Washington, D.C. 20549
SECURITIES AND EXCHANGE COMMISSION
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) November 19, 1996
GREG MANNING AUCTIONS, INC.
(Exact name of Small Business Issuer as specified in its Charter)
NEW YORK 1-11988 22-2365834
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification
No.)
775 Passaic Avenue
West Caldwell, New Jersey 07006
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code: (201) 882-0004
<PAGE>
Item 5. Other Events.
On November 19, 1996, the Company secured an additional term loan from
Brown Brothers Harriman & Co. in the amount of $1,400,000, bearing interest at
the rate of 12% per annum, payable monthly. The principal of the loan is due on
or before July 31, 1997. The loan is secured by all personal property and
fixtures of the Registrant, including accounts, contract rights, equipment,
inventory and general intangibles. The proceeds of the loan have been used to
fund a cash advance to a consignor in the amount of $1,400,000, relating to and
secured by property to be sold in the Registrant's auction to be held in June
1997.
The foregoing description is qualified in its entirety by reference to
the secured promissory note filed as an exhibit hereto, which is incorporated in
its entirety by reference herein.
Item 7. Financial Statements, Pro Forma Financial Statements and Exhibits.
(c) Exhibits
10.1 Secured Promissory Note, dated November 19, 1996, by
Greg Manning Auctions, Inc., as maker, in favor of Brown Brothers Harriman &
Co., as payee.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized
GREG MANNING AUCTIONS, INC.
By: Greg Manning
President and Chief Executive Officer
Date: December 2, 1996
<PAGE>
EXHIBIT INDEX
Exhibit
No. Description
________ __________________________________________
10.1 Secured Promissory Note, dated November 19, 1996, by Greg
Manning Auctions, Inc., as maker, in favor of Brown Brothers
Harriman & Co., as payee.
SECURED PROMISSORY NOTE (GRID)
(PLEDGE OF COLLATERAL)
$ 1,400,000.00 Date: NOVEMBER 19, 1996
Name of Maker: GREG MANNING AUCTIONS, INC.
Address of Maker:
State of Incorporation (if applicable):
Partnership Certificate Filed With (if applicable):
Due On: JULY 31, 1997
Interest Payable on: FIRST DAY OF EACH MONTH
FOR VALUE RECEIVED the Maker promises to pay on the due date set
forth above, to the order of BROWN BROTHERS HARRIMAN & CO. ("Payee') at its
office at 59 Wall Street, New York, New York 10005, the face amount hereof.
Interest on the balance from time to time outstanding shall accrue at the rate
of 12.00% per annum, and shall be payable as set forth above.
All advances pursuant to this Note and all repayments of principal due
hereunder shall be endorsed by the Payee on the schedule on the reverse side
hereof, or any continuation of such schedule attached hereto and denominated a
part hereof. Said endorsement on such schedule by an authorized agent of the
Payee shall be conclusive evidence of the unpaid balance due on this Note.
The indebtedness evidenced hereunder, as well as all other indebtedness
now or hereafter owing by the Maker to the Payee ("Obligation(s)") is secured by
certain collateral more fully described in the annexed Schedule "A', together
with all the Maker's personal property now or hereafter existing or acquired, of
any type or description, including but not limited to inventory, documents of
title covering any inventory, equipment, accounts, contract rights, general
intangibles (including tax refunds, instruments, investment securities, chattel
paper, notes, drafts, acceptances and all bank balances of the undersigned
("Collateral") which the Maker has pledged, deposited and delivered to the Payee
and granted to the Payee a security interest in.
Post-maturity or post-demand (as the case may be) interest shall
accrue and be payable at 120% of the rate payable on the due date or demand,
computed from said date to the date of actual payment.
Maker affirms and certifies that the Obligation evidenced by this Note
was not and will not be incurred for the purposes of purchasing, carrying or
trading in securities as defined in the Federal Reserve Board's Regulation
T, except in compliance with said Regulation.
In no contingency or event whatsoever shall the interest rate charged
hereunder exceed the highest rate permissible under any law which a court
of competent jurisdiction shall, in a final determination, deem applicable
hereto. In the event that such a court determines that the Payee has received
interest hereunder in excess of said highest permissible rate, Payee shall
promptly refund such excess interest to Maker.
So long as the Obligations are not in default, the Maker shall have the
right to vote any shares of stock included in the Collateral on all corporate
questions and the Payee shall, if required, execute due and timely proxies in
favor of the Maker to this end.
The Maker warrants and represents that there are no restrictions
upon the transfer of the Collateral, other than may appear on the face of the
certificates, and that the Maker has the right to pledge the Collateral free of
any encumbrances and without obtaining the consents of the other shareholders.
In the event that, prior to repayment of the Obligations, any stock dividend,
reclassification, readjustment or other change is declared or made in the
capital structure of any issuer of the Collateral, all new, substituted and
additional shares or other securities issued to Maker by reason of any such
change shall be delivered to Payee in kind to be held by the Payee under the
terms of this agreement in the same manner as all other Collateral. The
Payee may at any time, without notice to the Maker, transfer to and/or
register in Payee's name, or in the name of Payee's nominee, any or all of
the Collateral.
In the event that it becomes necessary, in Payee's opinion, to
comply with any Federal or State law or regulation or to make or file any
registration thereunder in order for Payee to exercise any of its rights
hereunder, Maker expressly agrees to do or will cause to be done all acts and
prepare and execute all documents necessary to effect such compliance or
registration, and to bear all costs in connection therewith. Maker agrees
to indemnify and to hold Payee harmless from and against any claim or liability
caused by any untrue statement of material fact, or omission to state a
material fact, as may be required in any registration statement or
prospectus; or caused by a failure to register or comply with any such law or
regulation. The Maker shall pay any and all expenses, including reasonable
attorneys' fees incurred by Payee in registering the Collateral, or in securing
an exemption for any such registration.
The Payee shall have no responsibility of any kind, nature or
description to arrange for the redelivery of the Collateral or any part
thereof to any issuer or transfer agent in order to preserve or maintain any
conversion or dividend rights with respect thereto; the Payee's only obligation
being to maintain physical possession or control thereof. The Payee agrees
to comply with any request received by it from Maker with respect to conversion,
reclassification, or the like of the Collateral, to the extent that such
instructions are not inconsistent with the intents and purposes hereof. Upon
payment and performance of all Obligations the Payee shall, at the request of
the Maker, redeliver the Collateral to the Maker.
Upon the occurrence of any of the following events of default, to wit:
the non-payment when due of any Obligation; the failure of the Maker
forthwith, upon demand, to furnish satisfactory additional Collateral, or to
make payments on account as may be agreed in any of the Obligations; the death,
failure in business, dissolution or termination of existence of the Maker of
any endorser, guarantor or surety of any Obligation (hereinafter referred to as
"Obligor(s)"); any petition for relief under the Bankruptcy Code being filed
by or against any Obligor or any proceedings in bankruptcy, or under any Acts
of Congress relating to the relief of debtors, being commenced for the relief
or readjustment of any indebtedness of any Obligor either through
reorganization, composition, extension or otherwise; the making by any Obligor
of an assignment for the benefit of creditors or for taking advantage by any
of the same of any insolvency law; any seizure, vesting or intervention by or
under authority of a government, by which the management of any Obligor is
displaced or its authority in the conduct of its business is curtailed; the
appointment of any receiver of any property of any Obligor; the attachment or
distraint of any of the Collateral or of same becoming subject at any time to
any mandatory court order or other legal process; the failure of any Obligor
to perform any of its duties as specified in any agreement(s) with respect to
the Obligations; the expulsion or suspension of any Obligor from membership in
any national securities association or any national securities exchange or other
organized exchange, or any clearing association; the admission in writing by any
Obligor of inability to pay its debts generally as they become due; the
commencement of any proceedings against any Obligor under Article 51 or 52 of
the New York Civil Practice Law and Rules (as heretofore or hereafter amended);
the Pension Benefit Guaranty Corporation shall commence proceedings (including
proceedings under Section 4042 of the Employee Retirement Income Security Act
of 1974) to terminate any employee pension benefit plan of the Maker; any
misstatement or false statement of any Obligor in connection with any
agreement between any Obligor and the Payee has been made; then in such event
the Maker shall immediately be liable without notice and shall pay on demand all
Obligations(whether or not otherwise due), together with all collection costs
and expenses, including reasonable attorneys' fees, in connection with the
collection of such indebtedness.
Payee shall have all rights and remedies of a secured party under the
Uniform Commercial Code. Further, upon the occurrence of any Event of Default,
all Obligations shall automatically become due and payable without notice and
Payee's commitment to make further loans or extensions of credit or other
financial accommodations to the Maker shall thereupon automatically and without
notice be terminated. In addition thereto, the Maker further agrees that (i) in
the event notice is necessary under applicable law, written notice mailed to the
Maker at the address then reflected in Payee's records 5 business days
prior to the date of public sale of any of the Collateral or prior to the date
after which private sale or any other disposition of the Collateral will be
made shall constitute reasonable notice, but notice given in any other
reasonable manner or at any other time shall be sufficient; (ii) in the event
of the sale or other disposition of any Collateral, Payee may apply the net
proceeds thereof first to the satisfaction of Payee's reasonable attorneys'
fees, legal expenses, and other costs and expenses incurred in connection with
Payee's taking, re-taking, holding, preparing for sale, and selling of the
Collateral; then to repayment of principal and interest on the Obligations,
with the Maker remaining liable for any deficiency; (iii) without precluding
any other methods of sale, the sale of Collateral shall have been made in a
commercially reasonable manner if conducted in conformity with reasonable
commercial practices of banks disposing of similar property, but in any event
Payee may sell on such terms as Payee may choose, without assuming any credit
risk and without any obligation to advertise or give notice of any kind; and
(iv) Payee may require the Maker to assemble Collateral, taking all necessary
or appropriate action to preserve and keep in good condition; and make such
available to Payee at a place and time convenient to both parties; all at the
expense of the Maker. To the extent permitted under applicable law, full
power and authority is hereby given Payee to sell, assign, and deliver all or
any part of the Collateral, at any time at any brokerage board, or at
public or private sale, at Payee's option, and no delay on Payee's part in
exercising any power of sale or any other rights or options hereunder, and no
notice or demand, which may be given to or made upon the Maker by Payee with
respect to any power or sale or other right or option hereunder, shall
constitute a waiver thereof, or limit or impair Payee's right to take any
action or to exercise any power of sale and any other rights' hereunder,
without notice or demand, or prejudice Payee's rights as against the Maker in
any respect. Payee may be a purchaser, free from any right of redemption
(which the Maker hereby expressly waives and releases) at any public or
private sale of Collateral. Should such net proceeds be inadequate to pay all
the Obligations, the Maker agrees to pay the Payee on demand any balance that
may be due to the Payee.
The Maker recognizes that the Payee may be unable to effect a
public sale of all or part of the Collateral by reason of certain prohibitions
contained in the Securities Act of 1933, as amended, as now or hereafter in
effect, or applicable Blue Sky or other state securities law, as now or
hereafter in effect, but may be compelled to resort to one or more private sales
to a restricted group of purchasers who will be obliged to agree, among other
things, to acquire the Collateral for their own account, for investment and not
with a view to the distribution or resale thereof. The Maker agrees that
private sales so made may be at prices and other terms less favorable to the
Payee than if such Collateral were sold at public sales, and that the
Payee has no obligation to delay sale of any such Collateral for the period
of time necessary to permit the issuer of the Collateral, even if such issuer
would agree, to register the Collateral for public sale under such applicable
securities laws. The Maker agrees that private sales made under the foregoing
circumstances shall be deemed to have been made in a commercially reasonable
manner.
The Maker at the request of the Payee will sign and deliver to the
Payee a security agreement or a trust receipt or other writing, together with
financing statement(s) or a statement of trust receipt financing or other
writing, covering any Collateral in order to comply with or to enable the
Payee to obtain the benefits of the Uniform Commercial Code or any other
similar statute now or hereafter enacted, of New York or of any other
jurisdiction where the Collateral may at any time be located. The Maker
agrees to supply the Payee with any information the Payee may reasonably
request with respect to any financing statement(s) or security agreement
relating to the Maker or to any property of the Maker, and the Maker agrees that
without written consent of the Payee the Maker will not enter into any security
agreement which creates a security interest in any category of the Maker's
personal property generally (as distinguished from any specific items
thereof) or in any after-acquired property other than accessions and fixtures.
The rights of the Payee specified herein shall be in addition to those
previously or otherwise created or existing. The Maker agrees to use every
effort and to take every action that may be necessary or appropriate to enable
the Payee to enforce, protect and preserve its rights and interests hereunder,
hereby granting unto the Payee, as the Maker's attorney-in fact, full power
and authority to take any and all such action, either in the name of the
Payee or in the name of the Maker as the Payee may in its sole discretion
determine.
The Maker authorizes the Payee, with or without notice to the
Maker, to cause to be transferred or registered at the expense of the Maker
any of the Collateral into the name of the Payee or its nominee and to
receive any income derived therefrom and to hold such income as security for
any of the Obligations or apply it upon principal or interest due on any
such Obligations. The Maker will execute and deliver in the Payee such
consents, endorsements, assignments and stock powers as may appear to
the Payee proper to further the negotiability of any of the Collateral
and will pay the expenses and charges of so furthering negotiability. The
Payee may at any time demand, sue for, collect or make any compromise or
settlement with reference to the Collateral as the Payee in its sole
discretion may determine. Any bonds or other obligations of or guaranteed by
the United States Government constituting part of the Collateral may be
pledged by the Payee (either alone or so mingled with other securities) to
secure deposits or other obligations of the Payee, whether or not such
deposits or other obligations be in excess of the Obligations.
The Maker agrees that the Payee assumes no responsibility
for the correctness, validity, genuineness or sufficiency of the instruments,
documents and/or chattel paper constituting the Collateral, or for the
existence, character, quantity, quality, condition, weight, packing, value or
delivery of any goods specified in any such documents. The Payee shall not be
required to take any steps necessary to preserve any rights against
prior parties to any of the Collateral. The Maker hereby waives presentment,
notice of dishonor and protest of all instruments evidencing or included in the
Obligations and the Collateral. The Maker will keep the Collateral adequately
covered by insurance satisfactory to the Payee, and will assign the
policies or certificates of insurance to the Payee, or make the loss or
adjustment payable to the Payee, at the option of the Payee; and the Maker
will furnish to the Payee evidence of acceptance by the insurers of such
assignment. Should the Maker fail to effect and maintain such insurance, the
Payee may do so for the account of the Maker.
No failure on the part of Payee to exercise, and no delay in
exercising any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise by Payee of any right.
power or remedy hereunder preclude any other or further exercise thereof
or the exercise of any other right, power or remedy.
If any provision hereof is held invalid or unenforceable, the
remainder and the application of such provision to other parties or
circumstances will not be affected thereby, the provisions being severable
in any such instance.
In any litigation hereunder, all Obligors hereby waive trial by jury
and waive the right to interpose any defense based upon any Statute of
Limitations or any claim of laches. Each Obligor hereby consents to the in
personam jurisdiction of the Courts of New York State, and the United
States District Court, the Southern District of New York in connection
with any claim arising hereunder. In the event that any action is commenced
hereunder in any such court, service of process may be made on any Obligor
by mailing a copy of the Summons to said party at its address then reflected in
Payee's records.
This Note shall be governed by the laws of the State of New York.
All Obligors hereby forever waive presentment, demand, protest,
notice of protest and notice of dishonor of this Note and consent without
notice to any and all extensions of time or terms of payment including any
compromise or settlement thereof.
GREG MANNING AUCTIONS, INC. GREG MANNING AUCTIONS, INC.
BY:_________________________ BY:_________________________
TITLE:_______________________ TITLE:______________________
ENDORSEMENT
FOR VALUE RECEIVED each of the undersigned endorsers assent to
all of the terms and conditions of the within Note and hereby forever waive
presentment, demand, protest, notice of protest, and notice of dishonor of
the within Note, and trial by jury, and the undersigned and each of them
guarantees the payment of said Note when due and consents without notice to
any and all extensions of time or terms of payment, and the release or
substitution, or failure to perfect a security interest in any collateral
made, agreed to or granted to or by the Payee.
SCHEDULE'A'
LIST OF COLLATERAL
07-160-001 (Rev. 3/85)
0038v
ALL PERSONAL PROPERTY AND FIXTURES OF THE DEBT0R, WHETHER NOW
EXISTING OR HEREAFTER ARISING AND WHEREVER LOCATED, OF EVERY KIND AND
DESCRIPTION, TANGIBLE OR INTANGIBLE, INCLUDING WITHOUT LIMITATION ALL GOODS,
INCLUDING WITHOUT LIMITATION EQUIPMENT AND INVENTORY; ACCOUNTS; CONTRACT
RIGHTS; DOCUMENTS, INCLUDING WITHOUT LIMITATION BILLS OF LADING, DOCK WARRANTS,
DOCK RECEIPTS, WAREHOUSE RECEIPTS AND OTHER DOCUMENTS OF TITLE CHATTEL PAPER;
GENERAL INTANGIBLES, INCLUDING WITHOUT LIMITATION TAX REFUNDS, DUTY
DRAWBACKS AND PROCEEDS OF INSURANCE AS TO ANY PROPERTY OF THE DEBTOR
DESCRIBED HEREIN; INSTRUMENTS, INCLUDING WITHOUT LIMITATION LETTERS OF CREDIT
NAMING DEBTOR AS BENEFICIARY; THE BALANCE OF EVERY DEPOSIT ACCOUNT; ALL
SECURITIES, OPTIONS, FUTURES CONTRACTS AND OTHER ASSETS DUE FROM OR HELD WITH
ANY BANK, BROKER OR DEPOSITORY INSTITUTION; MONEY; COMMODITIES; CREDITS, CLAIMS,
DEMANDS AND SECURITY INTERESTS ARISING IN FAVOR OF THE DEBTOR AND ANY OTHER
PROPERTY, RIGHTS AND INTERESTS OF THE DEBTOR; AND ALL CASH AND NON-CASH
PROCEEDS, PRODUCTS AND ACCESSIONS FROM THE SALE, LIQUIDATION OR DISPOSITION OF
ANY OF THE FOREGOING.
