Exhibit 10.21


 


PROMISSORY
NOTE


 


	
        Principal

        $650,000.00
	
        Loan Date

        04-02-2012
	
        Maturity

        04-01-2022
	Loan No	Call / Coll	Account	
        Officer

        CB
	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:	 	Superior Drilling Products
    of California, llc	 	Lender:	 	US Employment Development
    Lending Center, LLC
	 	 	2221 North 3250 West	 	 	 	1 World Trade Center, Suite 1870
	 	 	Vernal, UT 84078	 	 	 	Long Beach, CA 90831


 


 


	Principal Amount: $650,000.00	Date of Note: April 2, 2012


 


PROMISE
TO PAY. Superior Drilling Products of California, LLC (“Borrower”) promises to pay to US Employment Development
Lending Center, LLC (“Lender”), or order, in lawful money of the United States of America, the principal
amount of Six Hundred Fifty Thousand & 00/100 Dollars ($650,000.00), together with Interest on the unpaid principal balance
from April 2, 2012, until paid in full.


 


PAYMENT.
Subject to any payment changes resulting from changes in the Index, Borrower will pay this loan in 119 regular payments of $4,022.15
each and one irregular last payment estimated at $493,690.04. Borrower’s first payment is due May 1, 2012, and all
subsequent payments are due on the same day of each month after that. Borrower’s final payment will be due on April 1, 2022,
and will be for all principal and all accrued interest not yet paid. Payments include principal and interest. Unless otherwise
agreed or required by applicable law, payments will be applied first to any accrued unpaid interest; then to principal; then to
any late charges; and then to any unpaid collection costs. Borrower will pay Lender at Lender’s address shown above or at
such other place as Lender may designate in writing.


 


VARIABLE
INTEREST RATE. The interest rate on this Note is subject to change from time to time based on changes in an independent index
which is the the London Interbank Offered Rate Swaps (LIBOR SWAPS) for maturities of Five Years as published in the Wall Street
Journal (the “Index”). The Index is not necessarily the lowest rate charged by Lender on its loans. If the index
becomes unavailable during the term of this loan, Lender may designate a substitute index after notifying Borrower. Lender will
tell Borrower the current Index rate upon Borrower’s request. The interest rate change will not occur more often than each
Five Years. Borrower understands that Lender may make loans based on other rates as well. The Index currently is 1.241% per annum.
Interest on the unpaid principal balance of this Note will be calculated as described in the “INTEREST CALCULATION METHOD”
paragraph using a rate of 3.500 percentage points over the Index, adjusted if necessary for any minimum and maximum rate limitations
described below, resulting in an initial rate of 5.500%. NOTICE: Under no circumstances will the interest rate on this Note be
less than 5.500% per annum or more than the maximum rate allowed by applicable law. Whenever increases occur in the interest rate,
Lender, at its option, may do one or more of the following: (A) increase Borrower’s payments to ensure Borrower’s loan
will pay off by its original final maturity date, (B) increase Borrower’s payments to cover accruing interest, (C) increase
the number of Borrower’s payments, and (D) continue Borrower’s payments at the same amount and increase Borrower’s
final payment.


 


INTEREST
CALCULATION METHOD. Interest on this Note is computed on a 365/360 basis; that is, by applying the ratio of the interest rate
over a year of 360 days, multiplied by the outstanding principal balance, multiplied by the actual number of days the principal
balance is outstanding. All interest payable under this Note is computed using this method.


 


PREPAYMENT;
MINIMUM INTEREST CHARGE. In any event, even upon full prepayment of this Note, Borrower understands that Lender
is entitled to a minimum interest charge of $50.00. Other than Borrower’s obligation to pay any minimum interest
charge, 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: US Employment Development Lending
Center, LLC, 1 World Trade Center, Suite 1870 Long Beach, CA 90831.


 


LATE
CHARGE. If a payment is 10 days or more late, Borrower will be charged 5.000% of the unpaid portion of the regularly scheduled
payment.


 


INTEREST
AFTER DEFAULT. Upon default, the interest rate on this Note shall, if permitted under applicable law, Immediately increase
by adding an additional 5.000 percentage point margin (“Default Rate Margin”). The Default Rate Margin shall also apply
to each succeeding interest rate change that would have applied had there been no default.


 


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.


 


Environmental
Default. Failure of any party to comply with or perform when due any term, obligation, covenant or condition contained in any
environmental agreement executed in connection with any loan.


 


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.


 


Death
or Insolvency. The dissolution of Borrower (regardless of whether election to continue is made), any member withdraws from
Borrower, or any other termination of Borrower’s existence as a going business or the death of any member, 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 jaws 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.


 




    	 



    	 



    

 


	 	PROMISSORY NOTE	 
	 	(Continued)	Page 2



 


 


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


 


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.


 


FAILURE
OF THE DEBENTURE TO FUND. Notwithstanding anything to the contrary herein, in the event that the Debenture as defined in the
SBA 504 Loan Program does not close or otherwise fund pursuant to the terms of the SBA Authorization within six (6) months of the
Closing Date, then Lender shall, at its option, have the right to declare the entire principal amount of the Loan plus any accrued
interest due and payable In full upon thirty (30) days written notice to Borrower.


 


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 attorneys’ fees and Lender’s legal
expenses, whether or not there is a lawsuit, including attorneys’ fees, expenses for bankruptcy proceedings (including efforts
to modify or vacate any automatic stay or injunction), and appeals. Borrower also will pay any court costs, in addition to all
other sums provided by law.


 


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 California without regard to its conflicts of law provisions. This Note has been accepted by Lender in the State
of California.


 


CHOICE
OF VENUE. If there is a lawsuit, Borrower agrees upon Lender’s request to submit to the jurisdiction of the courts of
Los Angeles County County, State of California.


 


DISHONORED
ITEM FEE. Borrower will pay a fee to Lender of $25.00 if Borrower makes a payment on Borrower’s loan and the check or
preauthorized charge with which Borrower pays is later dishonored.


 


COLLATERAL.
Borrower acknowledges this Note is secured by the following collateral described in the security instruments listed herein:


 


(A)  a
Deed of Trust dated April 2, 2012, to a trustee in favor of Lender on real property located in Kern County, State of California.
That agreement contains the following due on sate provision: Lender may, at Lender’s option, declare Immediately due and
payable all sums secured by the Deed of Trust upon the sale or transfer, without Lender’s prior written consent, of all or
any part of the Real Property, or any interest in the Real Property. A “sale or transfer” means the conveyance of Real
Property or any right, title or interest in the Real Property; whether legal, beneficial or equitable; whether voluntary or involuntary;
whether by outright sale, deed, installment sale contract, land contract, contract for deed, leasehold interest with a term greater
than three (3) years, lease-option contract, or by sale, assignment, or transfer of any beneficial interest in or to any land trust
holding title to the Real Property, or by any other method of conveyance of an interest in the Real Property. If any Borrower is
a corporation, partnership or limited liability company, transfer also includes any change in ownership of more than twenty-five
percent (25%) of the voting stock, partnership interests or limited liability company interests, as the case may be, of such Borrower.
However, this option shall not be exercised by Lender if such exercise is prohibited by applicable law.


 


(B)  an
Assignment of All Rents to Lender on real property located in Kern County, State of California.


 


(C)  equipment,
fixtures and mineral, oil and gas described in a Commercial Security Agreement dated April 2, 2012.


 


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.


 


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 any applicable statute of limitations,
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 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.


 


PRIOR
TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS.
BORROWER AGREES TO THE TERMS OF THE NOTE.


 


BORROWER
ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE.


 


BORROWER:


 


SUPERIOR
DRILLING PRODUCTS OF CALIFORNIA, LLC


 


	By: 	/s/ Annette D. Meier	 
	 	Annette D. Meier, Manager of Superior Drilling 
	 	Products of California, LLC


 


LASER
PRO Lending, Ver. 5.60.00.005 Copr. Harland Financial Solutions, Inc. 1997, 2012. All Rights Reserved. – CA C:\HARLANDLP\CFI\LPL\G14.FC
TR-112 PR-14