Exhibit 10.1


 


PROMISSORY NOTE


SBA PAYCHECK PROTECTION PROGRAM


(POST-ECONOMIC AID ACT PPP LOAN)


 


SBA LOAN # 5747308510


 


MNB LOAN # 5747308510


 


DATE: March 1, 2021


 


BORROWER: Deep Down, Inc., a Delaware corporation


 


BORROWER'S ADDRESS: 18511 Beaumont Hwy, Houston, TX 77049


 


LENDER: MOODY NATIONAL BANK and its successors and assigns


 


LOAN PRINCIPAL AMOUNT $1,111,015.00


 


LOAN MATURITY DATE: March 1, 2026


 


The loan ("Loan") evidenced
by this Note is made pursuant to (i) all applicable provisions of the United States Small Business Administration ("SBA")
Small Business Act Section 7(a), the Paycheck Protection Program Flexibility Act of 2020 ("Flexibility Act"), the Coronavirus
Aid, Relief, and Economic Security Act ("CARES Act"), and the Economic Aid to Hard-Hit Small Businesses, Nonprofits and
Venues Act ("Economic Aid Act"), and all interim final rules, guidances, procedural notices, and final rules, and all
regulations, SOPs, and FAQs as are posted, issued, supplemented and/or amended from time to time by SBA and/or the United States
Department of Treasury ("Treasury"), and all further laws passed, related to the SBA Paycheck Protection Program (collectively,
the "Program"), and to (ii) that certain Paycheck Protection Program Borrower Application Form dated February 19, 2021
submitted by Borrower to Lender (such application together with all supporting information and documentation being referred to
herein as the "Application"). The Application is incorporated by this reference into this Note and made a part of this
Note, as if fully set out in this Note.


 


Borrower certifies to Lender that all
information, certifications and authorizations contained in the Application, including all supporting information and documentation
submitted as part of the Application, continue to be true, complete and correct as of the date of this Note.


 


Borrower agrees to comply with all requirements
of the Program, including but not limited to use of funds advanced under this Note for purposes permitted under the Program.


 


Lender may at any time, without notice
to or consent of Borrower, transfer, assign, sell or convey this Note to any person or entity, including the SBA.


 


Notwithstanding anything to the contrary
contained in this Note, when the SBA is the holder of this Note, this Note will be interpreted and enforced under Federal law,
including SBA regulations. Lender or SBA may use state or local procedures for filing papers, recording documents, giving notice,
and other purposes. By using such procedures, SBA does not waive any Federal immunity from state or local control, penalty, tax,
or liability. As to this Note, Borrower may not claim or assert against SBA any local or state law to deny any obligation, defeat
any claim of SBA, or preempt Federal law.


 


 


 






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PROMISE TO PAY


 


For value received, Borrower promises
to pay to the order of Lender the principal amount of One Million One Hundred Eleven Thousand Fifteen and 00/100ths Dollars ($1,111,015.00),
together with interest thereon as provided in this Note, and all other amounts required by this Note.


 


INTEREST RATE DURING NOTE TERM


 


Interest shall accrue at the pre
default rate of ONE PERCENT (1.0%) per annum on all Principal from time to time remaining unpaid from the date of advance until
the Loan Maturity Date (sometimes herein referred to as the "Note Term"). Interest shall be calculated on a non-compounding,
non-adjustable basis, computed on the per annum basis of a year of actual/365 days, and shall accrue on the actual number of days
elapsed for any whole or partial month in which interest is being calculated.


 


FORGIVENESS AND NOTE PAYMENT TERMS

Forgiveness:


 


Borrower
understands that, subject to the terms and conditions of the Program, Borrower may apply for Loan forgiveness by the SBA and that
this Loan may be forgiven in whole or in part by the SBA ("Loan Forgiveness"). If Borrower chooses to apply for Loan
Forgiveness, Borrower may submit its application for such Loan Forgiveness at any time on or before the Loan Maturity Date, provided
that Borrower has used all Loan proceeds for which Borrower is requesting Loan Forgiveness. Borrower shall, at or before any such
application, notify Lender in writing of the "Loan Forgiveness Covered Period" selected by Borrower as provided
herein. Borrower's "Loan Forgiveness Covered Period" shall mean the period of time selected by Borrower which must begin
on the date of disbursement of funds under this Loan ("Disbursement Date") and shall end ("Loan Forgiveness Covered
Period Ending Date") on any date selected by Borrower that occurs between (i) the date which is 8 weeks after the Disbursement
Date and (ii) the date which is 24 weeks after the Disbursement Date. The "Maximum Covered Period" is twenty-four (24)
weeks after the Disbursement Date.


 


Borrower
understands that Lender does not control any Loan Forgiveness determination made or not made by the SBA, or any other element
of the Program. Lender will have no liability to Borrower with respect to any determination made by Lender or SBA with
respect to the amount of Loan Forgiveness, if any, to which Borrower may be entitled under the Program. Borrower releases
and holds Lender harmless from any and all actions and decisions taken and/or not taken by the SBA regarding the Loan. Lender
shall notify Borrower of any remittance by SBA of any Loan Forgiveness amount, or shall notify Borrower that SBA has
determined that no Loan Forgiveness is allowed, whichever is applicable.


 


If the Loan is not fully forgiven
by SBA, Borrower shall remain liable for the full and punctual payment and satisfaction of, and Borrower agrees to pay, the remaining
Principal balance and all interest thereon in accordance with the terms of this Note. The amount of Loan Forgiveness, if any, will
be applied in the same manner as all other payments under this Note.


 


Note Payment Terms: 


 


If Borrower submits to Lender a
Loan Forgiveness application within 10 months after the end of the Maximum Covered Period, no payments of principal or interest
under this Note shall be due or payable before the date on which the SBA remits to Lender the amount of Loan Forgiveness determined
by it under the Program, or, the date on which SBA notifies Lender that no Loan Forgiveness is allowed ("Payment Deferral
Period"). Interest will continue to accrue during the Payment Deferral Period. It is provided, however, that if for any reason
Borrower does not apply for Loan Forgiveness within 10 months after the end of the Maximum Covered Period, the "Payment Deferral
Period" shall be deemed to end on the date which is 10 months after the end of the Maximum Covered Period.


 


If there remains any unpaid Principal
under this Note as of the end of the Payment Deferral Period ("Remaining Balance"), Lender will, following the end of
the Payment Deferral Period, provide the Borrower


 


with written notice of the amount of such
Remaining Balance. Such Remaining Balance, together with interest thereon as provided in this Note shall be due and payable in
equal amortizing monthly payments ("Monthly Installments") which shall be in such amount as stated in such notice. The
first Monthly Installment shall be payable on the date stated in such notice, and a Monthly Installment shall also be due and payable
on the same calendar day of each subsequent month during the term of this Note. It is provided, however, that all then-unpaid Principal
and all then-unpaid accrued interest will be due and payable in full on the Loan Maturity Date.


 


 


 






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If Lender has not received the full amount
of any Monthly Installment by the end of the tenth (10th) calendar day following the date upon which such Installment is due ("Past
Due Installment"), then, in addition to interest accruing at the Default Rate (herein defined) such overdue Installment from
the date due until paid, Borrower shall pay a late charge to the Lender in an amount equal to Five Percent (5%) of the amount of
such Past Due Installment ("Late Charge"), no later than the due date of the next Installment which becomes due after
the due date of the Past Due Installment for which the Late Charge is owed. Borrower shall be required to pay a Late Charge only
once for each Past Due Installment. Failure to timely pay a Late Charge required hereunder shall be an event of Default under the
Note. These provisions shall not waive or modify Borrower's obligations under the Note to timely pay all Monthly Installments.


 


Borrower may prepay this Note on any business day of Lender
without penalty.


 


Both Principal and interest are payable
at the office of Moody National Bank, in the City of Galveston, or at any other office of the Moody National Bank in Galveston,
Harris, Travis, Fort Bend or Brazoria County, Texas, or at such other place as Lender may direct in written notice to Borrower.


 


Payments received from Borrower shall be
applied first to Lender's cost of collection and enforcement of this Note, then to unpaid accrued interest, then to unpaid Principal.


 


All sums payable or to be payable under
this Note must be paid in immediately available funds in lawful money of the United States of America that, at the time of payment,
is legal tender for the payment of public and private debts, without offset. Whenever any payment to be made under this Note is
stated to be due on a Saturday, Sunday or legal holiday for commercial banks under applicable law, then such payment is due and
may be made on the next succeeding business day, and such extension of time may be included in the computation of payment of interest
under this Note. In the event payments under this Note are required to be made on the 29th, 30th, or 31st day of the month, the
payment date for the month of February will be the last day of February. Any check, draft, negotiable order of withdrawal, money
order or other instrument given in payment of all or any portion of this Note may be accepted by the holder hereof and handled
in collection in the customary manner, but will not constitute payment under this Note or diminish any rights of the holder hereof
until the required amount is actually and unconditionally received in full by the holder hereof. Payments in immediately available
funds received by Lender in the place designated for payment on a business day prior to 2 p.m. Galveston, Texas time at said place
of payment shall be credited prior to the close of business on the business day received, while payments received by Lender on
a day other than a business day or after 2 p.m. Galveston, Texas time on a business day shall not be credited until the next succeeding
business day. If any payment of Principal or interest on this Note shall become due and payable on a day other than a business
day, such payment shall be made on the next succeeding business day. Any such extension of time for payment shall be included in
computing interest which has accrued and shall be payable in connection with such payment.


 


Borrower is and shall be obligated to
pay all Principal, interest and any and all other amounts which become payable under this Note or under any of the other
instrument executed in connection with this Note ("Loan Documents") absolutely and unconditionally and without any
abatement, postponement, diminution or deduction whatsoever and without any reduction for counterclaim or setoff whatsoever.
If at any time any payment received by Lender hereunder shall be deemed by a court of competent jurisdiction to have been a
voidable preference or fraudulent conveyance under any applicable law, then the obligation to make such payment shall survive
any cancellation or satisfaction of this Note or return thereof to Borrower and shall not be discharged or satisfied with any
prior payment thereof or cancellation of this Note, but shall remain a valid and binding obligation enforceable in accordance
with the terms and provisions hereof, and such payment shall be immediately due and payable upon demand.


 


Remittances in payment of any part of this
Note other than in the required amount in immediately available funds at the place where this Note is payable shall not, regardless
of any receipt or credit issued therefore, constitute payment until the required amount is actually received by Lender in full
in accordance herewith and shall be made and accepted subject to the condition that any check or draft may be handled for collection
in accordance with the practice of the collecting bank or banks. Acceptance by Lender of any payment in an amount less than the
full amount then due shall be deemed an acceptance on account only, and the failure to pay the entire amount then due shall be
and continue to be an event of Default in the payment of this Note.


 


 


 






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DEFAULT INTEREST AND OTHER INTEREST RELATED PROVISIONS


 


Prior to Default hereunder, unpaid Principal
shall bear interest from the date hereof at the Interest Rate during the Note Term hereinabove provided. At Lender's option, from
and after any Default hereunder, and continuing thereafter unless and until Lender has otherwise agreed in writing, Lender may
elect in addition to all other rights and remedies of Lender hereunder, that all unpaid Principal (whether or not then due), and
all unpaid accrued interest on this Note shall bear interest until paid at the highest per annum rate of interest, which, when
added to all other interest paid, contracted for, received or charged, would not exceed the "Maximum Lawful Rate" (hereinafter
defined), or, if there is no Maximum Lawful Rate, then at a per annum rate equal to Eighteen Percent (18.0%) (hereinafter referred
to as the "Default Rate"), whether or not Lender has exercised its option to accelerate the maturity of this Note and
declare the entire unpaid Principal indebtedness and accrued interest due and payable. Provided, however, after any
Default hereunder, Lender, in its sole and absolute discretion, may elect to charge a rate of interest which is less than the Default
Rate provided for in the preceding sentence. Any such election by Lender to charge such lesser amount shall not constitute a waiver
of Lender's right to impose the Default Rate during the existence of any future Default. Borrower acknowledges that it would be
extremely difficult or impracticable to determine Lender's actual damages resulting from any Default, and any additional amounts
resulting from such Default Rate or other rate as provided above, are reasonable estimates of those damages and do not constitute
a penalty.


 


Notwithstanding any provision in this
Note to the contrary, it is expressly provided that in no case or event should the aggregate amounts, which by applicable law,
are deemed to be interest with respect to this Note or any document securing this Note, ever exceed the "Maximum Lawful
Rate". In this connection, it is expressly stipulated and agreed that it is the intention of the Lender and Borrower to
contract in strict compliance with the laws of the State of Texas and/or the United States governing the maximum rate or
amount of interest payable on the indebtedness evidenced by this Note and all other indebtedness paid or payable pursuant to
the Loan Documents (whichever permits the higher rate of interest) from time to time in effect and applicable to this Note
(herein called the "Applicable Law"). Nothing in this Note, or any other Loan Document, shall ever be construed to
create a contract to pay, as consideration for the use, forbearance or detention of money, interest at a rate in excess of
the Maximum Lawful Rate. If the applicable law is ever judicially interpreted so as to render usurious, any amount (i)
contracted for, charged, taken, reserved or received pursuant to this Note, any of the other Loan Documents or any other
communication or writing by or between Borrower and Lender related to the transaction or transactions that are the subject
matter of the Loan Documents, (ii) contracted for, charged, taken, reserved or received by reason of Lender's exercise of the
option to accelerate the maturity of this Note, (iii) Borrower will have paid or Lender will have received by reason of any
prepayment by Borrower of this Note, or (iv) if under any other circumstances, the aggregate amounts contracted for, charged,
or paid with respect to this Note, or any other Loan Document, which by applicable law are deemed to be interest, would
produce an interest rate greater than the Maximum Lawful Rate, then it is Borrower's and Lender's express intent that all
amounts charged in excess of the Maximum Lawful Rate shall be automatically canceled, ab initio, and all amounts in excess of
the Maximum Lawful Rate theretofore collected by Lender shall be credited on the amounts remaining owing under this Note (or,
if all amounts remaining owing under this Note have been or would thereby be paid in full, then refunded to Borrower), and
the provisions of this Note and the other Loan Documents shall immediately be deemed reformed and the amounts thereafter
collectible hereunder and thereunder reduced, without the necessity of the execution of any new document, so as to comply
with the applicable law, but so as to permit the recovery of the fullest amount otherwise called for hereunder and
thereunder; provided, however, if this Note has been paid in full before the end of the stated term of this Note, then
Borrower and Lender agree that Lender shall, with reasonable promptness after Lender discovers or is advised by Borrower that
interest was received in an amount in excess of the Maximum Lawful Rate, either refund such excess interest to Borrower
and/or credit such excess interest against the amounts under this Note then owing by Borrower to Lender. Borrower hereby
agrees that as a condition precedent to any claim or counterclaim (in which event such proceeding shall be abated for such
time period) seeking usury penalties against Lender, Borrower will provide written notice to Lender, advising Lender in
reasonable detail of the nature and amount of the violation, and Lender shall have sixty (60) days after receipt of such
notice in which to correct such usury violation, if any, by either refunding such excess interest to Borrower or crediting
such excess interest against amounts then owed under this Note by Borrower to Lender. All sums contracted for, charged,
taken, reserved or received by Lender for the use, forbearance or detention of any debt evidenced by this Note shall, to the
extent permitted by applicable law, be amortized or spread, using the actuarial method, throughout the stated term of this
Note until payment in full so that the rate or amount of interest on account of this Note does not exceed the Maximum Lawful
Rate from time to time in effect and applicable to this Note for so long as any indebtedness hereunder is outstanding. In no
event shall the provisions of Chapter 346 of the Texas Finance Code (which regulates certain revolving credit loan accounts
and revolving triparty accounts) apply to this Note. Notwithstanding anything to the contrary contained herein or in any of
the other Loan Documents, it is not the intention of Lender to accelerate the maturity of any interest that has not accrued
at the time of such acceleration or to collect unearned interest at the time of such acceleration.


 


 


 






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To the extent that Lender is relying on
Chapter 303 of the Texas Finance Code to determine the Maximum Lawful Rate payable on this Note and/or any other portion of the
Indebtedness, Lender will utilize the weekly ceiling from time to time in effect as provided in such Chapter 303, as amended.
To the extent United States federal law permits Lender to contract for, charge, take, receive or reserve a greater amount of interest
than under Texas law, Lender will rely on United States federal law instead of such Chapter 303 for the purpose of determining
the Maximum Lawful Rate. Additionally, to the extent permitted by applicable law now or hereafter in effect, Lender may, at its
option and from time to time, utilize any other method of establishing the Maximum Lawful Rate under such Chapter 303 or under
other applicable law by giving notice, if required, to Borrower as provided by applicable law now or hereafter in effect. As used
hereunder, the term "Maximum Lawful Rate" shall mean the maximum lawful rate of interest which may be contracted
for, charged, taken, received or reserved by Lender in accordance with the applicable laws of the State of Texas (or applicable
United States federal law to the extent that such law permits Lender to contract for, charge, take, receive or reserve a greater
amount of interest than under Texas law), taking into account all Charges made in connection with the transaction evidenced by
this Note and the other Loan Documents. As used hereunder, the term "Charges" shall mean all fees, charges and/or
any other things of value, if any, contracted for, charged, taken, received or reserved by Lender in connection with the transactions
relating to this Note and the other Loan Documents, which are treated as interest under applicable law.


 


DEFAULT AND LENDER REMEDIES


 


This Note shall become immediately
due and payable, at the option of Lender at Lender's sole discretion and without notice, demand, presentment, notice of
non-payment or non-performance, protest, notice of protest, notice of intent to accelerate, notice of acceleration or any
other notice or any other action (ALL OF WHICH BORROWER HEREBY EXPRESSLY WAIVES AND RELINQUISHES), upon any one of the
following occurrences or events (each referred to as a "Default"): (1) Borrower shall fail, refuse or neglect to
pay and satisfy, in full and in the applicable method and manner required, any required payment of principal or interest or
any other portion of the indebtedness evidenced by this Note as and when the same shall become due and payable, whether at
the stipulated due date thereof, at a date fixed for payment, or at maturity, by acceleration or otherwise; (2) upon breach
or default under the terms of any instrument executed in connection with this Note; (3) if Borrower shall die, become
insolvent (however such insolvency may be evidenced), or dissolve, or its existence as a legal entity terminate; (4) if
Borrower files a petition in any proceeding in bankruptcy or for relief of debtors or readjustment of debt seeking the
protection thereof, or makes an assignment for the benefit of creditors, or any receiver or liquidator is appointed for
Borrower or any property of Borrower, or Borrower make an assignment for the benefit of creditors; (5) if any proceedings in
bankruptcy or for the relief of debtors or readjustment of debts is filed against Borrower and not dismissed within 60 days
after the filing of the petition commencing such proceeding; (6) if Borrower fails to furnish financial or other information
requested by the Lender or SBA, or furnishes or has furnished any financial or other information or statements which are
false or misleading in any respect; (7) any event occurs with respect to Borrower which causes the holder of this Note to
reasonably deem itself insecure as to the likelihood of prompt full payment of the Indebtedness evidenced hereby; (8)
Borrower has any adverse change in financial condition that Lender believes may materially affect Borrower's ability to pay
this Note; (9) Borrower fails to disclose any material fact to Lender or SBA; (10) Borrower reorganizes, merges,
consolidates, or otherwise changes ownership or business structure without Lender's prior written consent; or (11) Borrower
becomes the subject of a civil or criminal action that Lender believes may materially affect Borrower's ability to pay this
Note.


 


Upon the occurrence of any
Default, Lender shall have the right to exercise any and all rights and remedies under the Loan Documents or hereunder, including
(i) to declare the entire unpaid balance of the indebtedness evidenced by this Note (including, without limitation, the outstanding
Principal balance hereof and all accrued but unpaid interest thereon and all other amounts owing under this Note) at once immediately
due and payable (and upon such declaration, the same shall be at once immediately due and payable) and may be collected forthwith,
whether or not there has been a prior demand for payment and regardless of the stipulated date of maturity, and (ii) to exercise
any of Lender's other rights, powers, recourses and remedies under this Note, under any other Loan Document, or at law or in equity,
and the same shall be cumulative and concurrent, may be pursued separately, singly, successively, or concurrently against any one
or more Borrower, at the sole discretion of Lender, and may be exercised as often as occasion therefor shall arise, it being agreed
by Borrower that the exercise, discontinuance of the exercise of or failure to exercise any of the same shall in no event be construed
as a waiver or release thereof or of any other right, remedy, or recourse, and are intended to be, and shall be, nonexclusive.
In no event shall Lender exercise any right of set off or offset against any Loan funds in any account of Borrower with Lender.


 


 


 






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If this Note is not paid at
maturity, whether by acceleration or otherwise, or is placed in the hands of an attorney for collection or suit is filed hereon,
or proceedings or had in probate, bankruptcy, receivership, organization, rearrangement or other legal proceedings for collection,
enforcement or defense hereof, Borrower agrees to pay Lender all costs of collection including but not limited to reasonable amount
of attorneys' fees, and to pay upon demand all fees and expenses incurred by Lender in securing or attempting to secure performance
by Borrower of any of its obligations under this Note.


 


BORROWER CONFIRMATIONS


 


Borrower confirms to Lender as follows:


 


		(a)	Borrower acknowledges that if Borrower defaults on this Loan, SBA may be required
to pay Lender under the SBA guarantee to Lender for this Loan, and SBA may then seek recovery on this Loan from Borrower (to the
extent any balance remains after Loan Forgiveness).



 


		(b)	Borrower will keep books and records in a manner satisfactory to Lender, furnish
financial statements as requested by Lender, and allow Lender and SBA to inspect and audit books, records and papers relating to
Borrower's financial or business condition.



 


		(c)	Borrower will not, without Lender's
                                                                prior written consent, change Borrower's ownership structure, make any distribution of Borrower's assets that would adversely
                                                                affect Borrower's financial condition, or transfer (including
pledging) or dispose of any assets of Borrower except in the ordinary course of Borrower's business.



 


		(d)	All certifications and statements made by Borrower in the Application are true and correct, and
Borrower understands that Lender is relying on their accuracy and truth in making this Loan.



 


		(e)	Pursuant to SBA SOP 50 10 5(J) (as may be amended), Borrower and/or Operating Company (as defined
in such SOP) is/are hereby notified and acknowledge(s) that if the small business defaults on the SBA-guaranteed loan and SBA suffers
a loss, the names of the small business and the guarantors of the SBA-guaranteed loan will be referred for listing in the CAIVRS
database, which may affect their eligibility for further financial assistance.



 


		(f)	If this Loan is a First Draw Loan under the Program, Borrower has not previously received any loan
under the Program or under any previous version of the Program.



 


WAIVERS AND GENERAL PROVISIONS


 


BORROWER WAIVES AND RELINQUISHES PRESENTMENT
FOR PAYMENT, PROTEST AND DEMAND, NOTICE OF NON-PAYMENT, PROTEST, NOTICE OF PROTEST, NOTICE OF ACCELERATION, NOTICE OF THE INTENT
TO ACCELERATE, THE FILING OF SUIT, AND DILIGENCE IN COLLECTING THIS NOTE, AND AGREES TO THE SUBSTITUTION, EXCHANGE OR RELEASE OF
ANY PARTY PRIMARILY OR SECONDARY LIABLE HEREON, AND FURTHER AGREES THAT IT WILL NOT BE NECESSARY FOR THE HOLDER HEREOF, IN ORDER
TO ENFORCE PAYMENT OF THIS NOTE BY IT, TO FIRST INSTITUTE SUIT OR EXHAUST ITS REMEDIES AGAINST BORROWER, AND CONSENTS TO ANY ONE
OR MORE EXTENSIONS OR POSTPONEMENTS OF THE TIME OF PAYMENT OF THIS NOTE ON ANY TERMS OR ANY OTHER INDULGENCES WITH RESPECT THERETO,
WITHOUT NOTICE THEREOF TO ANY BORROWER. BORROWER WAIVES AND RELINQUISHES PRESENTMENT FOR PAYMENT, DEMAND, NOTICE OF NONPAYMENT
OR NONPERFORMANCE, PROTEST, NOTICE OF PROTEST, NOTICE OF INTENT TO ACCELERATE, NOTICE OF ACCELERATION OR ANY OTHER NOTICES OR ANY
OTHER ACTION. BORROWER WAIVES AND RELINQUISHES, TO THE FULLEST EXTENT PERMITTED BY LAW, ALL RIGHTS TO THE BENEFITS OF ANY MORATORIUM,
REINSTATEMENT, MARSHALING, FORBEARANCE, VALUATION, STAY, EXTENSION, REDEMPTION, APPRAISEMENT, EXEMPTION AND HOMESTEAD NOW OR HEREAFTER
PROVIDED BY THE CONSTITUTION AND LAWS OF THE UNITED STATES OF AMERICA AND OF EACH STATE THEREOF, BOTH AS TO ITSELF AND IN AND TO
ALL OF ITS PROPERTY, REAL AND PERSONAL, AGAINST THE ENFORCEMENT AND COLLECTION OF THE OBLIGATIONS EVIDENCED BY THIS NOTE.


 


 


 






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Neither the failure to exercise, nor
delay in exercising, Lender's right to accelerate the maturity of this Note or any other right, power or remedy upon any
default may be construed as a waiver of such default or as a waiver of the right to exercise any such right, power or remedy
at any time, nor be construed as a novation of this Note or as a reinstatement of the indebtedness evidenced by this Note. No
single or partial exercise by Lender of any right, power or remedy exhausts the same or precludes any other or further
exercise thereof, and every such right, power or remedy may be exercised at any time and from time to time. All remedies
provided for in this Note and in any other instrument securing or executed in connection with this Note are cumulative of
each other and of any and all other remedies existing at law or in equity, and Lender is, in addition to the remedies
provided in this Note, entitled to avail itself of all such other remedies as may now or hereafter exist at law or in equity
for the collection of the indebtedness owing under this Note. The resort to any remedy provided for under this Note, or
provided for by law or in equity, will not prevent the concurrent or subsequent employment of any other appropriate remedy or
remedies. Without limiting the generality of the foregoing provisions, Lender's acceptance from time to time of any payment
under this Note that is past due or that is less than the payment in full of all amounts due and payable at the time of such
payment, will not (i) constitute a waiver of or impair or extinguish the rights of Lender to accelerate the maturity of this
Note or to exercise any other right, power or remedy at the time or at any subsequent time, or nullify any prior exercise of
any such right, power or remedy, or (ii) constitute a waiver of the requirement of punctual payment and performance, or a
novation in any respect, or (iii) operate to release, discharge, modify, change or affect the original liability of Borrower
under this Note, either in whole or in part, unless Lender specifically, unequivocally and expressly agrees otherwise in
writing. This Note may not be changed orally but only by an agreement in writing signed by the party against whom the
enforcement of any waiver, change or modification is sought. Borrower hereby waives and relinquishes the benefit of any
statute or rule of law or equity now or hereafter existing, which would produce a result contrary to or in conflict with the
foregoing.


 


If Borrower requests any modification or
extension of this Note, or any consent of Lender related to this Note or any aspect of the Program, Borrower shall, as consideration
for any review or action by Lender in response to any such request, pay all costs and expenses incurred by Lender in connection
therewith.


 


Borrower acknowledges and agrees that Lender
may, at any time, without the consent of or notice to Borrower, at Lender's sole discretion, assign, sell or transfer this Note
or grant participations in all or part of the obligations of Borrower evidenced by this Note. Lender may disseminate to any assignee,
purchaser, transferee or participant or prospective assignee, purchaser, transferee or participant any information that Lender
has pertaining to the loan evidenced by this Note, including without limitation, any information regarding Borrower.


 


This Note binds and inures to the benefit
of Borrower and Lender and their respective heirs, legal representatives, successors and assigns; provided, however, that if Borrower
assigns this Note, Borrower shall so inform Lender in writing but no such assignment shall release Borrower of Borrower's obligations
under this Note.


 


If there is more than one person or entity
as Borrower under this Note, the obligations of such persons and entities as Borrower hereunder shall be joint and several.


 


Time
is of the essence of this Note. This Note is executed and delivered as an incident to a lending transaction negotiated and
consummated in Galveston County, Texas, and shall, except as otherwise expressly provided in this Note or as otherwise
required by applicable law, be interpreted, construed and enforced in accordance with the internal laws of the State of
Texas, without regard to Texas law with respect to conflict of laws. Borrower, for itself and its heirs, administrators,
successors and assigns, hereby irrevocably (i) submits to the nonexclusive jurisdiction of the state and federal courts in
Texas, (ii) waives, to the fullest extent permitted by law, any objection that it may now or in the future have to the laying
of venue of any litigation arising out of or in connection with this Note or any Loan Document brought in the District
Court of Galveston County;-Texas or in the United
States District Court for the Southern-District-of Texas, (iii) waives any objection it may now or hereafter have as to the
venue of any such action or proceeding brought in such court or that such court is an inconvenient forum, and (iv) agrees
that any legal proceeding against any party to any of the Loan Documents arising out of or in connection with any of the Loan
Documents may be brought in one of the foregoing courts. Borrower hereby agrees that service of process upon Borrower may be
made by certified or registered mail, return receipt requested, at its address specified herein. Nothing herein shall affect
the right of Lender to serve process in any other manner permitted by law or shall limit the right of Lender to bring any
action or proceeding against Borrower or with respect to any of Borrower's property in courts in other jurisdictions. The
scope of each of the foregoing waivers is intended to be all encompassing of any and all disputes that may be filed in any
court and that relate to the subject matter of this transaction, including, without limitation, contract claims, tort claims,
breach of duty claims, and all other common law and statutory claims. Borrower acknowledges that these waivers are a material
inducement to Lender's agreement to enter into the agreements and obligations evidenced by the Loan Documents, that Lender
has already relied on these waivers and will continue to rely on each of these waivers in related future dealings. The
waivers in this paragraph are irrevocable, meaning that they may not be modified either orally or in writing, and these
waivers apply to any future renewals, extensions, amendments, modifications, or replacements in respect of any and all of the
applicable Loan Documents. Where the context so requires references to any gender shall include the others and references to
the singular shall include the plural and vice versa. If any term, covenant, condition, agreement, representation or warranty
of the Note or the application thereof to any person or circumstance shall, to any extent, be invalid or unenforceable, the
remainder of this Note, or the application of such term, covenant, condition, agreement, representation or warranty to
persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby and
each term, covenant, condition, agreement, representation or warranty of this Note shall be valid and enforced to the fullest
extent permitted by law.


 


 


 






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Notwithstanding any prior business or personal
relationship between Borrower and Lender, or any officer, director or employee of Lender, that may exist or have existed, the relationship
between Borrower and Lender is solely that of debtor and creditor, Lender has no fiduciary or other special relationship with Borrower,
Borrower and Lender are not partners or joint venturers, and no term or condition of any of the Loan Documents shall be construed
so as to deem the relationship between Borrower and Lender to be other than that of debtor and creditor. Whenever pursuant to this
Note or any other Loan Document or any provision of the Program, Lender exercises any right given to it to consent or withhold
consent, or approve or disapprove, the decision of Lender shall be in the sole discretion of Lender and shall be final and conclusive.


 


Borrower may not use or rely on any oral
statement of Lender of SBA to contradict or alter the written terms of this Note.


 


Borrower shall execute and deliver to Lender
upon Lender's request from time to time all additional and/or correction documents and information requested by Lender related
to this Note and/or the Program. Without in any way limiting the generality of the foregoing, in the event that SBA requires a
different promissory note form for loans in the Program, and/or any guidance, regulation or requirement is made or issued regarding
loans in the Program which Lender deems to require amendment or modification to this Note (collectively, "Regulatory Changes"),
Borrower expressly agrees that it shall upon request of Lender execute and deliver to Lender such replacement or amended promissory
note as deemed by Lender to be necessary pursuant to any Regulatory Changes.


 


THIS LOAN IS PAYABLE IN FULL AT MATURITY.
YOU MUST REPAY THE ENTIRE PRINCIPAL BALANCE OF THE LOAN AND UNPAID INTEREST THEN DUE. MOODY NATIONAL BANK IS UNDER NO OBLIGATION
TO REFINANCE THE LOAN AT THAT TIME. YOU WILL THEREFORE BE REQUIRED TO MAKE PAYMENT OUT OF OTHER ASSETS YOU MAY OWN OR YOU WILL
HAVE TO FIND A LENDER, WHICH MAY BE THE LENDER YOU HAVE THIS LOAN WITH, WILLING TO LEND YOU THE MONEY. IF YOU REFINANCE THIS LOAN
AT MATURITY, YOU MAY HAVE TO PAY SOME OR ALL OF THE CLOSING COSTS NORMALLY ASSOCIATED WITH A NEW LOAN EVEN IF YOU OBTAIN REFINANCING
FROM THE SAME LENDER.


 


Borrower, intending to be legally bound
hereby, has duly executed this Note as of the date first above written with the original "wet ink" signature of the authorized
representative of Borrower, and shall tender to Bank such executed original. Notwithstanding the foregoing, Borrower agrees that
a scanned or other electronically generated copy of such originally executed Note shall be fully enforceable the same as such originally
executed Note.


 





	 	“BORROWER”
	 	 
	 	Deep Down, Inc.
	 	A Delaware corporation
	 	 
	 	 
	 	By: /s/ Charles Njuguna
	 	Name: Charles Njuguna
	 	Title: President



 


 


 


 


 






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