EXHIBIT 10.30
LOAN AGREEMENT
THIS LOAN AGREEMENT (as it may be amended or modified from time to
time, together with all exhibits and schedules attached hereto from time to
time, this "Agreement") is entered into as of the 26th day of March, 2003 (the
"Effective Date") by and between DNA COMPUTING SOLUTIONS, INC., A DELAWARE
CORPORATION, ("Borrower"), Borrower's address for purposes of this Agreement
being 1240 EAST CAMPBELL ROAD, RICHARDSON, TEXAS 75081, and, FIRSTCAPITAL BANK,
SSB, 5633 WESTHEIMER, SUITE 100, HOUSTON, TEXAS 77056, (together with its
successors and assigns, "Lender"). Borrower has applied to Lender for a
commercial loan and other financial accommodations, including those which may be
described on any exhibit or schedule attached to this Agreement. Such loan and
financial accommodations are referred to collectively in this Agreement as the
"Loan". Borrower understands and agrees that: (a) in granting, renewing, or
extending the Loan, Lender is relying upon Borrower's representations,
warranties, and agreements, as set forth in this Agreement; (b) the granting,
renewing, or extending of the Loan by Lender at all times shall be subject to
Lender's sole judgment and discretion; and, (c) such Loan shall be and shall
remain subject to the following terms and conditions of this Agreement.
TERM. This Agreement shall be effective as of the Effective Date, and
shall continue until the "Final Maturity Date" (as hereinafter defined), unless
sooner terminated in accordance with the terms hereto provided, however, that
Borrower may extend the term of the Loan for an additional six (6) months if the
following conditions re satisfied: Borrower advises Lender in writing of its
election to extend the Loan, which notice must be given to Lender no more than
thirty (30) and no less than fifteen (15) days prior to the Final Maturity Date;
Borrower is not in default, and no condition exists which, with the giving of
notice, the passage of time, or the performance of some ministerial task, would
cause there to be an event of default, under this Agreement or the "Related
Documents (as hereinafter defined), at the time the foregoing option to extend
is exercised, or at any time between that date and the Final Maturity Date;
between the Effective Date and the Final Maturity Date, there has not been any
material adverse change in the financial condition of any Guarantor (as
determined by Lender in its sole discretion); and, Borrower pays all costs and
fees incurred by Lender, and executes all documents reasonably requested by
Lender, in connection with the documentation of such extension.
DEFINITIONS. The following words shall have the following meanings when
used in this Agreement. Terms not otherwise defined in this Agreement shall have
the meanings attributed to such terms in the Texas Business and Commerce Code
(the Texas Uniform Commercial Code). All references to dollar amounts shall mean
amounts in lawful money of the United States of America.
ACCOUNT. The word "Account" means a trade account, account receivable,
or other right to payment for goods sold or services rendered, owing to
Borrower.
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ADVANCE. The word "Advance" means a disbursement of Loan funds under
this Agreement.
APPLICABLE LAW. That law in effect from time to time and applicable to
the Collateral, the parties to this Agreement, and the Notes, which
lawfully permits the charging and collection of the highest permissible
lawful nonusurious rate of interest on the Notes, including laws of the
State of Texas and laws of the United States of America. In no event
shall the provisions of Chapter 346 of the Texas Finance Code (which
regulates certain revolving credit loan accounts and revolving
tri-party accounts) apply to the Loan.
BASE RATE. The words "Base Rate" shall mean the prime rate of interest
as posted in the Money Rates section of the Wall Street Journal, being
the base rate on corporate loans posted by at least 75% of the nation's
30 largest banks. If the publication of this rate is discontinued by
the Wall Street Journal, a comparable reference rate designated by
Lender as a substitute therefor shall be the Base Rate.
BORROWING BASE. The words "Borrowing Base" shall mean the sum of One
Million and No/100 Dollars ($1,000,000,00).
BUSINESS DAY. The words "Business Day" mean any day excluding Saturday,
Sunday, and any day which is a legal holiday under the laws of the
State of Texas or is a day on which banking institutions located in the
State of Texas are closed.
COLLATERAL. The word "Collateral" is defined in the "Security
Agreement" (as hereinafter defined).
EVENT OF DEFAULT. The words "Event of Default" mean and include without
limitation any of the Events of Default set forth below in the section
entitled "EVENTS OF DEFAULT".
FINAL MATURITY DATE. The words "Final Maturity Date" mean the date on
which all amounts under all "Loans" (as hereinafter defined) shall
become fully due and payable. Unless extended in writing by Borrower
and Lender, the Final Expiration Date is that day which is one (1) year
after the Effective Date.
GRANTOR. The word "Grantor" means and includes without limitation each
and all of the persons or entities granting a Security Interest in any
Collateral for the Indebtedness, including without limitation all
Borrowers granting such a Security Interest.
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GUARANTOR. The word "Guarantor" means and includes without limitation
each and all of the guarantors, sureties, and accommodation parties in
connection with any Indebtedness.
INDEBTEDNESS. The word "Indebtedness" means and includes without
limitation all Loans, together with all other obligations, debts and
liabilities of Borrower to Lender, or any one or more of them, as well
as all claims by Lender against Borrower, or any one or more of them,
whether now or hereafter existing, voluntary or involuntary, due or not
due, absolute or contingent, liquidated or unliquidated; whether
Borrower may be liable individually or jointly with others; and,
whether Borrower may be obligated as a guarantor, surety, or otherwise.
LOAN. The word "Loan" means the commercial loan and financial
accommodations from Lender to Borrower which are described herein or
described on any exhibit or schedule attached to this Agreement from
time to time.
MAXIMUM LEGAL RATE. The words "Maximum Legal Rate" mean, at any time,
the maximum rate of interest under applicable law that the Lender may
charge a Borrower. The Maximum Legal Rate shall be calculated in a
manner that takes into account any and all fees, payments, and other
charges in respect of this Agreement and the Related Documents that
constitute interest under applicable law. Each change in any interest
rate provided for herein based upon the Maximum Legal Rate resulting
from a change in the Maximum Legal Rate shall take effect without
notice to the Borrower at the time of such change in the Maximum Legal
Rate. For purposes of determining the Maximum Legal Rate under Texas
law, the applicable rate ceiling shall be the weekly rate ceiling
described in, and computed in accordance with, Chapter 303, Subchapter
A, of the Texas Finance Code.
MULTIPLE ADVANCE CREDIT NOTE/NOTE. The words "Multiple Advance Credit
Note" and the word "Note" each means the $1,000,000.00 Note to be dated
as of the Effective Date and to be executed by Borrower in favor of
Lender pursuant to the credit facility described in this Agreement, as
well as any substitute, replacement or refinancing note or notes
therefore. The principal amount outstanding under the Note may be
prepaid, in full or in part, at any time and from time to time, without
premium or penalty.
RELATED DOCUMENTS. The words "Related Documents" mean and include
without limitation all promissory notes, credit agreements, loan
agreements, environmental agreements, guaranties, security agreements,
mortgages, deeds of trust, and all other instruments, agreements and
documents,
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whether now or hereafter existing, executed in connection with the
Indebtedness.
SECURITY AGREEMENT. The words "Security Agreement" mean the Security
Agreement of even date herewith, to be executed by Borrower, as debtor,
and Lender, as secured party, covering, and creating a Security
Interest against the Personal Property, and securing the payment of the
Indebtedness, as it may be extended, modified, or renewed from time to
time, and any other agreements, whether created by law, contract, or
otherwise, evidencing, governing, representing, or creating a Security
Interest against any of the Personal Property.
SECURITY INTEREST. The words "Security Interest" mean and include,
without limitation, any type of collateral security which secures the
payment of the Indebtedness or the performance of any of Borrower's
obligations as described in this Agreement, whether in the form of a
lien, charge, mortgage, deed of trust, assignment, pledge, chattel
mortgage, chattel trust, factor's lien, equipment trust, conditional
sale, trust receipt, lien or title retention contract, lease or
consignment intended as a security device, or any other security or
lien interest whatsoever, whether created by law, contract, or
otherwise.
LINE OF CREDIT. The line of credit covered by this Agreement consists
of a working capital revolving line of credit (the "Line of Credit"). Subject to
the conditions precedent to an Advance as specified herein, and subject to the
other terms and conditions of this Agreement: Lender agrees to make Advances to
Borrower from time to time from the Effective Date to the Final Maturity Date
pursuant to the Line of Credit, provided the aggregate amount of such Advances
pursuant to the Line of Credit outstanding at any time does not exceed the
Borrowing Base. The Line of Credit will be evidenced by the Revolving Credit
Note. Within the foregoing limits, Borrower may borrow, partially or wholly
repay, and reborrow under the Line of Credit as follows.
CONDITIONS PRECEDENT TO EACH ADVANCE. Lenders obligation to make any
Advance to or for the account of Borrower under the Line of Credit is
subject to the following conditions precedent, with all documents,
instruments, opinions, reports, and other items required under this
Agreement to be in form and substance satisfactory to Lender;
(a) Lender shall have received evidence that this Agreement and
all Related Documents have been duly authorized, executed, and
delivered by Borrower to Lender.
(b) The Security Interests in the Collateral shall have been duly
authorized, created, and perfected with first lien priority
and shall be in full force and effect.
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(c) All guaranties required by Lender for this Agreement shall
have been executed by each Guarantor, delivered to Lender, and
shall be in full force and effect.
(d) Borrower shall have paid to Lender all fees, costs, and
expenses specified in this Agreement and the Related Documents
as are then due and payable.
(e) There shall not exist at the time of any Advance a condition
which would constitute an Event of Default under this
Agreement, or any of the Related Documents, and there shall
not exist a condition which, with the passage of time, the
giving of notice, or the performance of some other ministerial
act would constitute an Event of Default under this Agreement
or any of the Related Documents.
Subject to the remaining conditions of this Agreement, Lender will make
Advances to Borrower under the Revolving Credit Note as follows:
MAKING LOAN ADVANCES. Advances under the Line of Credit may be
requested orally by authorized persons. Lender may, but need not,
require that all oral requests be confirmed in writing. Each Advance
shall be conclusively deemed to have been made at the request of and
for the benefit of Borrower: (a) when credited to any deposit account
of Borrower maintained with Lender; or, (b) when advanced in accordance
with the instructions of an authorized person. Lender, at its option,
may set a cutoff time, after which all requests for Advances will be
treated as having been requested on the next succeeding Business Day.
As long as Lender is acting in good faith, Borrower hereby holds Lender
harmless from any claim that Lender made an Advance on the request of a
person who was not an authorized person.
CESSATION OF ADVANCES. If Lender has made any commitment to make any
Loan to Borrower, whether under this Agreement or under any other
agreement, Lender shall have no obligation to make Loan Advances or to
disburse Loan proceeds if: (a) Borrower is in default under the terms
of this Agreement or any of the Related Documents or any other
agreement that Borrower has with Lender; (b) Borrower becomes
insolvent, files a petition in bankruptcy or similar proceedings, or is
adjudged a bankrupt; (c) there occurs a material adverse change in
Borrower's financial condition or in the value of any Collateral
securing any Loan (d) any Guarantor seeks, claims or otherwise attempts
to limit, modify or revoke such Guarantor's guaranty of the Loan or any
other loan with Lender; or, (e) Lender in good faith deems itself
insecure, even though no Event of Default shall have occurred.
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MANDATORY LOAN REPAYMENTS. If at any time the aggregate principal
amount of the outstanding Advances with respect to the Line of Credit
shall exceed the Borrowing Base, Borrower, immediately upon written or
oral notice from Lender, shall pay to Lender an amount equal to the
difference between: (i) the outstanding principal balance of the
Advances under the Line of Credit; and, (ii) the Borrowing Base. On the
Final Maturity Date, Borrower shall pay to Lender in full the aggregate
unpaid principal amount of all Advances evidenced by the Revolving
Credit Note then outstanding and all accrued unpaid interest thereon,
together with all other applicable fees, costs and charges, if any, not
yet paid with respect to the Loan evidenced by the Revolving Credit
Note.
LOAN ACCOUNT. Lender shall maintain on its books a record of account in
which Lender shall make entries for each Advance and such other debits
and credits as shall be appropriate in connection with the Line of
Credit facility.
COLLATERAL. To secure the payment of the Loan and the performance of
all obligations and duties owed by Borrower to Lender and arising out of or
related in any way to this Agreement (collectively, the "Obligations"): Borrower
shall grant to Lender a Security Interest in the Collateral. Lenders Security
Interest in the Collateral shall be a continuing lien and shall include the
proceeds and products of the Collateral, including, without limitation, the
proceeds of any insurance.
NEGATIVE COVENANTS.
Borrower covenants and agrees with Lender that, while this Agreement is
in effect, Borrower shall not, without the prior written consent of Lender:
CONTINUITY OF OPERATIONS. (a) Engage in any business activities
substantially different from those in which Borrower is presently
engaged, (b) cease operations, liquidate, merge, transfer, acquire or
consolidate with any other entity, change ownership, change its name,
dissolve, transfer or sell Collateral out of the ordinary course of
business, or (c) make any distribution with respect to any shares or
capital account, whether by reduction of capital or otherwise (except
such distributions as are consistent with prior distributions made by
Borrower as reflected on the financial reports made available to and
acknowledged by Lender in writing, and which are justifiable given the
financial condition of Borrower at the time of such distributions).
PAYMENTS TO GUARANTORS/SHAREHOLDERS. Pay outside of the ordinary course
of Borrower's business, any amounts now outstanding and owing, or coming to be
owed, by Borrower, to any of the Guarantors or to any of the shareholders of
Borrower.
NOTICE OF FINAL AGREEMENT. THIS AGREEMENT AND ALL OTHER DOCUMENTS
RELATING TO THESE LOANS CONSTITUTE A WRITTEN LOAN
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AGREEMENT WHICH REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES HERETO AND
MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN
THE PARTIES RELATING TO THESE LOANS.
UCC FINANCING STATEMENT. Borrower hereby authorizes Lender or its
agents or assigns to file one or more such Financing Statements if permitted in
the relevant jurisdiction. Borrower will pay the cost of filing all such
Financing Statements in all public offices wherever filing is deemed by Lender
to be necessary or desirable.
ADDENDUM. This Agreement incorporates all addenda as if set forth in
full herein.
RIGHT OF SETOFF. Borrower grants to Lender a contractual security
interest in, and hereby assigns, conveys, delivers, pledges, and transfers to
Lender, all of Borrower's right, title, and interest in and to Borrower's
accounts with Lender (whether checking, savings, or other account), including
without limitation all accounts held jointly with someone else and all accounts
Borrower may open in the future, excluding, however, all IRA and Keogh accounts,
and all trust accounts for which the grant of a security interest would be
prohibited by law. Borrower authorizes Lender, to the extent permitted by
applicable law, to charge or setoff all sums owing on the Indebtedness against
any and all such accounts.
EVENTS OF DEFAULT. Each of the following shall constitute an Event of
Default under this Agreement.
DEFAULT ON INDEBTEDNESS. Failure of Borrower to make any payment when
due on the Loans.
OTHER DEFAULTS. Failure of Borrower to comply with or to perform when
due any other term, obligation, covenant or condition contained in this
Agreement or in any of the Related Documents, or failure of Borrower to
comply with or to perform any other term, obligation, covenant or
condition contained in any other agreement between Lender and Borrower.
DEFAULT IN FAVOR OF THIRD PARTIES. Should Borrower default under any
loan, extension of credit, security agreement, purchase or sales
agreement, or any other agreement, in favor of any other creditor or
person that may materially affect any of Borrower's property or
Borrowers ability to repay the Loans or perform their respective
obligations under this Agreement or any of the Related Documents.
FALSE STATEMENTS. Any warranty, representation or statement made or
furnished to Lender by or on behalf of Borrower under this Agreement or
the
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Related Documents is false or misleading in any material respect at the
time made or furnished, or becomes false or misleading at any time
thereafter.
DEFECTIVE COLLATERALIZATION. This Agreement or any of the Related
Documents ceases to be in full force and effect (including failure of
the Security Agreement to create a valid and perfected Security
Interest) at any time and for any reason.
DEATH OR INSOLVENCY. The dissolution or termination of Borrowers
existence as a going business; the death of any one or more of the
Guarantors; the insolvency of any Borrower; the appointment of a
receiver for any part of Borrower's property; any assignment by
Borrower 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 against
any Collateral, or by any governmental agency. This includes a
garnishment, attachment, or levy on or of any of Borrower's 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 furnishes reserves or a
surety bond for the creditor or forfeiture proceeding satisfactory to
Lender.
EVENTS AFFECTING GUARANTOR. Any of the preceding events occurs with
respect to any Guarantor of any of the Indebtedness or any Guarantor
dies or becomes incompetent, or revokes or disputes the validity of, or
liability under, any Guaranty of the Indebtedness.
CHANGE IN OWNERSHIP. The resignation or expulsion of any person with an
ownership interest (or sharing ratio) of twenty-five percent (25%) or
more in Borrower.
ADVERSE CHANGE. A material adverse change occurs in Borrower's or a
Guarantor's financial condition, or Lender believes the prospect of
payment or performance of the Indebtedness is impaired.
INSECURITY. Lender, in good faith, deems itself insecure.
RIGHT TO CURE. If any default is curable, it may be cured (and no Event
of Default will have occurred) if Borrower or Guarantor, as the case
may be, after receiving written notice from Lender demanding cure of
such default:
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(a) cures the default within fourteen (14) days; or, (b) with respect
to a non-monetary default, if the cure requires more than fourteen (14)
days, immediately initiates steps which Lender, in Lender's sole
discretion, deems to be sufficient to cure the default, and thereafter
continues and completes all reasonable and necessary steps sufficient
to produce compliance as soon as reasonably practicable.
EFFECT OF AN EVENT OF DEFAULT. If any Event of Default shall occur,
except where otherwise provided in this Agreement or the Related Documents, all
commitments and obligations of Lender under this Agreement, the Related
Documents, and every other agreement between Lender and any one or more of the
Borrowers immediately will terminate (including any obligation to make Loan
Advances or disbursements), and, at Lender's option, all Indebtedness
immediately will become due and payable, all without notice of any kind to
Borrower, except that in the case of an Event of Default of the type described
in the "Death or Insolvency" subsection above, including any such event as it
applies to any Guarantor, such acceleration shall be automatic and not optional.
In addition, Lender shall have all the rights and remedies expressly provided
elsewhere in this Agreement and in the Related Documents or available at law, in
equity, or otherwise. Except as may be prohibited by applicable law, all of
Lender's rights and remedies shall be cumulative and may be exercised singularly
or concurrently. Election by Lender to pursue any remedy shall not exclude
pursuit of any other remedy, and an election to make expenditures or to take
action to perform an obligation of Borrower or of any Guarantor shall not affect
Lender's right to declare a default and to exercise its rights and remedies.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a
part of this Agreement:
AMENDMENTS. This Agreement, together with any Related Documents,
constitutes the entire understanding and agreement of the parties as to
the matters set forth in this Agreement. No alteration of or amendment
to this Agreement shall be effective unless given in writing and signed
by the party or parties sought to be charged or bound by the alteration
or amendment.
GOVERNING LAW. THIS AGREEMENT HAS BEEN DELIVERED TO LENDER AND ACCEPTED
BY LENDER IN THE STATE OF TEXAS. IF THERE IS A LAWSUIT, AND IF THE
TRANSACTION EVIDENCED BY THIS AGREEMENT OCCURRED IN HARRIS COUNTY,
TEXAS, BORROWER AGREES UPON LENDER'S REQUEST TO SUBMIT TO THE
JURISDICTION OF THE FEDERAL OR STATE COURTS OF HARRIS COUNTY, THE STATE
OF TEXAS. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS AND APPLICABLE FEDERAL
LAWS. THE PROVISIONS OF THIS PARAGRAPH ARE SUBJECT TO ANY PROVISIONS ON
ARBITRATION CONTAINED IN THIS AGREEMENT AND/OR IN ANY RELATED
DOCUMENTS.
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CAPTION HEADINGS. Caption headings in this Agreement are for
convenience purposes only and are not to be used to interpret or define
the provisions of this Agreement.
CONSENT TO LOAN PARTICIPATION. Borrower agrees and consents to Lender's
sale or transfer, whether now or later, of one or more participation
interests in one or both of the Loans to one or more purchasers,
whether related or unrelated to Lender. Lender may provide, without any
limitation whatsoever, to any one or more purchasers, or potential
purchasers, any information or knowledge Lender may have about Borrower
or about any other matter relating to the Loans, and Borrower hereby
waives any rights to privacy it may have with respect to such matters.
Borrower additionally waives any and all notices of sale of
participation interests, as well as all notices of any repurchase of
such participation interests, subject to the terms and conditions of
the Loan Agreement. Borrower also agrees that the purchasers of any
such participation interests will be considered as the absolute owners
of such interests in the Loans and will have all the rights granted
under the participation agreement or agreements governing the sale of
such participation interests. Borrower further waives all rights of
offset or counterclaim that it may have now or later against Lender or
against any purchaser of such a participation interest and
unconditionally agrees that either Lender or such purchaser may enforce
Borrower's obligation under the Loans irrespective of the failure or
insolvency of any holder of any interest in the Loans. Borrower further
agrees that the purchaser of any such participation interests may
enforce its interests irrespective of any personal claims or defenses
that Borrower may have against Lender.
COSTS AND EXPENSES. Except as otherwise limited by the Texas Credit
Code and the Texas Finance Code, Borrower agrees to pay upon demand all
of Lender's expenses related to the Loans, including, without
limitation, attorneys' fees, incurred in connection with the
preparation, execution, enforcement, and modification of this Agreement
or in connection with the Loans made pursuant to this Agreement. Lender
may hire one or more attorneys to help collect the Indebtedness if
Borrower does not pay, and Borrower will pay Lender's reasonable
attorneys' fees. Borrower also will pay Lender all other amounts
actually incurred by Lender as court costs, and all lawful fees for
filing, recording, or releasing to any public office any instrument
securing the Indebtedness; the reasonable cost actually expended for
repossessing, storing, preparing for sale, and selling any Collateral;
fees for noting a lien on or transferring a certificate of title to any
motor vehicle offered as security for the Indebtedness; and, premiums
or identifiable charges incurred in connection with the acquisition of
insurance which Lender is authorized to obtain hereunder or under any
Related Documents.
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NOTICES. Subject to the ability of Lender, at its option, to make
Advances on the oral request of an authorized person as specified
hereinabove, all notices required to be given under this Agreement
shall be given in writing, may be sent by telefacsimile (unless
otherwise required by law), and shall be effective when actually
received by the party for whom intended or, if not sooner received: on
the first (1st) Business Day after deposited with a nationally
recognized overnight courier or deposited in the United States mail,
first class, postage prepaid, addressed to the party to whom the notice
is to be given at the address shown above. Any party may change its
address for notices under this Agreement by giving formal written
notice to the other parties, specifying that the purpose of the notice
is to change the party's address. For notice purposes, Borrower will
keep Lender informed at all times of Borrower's current address(es).
PAYMENT OF INTEREST AND FEES. Notwithstanding any other provision of
this Agreement or any provision of any Related Document, Borrower does
not agree or intend to pay, and Lender does not agree or intend to
contract for, charge, collect, take, reserve or receive (collectively
referred to herein as "charge or collect"), any amount in the nature of
interest or in the nature of a fee for these Loans, or any other Loan
with Borrower, which would in any way or event (including demand,
prepayment, or acceleration) cause Lender to charge or collect more for
the Loan than the maximum Lender would be permitted to charge or
collect by any applicable federal law or any applicable law of the
State of Texas. Any such excess interest or unauthorized fee shall,
instead of anything stated to the contrary, be applied first to reduce
the unpaid principal balance of the Loan, and when the principal has
been paid in full, be refunded to Borrower. The right to accelerate
maturity of sums due under this Agreement does not include the right to
accelerate any interest which has not otherwise accrued on the date of
such acceleration, and Lender does not intend to charge or collect any
unearned interest in the event of acceleration. All sums paid or agreed
to be paid to Lender for the use, forbearance or detention of sums paid
under this Agreement shall, to the extent permitted by applicable law,
be amortized, prorated, allocated and spread throughout the full term
of the applicable Loan evidenced by this Agreement until payment in
full so that the rate or amount of interest on account of any Loan
Evidenced by this Agreement does not exceed the applicable usury
ceiling. When the term "interest" is used in the context of "payment of
interest", it is the intent of the parties that all such references
shall be to accrued and unpaid interest, and in no event will Borrower
ever be required to pay unearned interest.
SEVERABILITY. If a court of competent jurisdiction finds any provision
of this Agreement to be invalid or unenforceable as to any person or
circumstance, such finding shall not render that provision invalid or
unenforceable as to any other persons or circumstances. If feasible,
any such offending provision
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shall be deemed to be modified to be within the limits of
enforceability or validity; however, if the offending provision cannot
be so modified, it shall be stricken and all other provisions of this
Agreement in all other respects shall remain valid and enforceable.
SUBSIDIARIES AND AFFILIATES OF BORROWER. To the extent the context of
any provisions of this Agreement makes it appropriate, including,
without limitation, any representation, warranty or covenant, the word
"Borrower" as used herein shall include all subsidiaries and affiliates
of Borrower. Notwithstanding the foregoing however, under no
circumstances shall this Agreement be construed to require Lender to
make any Loan or other financial accommodation to any subsidiary or
affiliate of Borrower.
SUCCESSORS AND ASSIGNS. All covenants and agreements contained by or on
behalf of a party hereto shall bind its successors and assigns and
shall inure to the benefit of the other party, its successors and
assigns. Borrower shall not, however, have the right to assign its
rights under this Agreement or any interest therein, without the prior
written consent of Lender.
SURVIVAL. All warranties, representations, and covenants made by a
party in this Agreement or in any certificate or other instrument
delivered by that party to the other party under this Agreement shall
be considered to have been relied upon by the party to whom made and
will survive the making of the Loans and delivery to Lender of the
Related Documents, regardless of any investigation made by the party to
whom made or on that party's behalf.
TIME IS OF THE ESSENCE. Time is of the essence in the performance of
this Agreement.
WAIVER. A party hereto shall not be deemed to have waived any rights
under this Agreement unless such waiver is given in writing and signed
by that party. No delay or extension on the part of a party hereto in
exercising any right shall operate as a waiver of such right or any
other right. A waiver by a party hereto of a provision of this
Agreement shall not prejudice or constitute a waiver of that party's
right otherwise to demand strict compliance with that provision or any
other provision of this Agreement. No prior waiver by Lender, nor any
course of dealing between Lender and Borrower, or between Lender and
any Guarantor, shall constitute a waiver of any rights or of any
obligations of either party hereto or of any Guarantor as to any future
transactions. Whenever the consent of a party hereto is required under
this Agreement, the granting of such consent by that party in any
instance shall not constitute continuing consent in subsequent
instances where such consent is required, and in all cases such consent
may be granted or withheld in the sole discretion of that party.
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BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS LOAN
AGREEMENT, AND BORROWER AGREES TO ITS TERMS. THIS AGREEMENT IS DATED AS OF THE
EFFECTIVE DATE.
BORROWER: LENDER:
DNA COMPUTING SOLUTIONS, INC., a FIRSTCAPITAL BANK, SSB
Delaware corporation
By: /s/ ROBERT P. CAPPS By: /s/ LUCIEN BRUCE
------------------------------- ------------------------------------
Robert P. Capps, Lucien Bruce, First Vice President
Executive Vice-President
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