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, 1998
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 31, 1998
<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>
<TABLE>
PART I -- FINANCIAL INFORMATION
Item 1. Financial Statements.
STERITEK, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEET
<CAPTION>
March 31, June 30,
1998 1997
----------- -------------
(Unaudited) (Derived from
Audited
Financial
Statements)
<S> <C> <C>
ASSETS
Current Assets:
Cash $389,211 $212,127
Trade accounts receivable, less allowance for
doubtful accounts of $4,895 1,178,763 904,425
Inventories 218,405 190,341
Prepaid expenses and other assets 73,888 79,719
Deferred tax asset 185,693 430,000
---------- ----------
Total current assets 2,045,960 1,816,612
Machinery and equipment 3,782,159 3,113,956
Less: accumulated depreciation and
amortization 2,329,850 2,057,921
---------- ----------
1,452,309 1,056,035
---------- ----------
Other assets
Security deposits 64,779 82,386
---------- ----------
$3,563,048 $2,955,033
========== ==========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
LIABILITIES AND SHAREHOLDERS' EQUITY
<S> <C> <C>
Current liabilities:
Accounts payable trade $607,760 $536,324
Accrued expenses 291,329 210,077
Taxes payable 32,629 35,272
Loans payable-stockholder 150,000 100,000
Current maturities of long-term debt 41,988 140,000
Current maturities of capital lease obligations 2,367 83,894
---------- ---------
Total current liabilities 1,126,073 1,105,567
Long-term debt, excluding current maturities 743,012 560,000
Capital lease obligations, less current maturities 19,678 7,067
---------- ----------
Total Liabilities $1,888,763 $1,672,634
========== ==========
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 1,033,441 641,555
---------- ----------
Total shareholders' equity 1,674,285 1,282,399
---------- ----------
$3,563,048 $2,955,033
========== ==========
</TABLE>
<PAGE>
<TABLE>
STERITEK, INC. AND SUBSIDIARY
(UNAUDITED)
CONSOLIDATED STATEMENTS OF OPERATIONS
<CAPTION>
Nine Months Ended
March 31,
-----------------------
1998 1997
---------- ----------
<S> <C> <C>
Sales $6,695,303 $3,662,588
Cost of sales 4,123,337 1,763,968
---------- ----------
Gross profit 2,571,966 1,898,620
Selling, general and administrative expenses 1,888,377 1,832,187
---------- ----------
Operating income 683,589 66,433
Interest expense (47,397) (35,963)
---------- ----------
Income before provision for income taxes 636,192 30,470
---------- ----------
Provision for income taxes:
Provision for federal income taxes - deferred 187,049 4,228
Provision for state income taxes - deferred 57,258 2,285
--------- ----------
244,307 6,513
--------- ----------
Net income $391,885 $ 23,957
========== ==========
Weighted-average number of common shares
outstanding 4,001,285 4,031,285
========== ==========
Net income per common share $0.10 $0.01
========== ==========
</TABLE>
<PAGE>
<TABLE>
STERITEK, INC. AND SUBSIDIARY
(UNAUDITED)
CONSOLIDATED STATEMENTS OF OPERATIONS
<CAPTION>
Three Months Ended
March 31,
-----------------------
1998 1997
---------- ----------
<S> <C> <C>
Sales $2,376,750 $1,275,648
Cost of sales 1,538,914 572,450
---------- ----------
Gross profit 837,836 703,198
Selling, general and administrative expenses 642,500 589,528
---------- ----------
Operating income 195,336 113,670
Interest expense (15,449) (10,572)
---------- ----------
Income before provision for income taxes 179,887 103,098
---------- ----------
Provision for income taxes:
Provision for federal income taxes - deferred 47,092 20,676
Provision for state income taxes - deferred 16,190 7,733
---------- ---------
63,282 28,408
---------- --------
Net income $116,605 $ 74,690
========== ==========
Weighted-average number of common shares
outstanding 4,001,285 4,031,285
=========== ==========
Net income per common share $0.03 $0.02
=========== ==========
</TABLE>
<PAGE>
<TABLE>
STERITEK, INC. AND SUBSIDIARY
(UNAUDITED)
CONSOLIDATED STATEMENTS OF CASH FLOWS
<CAPTION>
Nine Months Ended
March 31,
-----------------------
1998 1997
---------- ----------
<S> <C> <C>
Cash flows from operating activities:
Net income $391,885 $ 23,957
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization of machinery
and equipment 271,929 260,181
Amortization of physicians fax database 75,120
Changes in operating assets and liabilities:
(Increase)decrease in trade accounts
receivable (274,341) 7,992
(Increase) in inventories (28,064) (75)
Decrease in prepaid expenses
and other assets 23,438 18,633
Decrease in deferred tax asset 244,307 6,513
Increase (decrease) in accounts payable
and accrued expenses 152,692 (28,204)
(Decrease) increase in state income
taxes payable (2,643) 14,264
--------- ----------
Net cash provided by operating activities 779,203 378,381
----------- -----------
Cash flows from investing activities:
Collections on note receivable 1,233
Expenditures for purchase of machinery
and equipment (668,203) (163,357)
---------- -----------
Net cash (used in) investing activities (668,203) (162,124)
---------- -----------
Cash flows from financing activities:
Principal payments on long-term debt (98,012) (150,000)
Principal payments on capital lease obligations (68,916) (51,342)
Proceeds form officer's loan 50,000 0
Borrowings of long-term debt 183,012 0
---------- ----------
Net cash provided by (used in) financing
activities 66,084 (201,342)
---------- ----------
Net increase in cash 177,084 14,915
Cash at beginning of period 212,127 296,429
---------- ----------
Cash at end of period $389,211 $311,344
========== ===========
Supplemental disclosures of cash flow
information:
Interest paid $47,397 $35,963
========== ==========
</TABLE>
<PAGE>
STERITEK, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
March 31, 1998
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, 1998 are not necessarily
indicative of the results that may be expected for the year
ending June 30, 1998. 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, 1997.
<PAGE>
STERITEK, INC. AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Nine Months Ended March 31, 1998 as Compared to the Nine Months
Ended March 31, 1997
Revenues for the nine months ended March 31, 1998 increased to
$6,695,303 from $3,662,588 for the same period in 1997. Revenues for
the nine months ended March 31, 1998 reflect a significantly increased
level of activity in the Company's contract packaging and Physicians Fax
Network business. March 31, 1998 revenues included approximately:
(i) $6,122,673 from contract packaging, as compared to $3,277,004
for the same period in 1997; and (ii) $572,630 from the Physicians Fax
Network, as compared to $385,584 for the same period in 1997. The
Company has continued to aggressively market its contract packaging
business and its Physicians Fax Network.
The Company's cost of sales represented 61.6% of sales (or
$4,123,337) for the nine months ended March 31, 1998, as compared
to 48.2% of sales (or $1,763,968) for the nine months ended March
31, 1997. 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, 1998 was 28.2% of sales (or $1,888,377),
as compared to 50.2% of sales (or $1,832,187) for the nine months ended
March 31, 1997. The decrease in SG&A as a percent of sales is
principally a result of the increase in sales. SG&A, in dollar terms,
remained relatively constant during the two periods.
The Company reported net income for the nine months ended March
31, 1998 in the amount of $391,885 (or 5.8% of sales), as compared to
net income of $23,957 (or 0.7% of sales) for the nine months ended
March 31, 1997.
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, 1998 as Compared to the Three Months
Ended March 31, 1997
Revenues for the three months ended March 31, 1998 increased to
$2,376,750 as compared to $1,275,648 for the same period in 1997.
Revenues for the three months ended March 31, 1998 included
approximately $2,188,933 from contract packaging and $187,817 from
the Physicians Fax Network. For the three months ended March 31,
1997, the Company derived approximately $1,129,346 in revenues
from contract packaging and $146,302 from the Physicians Fax
Network.
The Company's cost of sales were $1,538,914 (or 64.7% of sales)
for the three months ended March 31, 1998 as compared to $572,450
(or 44.9% of sales) for the three months ended March 31, 1997. 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
three months ended March 31, 1998 was $642,500 (or 27.0% of sales)
as compared to $589,528 (or 46.2% of sales) for the three months
ended March 31, 1997.
Net income for the three months ended March 31, 1998
was $116,605 (or 4.9% of sales), as compared to net income of $74,690
(or 5.8% of sales) for the three months ended March 31, 1997.
The increase in net is principally attributable to the higher revenues
for the period ended March 31, 1998.
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, 1998 was $919,887,
as compared to $711,045 on June 30, 1997. The principal changes
in the components of working capital are the increases in the Company's
accounts receivable as a result of higher sales volume, and a related
increase in trade accounts payable.
On March 12, 1998, the Company executed a Note with the Bank of New
York in the amount of $785,000, payable over four years at a fixed interest
rate of 8.09%. The Note was issued to provide working capital and to
refinance a loan on June 17, 1997, in the amount of $700,000 from the Bank
of New York, payable monthly until June 17, 2002, at prime plus 1%.
The proceeds of the June 17, 1997 borrowing were used to retire
prior indebtedness of the Company and to provide working
capital for operations. On April 13, 1998, the Company executed am
additional Note with the Bank of New York in the amount of $146,000,
payable over three years at a fixed interest rate of 8.09%. The Note
was issued to provide working capital to the Company.
On March 12, 1998, the Company has obtained a line of credit from
the Bank of New York in the amount of $250,000, at prime plus 1/2%.
The Company has not drawn any funds on this line of credit as of the
date hereof.
On April 30, 1997, the Company borrowed $50,000 from Albert J.
Wozniak, the Chairman and Chief Executive Officer of the Company.
The loan bears interest at 8.5% per annum, and is payable by the
Company on demand. On May 31, 1997, the Company borrowed an
additional $50,000 from Mr. Wozniak. The May 31, 1997 loan bears
interest at 8.5% per annum, and is payable by the Company on demand.
On September 30, 1997, the Company borrowed an additional $50,000 from
Mr. Wozniak. The September 30, 1997 loan bears interest at 8.5% per
annum, and is payable by the Company on demand. It is anticipated that
the loans will be repaid when the Company's cash position improves.
All loans bear the same terms and conditions. The proceeds of the
loans were used by the Company for working capital purposes.
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
Ex. 10.23 PROMISSORY NOTE TIME/INSTALLMENT (FIXED RATE), dated March 12, 1998
Ex. 10.24 PROMISSORY NOTE TIME/INSTALLMENT (FIXED RATE - LOANS NOT IN EXCESS
OF $250,000), dated April 13, 1998
Ex. 10.25 MASTER PROMISSORY NOTE (PRIME RATE), dated March 12, 1998
Ex. 27 Financial Data Schedule
<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 19, 1998
PROMISSORY NOTE
TIME/INSTALLMENT
(FIXED RATE)
$785,000.00 March 12, 1998
FOR VALUE RECEIVED, the undersigned (the "Borrower") hereby
promises to pay to the order of THE BANK OF NEW YORK (the "Bank") at its
385 Rifle Camp Road, West Paterson, New Jersey office, Seven
Hundred Eighty-Five Thousand and 00/100 Dollars ($785,000.00) in
forty-eight(48) equal consecutive installments of principal and interest,
in the amount of $________19,197.32_________ each, beginning
on __________April 12, 1998_________ and continuing thereafter
on the ____12th_____________ day of each successive month until
__March 12_________________, 2002 when the entire unpaid principal
balance hereof and interest thereon shall be due and payable.
The Borrower agrees to pay interest from the date hereof on the
unpaid principal balance of the loan evidenced by this note, at a rate per
annum equal to __8.09____% (the "Fixed Rate"), but not to exceed the
maximum rate permitted by law.
Interest shall be computed on the basis of a 360 day year for the
actual number of days elapsed, provided that if payment is to be made in
equal installments of principal and interest, interest shall be computed
on the basis of a 360 day year comprised of twelve 30 day months.
Interest shall be payable on the _______12th____________ day of each month and
at the maturity of the loan evidenced by this note.
If any Event of Default (as hereinafter defined) shall occur
and be continuing, the Borrower agrees to pay interest on the unpaid
balance of the loan evidenced by this note, payable on demand, at a
rate per annum equal to the higher of (i) the rate set forth above plus
2%, and (ii) the Prime Rate plus 2%, but not to exceed the maximum rate
permitted by law. "Prime Rate" shall mean, for any day, the prime
commercial lending rate of the Bank as publicly announced to be in
effect from time to time, such rate to be adjusted automatically, without
notice, on the effective date of any change in such rate. The
Borrower acknowledges that the Prime Rate is not the lowest rate at
which the Bank may make loans or other extensions of credit.
If any payment of principal of or interest on the loan evidenced
by this note becomes payable on a Saturday, Sunday or other day on which
the Bank is permitted or required by law to be closed, then such payment
shall be extended to the next succeeding business day, and interest
shall be payable at the rate set forth above during such extension.
The loan evidenced by this note may be prepaid at any time,
in whole or in part, provided that the Borrower pays to the Bank at the
time such prepayment is made (i) accrued interest on the principal amount
of the loan being prepaid through the date of prepayment and (ii) an
amount determined in accordance with the next paragraph. If the loan
evidenced by this note is payable in installments, such prepayment
shall be applied to the installments thereof in the inverse order of
maturity and the amount payable pursuant to clause (ii) of the preceding
sentence shall be calculated with respect to each installment, or part
thereof, against which such prepayment was applied.
Upon any prepayment of the loan evidenced by this note, in
whole or in part, whether optional or mandatory, by voluntary or
involuntary prepayment, by acceleration or otherwise (including as a
result of any act caused by a third party including, but not
limited to, condemnation, casualty, bankruptcy or otherwise), the
Borrower shall indemnify the Bank and hold it harmless from and
against any losses and expenses incurred or suffered by the Bank as a
result of such prepayment. The Borrower agrees to pay to the Bank at
the time prepayment is made, as liquidated damages and not as a
penalty, an amount equal to the net present value (if positive) of the
difference between (i) the amount of interest, calculated at a rate
per annum equal to the Fixed Rate (and on the day count basis set forth
above), which would have accrued on the principal amount prepaid for the
period or periods from and including the date of prepayment to but excluding
the date or dates such amount or any installment thereof would otherwise
have been due and payable had no prepayment occurred, and (ii) the amount
of interest, calculated at a rate per annum equal to the Replacement Rate
(and on the day count basis set forth above), which would be earned by the
Bank if the Bank reinvested the principal amount prepaid for the
period or periods from and including the date of prepayment to but
excluding the date or dates such amount or any installment thereof
would otherwise have been due and payable had no prepayment
occurred. "Replacement Rate" shall mean a rate per annum determined by
the Bank in its sole discretion equal to the higher of (i) the yield to
maturity of U.S. Treasury obligations and (ii) the U.S. Dollar bid side
Libor swap rate, in each case, on the date prepayment is made (or if such
date is not a business day, the next succeeding business day) and
having a maturity date or dates comparable to the date or dates the
amount prepaid or any installment thereof would otherwise have been
due and payable had no prepayment occurred. A certificate setting
forth the amount due hereunder prepared by the Bank shall be conclusive
and binding, absent manifest error.
The Bank is authorized to charge any deposit account of the
Borrower maintained at the Bank for each principal prepayment hereof on
the date made, and for each principal payment and each interest payment
and any other amount due hereunder on the due date thereof.
So long as any obligation of the Borrower to the Bank under
this note is outstanding and unpaid:
(a) As of the last day of each fiscal year of the Borrower, the ratio
of (i) earnings of the Borrower before interest, taxes, depreciation
and amortization for such fiscal year to (ii) the sum of payments of
principal on the loan evidenced by this note scheduled to be made
during the immediately succeeding fiscal year of the Borrower plus
interest expense of the Borrower in respect of the loan evidenced by
this note for the immediately succeeding fiscal year of the Borrower
shall not be less than 1.25 to 1.00;
(b) The Borrower will not grant, without the prior written consent of the
Bank, a security interest in, a lien upon or an assignment of any of its
current assets (as so classified in accordance with generally accepted
accounting principles) now owned or hereafter acquired, to secure any
obligation for the payment of borrowed money indebtedness except
indebtedness owed to the Bank;
(c) Promptly upon the Bank's request, the Borrower will furnish to the Bank
such information (including, without limitation, financial statements
and tax returns of the Borrower) as the Bank shall reasonably request from
time to time; and
(d) The Borrower will permit the Bank to inspect and make copies of
the Borrower's books and records as the Bank shall reasonably request from
time to time.
If any of the following events (each an "Event of Default") shall
occur with respect to any Obligor (which term shall include the Borrower,
any guarantor hereof or any hypothecator of any collateral securing this
note): (1) failure of any Obligor in the performance of any of such
Obligor's covenants herein or in any instrument, document or agreement
delivered in connection herewith; (2) default by any Obligor in the
payment or performance of any Obligation (which term shall include any
and all present or future obligations or liabilities of such Obligor to
the Bank, whether incurred by such Obligor as maker, indorser, drawer,
acceptor, guarantor, accommodation party, counterparty, purchaser,
seller or otherwise, and whether due or to become due, secured or
unsecured, absolute or contingent, joint and/or several, and
howsoever and whensoever acquired by the Bank); (3) failure of any Obligor
to pay when due any other indebtedness for borrowed money, acceleration
of the maturity of such indebtedness or the occurrence of any event which
with notice or lapse of time, or both, would permit acceleration of
such indebtedness; (4) if the Obligor is an individual, the death or
incompetence of such Obligor; (5) if the Obligor is not an individual,
the dissolution, merger or consolidation of, or the sale or disposal of
all or substantially all of the assets of, such Obligor without the prior
written consent of the Bank; (6) the financial condition or credit standing
of any Obligor shall be or become materially impaired in the sole opinion of
the Bank or any of its officers; (7) commencement of any proceeding,
procedure or other remedy supplemental to the enforcement of a judgment
against any Obligor; (8) any representation or warranty made by any
Obligor or any financial or other statement of any Obligor delivered to the
Bank by or on behalf of any Obligor proves to be untrue, incorrect or
incomplete when made or delivered; (9) the death of the insured under any
life insurance policy held as collateral by the Bank for the Obligations of
any Obligor with respect to this note, or the non-payment of any premiums on
any such life insurance policy; (10) the validity or enforceability of this
note, any guarantee hereof or any other document delivered in connection
herewith shall be contested or declared null and void or any Obligor shall
deny it has any liability or obligation under or with respect to this note,
any guarantee hereof or any other document delivered by it in
connection herewith; or (11) any Obligor shall make payment on account of
any indebtedness subordinated to the indebtedness evidenced by this
note in contravention of the terms of such subordination; then the loan
evidenced by this note and all accrued interest thereon shall become due
and payable forthwith, upon declaration to that effect by the Bank,
without notice to Borrower or any other Obligor, anything contained herein
or in any other document, instrument or agreement to the
contrary notwithstanding. The loan evidenced by this note and accrued
interest thereon shall become immediately and automatically due and
payable, without presentment, demand, protest or notice of any kind,
upon the commencement by or against any Obligor of a case or proceeding
under any bankruptcy, insolvency or other law relating to the relief of
debtors, the readjustment, composition or extension of indebtedness
or reorganization or liquidation (such additional event is also
referred to herein as an "Event of Default").
All obligations of the Borrower to the Bank under this note are
secured pursuant to the terms of any security agreement executed by the
Borrower in favor of the Bank dated of even date herewith as such agreement
may be amended or modified from time to time and any mortgage executed
by the Borrower in favor of the Bank dated of even date herewith as such
mortgage may be amended or modified from time to time, and any other
security agreement and mortgage that the Borrower shall have executed
or shall at any time execute in favor of the Bank, and the Bank is
entitled to all of the benefits thereof.
The Bank shall have a lien on the balances of the Borrower now or
hereafter on deposit with or held as custodian by the Bank and the Bank
shall have full authority to set off such balances against the
indebtedness evidenced by this note or any other Obligation of the Borrower,
and may at any time, without notice to the extent permitted by law,
apply the same to the indebtedness evidenced by this note or
such other Obligations, whether due or not.
The Borrower agrees to pay all costs and expenses incurred by the
Bank incidental to or in any way relating to the Bank's enforcement
of the obligations of the Borrower hereunder or the protection of the
Bank's rights in connection herewith, including, but not limited to,
reasonable attorneys' fees and expenses, whether or not litigation is
commenced.
The Borrower waives any right to claim or interpose any
counterclaim or set-off of any kind in any litigation relating to this
note or the transactions contemplated hereby.
This note may not be amended, and compliance with its terms may
not be waived, orally or by course of dealing, but only by a writing
signed by an authorized officer of the Bank.
This note may be assigned by the Bank and its benefits shall inure
to the successors, indorsees and assigns of the Bank.
The Borrower authorizes the Bank to date this note as of the date
of the making of the loan evidenced hereby and to complete any blank space
herein according to the terms upon which such loan was granted.
No failure on the part of the Bank to exercise, and no delay in
exercising, any right, remedy or power hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise by the Bank
of any right, remedy or power hereunder preclude any other or future
exercise thereof or the exercise of any other right, remedy or power.
Each and every right, remedy and power hereby granted to the
Bank or allowed it by law or other agreement shall be cumulative
and not exclusive of any other right, remedy or power and may be exercised
by the Bank at any time and from time to time.
Every provision of this note is intended to be severable; if any
term or provision of this note shall be invalid, illegal or unenforceable
for any reason, the validity, legality and enforceability of the
remaining provisions hereof shall not in any way be affected or impaired
thereby.
The Borrower hereby waives presentment, demand, protest and
notice of protest, non-payment or dishonor of this note.
The Borrower represents and warrants that the Borrower is a
corporation duly organized, validly existing and in good standing under
the laws of the state of its incorporation and is duly qualified to do
business in the State of New Jersey; that the execution, delivery and
performance of this note are within the Borrower's corporate powers and
have been duly authorized by all necessary action of its board of
directors and shareholders; and that each person executing this note
has the authority to execute and deliver this note on behalf of the
Borrower.
THE PROVISIONS OF THIS NOTE SHALL BE CONSTRUED AND INTERPRETED,
AND ALL RIGHTS AND OBLIGATIONS HEREUNDER DETERMINED, IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW JERSEY WITHOUT REGARD TO THE PRINCIPLES OF
CONFLICT OF LAWS. THE BORROWER SUBMITS TO THE JURISDICTION OF STATE AND
FEDERAL COURTS LOCATED IN THE STATE OF NEW JERSEY AND THE CITY OF
NEWARK IN PERSONAM AND AGREES THAT ALL ACTIONS AND PROCEEDINGS RELATING
DIRECTLY OR INDIRECTLY TO THIS NOTE SHALL BE LITIGATED ONLY IN SAID
COURTS OR COURTS LOCATED ELSEWHERE AS SELECTED BY THE BANK AND THAT SUCH
COURTS ARE CONVENIENT FORUMS. THE BORROWER WAIVES PERSONAL SERVICE UPON
IT AND CONSENTS TO SERVICE OF PROCESS BY MAILING A COPY THEREOF TO
IT BY REGISTERED OR CERTIFIED MAIL.
THE BORROWER AND THE BANK WAIVE THE RIGHT TO TRIAL BY JURY IN ANY
ACTION OR PROCEEDING BASED UPON, ARISING OUT OF OR IN ANY WAY CONNECTED
TO THIS NOTE OR THE TRANSACTIONS CONTEMPLATED HEREBY.
STERITEK, INC. Address
121 Moonachie Avenue
Moonachie , New Jersey 07074
By:_/s/ Albert J. Wozniak__________
Albert J. Wozniak,
President and Chief Executive Officer
PROMISSORY NOTE
TIME/INSTALLMENT
(FIXED RATE - LOANS NOT IN EXCESS OF $250,000)
$146,000.00 April 13, 1998
FOR VALUE RECEIVED, the undersigned (the "Borrower") hereby promises
to pay to the order of THE BANK OF NEW YORK (the "Bank") at its 385 Rifle
Camp Road, West Paterson, New Jersey office, One Hundred Forty-Six Thousand
and 00/100 Dollars ($146,000.00) in thirty-six (36) equal
consecutive installments of principal and interest, in the amount
of $__4581.17_____ each, beginning on ____May 23_________________, 1998
and continuing thereafter on the ______23rd_____________ day of each successive
month until _________April 23_______________, 2001 when the entire
unpaid principal balance hereof and interest thereon shall be due and
payable.
The Borrower agrees to pay interest from the date hereof on the
unpaid principal balance of the loan evidenced by this note, at a rate per
annum equal to __8.09__% (the "Fixed Rate"), but not to exceed the maximum
rate permitted by law.
Interest shall be computed on the basis of a 360 day year for the
actual number of days elapsed, provided that if payment is to be made in
equal installments of principal and interest, interest shall be computed on
the basis of a 360 day year comprised of twelve 30 day months. Interest
shall be payable on the ____23rd___________ day of each month and at the
maturity of the loan evidenced by this note.
If any Event of Default (as hereinafter defined) shall occur
and be continuing, the Borrower agrees to pay interest on the unpaid
balance of the loan evidenced by this note, payable on demand, at a
rate per annum equal to the higher of (i) the rate set forth above plus 2%,
and (ii) the Prime Rate plus 2%, but not to exceed the maximum rate
permitted by law. "Prime Rate" shall mean, for any day, the prime
commercial lending rate of the Bank as publicly announced to be in
effect from time to time, such rate to be adjusted automatically, without
notice, on the effective date of any change in such rate. The
Borrower acknowledges that the Prime Rate is not the lowest rate at
which the Bank may make loans or other extensions of credit.
If any payment of principal of or interest on the loan evidenced
by this note becomes payable on a Saturday, Sunday or other day on which
the Bank is permitted or required by law to be closed, then such payment
shall be extended to the next succeeding business day, and interest
shall be payable at the rate set forth above during such extension.
The loan evidenced by this note may be prepaid at any time, in whole
or in part, provided that the Borrower pays to the Bank at the time
such prepayment is made (i) accrued interest on the principal amount of the
loan being prepaid through the date of prepayment and (ii) an amount
determined in accordance with the next paragraph. If the loan evidenced
by this note is payable in installments, such prepayment shall be applied
to the installments thereof in the inverse order of maturity.
Upon any prepayment of the loan evidenced by this note, in whole
or in part, whether optional or mandatory, by voluntary or
involuntary prepayment, by acceleration or otherwise (including as a
result of any act caused by a third party including, but not
limited to, condemnation, casualty, bankruptcy or otherwise), the Borrower
agrees to pay to the Bank at the time such prepayment is made, an amount
equal to the principal amount of the loan being prepaid multiplied by (i)
if the loan is prepaid during the period from and including the date
of the making of the loan to but excluding the first anniversary date
of this note, 3%; (ii) if the loan is prepaid during the period from
and including the first anniversary date of this note to but excluding the
second anniversary date of this note, 2%; and (iii) if the loan is
prepaid thereafter, 1%.
The Bank is authorized to charge any deposit account of the
Borrower maintained at the Bank for each principal prepayment hereof on
the date made, and for each principal payment and each interest payment
and any other amount due hereunder on the due date thereof.
So long as any obligation of the Borrower to the Bank under this
note is outstanding and unpaid:
(a) As of the last day of each fiscal year of the Borrower, the ratio
of (i) earnings of the Borrower before interest, taxes, depreciation
and amortization for such fiscal year to (ii) the sum of payments of
principal on the loan evidenced by this note scheduled to be made
during the immediately succeeding fiscal year of the Borrower plus
interest expense of the Borrower in respect of the loan evidenced by
this note for the immediately succeeding fiscal year of the Borrower
shall not be less than 1.25 to 1.00;
(b) The Borrower will not grant, without the prior written consent of the
Bank, a security interest in, a lien upon or an assignment of any of its
current assets (as so classified in accordance with generally accepted
accounting principles) now owned or hereafter acquired, to secure any
obligation for the payment of borrowed money indebtedness except
indebtedness owed to the Bank;
(c) Promptly upon the Bank's request, the Borrower will furnish to the
Bank such information (including, without limitation, financial
statements and tax returns of the Borrower) as the Bank shall reasonably
request from time to time; and
(d) The Borrower will permit the Bank to inspect and make copies
of the Borrower's books and records as the Bank shall reasonably
request from time to time.
If any of the following events (each an "Event of Default") shall
occur with respect to any Obligor (which term shall include the Borrower,
any guarantor hereof or any hypothecator of any collateral securing this
note): (1) failure of any Obligor in the performance of any of such
Obligor's covenants herein or in any instrument, document or agreement
delivered in connection herewith; (2) default by any Obligor in the
payment or performance of any Obligation (which term shall include any
and all present or future obligations or liabilities of such Obligor to
the Bank, whether incurred by such Obligor as maker, indorser, drawer,
acceptor, guarantor, accommodation party, counterparty, purchaser,
seller or otherwise, and whether due or to become due, secured or
unsecured, absolute or contingent, joint and/or several, and
howsoever and whensoever acquired by the Bank); (3) failure of any Obligor
to pay when due any other indebtedness for borrowed money, acceleration
of the maturity of such indebtedness or the occurrence of any event which
with notice or lapse of time, or both, would permit acceleration
of such indebtedness; (4) if the Obligor is an individual, the
death or incompetence of such Obligor; (5) if the Obligor is not an
individual, the dissolution, merger or consolidation of, or the sale or
disposal of all or substantially all of the assets of, such Obligor
without the prior written consent of the Bank; (6) the financial
condition or credit standing of any Obligor shall be or become
materially impaired in the sole opinion of the Bank or any of its
officers; (7) commencement of any proceeding, procedure or
other remedy supplemental to the enforcement of a judgment against
any Obligor; (8) any representation or warranty made by any Obligor
or any financial or other statement of any Obligor delivered to the Bank
by or on behalf of any Obligor proves to be untrue, incorrect or
incomplete when made or delivered; (9) the death of the insured under
any life insurance policy held as collateral by the Bank for the
Obligations of any Obligor with respect to this note, or the non-payment
of any premiums on any such life insurance policy; (10) the
validity or enforceability of this note, any guarantee hereof or
any other document delivered in connection herewith shall be
contested or declared null and void or any Obligor shall deny it
has any liability or obligation under or with respect to this note, any
guarantee hereof or any other document delivered by it in connection
herewith; or (11) any Obligor shall make payment on account of any
indebtedness subordinated to the indebtedness evidenced by this
note in contravention of the terms of such subordination; then the loan
evidenced by this note and all accrued interest thereon shall become
due and payable forthwith, upon declaration to that effect by the Bank,
without notice to Borrower or any other Obligor, anything contained herein
or in any other document, instrument or agreement to the
contrary notwithstanding. The loan evidenced by this note and accrued
interest thereon shall become immediately and automatically due and
payable, without presentment, demand, protest or notice of any kind,
upon the commencement by or against any Obligor of a case or proceeding
under any bankruptcy, insolvency or other law relating to the relief of
debtors, the readjustment, composition or extension of
indebtedness or reorganization or liquidation (such additional event
is also referred to herein as an "Event of Default").
All obligations of the Borrower to the Bank under this note are
secured pursuant to the terms of any security agreement executed by the
Borrower in favor of the Bank dated of even date herewith as such agreement
may be amended or modified from time to time and any mortgage executed by
the Borrower in favor of the Bank dated of even date herewith as such
mortgage may be amended or modified from time to time, and any other
security agreement and mortgage that the Borrower shall have executed
or shall at any time execute in favor of the Bank, and the Bank is
entitled to all of the benefits thereof.
The Bank shall have a lien on the balances of the Borrower now or
hereafter on deposit with or held as custodian by the Bank and the Bank
shall have full authority to set off such balances against the
indebtedness evidenced by this note or any other Obligation of the Borrower,
and may at any time, without notice to the extent permitted by law,
apply the same to the indebtedness evidenced by this note or
such other Obligations, whether due or not.
The Borrower agrees to pay all costs and expenses incurred by
the Bank incidental to or in any way relating to the Bank's enforcement
of the obligations of the Borrower hereunder or the protection of the
Bank's rights in connection herewith, including, but not limited to,
reasonable attorneys' fees and expenses, whether or not litigation is
commenced.
Promptly upon the Bank's request, the Borrower agrees to furnish
such information (including, without limitation, financial statements
and tax returns of the Borrower) to the Bank and to permit the Bank to
inspect and make copies of its books and records, as the Bank shall
reasonably request from time to time.
So long as any obligation of the Borrower to the Bank under this
note is outstanding and unpaid, the Borrower agrees that it will not
grant, without the prior written consent of the Bank, a security interest
in, lien upon or an assignment of, any of its current assets (as so
classified in accordance with generally accepted accounting principles)
now owned or hereafter acquired, to secure any obligation for the
payment of borrowed money indebtedness except indebtedness owed to
the Bank.
The Borrower waives any right to claim or interpose any counterclaim
or set-off of any kind in any litigation relating to this note
or the transactions contemplated hereby.
This note may not be amended, and compliance with its terms may
not be waived, orally or by course of dealing, but only by a writing signed
by an authorized officer of the Bank.
This note may be assigned by the Bank and its benefits shall inure
to the successors, indorsees and assigns of the Bank.
The Borrower authorizes the Bank to date this note as of the date
of the making of the loan evidenced hereby and to complete any blank space
herein according to the terms upon which such loan was granted.
No failure on the part of the Bank to exercise, and no delay in
exercising, any right, remedy or power hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise by the Bank
of any right, remedy or power hereunder preclude any other or future
exercise thereof or the exercise of any other right, remedy or power.
Each and every right, remedy and power hereby granted to the
Bank or allowed it by law or other agreement shall be cumulative
and not exclusive of any other right, remedy or power and may be exercised
by the Bank at any time and from time to time.
Every provision of this note is intended to be severable; if any
term or provision of this note shall be invalid, illegal or unenforceable
for any reason, the validity, legality and enforceability of the
remaining provisions hereof shall not in any way be affected or impaired
thereby.
The Borrower hereby waives presentment, demand, protest and
notice of protest, non-payment or dishonor of this note.
The Borrower represents and warrants that the Borrower is a
corporation duly organized, validly existing and in good standing under
the laws of the state of its incorporation and is duly qualified to do
business in the State of New Jersey; that the execution, delivery and
performance of this note are within the Borrower's corporate powers and
have been duly authorized by all necessary action of its board of directors
and shareholders; and that each person executing this note has the
authority to execute and deliver this note on behalf of the Borrower.
The Borrower represents and warrants that the Borrower is a
corporation duly organized, validly existing and in good standing under
the laws of the state of its incorporation and is duly qualified to do
business in the State of New Jersey; that the execution, delivery and
performance of this note are within the Borrower's corporate powers and
have been duly authorized by all necessary action of its board of
directors and shareholders; and that each person executing this note
has the authority to execute and deliver this note on behalf of the
Borrower.
THE PROVISIONS OF THIS NOTE SHALL BE CONSTRUED AND INTERPRETED,
AND ALL RIGHTS AND OBLIGATIONS HEREUNDER DETERMINED, IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW JERSEY WITHOUT REGARD TO THE PRINCIPLES OF
CONFLICT OF LAWS. THE BORROWER SUBMITS TO THE JURISDICTION OF STATE AND
FEDERAL COURTS LOCATED IN THE STATE OF NEW JERSEY AND THE CITY OF
NEWARK IN PERSONAM AND AGREES THAT ALL ACTIONS AND PROCEEDINGS RELATING
DIRECTLY OR INDIRECTLY TO THIS NOTE SHALL BE LITIGATED ONLY IN SAID
COURTS OR COURTS LOCATED ELSEWHERE AS SELECTED BY THE BANK AND THAT SUCH
COURTS ARE CONVENIENT FORUMS. THE BORROWER WAIVES PERSONAL SERVICE UPON
IT AND CONSENTS TO SERVICE OF PROCESS BY MAILING A COPY THEREOF TO
IT BY REGISTERED OR CERTIFIED MAIL.
THE BORROWER AND THE BANK WAIVE THE RIGHT TO TRIAL BY JURY IN ANY
ACTION OR PROCEEDING BASED UPON, ARISING OUT OF OR IN ANY WAY CONNECTED
TO THIS NOTE OR THE TRANSACTIONS CONTEMPLATED HEREBY.
STERITEK, INC. Address:
121 Moonachie Avenue
Moonachie , New Jersey 07074
By: __/s/ Albert J. Wozniak________
Albert J. Wozniak
President and Chief Executive Officer
MASTER PROMISSORY NOTE
(PRIME RATE)
$250,000.00 March 12, 1998
FOR VALUE RECEIVED, the undersigned (the "Borrower"), jointly
and severally, if more than one, hereby promises to pay to the order of
THE BANK OF NEW YORK (the "Bank") at its 385 Rifle Camp Road,
West Paterson, New Jersey office, the principal sum of TWO HUNDRED
FIFTY THOUSAND Dollars ($250,000.00) or the aggregate amount of all
advances made by the Bank to the Borrower (which aggregate unpaid forth
opposite the date last appearing on the schedule attached to this
note), whichever is less. Advances evidenced by this note shall be
payable ON DEMAND.
The Borrower agrees to pay interest on the unpaid principal balance
of each advance evidenced hereby from the date such advance is made at a
rate per annum equal to the Prime Rate plus .500%, but not to exceed
the maximum rate permitted by law. If any payment which is to be made
hereunder is not paid when due, such payment shall bear interest,
payable on demand, at a rate per annum equal to the rate specified
in the preceding sentence plus 2%, but not to exceed the maximum rate
permitted by law. "Prime Rate" shall mean, for any day, a rate per
annum equal to the prime commercial lending rate of the Bank as
publicly announced to be in effect from time to time, such rate to be
adjusted automatically, without notice, on the effective date of any
change in such rate. The Borrower acknowledges that the Prime Rate is
not the lowest rate at which the Bank may make loans or other such
extensions of credit.
Interest shall be computed on the basis of a 360 day year for the
actual number of days elapsed and shall be payable on the FIRST day
of each month, and at maturity. If any payment of principal of or
interest on the advances evidenced by this note becomes due and payable
on a Saturday, Sunday or a day on which the Bank is permitted or required
by law to be closed, then such payment shall be extended to the next
succeeding business day and interest shall be payable at the rate set forth
above during such extension.
Advances evidenced by this note may be prepaid at any time without
penalty, but with interest on the amount being prepaid through the
date of prepayment.
If the Bank shall make a new advance on a day on which the Borrower
is to repay an advance hereunder, the Bank shall apply the proceeds of
the new advance to make such repayment and only the amount by which the
amount being advanced exceeds the amount being repaid shall be made
available to the Borrower in accordance with the terms of this note.
The Borrower hereby authorizes the Bank to accept telephonic
instructions from a duly authorized representative of the Borrower to
make an advance hereunder or receive any payment hereof and to indorse
on the schedule attached hereto the amount of all advances hereunder
and all principal payments hereof received by the Bank.
The Bank is hereby authorized to charge any deposit account of the
Borrower maintained at the Bank for each principal prepayment hereof on
the date made, and for each principal payment and for each interest
payment due hereunder on the due date thereof. The Bank shall credit
the Borrower's deposit account maintained at the Bank in the amount
of each advance hereunder on the date of such advance, which credit
will be confirmed to the Borrower by standard advice of credit or notation
in the monthly statement sent to the Borrower in connection with such
account. The Borrower agrees that the actual crediting of the amount
of the advance to the Borrower's deposit account shall constitute
conclusive evidence that the advance was made, and neither the failure
of the Bank to indorse on the schedule attached hereto the amount of the
advance nor the failure of the Bank to forward an advice of credit
to the Borrower or note such advance in the monthly statement sent
to the Borrower shall affect the Borrower's obligations hereunder.
The Bank shall have a lien on the balances of the Borrower now or
hereafter on deposit with or held as custodian by the Bank and the Bank
shall have full authority to set off such balances against the
indebtedness evidenced by this note or any other Obligation (which term
shall include any and all present and future obligations or liabilities
of the Borrower as maker, indorser, drawer, acceptor, guarantor,
accommodation party, counterparty, purchaser, seller or otherwise, and
whether due or to become due, secured or unsecured, absolute or contingent,
joint and/or several, and howsoever and whensoever acquired by the Bank)
and may at any time, without notice, to the extent permitted by law,
apply the same to the advances evidenced by this note or such other
obligations, whether due or not.
All obligations of the Borrower to the Bank under this note are
secured pursuant to the terms of any security agreement executed by the
Borrower in favor of the Bank dated of even date herewith as such agreement
may be amended or modified form time to time and any mortgage executed
by the Borrower in favor of the Bank date of even date herewith as such
mortgage may be amended or modified from time to time, and any other
security agreement and mortgage that the Borrower shall have executed or
shall at any time execute in favor of the Bank, and the Bank is entitled
to all the benefits thereof.
The Borrower acknowledges that the advances evidenced hereby are
payable on demand and payment thereof may be demanded by the Bank at any
time for any reason in the sole and absolute discretion of the Bank.
All advances evidenced hereby together with all accrued interest
thereon shall become immediately and automatically due and payable,
without demand, presentment, protest or notice of any kind, upon the
commencement by or against the Borrower, any guarantor of this note
or any hypothecator of collateral securing this note of a case or
proceeding under any bankruptcy, insolvency or other law relating to
the relief of debtors, the readjustment, composition, or
extension of indebtedness or reorganization or liquidation.
The Borrower waives presentment, demand, protest, notice of
protest and notice of non-payment or dishonor of this note.
The Borrower hereby agrees to pay all costs and expenses incurred
by the Bank incidental to or in any way relating to the Bank's enforcement
of the obligations of the Borrower hereunder or the protection of the
Bank's rights hereunder, including, but not limited to, reasonable
attorneys' fees and expenses, whether or not litigation is commenced.
Promptly upon the Bank's request, the Borrower agrees to furnish
such information (including, without limitation, financial statements
and tax returns of the Borrower) to the Bank and to permit the Bank to
inspect and make copies its books and records, as the Bank shall
reasonably request from time to time.
The Borrower waives any right to claim or interpose any
counterclaim or set-off of any king in any litigation relating to this
note or the transactions contemplated hereby.
This note may not be amended, and compliance with its terms may
not be waived, orally or by course of dealing, but only by a writing
signed by an authorized officer of the Bank.
This note may be assigned or indorsed by the Bank and its benefits
shall insure to the successors, indorsees and assigns of the Bank.
The Borrower authorizes the Bank to date this note and to
complete any blank space herein according to the terms upon which said
advances were granted.
No failure on the part of the Bank to exercise, and no delay in
exercising, any right, remedy or power hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise by the Bank
of any right, remedy or power hereunder preclude any other or future
exercise thereof or the exercise of any other right, remedy or power.
Each and every right, remedy and power hereby granted to the
Bank or allowed it by law or other agreement shall be cumulative
and not exclusive the one of any other right, remedy or power, and
may be exercised by the Bank from time to time.
Every provision of this note is intended to be severable; if any
term or provision of this note shall be invalid, illegal or unenforceable
for any reason, the validity, legality and enforceability of the
remaining provisions hereof shall not in any way be affected or impaired
thereby.
IF THE BORROWER IS A CORPORATION:
The Borrower represents and warrants that the Borrower is a
corporation duly organized, validly existing and in good standing under
the laws of the state of its incorporation and is duly qualified to do
business in the State of New Jersey; that the execution, delivery and
performance of this note are within the Borrower's corporate powers and
have been duly authorized by all necessary action of its board of
directors and shareholders; and that each person executing this note
has the authority to execute and deliver this note on behalf of the
Borrower.
IF THE BORROWER IS A LIMITED LIABILITY COMPANY:
The Borrower represents and warrants that the Borrower is
a limited liability company duly organized, validly existing and in
good standing under the laws of the state of its organization and
is duly qualified to do business in the State of New Jersey; that the
execution delivery and performance of this note are within the Borrower's
company powers and have been duly authorized by all necessary action
of its members; and that each person executing this note has the
authority to execute and deliver this note on behalf of the Borrower.
IF THE BORROWER IS A PARTNERSHIP:
The Borrower represents and warrants that the Borrower is a
partnership duly formed under the laws of the state of its formation and
is duly qualified to do business in the State of New Jersey; that the
execution , delivery and performance of this note are within the
Borrower's partnership powers and have been duly authorized by all
necessary action of its partners and do not contravene the provisions
of its partnership agreement; and that each person executing this note
has the authority to execute and deliver this note on behalf of the
Borrower.
THE PROVISIONS OF THIS NOTE SHALL BE CONSTRUED AND INTERPRETED,
AND ALL RIGHTS AND OBLIGATIONS HEREUNDER DETERMINED, IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW JERSEY WITHOUT REGARD TO THE PRINCIPLES OF
CONFLICT OF LAWS. THE BORROWER SUBMITS TO THE JURISDICTION OF STATE AND
FEDERAL COURTS LOCATED IN THE STATE OF NEW JERSEY AND THE CITY OF
NEWARK IN PERSONAM AND AGREES THAT ALL ACTIONS AND PROCEEDINGS RELATING
DIRECTLY OR INDIRECTLY TO THIS NOTE SHALL BE LITIGATED ONLY IN SAID
COURTS OR COURTS LOCATED ELSEWHERE CONVENIENT FORUMS. THE BORROWER
WAIVES PERSONAL SERVICE UPON IT AN CONSENTS TO SERVICE OF PROCESS BY
MAILING A COPY THEREOF TO IT BY REGISTERED OR CERTIFIED MAIL.
THE BORROWER AND THE BANK WAIVE THE RIGHT TO TRAIL BY JURY IN
ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT OF OR IN ANY WAY
CONNECTED TO THIS NOTE OR THE TRANSACTIONS CONTEMPLATED HEREBY.
NAME OF BORROWER ADDRESS OF BORROWER
121 Moonachie Avenue
STERITEK, INC. Moonachie, NJ 07074
SIGNATURE OF BORROWER
OR AUTHORIZED SIGNER
___/s/ Albert J. Wozniak______
If Authorized Signer
NAME Albert J. Wozniak
TITLE President and Chief Executive Officer
SIGNATURE OF BORROWER
OR AUTHORIZED SIGNER
____________________________
If Authorized Signer
NAME _____________________
TITLE _____________________
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM STERITEK,
INC. AND SUBSIDIARIES (UNAUDITED) CONSOLIDATED FINANCIAL STATEMENTS
INCLUDED IN ITS FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 1998 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-END> MAR-31-1998
<CASH> 389,211
<SECURITIES> 0
<RECEIVABLES> 1,178,763
<ALLOWANCES> 4,895
<INVENTORY> 218,405
<CURRENT-ASSETS> 2,045,960
<PP&E> 3,782,159
<DEPRECIATION> 2,329,850
<TOTAL-ASSETS> 3,563,048
<CURRENT-LIABILITIES> 1,126,073
<BONDS> 743,012
0
0
<COMMON> 640,844
<OTHER-SE> 1,033,441
<TOTAL-LIABILITY-AND-EQUITY> 3,563,048
<SALES> 6,695,303
<TOTAL-REVENUES> 6,695,303
<CGS> 4,123,337
<TOTAL-COSTS> 4,123,337
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 47,397
<INCOME-PRETAX> 636,192
<INCOME-TAX> 244,307
<INCOME-CONTINUING> 391,885
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 391,885
<EPS-PRIMARY> .10
<EPS-DILUTED> 0
</TABLE>
