Exhibit 10.1


 


PROMISSORY NOTE


SBA PAYCHECK PROTECTION
PROGRAM






 


 


 


SBA LOAN
#: 4602497203


 


MNB LOAN #:
4602497203


 


DATE:
April 27, 2020


 


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 April 27, 2022


 


This
Note is made pursuant to the U. S. Small Business Administration ("SBA") Paycheck Protection Program (Coronavirus Aid,
Relief, and Economic Security Act Sections 1102 and 1106 and related rules and regulations as issued and as may be supplemented
and amended from time to time) ("Program"), and to that certain Paycheck Protection Program Borrower Application Form
dated April 22, 2020 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 as
if fully set out in this Note.


 


Borrower
certifies to Lender that all Information, certifications and authorizations contained in the Application, and 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.


 


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.




 


 


 


 






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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 Loan Maturity. Interest shall be computed on the per annum basis of a year of 365/365 days, and shall accrue
on the actual number of days elapsed for any whole or partial month in which interest is being calculated, unless such calculation
would result in a usurious rate, in which case interest shall be calculated on a per annum basis of a year of actual/365 days.


 


NOTE PAYMENT TERMS


 


No payments shall be due or payable until after
the date which is SIX (6) MONTHS after the date of this Note ("Payment Deferral Period").


 


Following the end
of the Payment Deferral Period, commencing with the Seventh (7th)
month following the date of this Note, on the 27th day of such month, and on the same day of each subsequent month thereafter
during the term of this Note, monthly payments each in the amount equal to the amount of Principal under this Note, if any, which
remains unpaid as of the end of the Payment Deferral Period ("Remaining Balance") divided by eighteen (18) (being the
number of months remaining in the Loan term after the Payment Deferral Period) ("Principal Payments") together with
all then unpaid accrued interest ("Monthly Installments") shall be due and payable. It is provided, however, that all
unpaid Principal and all unpaid accrued interest shall be due and payable in full on the Loan Maturity Date.


 


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.


 


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.


 


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. Borrower understands that Lender does not control any determination made or not made by the SBA, or any
other element of the Program, and releases and holds Lender harmless from any and all actions and decisions taken and/or not taken
by the SBA. Borrower understands and agrees that it is responsible to pay, and agrees to pay all amounts under this Note to the
extent same are not forgiven by the SBA.


 


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.


 


 


 


 


 






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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.


 


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.


 


 


 


 






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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 document securing this Note, 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 principal balance of this Note and/or the Related Indebtedness (hereinafter defined) (hereinafter defined)
(or, if this Note and all Related Indebtedness have been or would thereby be paid in full, 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 this Note and/or any Related Indebtedness
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 this Note and/or the Related Indebtedness then owing 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 and/or the Related Indebtedness shall, to the extent permitted by applicable law, be amortized or spread, using the
actuarial method, throughout the stated term of this Note and/or the Related Indebtedness (including any and all renewal and extension
periods) until payment in full so that the rate or amount of interest on account of this Note and/or the Related Indebtedness
does not exceed the Maximum Lawful Rate from time to time in effect and applicable to this Note and/or the Related Indebtedness
for so long as debt 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 and/or any of the Related Indebtedness.
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.


 


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.
As used hereunder, the term "Related Indebtedness" shall mean any and all indebtedness paid or payable by Borrower
to Lender pursuant to the 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, except such indebtedness which has been paid or
is payable by Borrower to Lender under this Note.


 


 


 






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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 any Borrower shall die, become insolvent (however such insolvency
may be evidenced), or dissolve, or its existence as a legal entity terminate; (4) if any 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 any 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 any Borrower and not dismissed within 60 days after the filing of the petition commencing such proceeding;
(6) if any 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 any 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) any Borrower has any adverse change in financial condition that Lender believes may
materially affect Borrower's ability to pay this Note; (9) any breach or event of default occurs under any document evidencing,
securing or executed in connection with any obligation of any Borrower to Lender, whether now existing or hereafter arising; (10)
any Borrower fails to disclose any material fact to Lender or SBA; (11) any Borrower reorganizes, merges, consolidates, or otherwise
changes ownership or business structure without Lender's prior written consent; or (12) any 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, including all sums advanced or accrued hereunder or under any other Loan
Document, and all accrued but unpaid interest thereon) 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.


 


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 or of any other Loan Documents, 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 or any other Loan Document.


 


 


 


 






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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 OR BY THE OTHER LOAN DOCUMENTS.


 


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 or
in any other Loan Document, 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, under any
other Loan Document, 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.


 


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 Borrower may not assign this note or any loan funds, or assign or delegate any of its rights or obligations,
without the prior written consent of Lender in each instance.


 


 


 






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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.


 


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, Lender exercises any right given to it to approve
or disapprove, or any arrangement or term is to be satisfactory to Lender, the decision of Lender to approve or disapprove or to
decide whether arrangements or terms are satisfactory or not satisfactory shall be (except as is otherwise specifically and expressly
provided herein to the contrary) 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 requires 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.


 


 


 






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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.


 


 


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



 


 


 


 


 


 


 


 


 


 


 






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