Exhibit 10.1


 


 


 


PROMISSORY
NOTE


 


	
        Principal

        $151,200.00
	
        Loan Date

        06-18-2020
	
        Maturity

        06-18-2025
	Loan No 

<REDACTED>	
        Call / Coll

        OP
	
        Account

        ***
	Officer EMG	Initials
	References in the boxes above are for Lender's use only and do not limit the applicability of this document to any particular loan or item. 

Any item above containing "***" has been omitted due to text length limitations.


 


	Borrower:	
        QS
ENERGY, INC.2

        6-400 Kuykendahl
Rd #C180-313

        Tomball, TX 77375-2882
	Lender:	
        CADENCE
BANK, N.A.

        SBA Middle Georgia

        Duluth Branch

        1970
Satellite Blvd

        Duluth, GA 30097



 


 



 


	Principal Amount: $151,200.00	Date of Note: June 18, 2020




 


PROMISE TO PAY. QS ENERGY,
INC. ("Borrower") promises to pay to CADENCE BANK, N.A. ("Lender"), or order, in lawful money of the United
States of America, the principal amount of One Hundred Fifty-one Thousand Two Hundred & 00/100 Dollars ($151,200.00), together
with interest on the unpaid principal balance from June 18, 2020, until paid in full.


 


PAYMENT. Borrower will
pay this loan in accordance with the following payment schedule, which calculates interest on the unpaid principal balances as
described in the "INTEREST CALCULATION METHOD" paragraph using the interest rates described in this paragraph: 53 monthly
consecutive principal and interest payments of $2,584.57 each, beginning January 2, 2021, with interest calculated on the unpaid
principal balances using an interest rate of 1.000% per annum based on a year of 360 days; and one principal and interest payment
of $18,775.37 on June 18, 2025, with interest calculated on the unpaid principal balances using an interest rate of 1.000% per
annum based on a year of 360 days. This estimated final payment is based on the assumption that all payments will be made exactly
as scheduled; the actual final payment will be for all principal and accrued interest not yet paid, together with any other unpaid
amounts under this Note. Unless otherwise agreed or required by applicable law, payments will be applied first to any accrued unpaid
interest; then to principal; and then to any late charges. Borrower will pay Lender at Lender's address shown above or at such
other place as Lender may designate in writing.


 


INTEREST CALCULATION
METHOD. Interest on this Note is computed on a 30/360 simple interest basis; that is, with the exception of odd days before the
first full payment cycle, monthly interest is calculated by applying the ratio of the interest rate over a year of 360 days, multiplied
by the outstanding principal balance, multiplied by a month of 30 days. Interest for the odd days before the first full month is
calculated on the basis of the actual days and a 360-day year. All interest payable under this Note is computed using this method.


 


PREPAYMENT. Borrower
may pay without penalty all or a portion of the amount owed earlier than it is due. Early payments will not, unless agreed to by
Lender in writing, relieve Borrower of Borrower's obligation to continue to make payments under the payment schedule. Rather, early
payments will reduce the principal balance due and may result in Borrower's making fewer payments. Borrower agrees not to send
Lender payments marked "paid in full", "without recourse", or similar language. If Borrower sends such a payment,
Lender may accept it without losing any of Lender's rights under this Note, and Borrower will remain obligated to pay any further
amount owed to Lender. All written communications concerning disputed amounts, including any check or other payment instrument
that indicates that the payment constitutes "payment in full" of the amount owed or that is tendered with other conditions
or limitations or as full satisfaction of a disputed amount must be mailed or delivered to: CADENCE BANK, N.A., 3500 Colonnade
Parkway, Suite 600 Birmingham, AL 35243.


 


LATE CHARGE. If a
payment is 15 days or more late, Borrower will be charged 5.000% of the unpaid portion of the regularly scheduled payment, regardless
of any partial payments Lender has received.


 


 


 


 


 






    	 	 	 



     


    

 


	 	PROMISSORY NOTE	 
	Loan No: 22159438	(Continued)	Page 2







 



 




INTEREST AFTER DEFAULT.
Upon default, at Lender's option, and if permitted by applicable law, Lender may add any unpaid accrued interest to principal
and such sum will bear interest therefrom until paid at the rate provided in this Note. Upon default, the total sum due under this
Note will continue to accrue interest at the interest rate under this Note, with the final interest rate described in this Note
applying after maturity, or after maturity would have occurred had there been no default. However, in no event will the interest
rate exceed the maximum interest rate limitations under applicable law.


 



DEFAULT.
Each of the following shall constitute an event of default ("Event of Default") under this Note: Payment Default.
Borrower fails to make any payment when due under this Note.


 


Other Defaults. Borrower
fails to comply with or to perform any other term, obligation, covenant or condition contained in this Note or in any of the related
documents or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement between
Lender and Borrower.


 


Default in Favor of Third
Parties. Borrower or any Grantor defaults under any loan, extension of credit, security agreement, purchase or sales agreement,
or any other agreement, in favor of any other creditor or person that may materially affect any of Borrower's property or Borrower's
ability to repay this Note or perform Borrower's obligations under this Note or any of the related documents.


 


False Statements. Any
warranty, representation or statement made or furnished to Lender by Borrower or on Borrower's behalf under this Note or the related
documents is false or misleading in any material respect, either now or at the time made or furnished or becomes false or misleading
at any time thereafter.


 


Insolvency. The dissolution
or termination of Borrower's existence as a going business, the insolvency of Borrower, the appointment of a receiver for any part
of Borrower's property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any proceeding
under any bankruptcy or insolvency laws by or against Borrower.


 


Creditor or Forfeiture
Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession
or any other method, by any creditor of Borrower or by any governmental agency against any collateral securing the loan. This includes
a garnishment of any of Borrower's accounts, including deposit accounts, with Lender. However, this Event of Default shall not
apply if there is a good faith dispute by Borrower as to the validity or reasonableness of the claim which is the basis of the
creditor or forfeiture proceeding and if Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits
with Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion,
as being an adequate reserve or bond for the dispute.


 


Events Affecting Guarantor.
Any of the preceding events occurs with respect to any guarantor, endorser, surety, or accommodation party of any of the indebtedness
or any guarantor, endorser, surety, or accommodation party dies or becomes incompetent, or revokes or disputes the validity of,
or liability under, any guaranty of the indebtedness evidenced by this Note.


 


Change
In Ownership. Any change in ownership of twenty-five percent (25%) or more of the common stock of Borrower.


 



 


 


 


 






    	 	 	 



     


    

 


	 	PROMISSORY NOTE	 
	Loan No: 22159438	(Continued)	Page 3







 



 



Adverse Change. A
material adverse change occurs in Borrower's financial condition, or Lender believes the prospect of payment or performance of
this Note is impaired.


 


Insecurity. Lender in good faith believes
itself insecure.


 


SBA. When SBA is
the holder, 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, foreclosing liens, 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.


 


PAYCHECK PROTECTION PROGRAM
.. Lender is making this loan pursuant to the Paycheck Protection Program (the "PPP") created by Section 1102 of the
Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act") and governed by the CARES Act, section 7(a)(36)
of the Small Business Act, any rules or guidance that has been issued by the Small Business Administration implementing the PPP,
or any other applicable Loan Program Requirements, as defined in 13 CFR 120.10, as amended from time to time (collectively "PPP
Loan Program Requirements"). Notwithstanding anything to the contrary herein, Borrower (a) agrees that this Promissory Note
shall be interpreted and construed to be consistent with the PPP Loan Program Requirements and (b) authorizes the Lender to unilaterally
amend any provision to the Promissory Note to the extent required to comply with the PPP Loan Program Requirements.


 


NOTE FORGIVENESS.
Borrower may apply to Lender for forgiveness of the amount due on this Note in an amount equal to the sum of the following costs
incurred by Borrower during the 8-week period beginning on the date of first disbursement of this Note:


a.Payroll costs


b.Any
payment of interest on a covered mortgage obligation (which shall not include any prepayment of or principal on a covered mortgage
obligation)


c.Any payment
on a covered rent obligation


d.Any covered
utility payment


 


The amount of forgiveness
shall be calculated (and may be reduced) in accordance with the requirements of the PPP, including the provisions of Section 1106
of the CARES Act. Not more than 25% of the amount forgiven can be attributed to non-payroll costs. If Borrower has received an
Economic Injury Disaster Loan ("EIDL") advance, then the amount of the advance shall be subtracted from the loan forgiveness
amount.


 


BORROWER'S CERTIFICATION.
In connection with the application submitted to Lender for a loan under the PPP, Borrower hereby certifies to the Lender the following:


a. The
"Average Monthly Payroll" that Borrower reported in the Application was calculated in accordance with the instructions
for the PPP Application Form (SBA From 2483).


b. Borrower
had and has the requisite corporate power and authority to execute and deliver the Application and any related documents, and to
perform Borrower's obligations thereunder.


c. Borrower understands
that this Borrower Certification is being delivered to Lender in addition to the representations, authorizations and certifications
Borrower made in the Application. Borrower further understands that the Lender will rely on the statements contained in this Borrower
Certification and the Application for purposes of making a loan to Borrower under the Program.


 


 


 






    	 	 	 



     


    

 


	 	PROMISSORY NOTE	 
	Loan No: 22159438	(Continued)	Page 4







 



 










d. The
statements contained in this Borrower Certification and the representations, authorizations and certifications in the Application
are true and correct in all respects.


e. Borrower
agrees to indemnify and hold harmless Lender, its officers, directors, employees, agents and controlling persons thereof, past,
present or future, from and against any and all liabilities, losses, costs, damages and expenses, including costs and reasonable
attorneys' fees arising out of or related to any loan made by Lender to Borrower under the PPP, including any misrepresentation,
omission, or inaccuracy contained in this Borrower's Certification, the Application or any supporting documentation provided by
Borrower in connection with obtaining a loan under the PPP.


 


LENDER'S RIGHTS. Upon
default, Lender may declare the entire unpaid principal balance under this Note and all accrued unpaid interest immediately due,
and then Borrower will pay that amount.


 


ATTORNEYS' FEES; EXPENSES.
Lender may hire or pay someone else to help collect this Note if Borrower does not pay. Borrower will pay Lender that amount.
This includes, subject to any limits under applicable law, Lender's costs of collection, including court costs and fifteen percent
(15%) of the principal plus accrued interest as attorneys' fees, if any sums owing under this Note are collected by or through
an attorney at law, whether or not there is a lawsuit, and legal expenses for bankruptcy proceedings (including efforts to modify
or vacate any automatic stay or injunction), and appeals. If not prohibited by applicable law, Borrower also will pay any court
costs, in addition to all other sums provided by law.


 


JURY WAIVER. Lender and
Borrower hereby waive the right to any jury trial in any action, proceeding, or counterclaim brought by either Lender or Borrower
against the other.


 


GOVERNING LAW. This Note
will be governed by federal law applicable to Lender and, to the extent not preempted by federal law, the laws of the State of
Georgia without regard to its conflicts of law provisions. This Note has been accepted by Lender in the State of Georgia.


 


CHOICE OF VENUE. If
there is a lawsuit, Borrower agrees upon Lender's request to submit to the jurisdiction of the courts of Gwinnett County, State
of Georgia.


 


COLLATERAL. This loan is unsecured.


 


SUCCESSOR INTERESTS.
The terms of this Note shall be binding upon Borrower, and upon Borrower's heirs, personal representatives, successors and
assigns, and shall inure to the benefit of Lender and its successors and assigns.


 


NOTIFY US OF INACCURATE
INFORMATION WE REPORT TO CONSUMER REPORTING AGENCIES. Borrower may notify Lender if Lender reports any inaccurate information
about Borrower's account(s) to a consumer reporting agency. Borrower's written notice describing the specific inaccuracy(ies) should
be sent to Lender at the following address: CADENCE BANK, N.A. 3500 Colonnade Parkway, Suite 600 Birmingham, AL 35243.


 


 


 


 






    	 	 	 



     


    

 


	 	PROMISSORY NOTE	 
	Loan No: 22159438	(Continued)	Page 5







 



 




GENERAL
PROVISIONS. If any part of this Note cannot be enforced, this fact will not affect the rest of the Note. Lender may delay
or forgo enforcing any of its rights or remedies under this Note without losing them. Borrower and any other person who
signs, guarantees or endorses this Note, to the extent allowed by law, waive presentment, demand for payment, and notice of
dishonor. Upon any change in the terms of this Note, and unless otherwise expressly stated in writing, no party who signs
this Note, whether as maker, guarantor, accommodation maker or endorser, shall be released from liability. All such parties
waive any right to require Lender to take action against any other party who signs this Note as provided in O.C.G.A. Section
10-7-24 and agree that Lender may renew or extend (repeatedly and for any length of time) this loan or release any party or
guarantor or collateral; or impair, fail to realize upon or perfect Lender's security interest in the collateral; and take
any other action deemed necessary by Lender without the consent of or notice to anyone. All such parties also agree that
Lender may modify this loan without the consent of or notice to anyone other than the party with whom the modification is
made. The obligations under this Note are joint .and several.


 


THIS NOTE IS GIVEN UNDER SEAL AND IT IS INTENDED
THAT THIS NOTE IS AND SHALL CONSTITUTE AND HAVE THE EFFECT OF A SEALED INSTRUMENT ACCORDING TO LAW.


 


BORROWER:


 


 


QS ENERGY, INC.


 


 


By: /s/ Michael McMullen                                                                    


Michael McMullen, Chief Financial Officer of QS ENERGY, INC.