Document:

EX-10.1

REIMBURSEMENT AGREEMENT

by and among

DNA COMPUTING SOLUTIONS, INC.

TERAFORCE TECHNOLOGY CORPORATION

and

Richard E. Bean

Robert E. Garrison II

Steven A. Webster

James Hawkins

Peter Badger

John Styles

Donald Campbell

Dated as of January 26, 2005

1

REIMBURSEMENT AGREEMENT

This REIMBURSEMENT AGREEMENT dated as of January 26, 2005, (the “Agreement), is made by and
between TERAFORCE TECHNOLOGY CORPORATION, a Delaware corporation ( “TERA”), DNA COMPUTING
SOLUTIONS, INC, a Delaware corporation and a wholly-owned subsidiary of TERA (“DNA-CS”) (TERA and
DNA-CS collectively referred to as the Companies) and Richard E. Bean, an individual residing in
Texas, Robert E. Garrison II, an individual residing in Texas, Steven A. Webster, an individual
residing in Texas, James Hawkins, an individual residing in Texas, Peter Badger, an individual
residing in Texas, Donald Campbell, an individual residing in Texas, and John Styles, an individual
residing in Texas ( each individual a “Guarantor” and collectively the “Guarantors”) (the TERA,
DNA-CS and Guarantors collectively referred to as the “Parties”)

W I T N E S S E T H:

WHEREAS, the Companies contemplate entering into a loan agreement with First Capital Bank (the
“Bank”) providing for the loan of up to $550,000 to DNA-CS (the “January Loan Agreement”) ; and

WHEREAS, the Companies previously entered into a loan agreement with the Bank dated July 30,
2004 providing for the loan of up to $575,000 to DNA-CS (the “July Loan Agreement”); and

WHEREAS, in order to enter into the July Loan Agreement the bank required the Guarantors to
provide limited guarantees aggregating $776,250 and the Guarantors provided these limited
guarantees pursuant to a Reimbursement Agreement dated July 27, 2004 among the Parties; and,

WHEREAS, the Companies previously entered into a loan agreement with the Bank dated October
22, 2004 providing for the loan of up to $600,000 to DNA-CS (the “October Loan Agreement”); and

WHEREAS, in order to enter into the October Loan Agreement the bank required the Guarantors
to provide limited guarantees aggregating $810,000 and the Guarantors provided these limited
guarantees pursuant to a Reimbursement Agreement dated October 22, 2004; and

WHEREAS, DNA-CS have granted the Bank a security interest in certain assets, including
accounts receivable, fixed assets, intellectual property and inventories; and

WEREAS, in order to enter into the January Loan Agreement the Bank has required the Guarantors
to provide joint and several guaranties; and

WHEREAS, in order to induce the Bank to enter into the January Loan Agreement, each Guarantor
has executed a guarantee to secure the loan there under in the amount as indicated in Schedule I
(the “Guarantee”); and

WHEREAS, the Bank shall provide Advances (as hereinafter defined) to the DNA-CS in accordance
with the provisions of the January Loan Agreement and shall be entitled to make demand upon the
Guarantors pursuant to the provisions of the Guarantees in the case of an Event of Default (as
defined in the January Loan Agreement) by the Companies under the January Loan Agreement; and

NOW, THEREFORE, in consideration of the foregoing, the Companies and the Guarantors covenant
and agree as follows:

ARTICLE I

GENERAL TERMS

Section 1.1. Definitions. As used in this Agreement, the following terms shall have
the following meanings:

“Advances” shall mean an advance of funds under and subject to the terms and conditions of the
January Loan Agreement provided that the principal amount outstanding shall never exceed the Loan
Maximum.

“Agreement” shall have the meaning specified in the preamble.

“Associated Expenses” shall mean the expenses associated with recovering the Guarantor
Advances, excluding the Guarantor Advances and interest thereon.

“Bank” shall have the meaning set forth in the recitals.

“Common Stock” shall mean the common stock, par value $0.01, of TERA.

“Demand for Reimbursement” shall have the meaning specified in Section 3.2(a).

“Governmental Authority” means any United States or foreign federal, territorial, state or
local governmental authority, quasi-governmental authority, instrumentality, court, government or
self-regulatory organization, commission, tribunal or organization or any regulatory,
administrative or other agency, or any political or other subdivision, department or branch of any
of the foregoing.

“Guarantor Advance” shall mean the amount of money advanced by the Guarantor to the Bank
pursuant to a demand for payment by the Bank on the Guarantee.

“Guarantor” and “Guarantors” shall have the meanings specified in the preamble.

“Guarantee” shall have the meaning set forth in the recitals.

“Guarantor’s Percentage ” shall mean the amount of a Guarantor’s Guarantee divided by the
aggregate amount of Guarantees provided by the Guarantors as indicated on Schedule I.

“Loans” shall mean the Companies’ obligations pursuant to the January, Loan Agreement, the
October Loan Agreement and the July Loan Agreement.

“Loan Documents” shall mean the January Loan Agreement and all exhibits and related documents
thereto, as they may be amended, extended or modified from time to time, including, without
limitation, a promissory note.

“Loan Maximum” shall mean the principal amount outstanding of $550,000.

“Person” means an individual, corporation, partnership, association, limited liability
company, trust, estate or other similar business entity or organization, including a Governmental
Authority.

“Registration Rights Agreement” shall have the meaning specified in Section 4.3.

“Reimbursement Obligation” shall have the meaning specified in Section 3.2(a).

“Related Documents” shall mean the Warrants and the Registration Rights Agreement.

“Warrants” shall have the meaning specified in Section 4.1.

Section 1.2. Interpretation.

(a) In this Agreement:

(i) the singular number includes the plural number and vice versa;

(ii) reference to any gender includes each other gender;

(iii) the words “herein,” “hereof” and “hereunder” and other words of similar import refer to
this Agreement as a whole and not to any particular Article, Section or other subdivision;

(iv) reference to any Person includes such Person’s heirs, administrators, successors and
assigns but, if applicable, only if such heirs, administrators, successors and assigns are
permitted by this Agreement, and reference to a Person in a particular capacity excludes such
Person in any other capacity or individually, provided that nothing in this sub clause (iv) is
intended to authorize any assignment not otherwise permitted by this Agreement;

(v) reference to any agreement, document or instrument means such agreement, document or
instrument as amended, supplemented or modified and in effect from time to time in accordance with
the terms thereof and, if applicable, the terms hereof, and reference to the Note includes any Note
issued pursuant hereto in extension or renewal hereof and in substitution or replacement here for;

(vi) unless the context indicates otherwise, reference to any Article, Section, Schedule or
Exhibit means such Article or Section hereof or such Schedule or Exhibit hereto;

(vii) the words “including” (and with correlative meaning “include”) means including, without
limiting the generality of any description preceding such term;

(viii) with respect to the determination of any period of time, the word “from” means “from
and including” and the word “to” means “to, but excluding”;

(ix) reference to any law means such as amended, modified, codified or reenacted, in whole or
in part, and in effect from time to time; and

(b) No provision of this Agreement shall be interpreted or construed against any Person solely
because that Person or its legal representative drafted such provision.

ARTICLE II

THE GUARANTIES

Section 2.1 Guarantees. On the terms and subject to the terms hereof, each Guarantor
agrees to provide the Guarantee in substantially the form as in Exhibit A.

ARTICLE III

ASSUMPTION OF LOAN, REIMBURSEMENT

Section 3.1 Assumption of Loan. Should the Guarantors be required to make payment
to the Bank pursuant to the Guarantee, the Companies hereby consent to the assumption of the
January Loan Agreement the Guarantors, including all collateral rights. The Companies will use
their best efforts to facilitate such assumption.

Section 3.2. Reimbursable Amounts and Other Payments

(a) Amounts. Should the Guarantors not elect to, or be unable for any reason to,
assume the January Loan Agreement, the Companies shall reimburse each Guarantor the amount paid by
the Guarantor to the Bank equal to the amount of his Guarantor Advance and any interest, taxes,
fees, charges or other costs and expenses incurred by Guarantor in connection with such payment
(the “Reimbursement Obligation”). Each such Reimbursement Obligation shall be paid by the
Companies to Guarantor promptly upon written demand from Guarantor (“Demand for Reimbursement”),
but in no event later than thirty (30) days after such demand. Each such Demand for
Reimbursement, in order to be valid, shall be accompanied by sufficient documentation, such as
copies of documents provided by the Bank to the Guarantors, supporting the amount of the
Reimbursement Obligation.

(b) Interest. The Company shall pay interest on any and all amounts remaining unpaid
under Section 3.1(a) at any time from the date such amounts become payable until paid in full,
payable on demand, at simple interest at the prime rate established by Bank One, N.A., plus 2.0%
per annum (or, if less, the highest rate permitted under applicable law). The Guarantors may, at
their election, receive interest payments in shares of Common Stock. The number of shares of
Common Stock to be issued shall be determined by dividing the amount of the interest payment by
$0.16, or such lesser amount as may be determined pursuant to Section 4.2 herein.

(c) Currency. All payments by the Company to Guarantor shall be made in lawful
currency of the United States of America and in immediately available funds at, and pursuant to,
such instructions as Guarantor may from time to time give.

Section 3.3 Obligations Absolute.

(a) The DNA-CS’s obligations under this Article III shall be absolute and unconditional
irrespective of any set-off, counterclaim, or defense to payment which the Company may have or have
had against the Bank.

(b) The DNA-CS hereby agrees that Guarantor shall not be responsible for, and the
Reimbursement Obligations shall not be affected by, among other things,

(i) the validity or genuineness of documents or of any endorsements
thereon even though such documents shall prove to be invalid, fraudulent, or
forged;

(ii) any dispute between the DNA-CS, TERA and the Bank; or

(iii) any claims whatsoever of the DNA-CS or TERA against the Bank.

(c) Guarantor shall not be liable for any error, omission, interruption or delay in
transmission, dispatch or delivery of any message or advice, howsoever transmitted, in connection
with the Guaranty, except for errors or omissions caused by Guarantor’s primary negligence or
willful misconduct.

(d) The Companies agrees that any action taken or omitted by the Guarantor in connection
with the Guaranty, provided Guarantor’s actions are not the result of Guarantor’s primary
negligence, willful misconduct, or breach of contractual obligations, shall be binding on the
DNA-CS and TERA and shall not result in any liability to Guarantor.

Section 3.4 Indemnity In addition to the rights and obligations set forth in
Section 3.2(a), the Companies hereby agrees to indemnify and hold harmless Guarantor, and each of
his respective successors, heirs and assigns, from and against any and all claims and damages,
losses, liabilities, costs or expenses (including reasonable attorneys fees) which Guarantor may
incur by reason of or in connection with the issuance, execution and delivery or transfer or
payment or failure to pay the Guarantee except to the extent of the primary negligence or willful
misconduct of Guarantor, or as may be attributable to Guarantor’s breach of his obligations under
this Agreement.

Section 3.5 Agreement Among Guarantors Upon the Bank invoking any or all of the
Guarantees, each Guarantor shall fund an amount equal to the total amount of payments made to the
Bank times his Guarantor’s Percentage. Should any Guarantor’s Guarantor Advance be in excess of
this amount, the other Guarantors shall reimburse that Guarantor such that each Guarantor Advance
is proportionate to each Guarantor’s Percentage. Such reimbursement shall be made within 30 days
of a demand from another Guarantor

ARTICLE IV

CONVERSION RIGHTS AND WARRANTS

Section 4.1. Warrants. As an inducement to enter into this Agreement, TERA agrees
to issue to the Guarantors Warrants to purchase an aggregate of 6,875,000 shares of Common Stock at
an exercise price per share of $0.17, the form of which is attached as Exhibit B (the “Warrants”).
Each Guarantor shall receive Warrants to purchase a number of shares of Common Stock equal to the
aggregate number of Warrants times his Guarantor’s Percentage.

Section 4.2 Conversion Rights. As long as any Loans are outstanding or DNA-CS is
able to incur Loans under the January Loan Agreement, each Guarantor shall have the right to
purchase a number of shares of Common Stock equal to his proportionate share of the Loan Maximum
divided by $0.16. Proceeds from the issuance of such shares of Common Stock shall be utilized by
TERA to repay amounts outstanding under the January Loan Agreement and cause the Bank to release
Guarantees underlying the amount of the Loan repaid. The Companies will undertake such procedures
to ensure the Guarantor that the Guarantee will be released immediately upon the purchase of the
shares of Common Stock. Further, each Guarantor shall have the right to covert any Reimbursement
Obligation into a number of shares of Common Stock equal to the amount of the Reimbursement
Obligation divided by $0.16. The Companies shall give the Guarantors not less than 30 days notice
of the intent to repay the Loans and obtain the release of the Guarantees. Should the Guarantors
be required to make payment to the Bank pursuant to the Guaranties, the price per share used in
determining the number of shares of Common Stock that may be purchased shall be adjusted to 85% of
the average trading price of the Common Stock for the 10 days prior to such payment, provided such
price is less than $0.16.

Section 4.3. Registration Rights. The TERA further agrees to grant the registration
rights to register the resale of the shares of Common Stock to be issued pursuant to the
Conversion Rights and the Warrants and the in accordance with the Registration Rights Agreement
attached hereto as Exhibit C (the “Registration Rights Agreement”).

Section 4.4. Subsequent Financings. Should TERA, at any time while the Guarantees
are outstanding, issue Common Stock at a price per share less than $0.16, or issue warrants or
convertible securities that provide for an exercise or conversion price of less than $0.16 per
share, then the conversion rate in Sections 3.2(b) and 4.2 and the Warrant exercise price in
Section 4.1 above shall be reduced to such lesser amount and the exercise price of the warrants
shall be reduced to such lesser amount.

Section 4.5 Sharing of Consideration. Should any Guarantor be required to make a
Guarantor Advance in an amount in excess of an amount equal to the Loan Maximum times his
Guarantor’s Percentage and does not receive reimbursement from the other Guarantors pursuant to
Section 3.5 of this Agreement and within the time frame required by Section 3.5, that Guarantor
shall receive additional Warrants and Conversion Rights proportionate with the amount of such
excess funding. Any Guarantor not making reimbursement to other Guarantors pursuant to Section 3.5
of this Agreement shall forfeit Warrants and Conversion Rights proportionate to the amount of
reimbursement not made.

Section 4.6 First Right of Refusal. The Guarantors shall have the first
right of refusal to provide TERA with additional financing in the amount of $800,000 for a period
of 30 days following the closing of the January Loan. The terms and conditions of such additional
financing shall be no less favorable, taken as a whole, to TERA than those offered to TERA by a
third party in a bone fide offer. Upon the mutual agreement of TERA and the Guarantors, the amount
of the additional financing may be increased to $1,300,000, provided that the proceeds of which are
used to repay any amounts outstanding under the January Loan. The Guarantors agree and
acknowledge that up to $300,000 of the proceeds from the additional financing may be used to reduce
amounts outstanding under TERA’s credit facility with Bank One, NA, provided that the maturity of
that facility is extended to a date no earlier than January 31, 2006 and that, pursuant to the
additional financing, the Guarantors are provided additional security in the form of a pledge of
the capital stock of DNA-CS.

2

ARTICLE V

REPRESENTATIONS AND WARRANTIES

Section 5.1. Representations and Warrants of the TERA and DNA-CS. TERA and DNA-CS
hereby represents and warrants to Guarantors as follows:

(a) Corporate Existence and Good Standing. Each is a corporation duly incorporated,
validly existing and in good standing under the laws of the State of Delaware and has all requisite
corporate power and authority to own its property and carry on its business as now conducted, and
is in good standing and authorized to do business in each jurisdiction in which the it owns real
property or conducts such business, where the failure to maintain such good standing or
authorization is reasonably expected to have a materially adverse effect on its business,
operations or financial or other condition, or could materially adversely affect its ability to
perform its obligations under this Agreement.

(b) Authorization and Validity. This Agreement and Related Documents have been duly
authorized by all necessary corporate action, and each has been duly executed and delivered by TERA
and DNA-CS and each is valid, binding and enforceable against the TERA and DNA-CS in accordance
with its terms except as may be limited by bankruptcy or insolvency laws and similar laws affecting
creditor rights generally and by generally and by general principles of equity.

(c) No Conflict; Government Consent; Title to Assets; No Liens. Neither the execution
and delivery of this Agreement and Related Documents, nor the consummation of the transactions
contemplated hereby or thereby nor compliance with the terms hereof or thereof under the
circumstances contemplated hereby or thereby will conflict with, are prohibited by or will
contravene, violate or constitute a breach of or a default under the Amended and Restated
Certificate of Incorporation or By-Laws of TERA or DNA-CS or constitute on the part of the TERA or
DNA-CS a material breach of or a material default under any agreement or other instrument to which
the either company is a party or any existing law, administrative regulation, or, to its knowledge,
any court order or consent decree to which TERA or DNA-CS is subject, or by which any of its
properties is bound.

5.2 Representations of Guarantors. Each Guarantor represents and warrants to the
TERA and DNA-CS that he has full power and authority to execute and deliver this Agreement and the
Related Documents, and that this Agreement and Related Documents are valid, binding and enforceable
in accordance with their terms as they relate to such Guarantor, except as may be limited by
bankruptcy and insolvency laws, and similar laws affecting creditors rights generally and by
general principals of equity. Each Guarantor represents and warrants that he or she (a) has such
knowledge and experience in financial and business matters that such Guarantor is capable of
evaluating the merits and risks of his or her investment and has the financial ability to assume
the monetary risk associated therewith; (b) is able to bear the complete loss of his or her
investment; (c) has received such documents and information from the TERA or DNA-CS as such
Guarantor has requested and has had the opportunity to ask questions of, and receive answers from,
the TERA and DNA-CS and the terms and conditions of the offering of the Warrants and the Common
Stock to be issued pursuant to the Conversion Rights and the Warrants and to obtain additional
information; (d) is an “accredited investor” as defined in Rule 501(a) of Regulation D promulgated
under the 1933 Act; and (e) is not relying upon any statements or instruments made or issued by any
person other than the TERA or DNA-CS in making a decision to invest in the Shares.

ARTICLE VI

AFFIRMATIVE AND NEGATIVE COVENANTS

Section 6.1 Conduct of Business. The TERA and DNA-CS covenant and agree that each
shall remain duly incorporated, validly existing and in good standing as a domestic corporation in
the State of Delaware, will not voluntarily dissolve without first discharging its obligations
under this Agreement.

Section 6.2 Pledge of Assets. The Companies will not pledge any assets, other than in
relation to January Loan Agreement, the October Loan Agreement and the July Loan Agreement, without
the express written consent of the Guarantors. Should the intellectual property of DNA-CS not be
included in the security provided to the Bank pursuant to the January Loan, DNA-CS and TERA will
grant to the Guarantors a security interest in such intellectual property.

ARTICLE VII

COVENANTS

Section 7.1 Successors and Assigns. This Agreement shall be binding upon each party
and their respective successors, heirs and assigns.

Section 7.2. Notices. All notices, requests and demands to or upon the respective
parties shall be in writing (including by facsimile) and, unless otherwise expressly provided
herein, shall be deemed to have been duly given or made (a) in the case of delivery by hand, when
delivered, (b) in the case of delivery by mail, three (3) days after being deposited in the mails,
postage prepaid, or (c) in the case of delivery by facsimile, when sent and receipt has been
confirmed, addressed as follows:

	 	 	 
	If to Guarantors:

	 	to the addresses as indicated on Schedule I
	 
	 	 
	If to the Company:

	 	TeraForce Technology Corporation

Attn.: Herman M. Frietsch, Chairman & CEO

1240 East Campbell Road

Richardson, Texas 75081

Telecopier: (469) 330-4999

Any entity entitled to receive notice hereunder may, by notice given hereunder, designate any
further or different addresses to which subsequent notices, certificates or other communications
shall be sent.

Section 7.3. Amendment. This Agreement may be amended, modified or discharged only
upon an agreement in writing of TERA, DNA-CS and each of the Guarantors.

Section 7.4. Effect of Delay and Waivers. No delay or omission to exercise any right
or power accruing upon any default, omission or failure of performance hereunder shall impair any
such right or power or shall be construed to be a waiver thereof, but any such right and power may
be exercised from time to time and as often as may be deemed expedient. In order to entitle
Guarantors to exercise any remedy now or hereafter existing at law or in equity or by statute, it
shall not be necessary to give any notice, other than such notice as may be herein expressly
required. In the event any provision contained in this Agreement should be breached by any party
and thereafter waived by the other party so empowered to act, such waiver shall be limited to the
particular breach so waived and shall not be deemed to waive any other breach hereunder. No
waiver, amendment, release or modification of this Agreement shall be established by conduct,
custom or course of dealing, but solely by an instrument in writing duly executed by the parties
thereunto duly authorized by this Agreement.

Section 7.5. Counterparts. This Agreement may be executed simultaneously in
counterparts, each of which shall be deemed an original, but both of which together shall
constitute one and the same instrument.

Section 7.6. Severability. The invalidity or unenforceability of any one or more
phrases, sentences, clauses or Sections contained in this Agreement shall not affect the validity
or enforceability of the remaining portions of this Agreement, or any part thereof. In particular,
this section means (among other things) that TERA and DNA-CS do not agree or intend to pay, and
Guarantors do not agree 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 anything construed to be a loan, which would in any way or event (including demand,
prepayment, or acceleration) cause Guarantors to charge or collect more for entering into this
Agreement than the maximum amount Guarantors would be permitted to charge or collect by federal law
or the laws of the State of Texas. Any such excess interest or unauthorized fee shall, instead or
anything stated to the contrary, be applied first to reduce the principal balance of the loan, if
any, and when the principal has been paid in full, refunded to the Companies.

Section 7.7. Governing Law and Jurisdiction. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas.

3

This Agreement has been signed by the Company as of the date first above written.

TERA:

TeraForce Technology Corporation

By:/s/ Robert P. Capps 

	 	 	 	Robert P. Capps, Executive Vice President

DNA-CS:

DNA Computing Solutions, Inc.

By:/s/ Robert P. Capps

	 	 	 	Robert P. Capps, Executive Vice President

GUARANTORS:

/s/ Richard E. Bean 

	 	 	 	Richard E. Bean

/s/ Robert E. Garrison II 

Robert E. Garrison II

/s/ Steven A. Webster

	 	 	 	Steven A. Webster

/s/ James Hawkins

	 	 	 	James Hawkins

/s/ Peter Badger

	 	 	 	Peter Badger

/s/ John Styles

	 	 	 	John Styles

/s/ Donald Campbell

	 	 	 	Donald Campbell

Schedule I

Guarantors

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	Proportionate

	 
	 	 	 	 	 	Guarantor’s            
	 	 	 	 	 	Share of
	Name
	 	Address	 	Percentage             
	 	Warrants             
	 	Loan Maximum

	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	P.O. Box 35068
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Houston, TX  77235
	 	 	 	 	 	 	 	 	 	 	 	 
	Richard E. Bean
	 	Fax: (713) 551-0427              
	 		18.18	%	 	 	1,250,000	 	 	$	100,000	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	600 Travis	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Suite 3000
	 	 	 	 	 	 	 	 	 	 	 	 
	Robert E. Garrison
	 	Houston, TX  77030
	 	 	 	 	 	 	 	 	 	 	 	 
	II
	 	Fax: (713) 993-4677              
	 	 	18.18	%	 	 	1,250,000	 	 	$	100,000	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	14701 St.	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Mary’s Lane Suite
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 		800		 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Houston, Texas  77079
	 	 	 	 	 	 	 	 	 	 	 	 
	Steven A. Webster
	 	Fax:  (281) 558-3011             
	 		18.18	%	 	 	1,250,000	 	 	$	100,000	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	P.O. Box 8216
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Waco, TX  76714
	 	 	 	 	 	 	 	 	 	 	 	 
	James Hawkins
	 	Fax:  (254) 761-2951             
	 	 	18.18	%	 	 	1,250,000	 	 	$	100,000	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	600 Travis	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Suite 3100
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Houston, TX  77030
	 	 	 	 	 	 	 	 	 	 	 	 
	Peter Badger
	 	Fax:  (713) 993-4606             
	 	 	18.18	%	 	 	1,250,000	 	 	$	100,000	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	2200 Southwest Frwy	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Suite 500
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Houston, TX  77098
	 	 	 	 	 	 	 	 	 	 	 	 
	John Styles
	 	Fax:  (713) 383-9549             
	 	 	4.55	%	 	 	312,500	 	 	$	25,000	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	323 Tamerlaine	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Houston, TX  77024
	 	 	 	 	 	 	 	 	 	 	 	 
	Donald Campbell
	 	Fax:  (713) 827-1191             
	 	 	4.55	%	 	 	312,500	 	 	$	25,000	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

4EX-10.2

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 January, 2005 (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 hereof.

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.

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 Five Hundred Fifty
Thousand and No/100 Dollars ($550,000.00).

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 July 31, 2005.

Grantor. The word “Grantor” means and includes, without limitation: (i) Borrower;
and, (ii) each and all of the persons or entities granting a Security Interest in
any Collateral for the Indebtedness, including, without limitation, TeraForce
Technology Corporation, a Delaware corporation, (“TeraForce”).

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.

Revolving Credit Note. The words “Revolving Credit Note” and the word “Note” each
means the $550,000.00 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, 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 TeraForce and Borrower, as debtor, and Lender,
as secured party, covering, and creating a Security Interest against the Collateral,
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 Collateral.

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. Lender’s 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.	 

	 	(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.

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. Lender’s 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.

AFFIRMATIVE COVENANTS.

Borrower covenants and agrees with Lender that, while this Loan Agreement is in effect,
Borrower will furnish Lender with copies of Borrower’s and Guarantors’ current financial statements
as specified below, and hereafter Borrower will furnish such financial statements in accordance
with the following schedule:

	 	 	 	 	 	 	 
	 	 	 	 	Date of Current	 	 
	Name	 	Type	 	Statement	 	Frequency
	Borrower

	 	Unaudited
	 	September 30, 2004
	 	Quarterannually,

commencing with the

statement dated

December 31, 2004
	 

	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 
	TeraForce

Technology

Corporation

	 	Audited
	 	December 31, 2003
	 	Annually,

commencing with the

statement dated

December 31, 2004
	 

	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 
	TeraForce

Technology

Corporation

	 	Unaudited
	 	September 30, 2004
	 	Quarterannually,

commencing with the

statement dated

March 31, 2005
	 

	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 
	Robert E.

Garrison, II

	 	Personal
	 	December 17, 2004
	 	Annually,

commencing with the

statement dated

December 17, 2005
	 

	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 
	Richard E. Bean

	 	Personal
	 	June 30, 2004
	 	Annually,

commencing with the

statement dated

June 30, 2005
	 

	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 
	Steven A. Webster

	 	Personal
	 	December 31, 2003
	 	Annually,

commencing with the

statement dated

December 31, 2004
	 

	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 
	James R. Hawkins

	 	Personal
	 	December 31, 2003
	 	Annually,

commencing with the

statement dated

December 31, 2004
	 

	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 
	Peter W. Badger

	 	Personal
	 	July 23, 2004
	 	Annually,

commencing with the

statement dated

July 23, 2005
	 

	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 
	John Styles

	 	Personal
	 	June 30, 2004
	 	Annually,

commencing with the

statement dated

June 30, 2005
	 

	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 
	Donald R.

Campbell

	 	Personal
	 	February 28, 2003
	 	Annually,

commencing with the

statement dated

February 28, 2004
	 

	 	 
	 	 
	 	 

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 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 or TeraForce 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 or TeraForce to comply with
or to perform any other term, obligation, covenant or condition contained in any
other agreement between Lender and Borrower or TeraForce, respectively.

Default in Favor of Third Parties. Should Borrower or TeraForce 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 or TeraForce’s property or Borrower’s ability to repay the Loans
or Borrower’s or TeraForce’s ability to 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 or TeraForce under this Agreement or the 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 Borrower’s or TeraForce’s
existence as a going business; the death of any one or more of the Guarantors; the
insolvency of Borrower or TeraForce; the appointment of a receiver for any part of
Borrower’s or TeraForce’s property; any assignment by Borrower or TeraForce for the
benefit of creditors; any type of creditor workout by Borrower or TeraForce; or, the
commencement of any proceeding under any bankruptcy or insolvency laws by or against
Borrower or TeraForce.

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 TeraForce or by any governmental agency,
against any of the Collateral. 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 or TeraForce as
to the validity or reasonableness of the claim which is the basis of the creditor or
forfeiture proceeding, and if Borrower or TeraForce 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, TeraForce, or Guarantor, as the case may be, after
Borrower’s receipt of written notice from Lender demanding cure of such default:
(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 Borrower
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.

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.

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 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.

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

Delaware corporation

	 	FIRSTCAPITAL BANK, SSB

	 
	 	 
	By: /s/ Robert P. Capps

Robert P. Capps,

	 	By: /s/ Dan R. Owen, Jr.

Dan R. Owen, Jr.,

Senior Vice President

Executive Vice- President

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