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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB/A
Amendment No. 1 to Form 10-QSB
[ X ] Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended March 31, 1997
[ ] Transition report under Section 13 or 15 (d) of the Exchange Act
For the transition period from to
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Commission file number 0-25110
CHILDROBICS, INC.
(Exact Name of Small Business Issuer as Specified in Its Charter)
New York 11-3163443
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
1745 Expressway Drive North, Hauppauge, New York 11788
(Address of Principal Executive Offices)
(516)- 851-0055
(Issuer's Telephone Number, Including Area Code)
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15 (d) of the Exchange Act during the past 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
--- ---
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date: As of June 10, 1997,
15,555,001 shares of the Registrant Common Stock were outstanding.
Note: This amendment is being filed to include an Exhibit not previously
filed with the Registrant's Form 10-QSB filed on June 6,1997.
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PART II OTHER INFORMATION
Item 6 - Exhibits and Reports on Form 8-K
<TABLE>
<S> <C>
(a) Exhibits.
Exhibit 27 - Financial Data Schedule*
Exhibit 10.21 - Guaranty, dated as of May 29, 1997, by Childrobics,
Inc. in favor of European American Bank of all of the
liabilities and obligations of Just Kiddie Rides, Inc.
(b) Reports on Form 8-K
None.
* Previously filed
</TABLE>
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.
CHILDROBICS, INC.
(Registrant)
June 12, 1997 /s/ Gerard A. Reda
---------------------------------------------
Gerard A. Reda
President and Chief Executive Officer
June 12, 1997 /s/ Marie Cerulli
---------------------------------------------
Marie Cerulli
Controller
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GUARANTY OF ALL LIABILITY
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THIS GUARANTY, is entered into as of MAY 29 , 1997 by the undersigned
(the "Guarantor"), in favor of and for the benefit of EUROPEAN AMERICAN BANK, a
New York banking corporation (the "Bank").
RECITALS
A. The Bank has made and may make, from time to time, loans,
advances, extensions of credit and/or other financial accommodations
(collectively, the "Loans") for the account of JUST KIDDIE RIDES, INC. (the
"Borrower").
B. The Guarantor, being affiliated with the Borrower,
acknowledges and agrees that the Guarantor has received and will receive direct
and indirect benefits from the extension of the Loans made to the Borrower from
time to time.
C. The Guarantor wishes to grant the Bank security and
assurance in order to secure the payment and performance by the Borrower of all
of its present and future Obligations (as that term is defined below), and, to
that effect, to guaranty the Borrower's Obligations as set forth herein.
Accordingly, the Guarantor hereby agrees as follows:
1. GUARANTY.
(a) The Guarantor hereby unconditionally and
irrevocably guarantees to the Bank the full and punctual payment by the
Borrower, when due, whether at the stated due date, by acceleration or otherwise
of all Obligations (as defined below) of the Borrower, howsoever created,
arising or evidenced, voluntary or involuntary, whether direct or indirect,
absolute or contingent now or hereafter existing or owing to the Bank,
(collectively, the "Guaranteed Obligations"). This Guaranty is an absolute,
unconditional, continuing guaranty of payment and not of collection of the
Guaranteed Obligations and includes Guaranteed Obligations arising from
successive transactions which shall either continue such Guaranteed Obligations
or from time to time renew such Guaranteed Obligations after the same has been
satisfied. This Guaranty is in no way conditioned upon any attempt to collect
from the Borrower or upon any other event or contingency, and shall be binding
upon and enforceable against the Guarantor without regard to the validity or
enforceability of any document, instrument or agreement evidencing or governing
the Obligations or any other agreement or instrument executed in connection
therewith (including, without limitation, this Guaranty) or contemplated thereby
(each, a "Loan Document" and, collectively, the "Loan Documents"). If for any
reason the Borrower shall fail or be unable duly and punctually to pay any of
the Guaranteed Obligations (including, without limitation, amounts that would
become due but for the operation of the automatic stay under Section 362(a) of
the Bankruptcy Code, 11 U.S.C. Section 362(a)), the Guarantor will forthwith pay
the same, in cash, immediately upon demand. As used herein "Obligations" shall
mean all obligations, liabilities and indebtedness of the Borrower to the Bank,
whether now existing or hereafter created, absolute or contingent, direct or
indirect, due or not, whether created directly or acquired by assignment or
otherwise, including, without limitation, the Loan and the payment and
performance of all other obligations, liabilities, and indebtedness of the
Borrower to the Bank under the Loan Documents, including without limitation all
fees, costs, expenses and indemnity obligations thereunder.
(b) In the event any Loan Document shall be
terminated as a result of the rejection thereof by any trustee, receiver or
liquidating agent of the Borrower or any of its properties in any bankruptcy,
insolvency, reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar proceeding, the Guarantor's obligations hereunder shall
continue to the same extent as if such Loan Document had not been so rejected.
(c) The Guarantor agrees to pay all costs, expenses
(including, without limitation, attorneys' fees and disbursements) and damages
incurred in connection with the enforcement of the Guaranteed Obligations of the
Borrower to the extent that such costs, expenses and damages are not paid by the
Borrower pursuant to the respective Loan Documents.
(d) The Guarantor further agrees that if any payment
made by the Borrower or the Guarantor to the Bank on any Guaranteed Obligation
is rescinded, recovered from or repaid by the Bank, in whole or in part, in any
bankruptcy, insolvency or similar proceeding instituted by or against the
Borrower or Guarantor, this Guaranty shall continue to be fully applicable to
such Guaranteed Obligation to the same extent as though the payment so recovered
or repaid had never originally been made on such Guaranteed Obligation
regardless of, and, without giving effect to, any discharge or release of the
Guarantor's obligations hereunder granted by the Bank after the date hereof.
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2. GUARANTY CONTINUING, ABSOLUTE, UNLIMITED.
The obligations of the Guarantor hereunder shall be continuing,
absolute, unlimited and unconditional, shall not be subject to any counterclaim,
setoff, deduction or defense based upon any claim the Guarantor may have against
the Bank or the Borrower or any other person, and shall remain in full force and
effect without regard to, and, to the fullest extent permitted by applicable
law, shall not be released, discharged or in any way affected by, any
circumstance or condition (whether or not any Guarantor shall have any knowledge
or notice thereof) whatsoever which might constitute a legal or equitable
discharge or defense including, but not limited to, (a) any express or implied
amendment, modification or supplement to any Loan Document or any other
agreement referred to in any Loan Document; (b) any failure on the part of the
Borrower to perform or comply with any Loan Document, or any failure of any
other person to perform or comply with any term of any Loan Document; (c) any
waiver, consent, change, extension, indulgence or other action or any action or
inaction under or in respect of any Loan Document or any other agreement as
aforesaid, whether or not the Bank, the Borrower or the Guarantor has notice or
knowledge of any of the foregoing; (d) any bankruptcy, insolvency,
reorganization, arrangement, readjustment, composition, liquidation or similar
proceeding with respect to the Borrower, or its properties or its creditors, or
any action taken by any trustee or receiver or by any court in any such
proceeding; (e) any furnishing or acceptance of additional security or any
release of any security; (f) any limitation on the liability or obligations of
the Borrower under any Loan Document or any termination, cancellation,
frustration, invalidity or unenforceability, in whole or in part, of any Loan
Document; (g) any lien, charge or encumbrance on or affecting the Guarantor's or
any of the Borrower's respective assets and properties; (h) any act, omission or
breach on the part of the Bank under any Loan Document or any other agreement at
any time existing between the Bank and the Borrower or any law or governmental
regulation applicable to the Bank or any Loan Document; (i) any claim as a
result of any other dealings among the Bank, the Guarantor or the Borrower; (j)
the assignment of this Guaranty, any Loan Document to any other person; or (k)
any change in the name of the Bank, the Borrower or any other person or entity
referred to herein.
3. WAIVER.
The Guarantor unconditionally and irrevocably waives, to the fullest
extent permitted by applicable law: (a) notice of any of the matters referred to
in Section 2 hereof; (b) all notices which may be required by statute, rule of
law or otherwise to preserve any rights against the Guarantor hereunder,
including, without limitation, notice of the acceptance of this Guaranty, or the
creation, renewal, extension, modification or accrual of the Guaranteed
Obligations or notice of any other matters relating thereto, any presentment,
demand, notice of dishonor, protest, nonpayment of any damages or other amounts
payable under any Loan Document; (c) any requirement for the enforcement,
assertion or exercise of any right, remedy, power or privilege under or in
respect of any Loan Document, including, without limitation, diligence in
collection or protection of or realization upon the Guaranteed Obligations or
any part thereof or any collateral therefor; (d) any requirement of diligence;
(e) any requirement to mitigate the damages resulting from a default by the
Borrower under any Loan Document; (f) the occurrence of every other condition
precedent to which the Guarantor or the Borrower may otherwise be entitled; (g)
the right to require the Bank to proceed against the Borrower or any other
person liable on the Guaranteed Obligations, to proceed against or exhaust any
security held by the Borrower or any other person, or to pursue any other remedy
in the Bank's power whatsoever, (h) the right to have the property of the
Borrower first applied to the discharge of the Guaranteed Obligations and any
and all rights it may now or hereafter have under any agreement or at law or in
equity (including, without limitation, any law subrogating the Guarantor to the
rights of the Bank) to assert any claim against or seek contribution,
indemnification or any other form of reimbursement from the Borrower or any
other party liable for payment of any or all of the Guaranteed Obligations for
any payment made by the Guarantor under or in connection with this Guaranty or
otherwise.
The Bank may, at its election, exercise any right or remedy it may have
against the Borrower without affecting or impairing in any way the liability of
the Guarantor hereunder and the Guarantor waives, to the fullest extent
permitted by applicable law, any defense arising out of the absence, impairment
or loss of any right of reimbursement, contribution or subrogation or any other
right or remedy of the Guarantor against the Borrower, whether resulting from
such election by the Bank or otherwise. The Guarantor waives any defense arising
by reason of any disability or other defense of the Borrower or by reason of the
cessation for any cause whatsoever of the liability, either in whole or in part,
of the Borrower to the Bank for the Guaranteed Obligations.
The Guarantor assumes the responsibility for being and keeping informed
of the financial condition of the Borrower and of all other circumstances
bearing upon the risk of nonpayment of the Guaranteed Obligations and agrees
that the Bank shall not have any duty to advise the Guarantor of information
regarding any condition or circumstance or any change in such condition or
circumstance. The Guarantor acknowledges that the Bank has not made any
representations to the Guarantor concerning the financial condition of the
Borrower.
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4. REPRESENTATIONS AND WARRANTIES OF THE GUARANTOR.
The Guarantor hereby represents and warrants that:
(a) If not an individual, it is a general partnership, limited
partnership, corporation, limited liability company or limited liability
partnership (as indicated on the signature page hereto) duly organized or
formed, as the case may be, under the laws of the jurisdiction of its
incorporation or formation and has all requisite power and authority to enter
into this Guaranty and to carry out its obligations hereunder.
(b) The execution, delivery and performance of this Guaranty
by the Guarantor have been duly authorized by all necessary action (other than a
Guarantor who is an individual) and this Guaranty constitutes the legal, valid
and binding obligation of the Guarantor, enforceable against the Guarantor in
accordance with its terms.
(c) If not an individual, it has the power and authority to
own its properties and assets and to conduct its business as now being conducted
and is duly qualified to do business in every jurisdiction in which the nature
of its assets or the conduct of its business requires it to be so qualified.
(d) Neither this Guaranty nor any other Loan Document to which
the Guarantor is a party will violate any provision of law, rule or regulation
to the Guarantor's best knowledge or any order of any court or other
governmental agency to which the Guarantor is subject, the organizational
documents of the Guarantor, any provision of any agreement or instrument to
which the Guarantor is a party or by which the Guarantor or any of the
Guarantor's properties or assets are bound, or be in conflict with, result in a
breach of, or constitute a default under (with or without notice or lapse of
time), any such agreement or instrument, or result in the creation or imposition
of any lien, charge or encumbrance of any nature whatsoever upon any properties
or assets of the Guarantor.
(e) No action or approval by or of and no filing or
registration with any governmental or public body or authority, or any
subdivision thereof, nor the consent of any other person or entity, nor any
other legal formality is required in connection with the entering into,
performance or enforcement of this Guaranty, except such as have been obtained
or taken and with respect to which a copy or other satisfactory evidence thereof
has been furnished to the Bank.
5. EVENTS OF DEFAULT.
Upon the occurrence of any of the following events (each an "Event of
Default"):
(a) the Guarantor defaults under this Guaranty or any Loan
Document to which the Guarantor is a party;
(b) any representation or warranty made by the Guarantor
herein or in any other Loan Document to which the Guarantor is a party is false
or untrue as of the date such representation or warranty is made;
(c) the Guarantor commences any case, proceeding, or other
action under any law of any jurisdiction relating to bankruptcy, insolvency,
reorganization, or relief of debtors or seeks to have an order for relief
entered with respect to the Guarantor or seeks to be adjudicated a bankrupt or
insolvent, or seeks reorganization, arrangement, adjustment, liquidation,
dissolution, composition or other relief with respect to the Guarantor or the
Guarantor's debts, or seeks the appointment of a receiver, trustee, custodian,
or other similar official for the Guarantor or for all or any substantial part
of the Guarantor's property;
(d) the Guarantor makes a general assignment for the benefit
of creditors;
(e) there is commenced against the Guarantor, any case,
proceeding or other action of the type referred to in clause (c) above or
seeking the issuance of a warrant of attachment, execution, distraint, or
similar process against all or any substantial part of the Guarantor's property,
which case, proceeding or other action results in an entry of an order for
relief or is not dismissed, discharged or bonded within sixty days of the
commencement thereof;
(f) the Guarantor takes any action indicating the Guarantor's
consent to, approval of, or acquiescence in or in furtherance of, any of the
acts set forth in clause (c) and (e) above;
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(g) the death or incapacity of a Guarantor, if an individual;
(h) the Guarantor admits in writing the Guarantor's inability
to pay the Guarantor's debts as they mature; or
(i) the Guarantor terminates or dissolves or suspends the
Guarantor's usual business activities or conveys, sells, leases, transfers or
otherwise disposes of all or a substantial part of the Guarantor's property,
business or assets other than in the ordinary course of business;
then, any or all of the Liabilities shall, at the Bank's option, become (for the
purpose of this Guaranty) immediately due and payable by the Guarantor, without
demand or notice.
6. PARTIES.
This Guaranty shall inure to the benefit of the Bank and its
successors, assigns or transferees, and shall be binding upon each Guarantor and
its successors and assigns. No Guarantor may delegate any of the Guarantor's
duties under this Guaranty without the prior written consent of the Bank.
7. NOTICES.
Any notice shall be conclusively deemed to have been received by a
party hereto and to be effective on the day on which delivered to such party at
the address set forth below if hand delivered or sent by Federal Express or
other reputable courier of national reputation, or if sent by registered or
certified mail, on the third business day after the day on which mailed in the
United States, addressed to such party at said address:
(a) if to the Bank, at
European American Bank
730 Veterans Memorial Highway
at Old Willets Path
Hauppauge, NY 11788
Attention: James Riley, Vice President
(b) if to the Guarantor,
Childrobics, Inc.
1745 Express Drive North
Hauppauge, NY 11788
- and -
(c) as to each such party at such other address as such party
shall have designated to the other in a written notice complying as to delivery
with the provisions of this Section 7.
8. RIGHT TO DEAL WITH THE BORROWER.
At any time and from time to time, without terminating, affecting or
impairing the validity of this Guaranty or the obligations of the Guarantor
hereunder, the Bank may deal with the Borrower in the same manner and as fully
as if this Guaranty did not exist and shall be entitled, among other things, to
grant the Borrower, without notice or demand and without affecting the
Guarantor's liability hereunder, such extension or extensions of time to
perform, renew, compromise, accelerate or otherwise change the time for payment
of or otherwise change the terms of indebtedness or any part thereof contained
in or arising under any Loan Document or any other document evidencing
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Obligations of the Borrower to the Bank, or to waive any obligation of the
Borrower to perform, any act or acts as the Bank may deem advisable.
9. DELIVERY OF FINANCIAL STATEMENTS.
The Guarantor shall deliver to the Bank:
(a) If the Guarantor is other than an individual, annually, as
soon as available, but in any event within 120 days after the last day of each
of its fiscal years, a balance sheet of the Guarantor and its subsidiaries, as
at such last day of the fiscal year, and statements of income and retained
earnings and cash flow for such fiscal year, each prepared in accordance with
generally accepted accounting principles consistently applied, in reasonable
detail.
(b) If the Guarantor is an individual, annually, as soon as
available, but in any event within 120 days after the last day of each calendar
year, the personal financial statement of the Guarantor on the Bank's standard
form or such other form as may be acceptable to the Bank from time to time.
(c) Promptly after a written request therefor, such other
financial data or information as the Bank may reasonably request from time to
time.
10. SURVIVAL OF REPRESENTATIONS, WARRANTIES, AND AGREEMENTS.
All representations, warranties, covenants and agreements made herein,
including representations and warranties deemed made herein, shall survive any
investigation or inspection made by or on behalf of the Bank and shall continue
in full force and effect until all of the obligations of the Guarantor under
this Guaranty shall be fully performed in accordance with the terms hereof, and
until the payment in full of the Guaranteed Obligations.
11. GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL. THIS
GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK. THE GUARANTOR HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION
OF THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF NEW YORK AND ANY
COURT IN THE STATE OF NEW YORK IN ANY ACTION, SUIT OR PROCEEDING BROUGHT AGAINST
THE GUARANTOR AND RELATED TO OR IN CONNECTION WITH THIS GUARANTY OR THE
TRANSACTIONS CONTEMPLATED HEREBY, AND TO THE EXTENT PERMITTED BY APPLICABLE LAW,
THE GUARANTOR HEREBY WAIVES AND AGREES NOT TO ASSERT BY WAY OF MOTION, AS A
DEFENSE OR OTHERWISE IN ANY SUCH SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT THE
GUARANTOR IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF SUCH COURTS, THAT THE
SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM, THAT THE VENUE
OF THE SUIT, ACTION OR PROCEEDING IS IMPROPER, OR THAT THIS GUARANTY OR ANY
DOCUMENT OR ANY INSTRUMENT REFERRED TO HEREIN OR THE SUBJECT MATTER THEREOF MAY
NOT BE LITIGATED IN OR BY SUCH COURTS. TO THE EXTENT PERMITTED BY APPLICABLE
LAW, THE GUARANTOR AGREES (i) NOT TO SEEK AND HEREBY WAIVES THE RIGHT TO ANY
REVIEW OF THE JUDGMENT OF ANY SUCH COURT BY ANY COURT OF ANY OTHER NATION OR
JURISDICTION WHICH MAY BE CALLED UPON TO GRANT AN ENFORCEMENT OF SUCH JUDGMENT
AND (ii) NOT TO ASSERT ANY COUNTERCLAIM, IN ANY SUCH SUIT, ACTION OR PROCEEDING
UNLESS SUCH COUNTERCLAIM COULD NOT, BY REASON OF ANY APPLICABLE FEDERAL OR STATE
PROCEDURAL LAWS, BE INTERPOSED, PLEADED OR ALLEGED IN ANY OTHER ACTION. THE
GUARANTOR AGREES THAT SERVICE OF PROCESS MAY BE MADE UPON THE GUARANTOR BY
CERTIFIED OR REGISTERED MAIL TO THE ADDRESS FOR NOTICES SET FORTH IN THIS
GUARANTY OR ANY METHOD AUTHORIZED BY THE LAWS OF NEW YORK. THE GUARANTOR
IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS GUARANTY, THE LOAN DOCUMENTS OR
THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
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12. MISCELLANEOUS.
(a) If this Guaranty is executed by two or more parties, they
shall be jointly and severally liable hereunder, and the word "Guarantor"
wherever used herein shall be construed to refer to each of such parties
separately, all in the same manner and with the same effect as if each of them
had signed separate instruments; and in any such case this Guaranty shall not be
revoked or impaired as to any one or more of such parties by the death or
dissolution of any of the others or by the revocation or release of any
liabilities hereunder of any one or more of such other parties and the Bank may
proceed against none, one or more of the Guarantors at one time, or from time to
time, in its sole and absolute discretion.
(b) If any term of this Guaranty or any application hereof
shall be invalid or unenforceable, the remainder of this Guaranty and any other
application of such term shall not be affected thereby.
(c) Any term of this Guaranty may be amended, waived,
discharged or terminated only by an instrument in writing signed by the
Guarantor and the Bank. No notice to or demand on the Guarantor shall be deemed
to be a waiver of the obligations of the Guarantor or of the right of the Bank
to take further action without notice or demand as provided in this Guaranty. No
course of dealing between the Guarantor and the Bank shall change, modify or
discharge, in whole or in part, this Guaranty or any obligations of the
Guarantor hereunder. No waiver of any term, covenant or provision of this
Guaranty shall be effective unless given in writing by the Bank and if so given
shall only be effective in the specific instance in which given.
(d) The headings in this Guaranty are for purposes of
reference only and shall not limit or define the meaning hereof.
(e) No delay or omission by the Bank in the exercise of any
right under this Guaranty shall impair any such right, nor shall it be construed
to be a waiver thereof; nor shall any single or partial exercise of any right
hereunder preclude any other or further exercise of any other right.
(f) The liability of any Guarantor under this Guaranty may be
terminated, but only with respect to Guaranteed Obligations arising subsequent
to the effective Date of Termination, upon written notice to that effect, signed
and delivered by the Guarantor to the Bank, provided, however, that such
termination shall only be effective upon the Bank's receipt thereof. In the
event of such termination, the Guarantor shall remain liable with respect to the
Guaranteed Obligations prior to date of termination, including any renewals,
extensions, modifications thereof, and this Guaranty shall remain in full force
and effect as if no such termination has been made.
(g) The execution and delivery of this Guaranty shall not
supersede, terminate, modify or supplement in any manner any other Guaranty
previously executed and delivered to the Bank by a Guarantor and no release or
termination of any Guaranty shall be construed to terminate or release any other
Guarantee unless such Guaranty is specifically referred to in any such
termination.
IN WITNESS WHEREOF, the undersigned has executed and delivered this
Guaranty as of the day and year first above written.
CHILDROBICS, INC.
By: /s/_______________________
Name: Gerard A. Reda
Title: President
WITNESS: /s/_________________________
EAB Officer: Gary M. Golden
Vice President
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