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Conformed Copy
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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) July 18, 1997
PUROFLOW INCORPORATED
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(Exact name of registrant as specified in its charter)
DELAWARE 13-1947195
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(State or other jurisdiction (I.R.S. Employer
of incorporation) identification No.)
0-5622
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(Commission File Number)
16559 SATICOY STREET, VAN NUYS, CALIFORNIA 91406-1739
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (818) 756-1388
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(Former name or former address, if changed since last report)
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ITEM 1 None
ITEM 2 None
ITEM 3 None
ITEM 4 None
ITEM 5 The Registrant renewed and extended its bank loan agreement with
California United Bank for a period of one (1) year expiring June 3,
1998 at a reduced interest rate of 1% over prime.
ITEM 6 None
ITEM 7 None
ITEM 8 None
EXHIBIT A
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Copy of change in terms of bank loan agreement with California United
Bank.
SIGNATURE
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Pursuant to the requirements of Securities Exchange Act of 1934, the Registrant
has duly caused this report to be signed on its behalf by the undersigned hereto
duly authorized.
Puroflow Incorporated
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Registrant
By: /s/ MICHAEL H. FIGOFF
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Michael H. Figoff
President/CEO
Dated: July 21, 1997
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CALIFORNIA
UNITED BANK
CHANGE IN TERMS AGREEMENT
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BORROWER: Puroflow Incorporated LENDER: California United Bank
16559 Sallcoy Street Encino Commercial Loan Center
Van Nuys, CA 91406 16030 Ventura Boulevard
Encino, CA 91436
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PRINCIPAL AMOUNT: $750,000.00 DATE OF AGREEMENT: JULY 14, 1997
DESCRIPTION OF EXISTING INDEBTEDNESS. A Promissory Note dated as of August
12, 1996 in the original principal amount of $750,000.00, executed by Borrower
in favor of Lender.
DESCRIPTION OF COLLATERAL. This Note is secured by the Collateral as defined
in that certain Commercial Security Agreement, dated as of August 12, 1996, as
it may amended, modified, supplemented, replaced, or restated, from time to
time, executed by Grantor in favor of Lender.
DESCRIPTION OF CHANGE IN TERMS. The maturity date is amended from June 3,
1997 to June 3, 1998. Effective as of July 3, 1997, the interest rate is
changed from the Index rate plus one and one-half percent (1.50%) to the Index
rate plus one percent (1.00%). Regularly scheduled monthly interest payments
shall continue to be due and payable as provided in said Note, commencing
August 3, 1997.
ARBITRATION. LENDER AND BORROWER AGREE THAT ALL DISPUTES, CLAIMS AND
CONTROVERSIES BETWEEN THEM, WHETHER INDIVIDUAL, JOINT, OR CLASS IN NATURE,
ARISING FROM THIS AGREEMENT OR OTHERWISE, INCLUDING WITHOUT LIMITATION
CONTRACT AND TORT DISPUTES, SHALL BE ARBITRATED PURSUANT TO THE RULES OF THE
AMERICAN ARBITRATION ASSOCIATION, UPON REQUEST OF EITHER PARTY. No act to take
or dispose of any collateral securing this Agreement shall constitute a waiver
of this arbitration agreement or be prohibited by this arbitration agreement.
This includes, without limitation, obtaining injunctive relief or a temporary
restraining order; invoking a power of sale under any deed of trust or
mortgage; obtaining a writ of attachment or imposition of a receiver, or
exercising any rights relating to personal property, including taking or
disposing of such property with or without judicial process pursuant to
Article 9 of the Uniform Commercial Code. Any disputes, claims, or
controversies concerning the lawfulness or reasonableness of any act, or
exercise of any right, concerning any collateral securing this Agreement,
including any claim to rescind, reform, or otherwise modify any agreement
relating to the collateral securing this Agreement, shall also be
arbitrated, provided however that no arbitrator shall have the right or the
power to enjoin or restrain any act of any party. Lender and Borrower agree
that in the event of an action for judicial foreclosure pursuant to California
Code of Civil Procedure Section 726, or any similar provision in any other
state, the commencement of such an action will not constitute a waiver of the
right to arbitrate and the court shall refer to arbitration as much of such
action, including counterclaims, as lawfully may be referred to arbitration.
Judgment upon any award rendered by any arbitrator may be entered in any court
having jurisdiction. Nothing in this Agreement shall preclude any party from
seeking equitable relief from a court of competent jurisdiction. The statute
of limitations, estoppel, waiver, laches, and similar doctrines which would
otherwise be applicable in an action brought by a party shall be applicable in
any arbitration proceeding, and the commencement of an arbitration proceeding
shall be deemed the commencement of an action for these purposes. The Federal
Arbitration Act shall apply to the construction, interpretation, and
enforcement of this arbitration provision.
CONTINUING VALIDITY. Except as expressly changed by this Agreement, the terms
of the original obligation or obligations, including all agreements evidenced
or securing the obligation(s), remain unchanged and in full force and effect.
Consent by Lender to this Agreement does not waive Lender's right to strict
performance of the obligation(s) as changed, nor obligate Lender to make any
future change in terms. Nothing in this Agreement will constitute a
satisfaction of the obligation(s). It is the intention of Lender to retain as
liable parties all makers and endorsers of the original obligation(s),
including accommodation parties, unless a party is expressly released by
Lender in writing. Any maker or endorser, including accommodation makers, will
not be released by virtue of this Agreement. If any person who signed the
original obligation does not sign this Agreement below, then all persons
signing below acknowledge that this Agreement is given conditionally, based on
the representation to Lender that the non-signing party consents to the
changes and provisions of this Agreement or otherwise will not be released by
it. This waiver applies not only to any initial extension, modification or
release, but also to all such subsequent action.
PRIOR TO SIGNING THIS AGREEMENT, BORROWER READ AND UNDERSTOOD ALL THE
PROVISIONS OF THIS AGREEMENT. BORROWER AGREES TO THE TERMS OF THE AGREEMENT
AND ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THE AGREEMENT.
BORROWER:
Puroflow Incorporated
By: /s/Michael H. Figoff
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Michael H. Figoff, President/CEO
LENDER:
California United Bank
By:
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Authorized Officer
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EXHIBIT A
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CALIFORNIA
UNITED BANK
DISBURSEMENT REQUEST AND AUTHORIZATION
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BORROWER: Puroflow Incorporated LENDER: California United Bank
16559 Saticoy Street Encino Commercial Loan Center
Van Nuys, CA 91406 16030 Ventura Boulevard
Encino, CA 91436
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LOAN TYPE. This is a Variable Rate (1.000% over prime rate published on a
daily basis in the "Money Rates" Section of the Western Edition of The Wall
Street Journal, making an initial rate of 9.500%), Revolving Line of Credit
Loan to a Corporation for $750,000.00 due on June 3, 1998.
PRIMARY PURPOSE OF LOAN. The primary purpose of this loan is for:
/ / Personal, Family, or Household Purposes or Personal Investment.
/x/ Business (Including Real Estate Investment).
SPECIFIC PURPOSE. The specific purpose of this loan is: Finance short term
working capital requirements.
DISBURSEMENT INSTRUCTIONS. Borrower understands that no loan proceeds will be
disbursed until all of Lender's conditions for making the loan have been
satisfied. Please disburse the loan proceeds of $750,000.00 as follows:
UNDISBURSED FUNDS: $750,000.00
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NOTE PRINCIPAL: $750,000.00
CHARGES PAID IN CASH. Borrower has paid or will pay in cash as agreed the
following charges:
PREPAID FINANCE CHARGES PAID IN CASH: $2,250.00
$1,875.00 Loan Fee
$300.00 Loan Documentation Fee
$75.00 Credit Report Fee
OTHER CHARGES PAID IN CASH: $150.00
$150.00 Asset Search Fee
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TOTAL CHARGES PAID IN CASH: $2,400.00
AUTOMATIC PAYMENTS. Borrower hereby authorizes Lender automatically to deduct
from Borrower's account numbered 1055275 the amount of any loan payment. If
the funds in the account are Insufficient to cover any payment, Lender shall
not be obligated to advance funds to cover the payment. At any time and for
any reason. Borrower or Lender may voluntarily terminate Automatic Payments.
FINANCIAL CONDITION. BY SIGNING THIS AUTHORIZATION, BORROWER REPRESENTS AND
WARRANTS TO LENDER THAT THE INFORMATION PROVIDED ABOVE IS TRUE AND CORRECT AND
THAT THERE HAS BEEN NO MATERIAL ADVERSE CHANGE IN BORROWER'S FINANCIAL
CONDITION AS DISCLOSED IN BORROWER'S MOST RECENT FINANCIAL STATEMENT TO
LENDER. THIS AUTHORIZATION IS DATED JULY 14, 1997.
BORROWER:
Puroflow Incorporated
By: /s/Michael H. Figoff
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Michael H. Figoff, President CEO
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SECOND AMENDMENT TO LOAN AGREEMENT:
THIS AGREEMENT, dated as of July 14, 1997 is entered into by and between
PUROFLOW INFORPORATED, a Delaware corporation ("Borrower"), and CALIFORNIA
UNITED BANK, a California banking corporation ("Lender").
RECITALS:
A. The Borrower and Lender are parties to a Loan Agreement dated as of
August 12, 1996, as amended dated as of March 14, 1997, (collectively the
"Agreement").
B. Borrower and Lender have agreed to amend certain terms and conditions
of the Agreement in certain respects.
C. Borrower and Lender are contemporaneously with this Agreement entering
into a Change in Terms Agreement which may also amend certain terms of the Loan
Agreement.
AGREEMENT:
Borrower and Lender agree as follows:
1. Each of the terms defined in the Agreement, unless otherwise defined
herein, shall have the same meaning when used herein.
2. The section titled OTHER REPORTS (d) of the Agreement is deleted without
substitution therefor.
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3. The section titled CASH COLLATERAL ACCOUNT of the Agreement is amended in
full to read as follows:
CASH COLLATERAL ACOUNT. Lender may, at its sole and absolute discretion,
require Borrower to maintain a Cash Collateral Account with Lender, in which
Lender shall have a first priority security interest in the Commercial Security
Agreement and the Assignment of Deposit Account. All deposits made by Borrower
or on behalf of Borrower shall be made to the Cash Collateral Account with the
daily ending balance of each account being applied to the outstanding balance on
the Line of Credit.
4. Except as specifically amended above, the Agreement shall remain in full
force and effect and is hereby ratified and confirmed. This Amendment and the
Agreement shall be read together, as one document.
5. Borrower represents and warrants as follows:
(a) Each of the representations and warranties contained in the
Agreement, as amended hereby, is hereby reaffirmed as of the date hereof;
(b) The execution, delivery and performance of this Amendment and any note
required hereunder are within the Borrower's powers, have been duly authorized
by all necessary action, have received all necessary governmental approvals, if
any, and do not contravene any law or any contractual restriction binding on
Borrower, and
(c) No event has occured and is continuing or would result from this
Amendment that constitutes an Event of Default under the Agreement, or would
constitute an Event of Default but for the requirement that notice be given or
time elapse or both.
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WITNESS the due execution hereof as of the date first above written.
PUROFLOW INCORPORATED
By: /s/ Michael H. Figoff
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Michael H. Figoff, President/CEO
CALIFORNIA UNITED BANK
By:
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Tom Roche, Assistant Vice President
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