Exhibit 10.1
CHANGE IN TERMS AGREEMENT
 

                                           
Principal
$84,881.80
    Loan Date
08-02-2007     Maturity
01-02-2008     Loan No
479195     Call / Coll
      Account
      Officer
025     Initials
                                             

References in the shaded area are for Lender’s use only and do not limit the
applicability of this document to any particular loan or item.
Any item above containing “***” has been omitted due to text length limitations.

 

     
Borrower:  Z-AXIS CORPORATION
THE QUADRANT — 5445 DTC PARKWAY STE. 450
GREENWOOD VILLAGE, CO 80111

 
Lender:  COLORADO BUSINESS BANK
DENVER
821 17TH ST.
DENVER, CO 80202

 
 
 

     
Principal Amount:  $84,881.80
  Date of Agreement:  August 2, 2007

 
DESCRIPTION OF EXISTING INDEBTEDNESS.  AN ORIGINAL PROMISSORY NOTE DATED JUNE 2,
2003 IN THE PRINCIPAL AMOUNT OF $500,000.00 WITH AN ORIGINAL MATURITY DATE OF
JULY 2, 2004 AND INCLUDING ANY AND ALL SUBSEQUENT EXTENSIONS OR MODIFICATIONS
THEREFROM.
 
DESCRIPTION OF CHANGE IN TERMS.  EXTENSION OF MATURITY DATE FROM AUGUST 2, 2007
TO JANUARY 2, 2008. IN ADDITION, THIS PROMISSORY NOTE WILL NO LONGER EVIDENCE A
REVOLVING LINE OF CREDIT. ALL OTHER TERMS AND CONDITIONS WILL REMAIN THE SAME.
 
PROMISE TO PAY.  Z-AXIS CORPORATION (“Borrower”) promises to pay COLORADO
BUSINESS BANK (“Lender”), or order, in lawful money of the United States of
America, the principal amount of Eighty-four Thousand Eight Hundred Eighty-one &
80/100 Dollars ($84,881.80), together with interest on the unpaid principal
balance from August 2, 2007, until paid in full.
 
PAYMENT.  Subject to any payment changes resulting from changes in the Index,
Borrower will pay this loan in accordance with the following payment schedule:
one principal payment of $14,881.80 on August 10, 2007, during which interest
continues to accrue on the unpaid principal balances at an interest rate based
on the COLORADO BUSINESS BANK PRIME RATE (currently 8.250%), plus a margin of
1.500 percentage points, resulting in an initial interest rate of 9.750%;
4 monthly consecutive principal payments of $15,000.00 each, beginning
September 2, 2007, during which interest continues to accrue on the unpaid
principal balances at an interest rate based on the COLORADO BUSINESS BANK PRIME
RATE (currently 8.250%), plus a margin of 1.500 percentage points, resulting in
an initial interest rate of 9.750%; 4 monthly consecutive interest payments,
beginning September 2, 2007, with interest calculated on the unpaid principal
balances at an interest rate based on the COLORADO BUSINESS BANK PRIME RATE
(currently 8.250%), plus a margin of 1.500 percentage points, resulting in an
initial interest rate of 9.750%; and one principal and interest payment of
$10,083.96 on January 2, 2008, with interest calculated on the unpaid principal
balances at an interest rate based on the COLORADO BUSINESS BANK PRIME RATE
(currently 8.250%), plus a margin of 1.500 percentage points, resulting in an
initial interest rate of 9.750%. This estimated final payment is based on the
assumption that all payments will be made exactly as scheduled and that the
index does not change; the actual final payment will be for all principal and
accrued interest not yet paid, together with any other unpaid amounts on this
loan. Notwithstanding the foregoing, the rate of interest accrual described for
any principal only payment stream applies only to the extent that no other
interest rate for any other payment stream applies. Unless otherwise agreed or
required by applicable law, payments will be applied first to any accrued unpaid
interest; then to principal; then to any late charges; and then to any unpaid
collection costs. Interest on this loan is computed on a 365/360 simple interest
basis; that is, by applying the ratio of the annual interest rate over a year of
360 days, multiplied by the outstanding principal balance, multiplied by the
actual number of days the principal balance is outstanding. Borrower will pay
Lender at Lender’s address shown above or at such other place as Lender may
designate in writing.
 
VARIABLE INTEREST RATE.  The interest rate on this loan is subject to change
from time to time based on changes in an index which is the COLORADO BUSINESS
BANK PRIME RATE (the “Index”). Lender will tell Borrower the current Index rate
upon Borrower’s request. The interest rate change will not occur more often than
each DAY. Borrower understands that Lender may make loans based on other rates
as well. The Index currently is 8.250% per annum. The interest rate or rates to
be applied to the unpaid principal balance during this loan will be the rate or
rates set forth herein the “Payment” section. Notwithstanding any other
provision of this Agreement, after the first payment stream, the interest rate
for each subsequent payment stream will be effective as of the last payment date
of the just-ending payment stream. NOTICE: Under no circumstances will the
interest rate on this loan be more than the maximum rate allowed by applicable
law. Whenever increases occur in the interest rate, Lender, at its option, may
do one or more of the following: (A) increase Borrower’s payments to ensure
Borrower’s loan will pay off by its original final maturity date, (B) increase
Borrower’s payments to cover accruing interest, (C) increase the number of
Borrower’s payments, and (D) continue Borrower’s payments at the same amount and
increase Borrower’s final payment.
 
PREPAYMENT.  Borrower agrees that all loan fees and other prepaid finance
charges are earned fully as of the date of the loan and will not be subject to
refund upon early payment (whether voluntary or as a result of default), except
as otherwise required by law. Except for the foregoing, Borrower may pay without
penalty all or a portion of the amount owed earlier than it is due. Early
payments will not, unless agreed to by Lender in writing, relieve Borrower of
Borrower’s obligation to continue to make payments

--------------------------------------------------------------------------------

 

under the payment schedule. Rather, early payments will reduce the principal
balance due and may result in Borrower’s making fewer payments. Borrower agrees
not to send Lender payments marked “paid in full”, “without recourse”, or
similar language. If Borrower sends such a payment, Lender may accept it without
losing any of the Lender’s rights under this Agreement, and Borrower will remain
obligated to pay any further amount owed to Lender. All written communications
concerning disputed amounts, including any check or other payment instrument
that indicates that the payment constitutes “payment in full” of the amount owed
or that is tendered with other conditions or limitations or as full satisfaction
of a disputed amount must be mailed or delivered to: COLORADO BUSINESS BANK,
ATTN: LOAN OPERATIONS, P.O. BOX 8779, DENVER, CO 80201.
 
LATE CHARGE.  If a payment is 11 days or more late, Borrower will be charged
5.000% of the unpaid portion of the regularly scheduled payment.
 
INTEREST AFTER DEFAULT.  Upon default, including failure to pay upon final
maturity, the interest rate on this loan shall be increased by adding a
5.000 percentage point margin (“Default Rate Margin”). The Default Rate Margin
shall also apply to each succeeding interest rate change that would have applied
had there been no default. After maturity, or after this loan would have matured
had there been no default, the Default Rate Margin will continue to apply to the
final interest rate described in this Agreement. However, in no event will the
interest rate exceed the maximum interest rate limitations under applicable law.
 
DEFAULT.  Each of the following shall constitute an Event of Default under this
Agreement:
 
Payment Default.  Borrower fails to make any payment when due under the
Indebtedness.
 
Other Defaults.  Borrower fails to comply with or to perform any other term,
obligation, covenant or condition contained in this Agreement or in any of the
Related Documents or to comply with or to perform any term, obligation, covenant
or condition contained in any other agreement between Lender and Borrower.
 
False Statements.  Any warranty, representation or statement made or furnished
to Lender by Borrower or on Borrower’s behalf under this Agreement or the
Related Documents is false or misleading in any material respect, either now or
at the time made or furnished or becomes false or misleading at any time
thereafter.
 
Insolvency.  The dissolution or termination of Borrower’s existence as a going
business, the insolvency of Borrower, the appointment of a receiver for any part
of Borrower’s property, any assignment for the benefit of creditors, any type of
creditor workout, or the commencement of any proceeding under any bankruptcy or
insolvency laws by or against Borrower.
 
Creditor or Forfeiture Proceedings.  Commencement of foreclosure or forfeiture
proceedings, whether by judicial proceeding, self-help, repossession or any
other method, by any creditor of Borrower or by any governmental agency against
any collateral securing the Indebtedness. This includes a garnishment of any of
Borrower’s accounts, including deposit accounts, with Lender. However, this
Event of Default shall not apply if there is a good faith dispute by Borrower as
to the validity or reasonableness of the claim which is the basis of the
creditor or forfeiture proceeding and if Borrower gives Lender written notice of
the creditor or forfeiture proceeding and deposits with Lender monies or a
surety bond for the creditor or forfeiture proceeding, in an amount determined
by Lender, in its sole discretion, as being an adequate reserve or bond for the
dispute.
 
Events Affecting Guarantor.  Any of the preceding events occurs with respect to
any guarantor, endorser, surety, or accommodation party of any of the
Indebtedness or any guarantor, endorser, surety, or accommodation party dies or
becomes incompetent, or revokes or disputes the validity of, or liability under,
any Guaranty of the Indebtedness evidenced by this Note.
 
Change in Ownership.  Any change in ownership of twenty-five percent (25%) or
more of the common stock of Borrower.

--------------------------------------------------------------------------------

 

CHANGE IN TERMS AGREEMENT

         
Loan No: 479195
  (Continued)   Page 2

 
 
Adverse Change.  A material adverse change occurs in Borrower’s financial
condition, or Lender believes the prospect of payment or performance of the
Indebtedness is impaired.
 
Insecurity.  Lender in good faith believes itself insecure.
 
LENDER’S RIGHTS.  Upon default, Lender may declare the entire unpaid principal
balance under this Agreement and all accrued unpaid interest immediately due,
and then Borrower will pay that amount.
 
ATTORNEYS’ FEES; EXPENSES.  Lender may hire or pay someone else to help collect
this Agreement if Borrower does not pay. Borrower will pay Lender the reasonable
costs of such collection. This includes, subject to any limits under applicable
law, Lender’s attorneys’ fees and Lender’s legal expenses, whether or not there
is a lawsuit, including without limitation attorneys’ fees and legal expenses
for bankruptcy proceedings (including efforts to modify or vacate any automatic
stay or injunction), and appeals. If not prohibited by applicable law, Borrower
also will pay any court costs, in addition to all other sums provided by law.
 
JURY WAIVER.  Lender and Borrower hereby waive the right to any jury trial in
any action, proceeding, or counterclaim brought by either Lender or Borrower
against the other.
 
GOVERNING LAW.  This Agreement will be governed by federal law applicable to
Lender and, to the extent not preempted by federal law, the laws of the State of
Colorado without regard to its conflicts of law provisions. This Agreement has
been accepted by Lender in the State of Colorado.
 
DISHONORED ITEM FEE.  Borrower will pay a fee to Lender of $32.00 if Borrower
makes a payment on Borrower’s loan and the check or preauthorized charge with
which Borrower pays is later dishonored.
 
RIGHT OF SETOFF.  To the extent permitted by applicable law, Lender reserves a
right of setoff in all Borrower’s accounts with Lender (whether checking,
savings, or some other account). This includes all accounts Borrower holds
jointly with someone else and all accounts Borrower may open in the future.
However, this does not include any IRA or Keogh accounts, or any trust accounts
for which setoff would be prohibited by law. Borrower authorizes Lender, to the
extent permitted by applicable law, to charge or setoff all sums owing on the
debt against any and all such accounts.
 
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 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
actions.
 
SUCCESSORS AND ASSIGNS.  Subject to any limitations stated in this Agreement on
transfer of Borrower’s interest, this Agreement shall be binding upon and inure
to the benefit of the parties, their successors and assigns. If ownership of the
Collateral becomes vested in a person other than Borrower, Lender, without
notice to Borrower, may deal with Borrower’s successors with reference to this
Agreement and the indebtedness by way of forbearance or extension without
releasing Borrower from the obligations of this Agreement or liability under the
indebtedness.
 
NOTIFY US OF INACCURATE INFORMATION WE REPORT TO CONSUMER REPORTING
AGENCIES.  Please notify us if we report any inaccurate information about your
account(s) to a consumer reporting agency. Your written notice describing the
specific inaccuracy(ies) should be sent to us at the following address: COLORADO
BUSINESS BANK ATTN: LOAN OPERATIONS 821 17TH STREET DENVER, CO 80202.
 
MISCELLANEOUS PROVISIONS.  If any part of this Agreement cannot be enforced,
this fact will not affect the rest of the Agreement. Lender may delay or forgo
enforcing any of its rights or remedies under this Agreement without losing
them. Borrower and any other person who signs, guarantees or endorses this
Agreement, to the extent allowed by law, waive presentment, demand for payment,
and notice of dishonor. Upon any change in the terms of this Agreement, and
unless otherwise expressly stated in writing, no party who signs this Agreement,
whether as maker, guarantor, accommodation maker or endorser, shall be released
from liability. As such parties agree that Lender may renew or extend
(repeatedly and for any length of time) this loan or release any party or
guarantor or collateral; or impair, fail to realize upon or perfect Lender’s
security interest in the collateral; and take any other action demand necessary
by Lender without the consent of or notice to anyone. All such parties also
agree that Lender may modify this loan without the consent of or notice to
anyone other than the party with whom the modification is made. The obligations
under this Agreement are joint and several.
 
PRIOR TO SIGNING THIS AGREEMENT, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS
OF THIS AGREEMENT, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. BORROWER
AGREES TO THE TERMS OF THE AGREEMENT.
 
 
BORROWER:
 
Z-AXIS CORPORATION
 

     
By: 

/s/  Alan Treibitz

ALAN TREIBITZ, CEO/CFO of Z-AXIS
CORPORATION

 
By: 

/s/  Stephanie S. Kelso

STEPHANIE S. KELSO, President of Z-AXIS CORPORATION

 

--------------------------------------------------------------------------------

 

DISBURSEMENT REQUEST AND AUTHORIZATION
 

                                           
Principal
$84,881.80
    Loan Date
08-02-2007     Maturity
01-02-2008     Loan No
479195     Call / Coll
      Account
      Officer
025     Initials
                                             

References in the shaded area are for Lender’s use only and do not limit the
applicability of this document to any particular loan or item.
Any item above containing “***” has been omitted due to text length limitations.

 

              Borrower:   Z-AXIS CORPORATION
THE QUADRANT - 5445 DTC PARKWAY STE. 450
GREENWOOD VILLAGE, CO 80111   Lender:   COLORADO BUSINESS BANK
DENVER
821 17TH ST.
DENVER, CO 80202

 
LOAN TYPE. This is a Variable Rate Nondisclosable Loan to a Corporation for
$84,881.80 due on January 2, 2008. The reference rate (based on COLORADO
BUSINESS BANK PRIME RATE) is added to the margin of 1.500%, resulting in an
initial rate of 9.750.
 
PRIMARY PURPOSE OF LOAN. The primary purpose of this loan is for:
 

  o  Personal, Family, or Household Purposes or Personal Investment.

 
x Business (Including Real Estate Investment).
 
SPECIFIC PURPOSE. The specific purpose of this loan is: CHANGE IN TERMS.
 
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 $84,881.80 as follows:
 

         
Other Disbursements:
  $ 84,881.80  
$84,881.80 EXTEND & MODIFY LOAN #479195 (CURRENT BALANCE)
                 
Note Principal:
  $ 84,881.80  

 
CHARGES PAID IN CASH. Borrower has paid or will pay in cash as agreed the
following charges:
 

         
Prepaid Finance Charges Paid in Cash:
  $ 2,000.00  
$2,000.00 LOAN FEE
       
Other charges Paid in Cash:
  $ 15,610.70  
$14,881.80 PRINCIPAL PAYDOWN AS OF 8-10-07
       
$728.90 INTEREST DUE TO 8-2-07
                 
Total Charges Paid in Cash:
  $ 17,610.70  

 
AUTHORIZATION. BORROWER AUTHORIZES LENDER TO DISBURSE THE LOAN PROCEEDS BY WIRE
TRANSFER WHERE APPROPRIATE AND THIS AUTHORIZATION SHALL CONSTITUTE A PAYMENT
ORDER FOR SUCH TRANSFERS.
 
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 AUGUST 2, 2007.
 
BORROWER:
 
Z-AXIS CORPORATION
 

     
By: 

/s/  Alan Treibitz

ALAN TREIBITZ, CEO/CFO of Z-AXIS
CORPORATION

 
By: 

/s/  Stephanie S. Kelso

STEPHANIE S. KELSO, President of Z-AXIS CORPORATION