Exhibit 10.2


 


 





PROMISSORY NOTE


 


	$2,500,000	March 8, 2016


 


FOR VALUE RECEIVED,
SUPERIOR DRILLING PRODUCTS, INC., a Utah corporation, SUPERIOR DRILLING SOLUTIONS, LLC, a Utah limited liability
company, HARD ROCK SOLUTIONS, LLC, a Utah limited liability company, and EXTREME TECHNOLOGIES, LLC, a Utah limited
liability company (individually and together, “Debtor”), hereby unconditionally and jointly and severally promise
to pay to the order of FEDERAL NATIONAL PAYABLES, INC., doing business as Federal National Commercial Credit (“Payee”)
at the offices of Payee at 7315 Wisconsin Avenue, Suite 600W, Bethesda, MD 20814, or at such other place as Payee or any holder
hereof may from time to time designate, on or before the Termination Date (as defined in the Credit Agreement), the principal
sum of Two Million Five Hundred Thousand Dollars ($2,500,000.00), or such lesser sum which then represents the aggregate unpaid
principal amount of all revolving credit Advances made or extended to Debtor under that certain Loan and Security Agreement, dated
of even date herewith, between Debtor and Payee, as the same now exists or may hereafter be amended, modified, supplemented, extended,
renewed, restated, or replaced (herein referred to as the “Credit Agreement”), in lawful money of the United
States of America and in immediately available funds. Debtor hereby further promises to pay interest to the order of Payee in the
manner set forth in the Credit Agreement at the per annum interest rate at all times equal to the Prime Rate then in effect
plus 1.00% per annum. The “Prime Rate” is defined as the interest rate reported from time to time in the "Money
Market Rates" section of The Wall Street Journal. Any change in the interest rate hereunder as a result of a change
in the Prime Rate shall become effective on the date of said announcement. Interest shall be computed on the basis of a 360 day
year and applied to actual days elapsed.


 


All
payments made hereunder shall be applied to fees and Expenses,
interest (including, as applicable, interest at the Default Rate), and principal in such order or proportion as Payee, in its sole
discretion, may elect from time to time in accordance with the terms of the Credit Agreement. Subject to the terms and conditions
of the Credit Agreement, the principal balance of this Promissory Note (“Note”) may be paid in full at any time
or in part from time to time; provided, however, that all payments of principal of this Note shall be accompanied
by the payment of all accrued and unpaid interest under this Note and any applicable Termination Fee. The entire unpaid principal
balance of this Note and all accrued but unpaid interest shall be due and payable on the Termination Date, or as otherwise may
be provided for in the Credit Agreement. 


 


This Note is issued
pursuant to and is subject to the terms and provisions of the Credit Agreement, which contains provisions for acceleration upon
the happening of certain events, for optional and mandatory prepayments and for the amendment or waiver of certain terms and conditions
therein specified. Unless otherwise defined herein, all capitalized terms used herein shall have the meaning assigned thereto in
the Credit Agreement. This Note is secured by the Collateral described in or referred to in the Credit Agreement and all other
existing and future Credit Documents, and is entitled to all of the benefits and rights thereof.


 


Debtor (i) waives diligence,
demand, presentment, protest, and notice of any kind, (ii) agrees that it will not be necessary for Payee to first institute suit
in order to enforce payment of this Note, and (iii) consents to any one or more extensions or postponements of time of payment,
release, surrender, or substitution of collateral security, or forbearance or other indulgence, without notice or consent. The
pleading of any statute of limitations as a defense to any demand against Debtor is expressly hereby waived by Debtor. Should this
Note be referred to an attorney for collection, whether or not suit has been filed, Debtor shall pay all out of pocket costs, fees
and Expenses, including attorneys' fees, resulting from such referral.


 



     


     


    

 





The validity, interpretation,
and enforcement of this Note and the other Credit Documents and any dispute arising in connection herewith or therewith shall be
governed by the internal laws of the State of Maryland (without giving effect to principles of conflicts of law).


 


DEBTOR IRREVOCABLY
CONSENTS AND SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE STATE OF MARYLAND AND THE UNITED STATES DISTRICT COURT FOR THE DISTRICT
OF MARYLAND AND WAIVES ANY OBJECTION BASED ON VENUE OR FORUM NON CONVENIENS WITH RESPECT TO ANY ACTION INSTITUTED THEREIN ARISING
UNDER THIS NOTE OR ANY OF THE OTHER CREDIT DOCUMENTS OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF DEBTOR
AND PAYEE IN RESPECT OF THIS NOTE OR ANY OF THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE
WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE, AND AGREES THAT ANY DISPUTE ARISING
OUT OF THE RELATIONSHIP BETWEEN DEBTOR AND PAYEE OR THE CONDUCT OF SUCH PERSONS IN CONNECTION WITH THIS NOTE OR OTHERWISE SHALL
BE HEARD ONLY IN THE COURTS DESCRIBED ABOVE (EXCEPT THAT PAYEE SHALL HAVE THE RIGHT TO BRING ANY ACTION OR PROCEEDING AGAINST DEBTOR
OR ITS PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION THAT PAYEE DEEMS NECESSARY OR APPROPRIATE IN ORDER TO REALIZE ON THE COLLATERAL
OR TO OTHERWISE ENFORCE ITS RIGHTS AGAINST DEBTOR OR ITS PROPERTY).


 


This Note shall be
binding upon the successors and assigns of Debtor and shall inure to the benefit of Payee and its successors, endorsees, and assigns.
Whenever used herein, the term “Debtor” shall be deemed to include its successors and assigns and the term “Payee”
shall be deemed to include its successors, endorsees, and assigns. If any term or provision of this Note shall be held invalid,
illegal, or unenforceable, the validity of all other terms and provisions hereof shall in no way be affected thereby. This Note
evidences an extension of credit made for business or commercial purposes.


 


 


 


 


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WITNESS, the due execution
of this Note, as a sealed instrument, the date and year first above written.


 





	 	SUPERIOR DRILLING PRODUCTS, INC.	 
	 	 	 	 
	 	By:	/s/
Troy Meier	(Seal)
	 	 	Troy
Meier, Chief Executive Officer	 
	 	 	 	 
	 	SUPERIOR DRILLING SOLUTIONS, LLC	 
	 	 	 	 
	 	By:	/s/
Troy Meier	(Seal)
	 	 	Troy
Meier, Chief Executive Officer	 
	 	 	 	 
	 	HARD ROCK SOLUTIONS, LLC	 
	 	 	 	 
	 	By:	/s/
Troy Meier	(Seal)
	 	 	Troy
Meier, Chief Executive Officer	 
	 	 	 	 
	 	EXTREME TECHNOLOGIES, LLC	 
	 	 	 	 
	 	By:	/s/
Troy Meier	(Seal)
	 	 	Troy
Meier, Chief Executive Officer	 



  






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