Document:

Exhibit 10.32

 

PROMISSORY NOTE

 

	Principal	Loan
    Date	Maturity	Loan
    No	Call
    / Coll	Account	Officer	Initials
	$1,350,000,00	05-11-2012	05-01-2017	5051014	 	 	CB	 
	
        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: $1,350,000.00	Date
    of Note: May 11, 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 One Million
Three Hundred Fifty Thousand & 00/100 Dollars ($1,350,000.00) or so much as may be outstanding, together with interest on
the unpaid outstanding principal balance of each advance. Interest shall be calculated from the date of each advance until repayment
of each advance.

 

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: 6 monthly consecutive interest payments, beginning June 1, 2012, with interest calculated
on the unpaid principal balances using an interest rate of 5.500%; 53 monthly consecutive principal and interest payments of $9,346.39
each, beginning December 1, 2012, with interest calculated on the unpaid principal balances using an interest rate of 5.500%;
and one principal and interest payment of $1,171,102.89 on May 1, 2017, with interest calculated on the unpaid principal balances
using an interest rate of 5.500%. 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; 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.

 

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. Upon prepayment of this Note, Lender is entitled to
the following prepayment fee: 5% on amounts prepaid during years 1
through 4. Except for the foregoing, Borrower may
pay 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, eariy 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.

 

INTEREST
RESERVES. Borrower authorizes Lender to place $23,000.00 of the Principal Amount as an interest reserve, which is an estimate
of the interest due on the Note for the draw phase (“Interest Reserve”). Borrower may pay interest due directly to
Lender. In the event Borrower does not make an interest payment, Lender may automatically deduct the interest due from the Interest
Reserve. Interest will accrue, as described in this Note, on amounts deducted from the Interest Reserve. In the event the interest
due under this Note for the draw phase exceeds the Interest Reserve, Borrower will pay accrued unpaid interest when due according
to the terms of this Note. At the end of the draw phase, Lender will advance or disburse the remaining Interest Reserve, if any,
to Borrower.

 

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. After maturity, or after this Note would
have matured had there been no default, the Default Rate Margin will continue to apply to the final interest rate described in
this Note.

 

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 parly 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 laws by or against Borrower.

 

    	 

    	 

    

 

PROMISSORY NOTE

	 	(Continued)	Page 2

 

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 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.
Lenderingood faith believes itself insecure.

 

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, 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
Construction Deed of Trust dated May 11, 2012, to a trustee in favor of Lender on real property located in Kern County, Stafe of
California. That agreement contains the following due on sale provision; Lender may, at Lender’s option, declare immediately
due and payable all sums secured by the Construction 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 Kem County, Slate of California,

 

(C)inventory,
chattel paper, accounts, equipment, general intangibles, fixtures and mineral, oil and gas described in a Commercial Security Agreement
dated May 11, 2012.

 

LINE
OF CREDIT. This Note evidences a straight line of credit. Once the total amount of principal has been advanced, Borrower is
not entitled to further loan advances. Borrower agrees to be liable for all sums either: (A) advanced in accordance with the instructions
of an authorized person or (B) credited to any of Borrower’s accounts with Lender. The unpaid principal balance owing on
this Note at any time may be evidenced by endorsements on this Noto or by Lender’s internal records, including daily computer
print-outs.

 

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 otheiwise expressly stated in writing, no party
who signs this Note, whether as maker, guarantor, accommodation maker pr 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.

 

 

    	 

    	 

    

 

PROMISSORY
NOTE 

	 	(Continued)	Page
    3

 

PRIOR TO
SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE. 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:	Annette D. Meier	 
	Annette D, Meier, Manager or superior Drilling	 
	Products of California, LLC	 

 

LASER PSO 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-14Exhibit 10.33

 

GUARANTY OF COMPLETION AND PERFORMANCE

 

	
        Principal

        $1,350,000.00
	Loan Date

 05-11-2012	Maturity

05-01-2017	Loan No

5051014	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

        2221 North 3250 West

        Vernal, UT 84078
	 	Lender:	US Employment Development Lending Center, LLC

        1 World Trade Center,
        Suite 1870

        Long Beach, CA 90831

	 	 	 	 	 
	Guarantor:	Superior
                    Drilling Products of California, LLC;

Superior Drilling Products,
LLC; Annette D. Meier;

and Gilbert Troy Meier

2221 North 3250 West

Vernal, UT 84078

	 
	 	 	 

 

THIS GUARANTY OF COMPLETION AND PERFORMANCE
(“Guaranty”) is made as of May 11, 2012, by Superior Drilling Products of California, LLC; Superior Drilling Products,
LLC; Annette D. Meier; and Gilbert Troy Meier (“Guarantor”) to and for the benefit of US Employment Development Lending
Center, LLC (“Lender”).

 

THE LOAN. Borrower proposes to borrow
from Lender the principal amount of One Million Three Hundred Fifty Thousand & 00/100 Dollars ($1,350,000.00) pursuant to the
terms and conditions of the Construction Loan Agreement. As a condition and inducement to making the Loan, Borrower has requested
that Guarantor duly execute and deliver this Guaranty guaranteeing the lien-free completion of the construction of the Project
and the performance of other covenants, which are all considered by Lender to be material regarding Lender's decision to make the
Loan.

 

GUARANTY. Guarantor hereby unconditionally
and absolutely warrants and guarantees to Lender that: (a) construction of the Project shall be commenced and shall be substantially
completed within the time limits set forth in the Construction Loan Agreement; (b) the Project shall be constructed and completed
in accordance with the Loan Documents and the Plans and Specifications, without substantial deviation there from unless approved
by Lender in writing; (c) except for Lender's security agreements, the Project will be constructed and completed free and clear
of all liens and encumbrances, including without limitation all mechanics' liens, materialmen’s liens, and equitable liens;
and (d) all costs of constructing the Project will be paid when due, and no stop notices shall be served on Lender.

 

OBLIGATIONS OF GUARANTOR UPON EVENT
OF DEFAULT. Should an Event of Default (as defined in any Construction Loan Agreement) occur or if the Project shall not be
constructed and completed as provided above, Guarantor shall: (a) diligently proceed to cure such default and procure completion
of the Project at Guarantor's sole cost and expense; (b) fully pay and discharge all Claims for labor performed and material and
services furnished in connection with the construction of the Project; and (c) pay such amounts as may be necessary to release
and discharge all Claims of stop notices, mechanics' liens, materialmen’s liens, and equitable liens, if any, that may come
into existence in connection with the construction of the Project.

 

NATURE OF GUARANTY. This Guaranty
is an original and independent Obligation of Guarantor, separate and distinct from Borrower’s obligations to Lender under
the Loan Documents. The obligations of Guarantor to Lender under this Guaranty are direct and primary, regardless of the validity
or enforceability of the Loan Documents. This Guaranty is for the benefit of Lender, and is not for the benefit of any third party.
This Guaranty shall continue until (A) the Project has been completed, free and clear of all liens and encumbrances as provided
above, and (B) all obligations of Guarantor to Lender under this Guaranty have been performed in full.

 

GUARANTOR’S AUTHORIZATION TO LENDER.
Guarantor authorizes Lender, without notice or demand and without lessening Guarantor’s liability under this Guaranty, from
time to time: (a) to make or approve changes to the Plans and Specifications; (b) to make modifications to the Construction Loan
Agreement and the other Loan Documents; (c) to make one or more additional secured or unsecured loans to Borrower; (d) to repeatedly
alter, compromise, renew, extend, accelerate, or otherwise change the time for payment or other terms of the Loan or any part of
the Loan, including increases and decreases of the rate of interest on the Loan; extensions may be repeated and may be for longer
than the original loan term; (e) to take and hold security for the payment of the Loan or this Guaranty, and exchange, enforce,
waive, and release any such security, with or without the Substitution of new collateral; (f) to release, substitute, agree not
to sue, or deal with any one or more of Borrower’s sureties, endorsers, or other guarantors on any terms or in any manner
Lender may choose; (g) to determine how, when, and what application of payments and credits shall be made on the Loan; (h) to apply
such security and direct the order or manner of sale thereof, including without limitation, any nonjudicial sale permitted by the
terms of the controlling security agreement or deed of trust, as Lender in Lender’s discretion may determine; (i) to sell,
transfer, assign or grant participations in all or any part of the Loan; and (j) to assign or transfer this Guaranty in whole or
in part.

 

GUARANTOR’S REPRESENTATIONS AND
WARRANTIES. Guarantor represents and warrants to Lender that: (a) no representations or agreements of any kind have been made
to Guarantor which would limit or qualify in any way the terms of this Guaranty; (b) this Guaranty is executed at Borrower’s
request and not at the request of Lender to induce Lender to disburse the Loan to Borrower pursuant to the terms of the Loan Documents
and that Lender would not make and disburse the Loan to Borrower pursuant to the Loan Documents were it not for the execution and
delivery of this Guaranty; (c) Guarantor has not and will not, without the prior written consent of Lender, sell, lease, assign,
encumber, hypothecate, transfer, or otherwise dispose of all or substantially all of Guarantor’s assets, or. any interest
therein; (d) neither the execution nor the delivery of this Guaranty nor compliance with the terms hereof will conflict with or
result in the breach of any law or Statute, will constitute a breach or default under any agreement or instrument to which Guarantor
may be a party, or will result in the creation or imposition of any charge or lien upon any property or assets of Guarantor; (e)
Lender has made no representation to Guarantor as to the creditworthiness of Borrower; (f) the most recent financial statements
of Guarantor heretofore delivered to Lender are true and correct in all material respects and fairly present the financial condition
of Guarantor as of the respective dates thereof, and no material adverse change has occurred in the financial condition of Guarantor
since the date of the most recent financial statements; and (g) Guarantor has established adequate means of obtaining from Borrower
on a continuing basis information regarding Borrower’s financial condition. Guarantor agrees to keep adequately informed
from such means of any facts, events, or circumstances which might in any way affect Guarantor’s risks under this Guaranty,
and Guarantor further agrees that, absent a request for Information, Lender shall have no obligation to disclose to Guarantor any
Information or documents acquired by Lender in the course of its relationship with Borrower.

 

GUARANTOR’S WAIVERS. Except
as prohibited by applicable law, Guarantor waives any right to require Lender to (A) make any presentment, protest, demand, or
notice of any kind, including notice of change of any terms of repayment of the indebtedness, default by Borrower or any other
guarantor or surety, any action or nonaction taken by Borrower, Lender, or any other guarantor or surety of Borrower, or the creation
of new or additional indebtedness; (B) proceed against any person, including Borrower, before proceeding against Guarantor; (C)
proceed against any collateral for the indebtedness, including Borrower’s collateral, before proceeding against Guarantor;
(D) apply any payments or proceeds received against the Indebtedness in any order; (E) give notice of the terms, time, and place
of any sale of the collateral pursuant to the Uniform Commercial Code or any other law governing such sale; (F) disclose any information
about the Indebtedness, the Borrower, the collateral, or any other guarantor or surety, or about any action or nonaction of Lender;
or (G) pursue any remedy or course of action in Lenders power whatsoever.

 

    	 

    	 

    

 

	 	GUARANTY OF COMPLETION AND PERFORMANCE	 
	 	(Continued)	Page 2
	 	 	 

 

Guarantor also waives any and all rights
or defenses arising by reason of (H) any disability or other defense of Borrower, any other guarantor or surety or any other person;
(I) the cessation from any cause whatsoever, other than payment in full, of the Indebtedness; (J) the application of proceeds of
the Indebtedness by Borrower for purposes other than the purposes understood and intended by Guarantor and Lender; (K) any act
of omission or commission by Lender which directly or indirectly results in or contributes to the discharge of Borrower or any
other guarantor or surety, or the Indebtedness, or the loss or release of any collateral by operation of law or otherwise; (L)
any statute of limitations in any action under this Guaranty or on the Indebtedness; or (M) any modification or change in terms
of the Indebtedness, whatsoever, including without limitation, the renewal, extension, acceleration, or other change in the time
payment of the Indebtedness is due and any change in the interest rate, and including any such modification or change in terms
after revocation of this Guaranty on Indebtedness incurred prior to such revocation. Until all Indebtedness is paid in full, Guarantor
shall have no right of Subrogation, and Guarantor waives any defense Guarantor may have based upon any election of remedies by
Lender which limits or destroys Guarantor’s Subrogation rights or Guarantor’s rights to seek reimbursement from Borrower
or any other guarantor or surety, including without limitation, any loss of rights Guarantor may suffer by reason of any rights
or protections of Borrower in connection with any anti-deficiency laws or other laws limiting or discharging the Indebtedness or
Borrower’s obligations (including, without limitation, Sections 726, 580b, and 580d of the California Code of Civil Procedure).
Until all Indebtedness is paid in full, Guarantor waives any right to enforce any remedy Lender may have against Borrower or any
other guarantor, surety, or other person, and further, Guarantor waives any right to participate in any collateral for the Indebtedness
now or hereafter held by Lender.

 

GUARANTOR’S UNDERSTANDING WITH
RESPECT TO WAIVERS. Guarantor warrants and agrees that each of the waivers set forth above is made with Guarantor’s full
knowledge of Guarantor’s significance and consequences and that, under the circumstances, the waivers are reasonable and
not contrary to public policy or law. If any such waiver is determined to be contrary to any applicable law or public policy, such
waiver shall be effective only to the extent permitted by law.

 

RIGHTS AND REMEDIES. If Guarantor
shall fail to perform, promptly as provided in this Guaranty, Lender shall have the following rights and remedies:

 

Perform Work. Lender,
at its option, but without any Obligation to do so, may proceed to perform on behalf of Guarantor any and all work on the Project
and to pay any costs incurred in connection with the work.  Guarantor, upon Lender’s demand, shall promptly pay to Lender
all such sums expended together with interest thereon at the interest rate set forth in the Note.

 

Cure Defaults. Lender,
at its option, but without any Obligation to do so, may sure any defaults, including without limitation, paying any unpaid bills
and liens, including without limitation those for construction, labor, and materials. Guarantor, upon Lender’s demand. shall
promptly pay to Lender all such sums expended together with interest thereon at the interest rate set forth in the Note.

 

Specific Performance.
From time to time and without first requiring performance on the part of Borrower and without being required to exhaust any security
held by Lender for the Loan, to require Guarantor specifically to perform Guarantor’s obligations under this Guaranty, by
action at law or in equity or both, and further, to collect in any such action, compensation for all loss, cost, damage, injury
and expense sustained or Incurred by Lender as a direct or indirect consequence of Borrower’s or Guarantor’s failure
to perform, with Interest thereon at the interest rate set forth In the Note.

 

Other Rights and Remedies.
In addition, Lender shall have and may exercise any or all of the rights and remedies it may have available at law, in equity,
or otherwise.

 

SUBORDINATION OF BORROWER’S DEBTS
TO GUARANTOR. Guarantor agrees that the Loan, whether now existing or hereafter created, shall be superior to any claim that
Guarantor may now have or hereafter acquire against Borrower, whether or not Borrower becomes insolvent. Guarantor hereby expressly
subordinates any claim Guarantor may have against Borrower, upon any account whatsoever, to any claim that Lender may now or hereafter
have against Borrower. In the event of insolvency and consequent liquidation of the assets of Borrower, through bankruptey, by
an assignment for the benefit of creditors, by voluntary liquidation, or otherwise, the assets of Borrower applicable to the payment
of the claims of both Lender and Guarantor shall be paid to Lender and shall be first applied by Lender to the Loan. Guarantor
does hereby assign to Lender all claims which it may have or acquire against Borrower or against any assignee or trustee in bankruptey
of Borrower; provided however, that such assignment shall be effective only for the purpose of assuring to Lender full payment
in legal tender of the Loan. If Lender so requests, any notes or credit agreements now or hereafter evidencing any debts or obligations
of Borrower to Guarantor shall be marked with a legend that the same are subject to this Guaranty and shall be delivered to Lender.
Guarantor agrees, and Lender is hereby authorized, in the name of Guarantor, from time to time to file financing statements and
continuation statements and to execute documents and to take such other actions as Lender deems necessary or appropriate to perfect,
preserve and enforce its rights under this Guaranty.

 

MISCELLANEOUS PROVISIONS. The following
miscellaneous provisions are a part of this Guaranty:

 

Amendments. This Guaranty,
together with any Related Documents, constitutes the entire understanding and agreement of the parties as to the matters set forth
in this Guaranty. No alteration of or amendment to this Guaranty shall be effective unless given in writing and signed by the
party or parties sought to be charged or bound by the alteration or amendment.

 

Attorneys Fees; Expenses.
Guarantor agrees to pay upon demand all of Lender’s costs and expenses, including Lender’s attorneys’ fees and
Lender’s legal expenses, incurred in connection with The enforcement of this Guaranty. Lender may hire or pay someone else
to help enforce this Guaranty, and Guarantor shall pay the costs and expenses of such enforcement.  Costs and expenses include
Lender’s attorneys’ fees and legal expenses whether or not there is a lawsuit, including attorneys fees
and legal expenses for bankruptey proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals,
and any anticipated post-judgment collection services. Guarantor also shall pay all court costs and such additional fees as may
be directed by the court.

 

Caption Headings. Caption
headings in this Guaranty are for convenience purposes only and are not to be used to interpret or define the provisions of this
Guaranty.

 

Governing Law. This Guaranty
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.

 

Choice of Venue. If there
is a lawsuit, Guarantor agrees upon Lender’s request to submit to the jurisdiction of the courts of Los Angeles County, State
of California.

 

Joint and Several Liability.
All obligations of Guarantor under this Guaranty shall be joint and several, and all references to Guarantor shall mean each and
every Guarantor. This means that each Guarantor signing below is responsible for all obligations in this Guaranty. Where any one
or more of the parties is a corporation, partnership, limited liability company or similar entity, it is not necessary for Lender
to inquire into the powers of any of the officers, directors, partners, members, or other agents acting or purporting to act on
the entity’s behalf, and any obligations made or created in reliance upon the professed exercise of such powers shall be
guaranteed under this Guaranty.

 

    	 

    	 

    

 

	 	GUARANTY OF COMPLETION AND PERFORMANCE	 
	 	(Continued)	Page 3
	 	 	 

 

No Waiver by Lender.
Lender shall not be deemed to have waived any rights under this Guaranty unless such waiver is given in writing and signed by Lender.
No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right.
A waiver by Lender of a provision of this Guaranty shall not prejudice or constitute a waiver of Lender’s right otherwise
to demand strict compliance with that Provision or any other Provision of this Guaranty. No prior waiver by Lender, nor any course
of dealing between Lender and Guarantor, shall constitute a waiver of any of Lender’s rights or of any of Guarantor’s
obligations as to any future transactions. Whenever the consent of Lender is required under this Guaranty, the granting of such
consent by Lender in any instance shall not constitute continuing consent to subsequent instances where such consent is required
and in all cases such consent may be granted or withheld in the sole discretion of Lender.

 

Notices. Any notice required
to be given under this Guaranty shall be given in writing, and shall be effective when actually delivered, when actually received
by telefacsimile (unless otherwise required by law), when deposited with a nationally recognized overnight Courier, or, if mailed,
when deposited in the United States mail, as first class, certified or registered mail postage prepaid, directed to the addresses
shown near the beginning of this Guaranty. Any party may change its address for notices under this Guaranty by giving formal written
notice to the other parties, specifying that the purpose of the notice is to change the party’s address. For notice purposes,
Guarantor agrees to keep Lender informed at all times of Guarantor’s current address, Unless otherwise provided or required
by law, if there is more than one Guarantor, any notice given by Lender to any Guarantor is deemed to be notice given to all Guarantors.

 

Interpretation. In all
cases where there is more than one Guarantor, then all words used in this Guaranty in the singular shall be deemed to have been
used in the plural where the context and construction so require; and where there is more than one Guarantor named in this Guaranty
or when this Guaranty is executed by more than one, the words “Guarantor” shall mean all and any one or more of them.
Reference to the phrase “Guarantor” includes the heirs, successors, assigns, and transferees of each of them.

 

Severability. If a court
of competent jurisdiction finds any provision of this Guaranty to be illegal, invalid, or unenforceable as to any person or circumstance,
that finding shall not make the offending Provision illegal, invalid, or unenforceable as to any other person or circumstance.
If feasible, the offending provision shall be considered modified so that it becomes legal, valid and enforceable. If the offending
provision cannot be so modified, it shall be considered deleted from this Guaranty. Unless otherwise required by law, the illegally,
invalidity, or unenforceability of any provision of this Guaranty shall not affect the legality, validity or enforceability of
any other Provision of this Guaranty.

 

Successors and Assigns.
Subject to any limitations stated in this Guaranty on transfer of Guarantor’s interest, this Guaranty shall be binding upon
and inure to the benefit of the parties, their successors and assigns. If ownership of the Collateral becomes Vested in a person
other than Guarantor, Lender, without notice to Guarantor, may deal with Guarantor’s successors with reference to this Guaranty
and the Loan by way of forbearance or extension without releasing Guarantor from the obligations of this Guaranty or liability
under the Loan.

 

DEFINITIONS. The following capitalized
words and terms shall have the following meanings when used in this Guaranty. Unless specifically stated to the contrary, all references
to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the singular shall
include the plural, and the plural shall include the singular, as the context may require. Words and terms not otherwise defined
in this Guaranty shall have the meanings attributed to such terms in the Uniform Commercial Code:

 

Borrower. The word “Borrower”
means Superior Drilling Products of California, LLC and includes all co-signers and co-makers signing the Note and all their successors
and assigns.

 

Collateral. The word
“Collateral” means all of Guarantor’s right, title and Interest in and to all the Collateral as described in
the Collateral Description section of this Guaranty.

 

Guarantor. The word “Guarantor”
means everyone signing this Guaranty, including without limitation Superior Drilling Products of California, LLC; Superior Drilling
Products, LLC; Annette D. Meier; and Gilbert Troy Meier, and in each case, any signer’s successors and assigns.

 

Guaranty. The word “Guaranty”
means the guaranty from Guarantor to Lender, including without limitation a guaranty of all or part of the Note.

 

Lender. The word “Lender”
means US Employment Development Lending Center, LLC, its successors and assigns.

 

Loan. The word “Loan”
means the loan made to Borrower under the Construction Loan Agreement and the Loan Documents as described below.

 

Note. The word “Note”
means the Note executed by Superior Drilling Products of California, LLC in the principal amount of $1,350,000.00 dated May 11,
2012, together with all renewals of, extensions of, modifications of, refinancing of, consolidations of, and substitutions for
the note or credit agreement.

 

Plans and Specifications.
The words “Plans and Specifications” mean the plans and specifications for the Project which have been submitted to
and initialed by Lender, together with such changes and additions as may be approved by Lender in writing.

 

Project. The word “Project”
means the construction, renovation, or other work on the improvements as set forth in the Plans and Specifications. The Project
includes the following work:

 

To construct improvements
on the real property commonly known as 1140 Black Gold Road, Bakersfield, CA 93308.

 

Related Documents. The
words “Related Documents” mean all promissory notes, credit agreements, loan agreements, environmental agreements,
guaranties, security agreements, mortgages, deeds of trust, security deeds, collateral mortgages, and all other instruments, agreements
and documents, whether now or hereafter existing, executed in connection with the Loan.

 

    	 

    	 

    

 

	 	GUARANTY OF COMPLETION AND PERFORMANCE	 
	 	(Continued)	Page 4
	 	 	 

 

EACH UNDERSIGNED GUARANTOR ACKNOWLEDGES
HAVING READ ALL THE PROVISIONS OF THIS GUARANTY AND AGREES TO ITS TERMS. IN ADDITION, EACH GUARANTOR UNDERSTANDS THAT THIS GUARANTY
IS EFFECTIVE UPON GUARANTOR’S EXECUTION AND DELIVERY OF THIS GUARANTY TO LENDER. NO FORMAL ACCEPTANCE BY LENDER IS NECESSARY
TO MAKE THIS GUARANTY EFFECTIVE. THIS GUARANTY IS DATED MAY 11, 2012.

 

GUARANTOR:

 

SUPERIOR DRILLING PRODUCTS OF CALIFORNIA,
LLC

 

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

 

SUPERIOR DRILLING PRODUCTS, LLC

 

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

 

	x	/s/ Annette D. Meier	 	x	/s/ Gilbert Troy Meier
	 	Annette D. Meier, Individually	 	 	Gilbert Troy Meier, individually

 

LENDER:

 

US EMPLOYMENT DEVELOPMENT LENDING CENTER,
LLC

 

	x	 	 
	 	Authorized Signer	 

 

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-128 PR-20

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