Exhibit 10.59


 





STOCK PLEDGE AGREEMENT


 


This STOCK PLEDGE AGREEMENT (the “Agreement”)
is entered into by and between MEIER FAMILY HOLDING COMPANY, LLC, a Utah limited liability company (the “Pledgor”),
and SUPERIOR DRILLING PRODUCTS, INC. (previously known as SD Company, Inc.), a Utah corporation (the “Company”).


 


BACKGROUND


 


A.                
The Company is purchasing the Second Amended and Restated Promissory Note of TRONCO ENERGY CORPORATION (“Tronco”)
in favor of ACF PROPERTY MANAGEMENT, INC. (“Original Lender”), dated effective as of January 1, 2014
(“Tronco Loan”) from the Original Lender (“Loan Purchase”).


 


B.                
The collateral for the Tronco Loan includes the Guaranty Agreements (the “Guaranties”), each dated
June 15, 2009, from G. Troy Meier, Annette Deuel Meier, the Gilbert Troy Meier Trust, and the Annette Deuel Meier Trust, respectively
(collectively, the “Guarantors”).


 


C.                
 This Agreement is being entered into as additional Pledged Shares to secure the performance of the Guarantors under the
Guaranties after the Company’s purchase of the Tronco Loan from the Original Lender. 


 


AGREEMENT


 


For good and valuable consideration, the
receipt and sufficiency of which is acknowledged, the parties agree as follows:


 


1.                  “Pledged
Shares” means (a) the 5,641,510 Shares of the Company’s common stock owned by Pledgor, and (b) any shares
of stock (including, without limitation, any stock dividend or any distribution or exchange of stock in connection with the
reorganization, recapitalization, reclassification or increase or reduction of capital) to which Pledgor will become entitled
for any reason whatsoever as an addition to, in substitution for, or in exchange for, any of the Pledged Shares.


 


2.                 
Pledge. Effective as of the date that the Company purchases the Tronco Loan from the Original Lender (the “Effective
Date”), Pledgor hereby grants to the Company a security interest in the Pledged Shares, and their proceeds, to secure
performance and payment of all obligations and indebtedness of the Guarantors to the Company under the terms of the Guaranties,
with all of the rights of a secured party under the Uniform Commercial Code of Utah and any other applicable law.


 


3.                 
Escrow


 


3.1.           
Delivery; Release. Upon issuance of the Pledged Shares, the Company will direct its transfer agent to deliver the certificates
representing the Pledged Shares to the Escrow Agent signing below (the “Escrow Agent”) to hold in trust
for the benefit of the Company until all amounts owed under the Guaranties (“Indebtedness”) are paid
in full. Upon receipt of evidence that the Indebtedness has been paid in full, or if not paid in full, instructions from the Company
to release a specified portion of Pledged Shares, Escrow Agent will be authorized to release all or the remaining Pledged Shares
to Pledgor.


 


3.2.           
Escrow Agent.  The parties acknowledge and agree that the Escrow Agent serves as legal counsel for the Company
and is serving as Escrow Agent as a convenience to the parties, without additional fee, at their request, in order to facilitate
the closing of the Loan Purchase.  In the event of a dispute between the parties as to the Pledged Shares or otherwise in
connection with this Escrow Agreement, the Escrow Agent shall be permitted to assign all of its rights, duties and obligations
as provided in this Agreement to another law firm or bank located in Houston, Texas, and to represent the Company as legal counsel
to the extent requested by the Company in the resolution of any such dispute.  The Pledgor, by its execution and delivery
of this Agreement, hereby agrees with the foregoing and waives any conflict of interest that may otherwise be present in connection
with such future representation of the Company by the Escrow Agent.


 






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3.3.           
Successor Escrow Agents.  The Escrow Agent, or any successor escrow agent, may resign at any time by giving notice
in writing to each of the other parties, and shall be discharged from its duties under this Escrow Agreement on the first to occur
of (a) the appointment of a successor escrow agent as provided in this Section 3.3, or (b) the expiration of 30 calendar days after
such notice is given.  Any successor escrow agent shall deliver to each of the parties a written instrument accepting appointment
under this Escrow Agreement, and thereupon it shall succeed to all the rights and duties of the Escrow Agent hereunder and shall
be entitled to receive, in its capacity as escrow agent, possession of the Pledged Shares.  In such event, the Pledgor and
the Company shall deliver to the former Escrow Agent a release executed by each of them, releasing said Escrow Agent from its obligations
hereunder and any liabilities in connection herewith.


 


3.4.           
Indemnification.  In the event the Escrow Agent becomes involved in any suit, litigation or other investigative
or legal proceeding in connection with this Agreement, the Pledged Shares, or any matter relating hereto or thereto, the Pledgor
and the Company, jointly and severally, agree to indemnify and hold the Escrow Agent harmless from all loss, cost, damage, expense,
liability, fees and expenses (including attorneys' fees and expenses) suffered or incurred by the Escrow Agent as a result thereof,
except any such loss, cost, damage, expense, or liability that arises as a result of the Escrow Agent's gross negligence or willful
misconduct.


 


3.5.           
Acting on Notices.  The Escrow Agent shall be protected in acting on any written notice, request, waiver, consent,
certificate, receipt, authorization, power of attorney, or other paper or document that the Escrow Agent believes to be genuine. 


 


3.6.           
Standard of Care.  The Escrow Agent shall not be liable for anything that it may do or refrain from doing in connection
herewith, provided it acts in good faith and is not grossly negligent.


 


3.7.           
Consultation with Counsel.  The Escrow Agent may consult with legal counsel in the event of any dispute or question
as to the construction of any of the provisions of this Escrow Agreement or the Escrow Agent's duties hereunder, and it shall incur
no liability and shall be fully protected in acting in accordance with the opinion and instructions of such counsel.  The
Pledgor and the Company agree that each party shall jointly and severally be liable for any attorneys’ fees incurred by Escrow
Agent in connection with the foregoing, and in the vent of any dispute, the non-prevailing party as between the Pledgor and the
Company shall be liable for the payment of any attorney fees reasonably incurred by the Escrow Agent in connection with the foregoing.


 


3.8.           
Discharge of Obligations.  The Escrow Agent, upon (a) fully performing its duties under this Agreement, or (b)
interpleading the Pledged Shares, shall be discharged from any further obligation hereunder.


 


4.                 
Voting and Dividends. Pledgor will be entitled to vote the Pledged Shares and receive all dividends and distributions
declared or paid upon the Pledged Shares at all times, except as provided in this Agreement. Pledgor will not vote the Pledged
Shares for any corporate action which results in a merger, dissolution, liquidation, partial liquidation, distribution, transfer,
or assignment of its principal assets except as permitted in the Stock Purchase Agreement, or a corporate action which results
in a dilution of the Pledged Shares.


 


5.                 
Default; Remedies


 


5.1.           
If the Guarantors default under the terms of the Guaranties and fail to cure such default within 30 days of receiving
written notice of default from Company, the Company (a) will be entitled to direct the Escrow Agent to sell that amount of Pledged
Shares, on the Pledgor’s behalf, as necessary to repay the Tronco Loan in full, subject to all applicable holding periods
under Rule 144 of the Securities Act of 1933 and required black-out periods, (b) will be entitled to vote the Pledged Shares and
receive and retain, as payment of interest or principal on the Note, any and all dividends and any other distributions declared
or paid upon the Pledged Shares during such period, until such time as the Guarantors cure such default, and (c) may also exercise
all of the rights, powers and remedies of a secured party under the Uniform Commercial Code in force in the State of Utah at the
date of execution of this Agreement and any other applicable law.


 






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5.2.           
Subject to Section 5.1, upon the occurrence of an event of default under the Guaranties, and during the continuation
thereof, and at any time thereafter:


 


5.2.1.     
If notice to Pledgor is required by the Uniform Commercial Code of Utah of public or private sale of Pledged Shares, Company
may give written notice to Pledgor five days prior to the date of public sale of the Pledged Shares or prior to the date after
which private sale of the Pledged Shares. The Company may apply the proceeds of any disposition of the Pledged Shares to satisfaction
of the Indebtedness and the expenses of sale in any order of preference which Company, in its sole discretion, chooses. Pledgor
shall remain liable for any deficiency.


 


5.2.2.     
Pledgor irrevocably makes, constitutes, and appoints the Company its true and lawful attorney for it and in its name, place,
and stead to do any and every act and exercise any and every power that Pledgor might or could
do or exercise to fully, effectually, and finally carry out and comply with all of the terms and provisions of this Agreement,
to attend all meetings of the shareholders, and then and there to vote in its name, stead, and behalf any and all of the Pledged
Shares; and to make, execute, and enter into, in its stead and behalf as a shareholder in the Company, any and all consents, certificates,
or other documents, including those relating to a merger with other corporations, re-organizations, or other change in the corporate
structure. This proxy is coupled with an interest in that the Pledged Shares, and shall be and remain exclusive and irrevocable
so long as any Guarantor remains indebted to the Company under the Guaranties, and shall be binding upon the Pledgor and its administrators,
and assigns, as the case may be. The Company shall have full power of substitution hereunder, and any party designated by Company
as its substitute shall be entitled to exercise all powers herein granted with respect to any and all shares of stock mentioned
or referred to in the Agreement.


 


6.                 
Further Cooperation. Pledgor agrees that at any time and from time to time upon written request of the Lender, Pledgor
will execute and deliver such further documents and do such further acts as may reasonably be requested in order to effect the
purposes of this Pledge Agreement.


 


7.                 
General


 


7.1.           
Notices. The parties will deliver any notices provided under this Agreement in writing by personal or courier delivery,
facsimile transmission, or by registered or certified U.S. mail, return receipt requested, postage prepaid, to address set forth
next to the parties' signatures, or to such other address as specified by a party in writing. Notices will be deemed effective
as of the date of personal or courier delivery, confirmed facsimile transmission, or the date on the U.S. postmark affixed to the
notice.


 


7.2.           
Dispute Resolution. In the event of any disagreement involving the parties resulting in adverse claims or demands being
made in connection with the Pledged Shares, or in the event that the Escrow Agent, in good faith, shall be in doubt as to what
action it should take hereunder, the Escrow Agent may, at its option and in its sole discretion, (a) interplead the Pledged Shares
into a court of competent jurisdiction, and/or (b) refuse to take any other action hereunder, so long as such disagreement continues
or such doubt exists, and in such event, the Escrow Agent shall not be or become liable in any way or to any person for its failure
or refusal to act.  The Escrow Agent shall be entitled to continue to refrain from acting until (i) the rights of all interested
parties shall have been fully and finally adjudicated by a court of competent jurisdiction, or (ii) all differences shall have
been adjusted and all doubt resolved by agreement between the parties, and (iii) the Escrow Agent shall have been notified thereof
by a written document signed by the Pledgor and each of the Company.  Should a bill of interpleader be instituted, or should
the Escrow Agent become involved in litigation in any manner whatsoever on account of this Escrow Agreement or the terms or performance
hereof, the Pledgor and the Company hereby bind and obligate themselves, jointly and severally, and their respective heirs, executors,
administrators, successors, assigns and legal representatives, that the non-prevailing party as between the Pledgor and the Company
will pay the reasonable attorney fees incurred by the Escrow Agent, and any other disbursements, expenses, losses, costs, and damages
in connection with and resulting from such litigation.


 






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7.3             
Equitable Relief.  The parties acknowledge that the rights of the parties contained in this Agreement are unique, and that
money damages alone for breach of this Agreement would be inadequate. Any party aggrieved by a breach of the provisions of this
Agreement may bring an action at law or suit in equity for specific performance, injunctive relief or any other available equitable
remedy.


 


7.4             
Attorney Fees.  The substantially prevailing party in any mediation, arbitration, other dispute resolution proceeding,
or litigation, concerning this Agreement is entitled to reimbursement of its court costs and attorney fees by the non-prevailing
party, including such costs and fees as may be incurred on appeal or in a bankruptcy proceeding.


 


7.5             
General Provisions. This Agreement (a) cannot be assigned without the written consent of all parties, (b) will be enforced,
governed and construed exclusively under the laws of the State of Utah, and under the jurisdiction of and venue in any appropriate
court in Utah County, State of Utah, (c) benefits and is binding upon each of the parties and their respective heirs, estate, legal
representatives, successors and assigns, as appropriate, (d) will remain in full force and effect to the extent possible if any
portion of this Agreement is declared invalid by a court having jurisdiction, (e) constitutes the entire agreement of the parties,
and supercedes all previous agreements, written or oral, with regard to its subject matter, (f) may only be waived of modified,
in any respect, in writing and signed by all parties, and (g) may be executed in two or more counterparts, which together constitute
one and the same instrument.


 


 


Signatures are on the following page.


 




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SIGNATURE PAGE FOLLOWS


 


IN WITNESS WHEREOF, the parties hereto have
executed this Agreement as of the day and year first above written.





 


	COMPANY:	 	PLEDGOR:
	 	 	 	 	 
	SUPERIOR DRILLING PRODUCTS, INC.	 	MEIER FAMILY HOLDING COMPANY, LLC
	 	 	 
	 	 	 
	By:  	/s/ Christopher Cashion	 	By: 	/s/ Annette Meier
	 	Christopher Cashion	 	 	Annette Meier, Manager
	 	Chief Financial Officer	 	 	 


 


 


AGREED TO AND ACCEPTED ON THIS 12th DAY OF MAY, 2014.


 


EWING & JONES, PLLC


 


 


	By 	/s/ Randolph Ewing	 	 
	 	Randolph Ewing	 	 
	 	Chief Executive Officer	 	 


 








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