1996
1. Basis of Presentation
The accompanying unaudited consolidated financial statements
have been prepared in accordance with generally accepted
accounting principles for interim financial information and
with the instructions for Form 10-Q and Rule 10-01 of
Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted
accounting principles for complete financial statements. In
the opinion of management, all adjustments (consisting only of
normally recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the
nine month period ended March 31, 1996 are not necessarily
indicative of the results that may be expected for the year
ending June 30, 1996. For further information, refer to the
consolidated financial statements and footnotes thereto
included in the Company's Form 10-K for the year ended June
30, 1995.
<PAGE>
STERITEK, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Nine Months Ended March 31, 1996 as Compared to the Nine Months
Ended March 31, 1995
Revenues for the nine months ended March 31, 1996 decreased to
$3,943,713 from $3,958,864 for the same period in 1995. While total
revenues for the period decreased slightly, revenues from the Company's
continuing operations, contract packaging and the Physicians Fax
Network, increased significantly. Revenues for the nine months ended
March 31, 1996 included approximately: (i) $3,346,531 from contract
packaging, as compared to $3,234,169 for the same period in 1995;
(ii) $395,371 from the Physicians Fax Network, as compared to $140,447
for the same period in 1995; and (iii) $201,811 from its BioMedical
Services business (intracranial pressure monitor business ("ICP")
and the electron microscope supply ("EMS") business), as compared to
$584,248 for the same period in 1995. The Company sold its ICP and
EMS businesses on October 6, 1995. The Company did not report any
revenues from these businesses since September 30, 1995. The Company
has continued to aggressively market its contract packaging business
and its Physicians Fax Network.
The Company's cost of sales represented 50.4% of sales (or
$1,987,562) for the nine months ended March 31, 1996, as compared
to 47.1% of sales (or $1,866,267) for the nine months ended March
31, 1995. The increase in cost of sales, as a percent of sales, is
a result of the change in the mix of the products packaged by the
Company during the respective periods.
Selling, general and administrative expenses ("SG&A") for the
nine months ended March 31, 1996 was 50.5% of sales (or
$1,992,194), as compared to 45.9% of sales (or $1,818,183) for the
nine months ended March 31, 1995. The increase in SG&A is principally
a result of the addition of staff and increased sales efforts to market
and sell the Company's contract packaging services and Physicians Fax
Network.
The Company incurred an operating loss for the nine months ended
March 31, 1996 in the amount of ($36,043) as compared to income of
$274,414 (or 6.9% of sales) for the nine months ended March 31, 1995.
The operating loss is principally attributable to the increase in SG&A
and the lower gross profit margins in the contract packaging business.
The Company reported a $276,098 gain from the sale of certain
of its assets comprising the ICP and the EMS businesses during the
quarter ended December 31, 1995. On or about October 6, 1995,
Sterimed, Inc. ("Sterimed"), a wholly-owned subsidiary of the
Company, entered into an Asset Sale/Purchase Agreement with RAJ
Communications, Ltd. ("RAJ"), John Arnott and Rita Arnott.
Pursuant to that agreement, Sterimed sold to RAJ all of its assets,
<PAGE>
subject to certain of its liabilities, which comprised the EMS
business. The purchase price was $300,000, paid at closing. The
Company's revenues from the EMS business were $696,333 for the
fiscal year ended June 30, 1995, and $607,500 for the fiscal year
ended June 30, 1994. On or about October 6, 1995, the Company also
entered into a separate Asset Sale/Purchase Agreement with RAJ,
John Arnott and Rita Arnott. Pursuant to that agreement, the
Company sold to RAJ all of its assets used directly and exclusively
in its ICP business. The purchase price was $300,000, and is to be
paid in consecutive monthly installments (without interest)
commencing October 15, 1995, each in the amount of 10% of the gross
receipts of the RAJ ICP business until paid in full. The sole
source of payment of such purchase price is the gross receipts from
the ICP business. The Company has received only $3,784 in payments
against such purchase price as of March 31, 1996. It is unclear
when the entire $296,218 balance will be paid. The Company's
revenues from the ICP business were $152,948 for the fiscal year
ended June 30, 1995, and $181,700 for the fiscal year ended June
30, 1994.
There were no other material changes in the results of
operations in the Company's business.
Health care packaging services are typically provided by the
Company to its customers on an "as-needed" (purchase order-by-
purchase order) basis, and not pursuant to a long-term contract.
Because of the nature of the contract packaging business, the
Company's operating results can vary significantly from period to
period.
Three Months Ended March 31, 1996 as Compared to the Three Months
Ended March 31, 1995
Revenues for the three months ended March 31, 1996 were
$989,847 as compared to $1,370,451 for the same period in 1995.
Revenues for the three months ended March 31, 1996 included
approximately $910,639 from contract packaging and $79,208 from
the Physicians Fax Network. The Company reported no revenues from
its EMS and ICP businesses for the quarter ended March 31, 1996.
The Company sold the ICP and EMS business on October 6, 1995 (see
discussion above). For the three months ended March 31, 1995, the
Company derived approximately $1,152,864 in revenues from contract
packaging, $29,847 from the Physicians Fax Network, and $187,740
from its ICP and EMS businesses.
The Company's cost of sales were $545,056 (or 55.0% of sales)
for the three months ended March 31, 1996 as compared to $690,136
(or 50.3% of sales) for the three months ended March 31, 1995. The
increase in cost of sales, as a percent of sales, is a result of
the change in the mix of the products packaged by the Company
during the respective periods.
<PAGE>
Selling, general and administrative expenses ("SG&A") for the
three months ended March 31, 1996 was $706,921 (or 71.4% of sales)
as compared to $615,298 (or 44.9% of sales) for the three months
ended March 31, 1995. SG&A remained relatively constant between
the two periods. The increase in SG&A is principally a result of
the addition of staff and increased sales efforts to market and sell
the Company's contract packaging services and Physicians Fax Network.
Operating loss for the three months ended March 31, 1996 was
($262,130), as compared to income of $65,017 (or 4.7% of sales) for
the three months ended March 31, 1995. The decrease in
operating income is principally attributable to the comparatively
higher sales and lower cost of sales for the period ended March 31,
1995, as well as the lower SG&A.
There were no other material changes in the results of
operations in the Company's business.
Liquidity and Capital Resources
The Company's working capital on March 31, 1996 was $1,046,322.
The Company's working capital on June 30, 1995, was approximately
$694,012. The increase in working capital is partially
attributable to the refinancing of the current portion of long term
debt as of June 30, 1995 and the sale of the Company's EMS
business on October 6, 1995 for $300,000 in cash.
The Company's Note receivable, in the amount of $296,218,
represents the balance of the $300,000 purchase price for the ICP
business. That purchase price is to be paid in consecutive monthly
installments (without interest) commencing October 15, 1995, each
in the amount of 10% of the gross receipts of the RAJ ICP business
until paid in full. The sole source of payment of such purchase
price is the gross receipts from the ICP business. The Company's
receipts against the purchase price from the sale of the ICP
business have been only $3,784 through March 31, 1996. It is
unclear when the entire $296,216 balance will be paid. The
Company's revenues from the ICP business were $152,948 for the
fiscal year ended June 30, 1995, and $181,700 for the fiscal year
ended June 30, 1994.
As of March 31, 1994, the Company executed its 7% Subordinated
Promissory Note, due March 31, 1996, in the amount of $300,000. The
Company paid this note in full on March 31, 1996, with the proceeds
of a loan from The Bank of New York (NJ). The Bank of New York note
bears interest at the bank's prime rate plus .5% per year, and is
payable in monthly increments of $5,000. Any upaid balance due is
payable April 1, 2001.
On June 30, 1993, the Company borrowed $700,000 from a bank,
payable monthly until July 1, 1998, at prime plus 1/2%. This Note
is collateralized by substantially all of the assets of the Company
and is personally guaranteed by the president of the Company. At
June 30, 1994, the Company was not in compliance with certain
<PAGE>
covenants pertaining to minimum working capital, net worth, quick
ratio, current ratio and debt service. These covenants have been
waived by the bank as of June 30, 1995, for the remaining term of
the loan. The Company has continued to make its monthly payments
to the bank in a timely fashion.
The Company believes that funding for anticipated operations
and capital needs will come from existing working capital and
anticipated future operations.
<PAGE>
PART II -- OTHER INFORMATION
Item 1. Legal Proceedings.
None.
Item 2. Changes in Securities.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
Item 5. Other Information.
None.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
10.19 Commercial Note, entered into on or about March 29,
1996 and Guaranty
PAGE
<PAGE>
STERITEK, INC. AND SUBSIDIARIES
SIGNATURES
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, thereunto duly authorized.
Steritek, Inc.
By/s/ James K. Wozniak
James K. Wozniak, Vice President,
Chief Financial Officer and
Secretary (principal financial
and accounting officer)
Date: May 14, 1996
<PAGE>
EXHIBIT 10.19
COMMERCIAL NOTE
Fair Lawn Center
Branch
$300,000 Date: _______________
--------
1. PROMISE TO PAY
--------------
For value received, the undersigned, jointly and severally,
promises to pay to the order of THE BANK OF NEW YORK(NJ),
(hereinafter referred to as the BANK) at it's principal office
at 385 Rifle Camp Road, West Paterson, N.J. 07424-3206, or at
such other office as the BANK may from time to time designate,
in lawful money of the United States of America and in
immediately available funds, the principal sum of
2. AMOUNT
------
Three hundred thousand and 00/100 ($300,000.00) Dollars,
together with interest on the unpaid part the principal amount
at the interest rate indicated below by checkmark or "X"
placed in the box below opposite the applicable interest rate
method.
3. INTEREST
--------
Interest will be computed on the basis of a 360-day year for
the actual number of days elapsed.
[ ] 3.1 Fixed Rate _________% per annum
[X] 3.2 Variable Rate .50% per annum plus the BANK'S PRIME
RATE. Upon an increase or decrease in the BANK'S PRIME
RATE, the corresponding increase or decrease in the
interest rate on this note will be effective
immediately, or
[ ]
_______________________________________________________
The Bank of New York's(NJ) PRIME RATE is the rate of interest
announced from time to time by the BANK as its prime rate,
prime lending rate, or base rate. This rate of interest is
determined from time to time by the BANK as a means of pricing
some loans and it is neither tied to any external rate of
interest or index nor does it necessarily reflect the lowest
rate of interest actually charged by the BANK to any
particular class or category of customers.
<PAGE>
[ ] 3.3 Variable Rate ________% per annum plus the BANK'S
ALTERNATE BASE RATE. Upon an increase or decrease in
the BANK'S ALTERNATE BASE RATE, the corresponding
increase or decrease in the interest rate on this note
will be effective immediately, or
[ ] _____________________________.
DEFINITION OF ALTERNATE BASE RATE: "Alternate Base Rate"
means the greater of (A) The BANK'S Prime Rate, as in effect
from time to time OR (B) 1/2% plus the effective federal funds
rate as published by the Federal Reserve Bank of New York.
4. PAYMENT
-------
The principal and interest shall be paid to the BANK in
accordance with the method indicated below by checkmark or "X"
in the box below opposite the applicable payment method.
[ ] 4.1 ON DEMAND. In one single payment, with interest
payable monthly on the _____ day of each month, with
the balance of the unpaid principal and interest to be
paid upon demand.
It is understood that any other repayment program
agreed to by the Bank and the undersigned, now or in
the future, is not intended to modify or restrict any
rights or remedies which accrue to the Bank by the
demand nature of this note. Regardless of any
repayment program, agreed to or implied, the Bank
reserves the right to demand payment in full, at any
time, and at its sole discretion.
[ ] 4.2 SINGLE PAYMENT. _____ days after date.
[ ] 4.3 BULLET PAYMENT. The undersigned will pay
accumulated interest on the principal amount ____
monthly, or ____ quarterly beginning on
____________________ and will pay the principal amount
and all unpaid interest on _______________.
[X] 4.4 CONSTANT PRINCIPAL PAYMENTS. The undersigned will
pay $5,000.00 on the principal balance plus accumulated
interest on the principal balance beginning on May
1, 1996 and on the 1st day of each month thereafter.
The balance of unpaid principal and interest shall be
due and payable on April 1, 2001.
[ ] 4.5 INSTALLMENT PAYMENTS. The undersigned will pay
_______________ monthly including interest on the
unpaid principal balance beginning on ______________
and on the _______ day of each month thereafter. The
balance of unpaid principal and interest shall be due
and payable on _____________. When this note is a
<PAGE>
variable rate note, if the BANK'S ALTERNATE BASE RATE
rises to such a rate that the entire installment
payment is applied to interest resulting in no
reduction of the unpaid principal balance, then the
BANK may increase the remaining installment payments
by an amount equal to the originally scheduled principal
repayments, or a lesser amount if the BANK so chooses.
This may be done at the BANK's sole discretion, as
frequently as conditions require, without notice to
the undersigned or any endorsers and guarantors. In
the event there is a subsequent decline in the BANK'S
ALTERNATE BASE RATE, the BANK may, but shall not
be obligated to, reduce the remaining installment
payments.
[ ] 4.6 OTHER.
______________________________________________________
______________________________________________________
______________________________________________________
______________________________________________________
5. MULTIPLE ADVANCES
-----------------
[ ] This note may be disbursed in multiple advances under
a line of credit agreement (see paragraph 5.9)
DIRECT CHARGE. The undersigned authorizes the BANK to charge
my account _______________ for all payments due under this
note.
THIS NOTE INCLUDES THE ADDITIONAL TERMS ON THE REVERSE
SIDE HEREOF ALL OF WHICH ARE MADE A PART HEREOF
Steritek, Inc.
(a New Jersey Corporation)
ATTEST/WITNESS:
By: /s/__[not legible]______ By:__/s/_Albert_J._Wozniak__________
Albert J. Wozniak, President/C.E.O.
By: _______________________________
PAGE
<PAGE>
5. ADDITIONAL TERMS OF THE NOTE
----------------------------
5.1 SET OFF. In addition to any other security interest
that may be given to secure the repayment of this note,
in addition to the BANK'S right of set-off, the BANK is
hereby granted a security interest in any amount which
the BANK may owe to the undersigned, or any endorsers
or guarantors, including any balance or share of any
deposit or investment or other property, tangible or
intangible, owned by or in which the undersigned or
endorsers or guarantors have an interest, and
additions and substitutions thereto, and any such
property acquired hereafter by the undersigned,
endorsers or guarantors, which may be in possession or
control of the BANK, which property will also secure
any other liabilities of the undersigned, endorsers or
guarantors to the BANK, either now existing or
hereafter arising. However, any collateral subject to
the Right of Rescission as defined in Regulation Z (12
CFR 226) is hereby excluded. Upon demand, the
undersigned, endorsers and guarantors will deposit
additional collateral with the BANK, in form and
amounts satisfactory to the BANK, for the further
securing of any liability of the undersigned, endorsers
and guarantors, now existing or hereafter incurred.
5.2 REIMBURSABLE EXPENSES. The UNDERSIGNED authorizes the
BANK, without demand and acting in its discretion in
each instance, to charge and withdraw from any credit
balance which the undersigned may then have with the
BANK, any amount which shall be due from the
UNDERSIGNED, from time to time in connection with or
by reason of the UNDERSIGNED'S application for, and
the making and administration of the loan, perfection
of any security interest or mortgage, or appraisal on
any collateral. The BANK, within a reasonable time,
shall advise the UNDERSIGNED of each such charge and
amount thereof.
5.3 WAIVERS. The undersigned and all endorsers and
guarantors waive their right of presentment (any
notices to which they may be entitled), demand for
payment, protest and notice of extension or renewal
hereof, and agree they shall not be released or
discharged from liability by reason of any extension of
time for payment or by reason of the BANK's waiver of
any terms or conditions of this note.
5.4 WAIVER OF TRIAL BY JURY. Each party to this note
hereby expressly waives any right to trial by jury of
any claim, demand, action or cause of action (1)
<PAGE>
arising under this note or any other instrument,
document or agreement executed or delivered in
connection herewith, or (2) in any way connected with
or related or incidental to the dealings of the
parties hereto or any of them with respect to this
note or any other instrument, document or agreement
executed or delivered in connection herewith, or the
transactions related hereto or thereto, in each
case whether now existing or hereafter arising and
whether sounding in contract or tort or otherwise;
and each party hereby agrees and consents that any
such claim, demand, action or cause of action shall be
decided by court trial without a jury, and that any
party to this agreement may file an original
counterpart or a copy of this section with any court
as written evidence of the consent of the parties
hereto to the waiver of their right to trial by jury.
5.5 DEFAULT. This note shall be in default at any time the
BANK deems itself insecure or, at the BANK'S option,
upon the occurrence of any of the following without
notice to the undersigned, any endorsers or guarantors:
(a) failure to pay when due the principal of or
interest on the note or any installment thereof; (b)
change in the condition or affairs, financial or
otherwise, of any of the undersigned or any endorsers
or guarantors which in the opinion of the BANK impairs the
prospect of payment thereof; (c) death, insolvency,
termination of business, or commencement of any
insolvency or bankruptcy proceedings by or against any
of the undersigned, any endorsers or guarantors; (d)
impairment of, damage to, or destruction of any
collateral.
5.6 REMEDIES. On default, the BANK may declare this note
and any other obligation of the undersigned, endorsers
or guarantors to be immediately due and payable, unless
said obligations were extended by the BANK for "consumer
credit" purposes, and may apply the property in which
it has a security interest toward repayment of this
note. The interest rate of this note shall be
increased to 5% above the Bank's Prime Rate or to the
maximum interest rate permitted by law, for a
commercial loan of the kind evidenced by this note,
upon the occurrence of a default as such term is
defined in Section 5.5 of this note.
At the BANK's option, the undersigned will pay a "late
charge" not exceeding five percent (5%) of any
installment or the balance due at maturity when paid
more than fifteen (15) days after the due date thereof
to cover the added expense involved in handling
<PAGE>
delinquent payments, but such "late charges" shall
not be payable out of the proceeds of any sale made to
satisfy the indebtedness secured hereby, unless such
proceeds are sufficient to discharge the entire
indebtedness and all proper costs and expenses secured
thereby.
Upon default, the undersigned shall pay the costs of
collection and if this note is placed in the hands of
an attorney, an amount equal to twenty percent (20%) of
the unpaid principal balance and interest as
an attorney's fee, which the undersigned agrees is
reasonable.
5.7 FINANCIAL STATEMENTS. The undersigned agrees to
furnish to the BANK, from time to time as the BANK may
reasonably request but not less than annually, copies of
its financial statements consisting of consolidated and
consolidating balance sheet and income statement with
supporting schedules for the undersigned and its
subsidiaries. The statements are to be prepared in
accordance with generally accepted accounting principles
by an independent certified public accountant acceptable
to the BANK.
5.8 MISCELLANEOUS. The undersigned authorizes the BANK to
surrender this note and related collateral to the
person making final payment.
This note and the rights and remedies of the BANK shall
be governed by the laws of the State of New Jersey. If
any portion of this note is held to be void, illegal or
of no effect, the remaining portion of this agreement
shall nevertheless be enforceable.
5.9 MULTIPLE ADVANCES. The undersigned acknowledges and
understands that:
(1) Advances evidencing disbursement under this note,
may be made upon receipt of oral or written
instructions or required from time to time;
(2) All advances are subject to the BANK'S prior
approval;
(3) The balance outstanding on the note at any time
shall be the difference between the total advances made
less the total repayments, plus interest and charges,
regardless that the sum of the advances may exceed the
face amount of the note;
PAGE
<PAGE>
(4) The maximum amount of principal outstanding at any
time shall not exceed the face amount of the note,
except for moneys expended by the BANK in the payment
of any tax, assessment, rent, municipal or governmental
charge, premium for insurance, lien, repair,
maintenance, protection or preservation of any
collateral securing this note.
5.10 ADVERSE CHANGES IN FINANCIAL/OTHER CONDITIONS: The
undersigned warrants that there has been no material
adverse change in the financial or any other condition
of the undersigned, since the submission of the loan
request to the BANK, which request resulted in the
execution of and is evidenced by this note, which would
warrant withholding any disbursement or future
disbursements under this note. The undersigned
agrees to immediately advise the BANK in writing, upon
the occurrence of any material adverse change in the
financial condition or any other condition of the
undersigned.
=================================================================
=================================================================
ENDORSEMENT/GUARANTY
In consideration of One Dollar ($1.00), receipt of which is
acknowledged, and of the credit given or discount loan or extension
of time made by or upon the within note, the undersigned (if more
than one, jointly and severally), hereby unconditionally guarantee
to the holder of said note, irrespective of the genuineness,
validity, regularity or enforceability thereof, or of the
obligation evidenced thereby, or of existence or amount of any
collateral held therefor, or of the acceleration of the maturity
thereof whether by the terms thereof or of any other agreement now
or hereafter made between the maker and the payee whether or not
the undersigned shall have notice of such agreement, and
irrespective of any other circumstances, that all sums stated
therein to be payable thereunder and under any renewal thereof
shall be promptly paid in full whenever due, in accordance with the
provisions thereof, at maturity, by acceleration or otherwise, and,
in case of extension of time payment in whole or in part, all said
sums shall be promptly paid in full whenever due, in accordance
with the provision thereof, at maturity, by acceleration or
otherwise, and, in case of extension of time of payment in whole or
in part, all said sums shall be promptly paid when due according to
such extension or extensions at maturity, by acceleration or
otherwise; and hereby consent that from time to time, without
notice to the undersigned, payment of any of said sums under said
note or any renewal thereof or of any collateral held therefor may
be extended in whole or in part or any of said collateral may be
exchanged, surrendered, or otherwise dealt with as the holder of
<PAGE>
the within note may determine, or the rate of interest changed; and
hereby waive their right to a trial by jury, presentment, demand of
payment, protest and notice of protest, or other notice of dishonor
and notice of any exchange, surrender, sale or other dealing with
collateral. The signature or signatures of the undersigned hereto
of dishonor and notice of any exchange, surrender, sale or other
dealing with collateral. The signature or signatures of the
undersigned hereto is or are intended as an endorsement of the
within instrument as well as the execution of the foregoing
guarantee by each of the undersigned.
BY:_____________________________________________
BY:_____________________________________________
BY:_____________________________________________
BY:_____________________________________________
BY:_____________________________________________
BY:_____________________________________________
501.194 NJ (9/93)
PAGE
<PAGE>
GUARANTY
Guaranty given by the undersigned, hereinafter called the
GUARANTORS, to induce THE BANK OF NEW YORK(NJ), a New Jersey
banking corporation, hereinafter called the LENDER, to extend
credit to, or otherwise become the creditor of,
Steritek, Inc. (a New Jersey Corporation)
hereinafter called the BORROWER.
In consideration of the foregoing and of the sum of One Dollar
($1.00), the receipt whereof is hereby acknowledged, it is agreed:
1. The GUARANTORS jointly and severally guarantee to the
LENDER, its successors and assigns, the prompt payment to the
LENDER at maturity as a result of acceleration or otherwise, of
every note, check, bill of exchange, draft, trade acceptance, loan,
advance, discount, and order for the payment of money, and all
other obligations, in connection with which, either as maker,
drawer, guarantor, indorser or otherwise, whether directly or
contingently, the BORROWER is or shall become liable to the LENDER,
with interest thereon (the "OBLIGATIONS"), together with all
attorney's fees, costs and expenses of collection incurred by the
LENDER in connection with any matter covered by this Guaranty.
2. The joint and several liability of the GUARANTORS shall
continue until payment is made of all OBLIGATIONS now due or
hereafter to become due, and until payment is made of any loss or
damage incurred by the LENDER with respect to any matter covered by
this Guaranty, or, in the alternative, until the LENDER shall
receive written notice, by registered mail signed by the
GUARANTORS, cancelling this Guaranty; but such cancellation shall
not affect the liability of the GUARANTORS jointly and severally on
any OBLIGATIONS covered by this Guaranty up to the time of the
actual receipt by the LENDER of such notice of cancellation.
3. The GUARANTORS jointly and severally consent, without
affecting the GUARANTORS' liability to the LENDER hereunder, that
the LENDER may, without notice to or consent of the GUARANTORS,
upon such terms as it may deem advisable: (a) extend, in whole or
in part, by renewal or otherwise, the time of payment of any
OBLIGATION, or held by the LENDER as security for any such
OBLIGATION; (b) release, surrender, exchange, modify, impair or
extend the period of duration, or the time for performance or
payment of any OBLIGATION or of any collateral securing any
OBLIGATION; and (c) settle or compromise any claim of the LENDER as
collateral security for any OBLIGATION. The GUARANTORS jointly and
severally hereby ratify and confirm any such extension, renewal,
release, surrender, exchange, modification, impairment, settlement,
or compromise; and all such actions shall be binding upon the
GUARANTORS jointly and severally, who hereby waive all defenses,
counterclaims, or offsets which the GUARANTORS jointly and
severally might have by reason thereof.
<PAGE>
4. The GUARANTORS jointly and severally waive: (a) notice of
acceptance of this GUARANTY by the LENDER; (b) notice of
presentment, demand for payment, or protest of any of the
OBLIGATIONS, or the obligation of any person, firm, or corporation,
held by the LENDER as collateral security for any of the
OBLIGATIONS; (c) notice of the failure of any person, firm or
corporation to pay to the LENDER any indebtedness held by the
LENDER as collateral security for any obligation of the BORROWER;
and (d) all defenses, offsets and counterclaims which the
GUARANTORS may at any time have to any claim of the LENDER against
the BORROWER.
5. The GUARANTORS jointly and severally represent that, at
the time of the execution and delivery of this Guaranty, nothing
exists to impair the effectiveness of the liability of the
GUARANTORS to the LENDER hereunder, or the immediate taking effect
of this Guaranty as the sole agreement between the GUARANTORS and
the LENDER with respect to guaranteeing the OBLIGATIONS.
6. The LENDER may at its option proceed in the first instance
against the GUARANTORS, jointly and severally, to collect any
obligation covered by this Guaranty without first proceeding
against the BORROWER, or any other person, firm or corporation, and
without first resorting to any property at anytime held by the
LENDER as collateral security.
7. The whole of this Guaranty is herein set forth, and there
is no verbal or other written agreement, and no understanding or
custom affecting the terms hereof. This Guaranty can be modified
only by a written instrument signed by the party to be charged
therewith.
8. This Guaranty is delivered and made in, and shall be
construed pursuant to the laws of, the State of New Jersey, and is
binding jointly and severally upon the Guarantors, their legal
representatives and assigns, and shall inure to the benefit of the
LENDER, its successors and assigns.
9. Words used herein in the plural shall include the singular
and vice versa.
10. The GUARANTORS jointly and severally agree to indemnify
and save harmless the LENDER, its successors or assigns, from all
claims, costs, actions, suits, liabilities, losses, damages,
charges, counsel fees and other expenses of any nature and
character by reason of the LENDER having become a creditor or
obligee of the BORROWER.
11. Notwithstanding anything to the contrary in this
guaranty, the GUARANTOR hereby irrevocably waives all rights it may
have at law or in equity (including, without limitation, any law
<PAGE>
subrogating the GUARANTOR to the rights of the LENDER) to seek
contribution, indemnification, or any other form of reimbursement
from the BORROWER, any other GUARANTOR, or any other person now or
hereafter primarily or secondarily liable for any obligations of
the BORROWER to the LENDER, for any disbursement made by the
GUARANTOR under or in connection with this guaranty or otherwise.
12. In addition to any other security interest that may be
given, in addition to the LENDER'S right of set-off, the LENDER is
hereby granted a security interest in any amount which the LENDER
may owe to the undersigned, endorsers or guarantors, including any
balance or share of any deposit or investment or other property
tangible or intangible, owned by or in which the undersigned,
endorsers or guarantors have an interest, and additions and
substitutions thereto, and any such property acquired hereafter by
the undersigned, endorsers or guarantors, which may be in
possession or control of the LENDER, which property will also
secure any other liabilities of the undersigned, endorsers or
guarantors to the LENDER, either now existing or hereafter arising.
Upon demand, the undersigned, endorsers and guarantors will deposit
additional collateral with the LENDER, in form and amounts
satisfactory to the LENDER, for the further securing of any
liability of the undersigned, endorsers or guarantors, now existing
or hereinafter incurred.
IN WITNESS WHEREOF, the GUARANTORS have hereunto set their
hands and seals this _____ day of ______________.
THIS GUARANTY INCLUDES THE ADDITIONAL TERMS ON THE REVERSE
SIDE HEREOF ALL OF WHICH ARE MADE A PART HEREOF
Signed, sealed and delivered)
in the presence of: )
_____________________________ /s/_Albert_J._Wozniak_______ (SEAL)
Albert J. Wozniak
____________________________ (SEAL)
______________________ (SEAL) ____________________________ (SEAL)
______________________ (SEAL) ____________________________ (SEAL)
501.199 NJ (9/93)
PAGE
<PAGE>
13. The GUARANTORS warrant that there has been no material
adverse change in the financial or any other condition of the
GUARANTORS, since the submission of the loan request to the LENDER,
which request resulted in the execution of and is evidenced by this
Guaranty, which would warrant withholding any disbursement or
future disbursements under this Guaranty. The GUARANTORS agree to
immediately advise the LENDER in writing, upon the occurrence of
any material adverse change in the financial condition or any other
condition of the GUARANTORS.
14. The GUARANTORS agree to furnish to the LENDER as
reasonably requested, but not less than annually, copies of their
financial statements consisting of a consolidated and consolidating
balance sheet and income statement, with supporting schedules for
the GUARANTORS and subsidiaries. The GUARANTORS also agree to
furnish to the LENDER such further information regarding the
business affairs and financial conditions of the GUARANTORS and
subsidiaries as reasonably requested. When the GUARANTORS are
individuals, they agree to annually furnish to the LENDER signed
copies of all federal and state income tax returns required to be
filed with all supporting schedules attached.
