Document:

Exhibit

Exhibit 10.6
Restricted Stock Unit Award
under the Fossil Group, Inc. 2016 Long-Term Incentive Plan
This RESTRICTED STOCK UNIT AWARD (the “Award”), is entered into effect as of the date of the grant (the “Effective Date”).
W I T N E S S E T H:
WHEREAS, Fossil Group, Inc., a Delaware corporation (the “Company”) has adopted the Fossil Group, Inc. 2016 Long-Term Incentive Plan (the “Long-Term Incentive Plan”), effective as of the Effective Date (as defined in the Long-Term Incentive Plan), with the objective of advancing the best interests of the Company, its Subsidiaries and its stockholders in order to attract, retain and motivate key employees with additional incentives through the award of Restricted Stock Units; and
WHEREAS, the Long-Term Incentive Plan provides that Eligible Participants of the Company or its Subsidiaries, as determined in the judgment of the Committee, may be granted an Award which may consist of grants of restricted units of common stock, par value $.01 per share (“Common Stock”), of the Company; 
NOW, THEREFORE, the Participant identified in the Notice of Grant is hereby awarded Restricted Stock Units in accordance with the following terms:
1.Grant of Award; Restricted Stock Units.  Subject to the terms and conditions set forth in the Long-Term Incentive Plan, this Award and in the Notice of Grant, the Company hereby grants to the Participant an award of those Restricted Stock Units specified in the Notice of Grant, subject to adjustment from time to time as provided in Articles 12, 13 and 14 of the Long-Term Incentive Plan.  Each Restricted Stock Unit shall consist of the right to receive, upon the Vesting Date and subject to achievement of the performance goals set forth in the Notice of Grant, a share of Common Stock for each vested Unit, which shall be electronically registered by the Company in the name of the Participant as promptly as practicable following the Vesting Date.

2.Vesting.  If the Participant remains continuously employed by the Company or a Subsidiary through each Vesting Date set forth in the Notice of Grant, the Restricted Stock Units shall vest (it being understood that Units shall vest cumulatively) based upon the achievement of the performance goals and vesting schedule as set forth in the Notice of Grant and the Company shall electronically register one share of Common Stock in the Participant’s name for each vested Unit.  Any Restricted Stock Unit that does not vest on the Vesting Date shall be forfeited.

Notwithstanding the vesting conditions set forth in the Notice of Grant, in the event the Participant incurs a Termination of Service (as such term is defined in that certain Executive Severance Agreement by and between the Company and the Participant (the “Severance Agreement”)) without Cause (as defined in the Severance Agreement) or for Good Reason (as defined in the Severance Agreement) prior to a Change in Control, then the then-outstanding Restricted Stock Units shall vest pro-rata on the date such award would vest on its terms, in an amount equal to (1) the ratio derived by dividing the sum of eighteen (18) months plus the number of whole calendar months from the respective Date of Grant through the Termination Date, by the total number of months from the Date of Grant through the date such award would vest on its terms, provided the ratio is no greater than one, multiplied by (2) the number of performance based restricted stock unit awards that would have vested and shall be electronically converted into shares of Common Stock on the Vesting Date, subject to and based upon the achievement of the performance goals and vesting schedule set forth in the Notice of Grant, to the same extent such Restricted Stock Units would have otherwise vested had the Participant remained employed during such period, provided, however, if such Termination of Service occurs in connection with or following a Change in Control, then (A) if the Termination of Service occurs within the first half of the applicable performance period, then full acceleration of vesting at Target (as defined in the Severance Agreement) performance, and (B) if the Termination of Service occurs within the second half of the applicable performance period, then accelerated vesting of the award, based on actual performance if measurable, or at Target performance if the performance is not measurable.  

Notwithstanding the vesting conditions set forth in the Notice of Grant and this Section 2: (i) the Committee may in its discretion at any time accelerate the vesting of Restricted Stock Units or otherwise waive or amend any conditions of a grant of a Restricted Stock Units; and (ii) all of the Restricted Stock Units shall vest upon a Change in Control of the Company or upon the death of the Participant.  
3.Termination in Event of Nonemployment.  Except as provided in Section 2 of the Award, in the event that the Participant ceases to be employed by the Company or any of its Subsidiaries before a Vesting Date for any reason other than death, the unvested Restricted Stock Units granted pursuant to this Agreement shall be forfeited. 

4.Stock Certificates.  Except as provided in Section 2 of this Award, shares of Common Stock evidencing the conversion of Restricted Stock Units into shares of Common Stock shall be electronically registered in the Participant’s name as of (or as promptly as practicable after) each Vesting Date.  No stock certificate or certificates shall be issued with respect to such shares of Common Stock, unless, the Participant requests delivery of the certificate or certificates by submitting a written request to the General Counsel requesting deliver of the certificates.  Subject to Section 5 of this Award, the Company shall deliver the certificates requested by the Participant to the Participant as soon as administratively practicable following the Company’s receipt of such request. Upon registration (or issuance) of any shares hereunder,  the Participant may be required to enter into such written representations, warranties and agreements as the Company may reasonably request in order to comply with applicable securities laws, the Long-Term Incentive Plan or with the Notice of Grant.  Notwithstanding the foregoing, to the extent (i) the Participant is deemed as of his Termination of Service to be a “specified employee” under Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”); and (ii) on the Termination of Service the Company is publicly traded (as defined in Section 409A of the Code), then, to the extent required by Section 409A of the Code, no Restricted Stock Unit shall vest, or be converted into shares of Common Stock, until the earlier of (x) the first day of the seventh month following the Participant’s Termination of Service or (y) the date of the Participant’s death following such Termination of Service.  Upon the expiration of the applicable deferral period, any Restricted Stock Units which would have otherwise been vested and converted into shares of Common Stock during that period (whether in a single sum or in installments) shall be converted into shares of Common Stock and transferred to the Participant or the Participant’s beneficiary in one lump sum.

5.Tax Withholding Obligations.  The Participant shall be required to deposit with the Company an amount of cash equal to the amount determined by the Company to be required with respect to any withholding taxes, FICA contributions, or the like under any federal, state, or local statute, ordinance, rule, or regulation in connection with the award or settlement of the Restricted Stock Units.  Alternatively, the Company may, at its sole election, (i) withhold the required amounts from the Participant’s pay during the pay periods next following the date on which any such applicable tax liability otherwise arises, or (ii) withhold a number of shares of Common Stock otherwise deliverable having a Fair Market Value sufficient to satisfy the statutory minimum of all or part of the Participant’s estimated total federal, state, and local tax obligations associated with vesting or settlement of the Restricted Stock Units.  The Company shall not deliver any of the shares of Common Stock until and unless the Participant has made the deposit required herein or proper provision for required withholding has been made.

6.Assignability.  Until the Restricted Stock Units are vested as provided above, they may not be sold, transferred, pledged, assigned, or otherwise alienated  other than by will or the laws of descent and distribution or pursuant to a qualified domestic relations order as defined by Code or Title I of the Employee Retirement Income Security Act of 1974, as amended.  Any attempt to do so contrary to the provisions hereof shall be null and void.   No assignment of the Restricted Stock Units herein granted shall be effective to bind the Company unless the Company shall have been furnished with written notice thereof and a copy of such documents and evidence as the Company may deem necessary to establish the validity of the assignment and the acceptance by the assignee or assignees of the terms and conditions hereof.

7.No Stockholder Rights.  The Participant shall have no rights as a stockholder of the Company with respect to the Restricted Stock Units unless and until certificates evidencing shares of Common Stock shall have been issued by the Company to the Participant.  Until such time, the Participant shall not be entitled to dividends or distributions in respect of any shares or to vote such shares on any matter submitted to the stockholders of the Company.  

In addition, except as to adjustments that may from time to time be made by the Committee in accordance with the Long-Term Incentive Plan, no adjustment shall be made or required to be made in respect of dividends (ordinary or extraordinary, whether in cash, securities or any other property) or distributions paid or made by the Company or any other rights granted in respect of any shares for which the record date for such payment, distribution or grant is prior to the date upon which certificates evidencing such shares shall have been issued by the Company.

8.Administration.  The Committee shall have the power to interpret the Long-Term Incentive Plan, the Notice of Grant and this Award, and to adopt such rules for the administration, interpretation, and application of the Long-Term Incentive Plan as are consistent therewith and to interpret or revoke any such rules.  All actions taken and all interpretations and determinations made by the Committee shall be final and binding upon the Participant, the Company, and all other interested persons.  No member of the Committee shall be personally liable for any action, determination, or interpretation made in good faith with respect to the Long-Term Incentive Plan or this Award.

9.Restrictions and Related Representations. Upon the acquisition of any shares of Common Stock pursuant to the vesting of the Restricted Stock Units granted pursuant hereto, the Participant may be required to enter into such written representations, warranties and agreements as the Company may reasonably request in order to comply with applicable securities laws, the Long-Term Incentive Plan or with this Award.  In addition, to the extent a certificate or certificates are issued representing any shares, the certificate or certificates will be stamped or otherwise imprinted with a legend in such form as the Company may require with respect to any applicable restrictions on sale or transfer, and the stock transfer records of the Company will reflect stop-transfer instructions, as appropriate, with respect to such shares.

10.Notices and Electronic Delivery.  Unless otherwise provided herein, any notice or other communication hereunder shall be in writing and shall be given by registered or certified mail unless the Company, in its sole discretion, decides to deliver any documents relating to the Award or future awards that may be granted under the Long-Term Incentive Plan by electronic means or to request the Participant’s consent to participate in the Long-Term Incentive Plan by electronic means.  The Participant hereby consents to receive such documents by electronic delivery and, if requested, to agree to participate in the Long-Term Incentive Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.   All notices by the Participant hereunder shall be directed to Fossil Group, Inc., Attention: Secretary, at the Company’s then current address unless the Company, in writing or electronically, directs the Participant otherwise.  Any notice given by the Company to the Participant directed to him at his address on file with the Company shall be effective to bind any other person who shall acquire rights hereunder.  The Participant shall be deemed to have familiarized himself with all matters contained herein and in the Long-Term Incentive Plan which may affect any of the Participant’s rights or privileges hereunder. 

11.Scope of Certain Terms.  Whenever the term “Participant” is used herein under circumstances applicable to any other person or persons to whom this Award may be assigned in accordance with the provisions of Paragraph 6 (Assignability) of this Agreement, it shall be deemed to include such person or persons.  The term “Long-Term Incentive Plan” as used herein shall be deemed to include the Long-Term Incentive Plan and any subsequent amendments thereto, together with any administrative interpretations which have been adopted thereunder by the Committee pursuant to Section 3.3 of the Long-Term Incentive Plan. Unless otherwise indicated, defined terms herein shall have the meaning ascribed to them in the Long-Term Incentive Plan.

12.General Restrictions.  This Award is subject to the requirement that, if at any time the Committee shall determine that (a) the listing, registration or qualification of the shares of Common Stock subject or related thereto upon any securities exchange or under any state or federal law; (b) the consent or approval of any government regulatory body; or (c) an agreement by the recipient of an Award with respect to the disposition of shares of Common Stock, is necessary or desirable (in connection with any requirement or interpretation of any federal or state securities law, rule or regulation) as a condition of, or in connection with, the granting of such Award or the issuance, purchase or delivery of shares of Common Stock thereunder, such Award may not be consummated in whole or in part unless such listing, registration, qualification, consent, approval or agreement shall have been effected or obtained free of any conditions not acceptable to the Committee.

13.Adjustments for Changes in Capitalization.  The number of Restricted Stock Units covered by this Award shall be subject to adjustment in accordance with Articles 12-14 of the Long-Term Incentive Plan.

14.No Right of Employment. Neither the granting of the Restricted Stock Units, the exercise of any part hereof, nor any provision of the Long-Term Incentive Plan or this Award shall constitute or be evidence of any understanding, express or implied, on the part of the Company or any Subsidiary to employ the Participant for any specified period. 

15.Amendment.  This Award may be amended only by a writing executed by the Company and the Participant which specifically states that it is amending this Award.  Notwithstanding the foregoing, this Award may be amended solely by the Committee by a writing which specifically states that it is amending this Award, so long as a copy of such amendment is delivered to the Participant, and provided that no such amendment adversely affecting the rights of the Participant hereunder may be made without the Participant’s written consent.  Without limiting the foregoing, the Committee reserves the right to change, by written notice to the Participant, the provisions of the Restricted Stock Units or this Award in any way it may deem necessary or advisable to carry out the purpose of the grant as a result of any change in applicable laws or regulations or any future law, regulation, ruling, or judicial decision, provided that any such change shall be applicable only to Restricted Stock Units which are then subject to restrictions as provided herein.

16.Precondition of Legality.  Notwithstanding anything to the contrary contained herein, the Participant agrees that the Company will not be obligated to issue any shares pursuant to this Award, if the issuance of such shares would constitute a violation by the Participant or by the Company of any provision of any law or regulation of any governmental authority or any national securities exchange or transaction quotation system.

17.Incorporation of the Long-Term Incentive Plan. This Award is subject to the Long-Term Incentive Plan, a copy of which has been furnished to the Participant and for which the Participant acknowledges receipt.  The terms and provisions of the Long-Term Incentive Plan are incorporated by reference herein.  In the event of a conflict between any term or provision contained here in and a term or provision of the Long-Term Incentive Plan, the applicable terms and provisions of the Long-Term Incentive Plan shall govern and prevail.

18.Severability.  If one or more of the provisions of this Award shall be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby and the invalid, illegal or unenforceable provisions shall be deemed null and void; however, to the extent permissible by law, any provisions which could be deemed null and void shall first be construed, interpreted or revised retroactively to permit this Award to be construed so as to first the intent of this Award and the Long-Term Incentive Plan.

19.Construction.  The Restricted Stock Units are being issued pursuant to Section 6.6 of the Long-Term Incentive Plan and are subject to the terms of the Long-Term Incentive Plan.  A copy of the Long-Term Incentive Plan has been given to the Participant, and additional copies of the Long-Term Incentive Plan are available upon request during normal business hours at the principal executive offices of the Company.  To the extent that any provision of this Award violates or is inconsistent with an express provision of the Long-Term Incentive Plan, the Long-Term Incentive Plan provision shall govern and any inconsistent provision in this Award shall be of no force or effect. 
 
20.Governing Law.  The Restricted Stock Unit grant and the provisions of this Award are governed by, and subject to, the laws of the State of Delaware, as provided in the Long-Term Incentive Plan.Exhibit 10.1

 

THIS NOTE
HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER THE SECURITIES
LAWS OF ANY STATES IN THE UNITED STATES. THIS NOTE IS SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED
OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM.
THE ISSUER OF THIS NOTE MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY
PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS.

 

PROMISSORY
NOTE

 

	Date of Note:	August 5, 2016
	 	 
	Principal Amount of Note:	$1,000,000.00

 

For
value received Superior Drilling Products, Inc., a Utah corporation (“Company”),
promises to pay to the undersigned holder or such party’s assigns (“Holder”) the principal amount
set forth above with respect to this promissory note (the “Note”) with simple interest on the outstanding
principal amount at the rate of 8% per annum. Interest shall commence with the date hereof and shall continue on the outstanding
principal until paid in full. Accrued interest shall be payable in arrears on the last day of each month. Interest shall be computed
on the basis of a year of 365 days for the actual number of days elapsed. Subject to Sections 1(b) and 1(c) below, all unpaid interest
and principal shall be due and payable upon request of the Holder on or after February 5, 2017 (the “Maturity Date”).
Notwithstanding anything to the contrary in this Note the Company may elect, at its sole option and by written notice to the Holder
on or prior to the Maturity Date, to extend the Maturity Date for an additional three months through the nine month anniversary
of the date of this Note.

 

1.                 
Basic Terms.

 

(a)              
Payments. All payments of interest and principal shall be in lawful money of the United States of America. All payments
shall be applied first to accrued interest, and thereafter to principal. Any amounts repaid by the Company may not be reborrowed.

 

(b)              
Prepayments. The Company may prepay the outstanding principal under this Note, in whole or in part, prior to the Maturity
Date. In the event that the indebtedness under this Note is repaid or prepaid in full or accelerated in accordance with the terms
of this Note, in either case, prior to the Maturity Date, the Company shall pay to the Holder on such date, the greater of (i)
$40,000 and (ii) the amount of the unpaid accrued interest then due and owing on the outstanding principal amount (the “Prepayment
Penalty Amount”); provided, however, the Prepayment Penalty Amount shall be reduced by any and all interest payments
made by the Company to the Holder prior to such date.

 

(c)               
Equity Penalty. In the event that the Company fails to repay or prepay in full the indebtedness under this Note on or
before the Maturity Date, the Company shall deliver to the Holder on the first business day following the Maturity Date restricted
shares of the Company’s common stock, par value $.001 per share (the “Common Stock”), in an aggregate
amount representing 200% of the principal amount of this Note outstanding at the Maturity Date, based on a per share price equal
to the 30-day volume weighted average trading price of the Common Stock on the NYSE MKT calculated as of the Maturity Date (the
“Equity Penalty”). Issuance of the shares of Common Stock pursuant to the Equity Penalty shall constitute
full satisfaction of all amounts of principal and interest then due and owing by the Company to the Holder under this Note. The
Company acknowledges and agrees that in the event that the Equity Penalty is triggered, the Company shall file, within 60 days
of the Maturity Date, a registration statement with the U.S. Securities and Exchange Commission covering the resale of the shares
of Common Stock issued to the Holder as part of the Equity Penalty.

 

     

     

    

 

2.                 
Repayment.

 

(a)              
Repayment upon a Qualified Financing. In the event that the Company (i) consummates the issuance and sale of equity
or debt securities to investors on or before the Maturity Date with total proceeds to the Company of not less than $2,000,000 (in
either case, a “Qualified Financing”), then the Company shall repay the Holder in full in cash in an
amount equal to the aggregate outstanding principal amount of this Note plus any unpaid accrued interest on the original principal
concurrent with the closing of the Qualified Financing.

 

(b)              
Change of Control. If the Company consummates a Change of Control (as defined below) while this Note remains outstanding,
the, subject to Section 1(c) above, the Company shall repay the Holder in full in cash in an aggregate amount equal to the outstanding
principal amount of this Note plus any unpaid accrued interest on the original principal. For purposes of this Note, a “Change
of Control” means (i) a consolidation or merger of the Company with or into any other corporation or other entity
or person, or any other corporate reorganization, other than any such consolidation, merger or reorganization in which the shares
of capital stock of the Company immediately prior to such consolidation, merger or reorganization, continue to represent a majority
of the voting power of the surviving entity immediately after such consolidation, merger or reorganization; (ii) any transaction
or series of related transactions to which the Company is a party in which in excess of 50% of the Company’s voting power
is transferred; or (iii) the sale or transfer of all or substantially all of the Company’s assets, or the exclusive license
of all or substantially all of the Company’s material intellectual property; provided that a Change of Control shall
not include any transaction or series of transactions principally for bona fide equity financing purposes in which cash is received
by the Company or any successor, indebtedness of the Company is cancelled, or converted or a combination thereof. The Company shall
give the Holder notice of a Change of Control not less than 5 days prior to the anticipated date of consummation of the Change
of Control.

 

(c)               
Interest Accrual. If a Change of Control or Qualified Financing is consummated, all interest on this Note shall be deemed
to have stopped accruing as of 10 days prior to the signing of the definitive agreement for the Change of Control or Qualified
Financing.

 

3.                 
Representations and Warranties.

 

(a)              
Representations and Warranties of the Company. The Company hereby represents and warrants to the Holder as of the date
the first Note was issued as follows:

 

(i)                
Organization, Good Standing and Qualification. The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Utah. The Company has the requisite corporate power to own and operate its
properties and assets and to carry on its business as now conducted and as proposed to be conducted. The Company is duly qualified
and is authorized to do business and is in good standing as a foreign corporation in all jurisdictions in which the nature of its
activities and of its properties (both owned and leased) makes such qualification necessary, except for those jurisdictions in
which failure to do so would not have a material adverse effect on the Company or its business.

 

    	 	2	 

     

    

 

(ii)              
Corporate Power. The Company has all requisite corporate power to issue this Note and to carry
out and perform its obligations under this Note. The Company’s Board of Directors (the “Board”)
has approved the issuance of this Note based upon a reasonable belief that the issuance of this Note is appropriate for the Company
after reasonable inquiry concerning the Company’s financing objectives and financial situation.

 

(iii)            
Authorization. All corporate action on the part of the Company, the Board and the Company’s stockholders
necessary for the issuance and delivery of this Note has been taken. This Note constitutes a valid and binding obligation of the
Company enforceable in accordance with its terms, subject to laws of general application relating to bankruptcy, insolvency, the
relief of debtors and, with respect to rights to indemnity, subject to federal and state securities laws.

 

(iv)            
Governmental Consents. All consents, approvals, orders or authorizations of, or registrations, qualifications,
designations, declarations or filings with, any governmental authority required on the part of the Company in connection with issuance
of this Note has been obtained.

 

(v)              
Compliance with Laws. To its knowledge, the Company is not in violation of any applicable statute, rule,
regulation, order or restriction of any domestic or foreign government or any instrumentality or agency thereof in respect of the
conduct of its business or the ownership of its properties, which violation of which would materially and adversely affect the
business, assets, liabilities, financial condition, operations or prospects of the Company.

 

(vi)            
Compliance with Other Instruments. The Company is not in violation or default of any term of its certificate
of incorporation or bylaws, or of any provision of any mortgage, indenture or contract to which it is a party and by which it is
bound or of any judgment, decree, order or writ, other than such violation(s) that would not have a material adverse effect on
the Company. The execution, delivery and performance of this Note will not result in any such violation or be in conflict with,
or constitute, with or without the passage of time and giving of notice, either a default under any such provision, instrument,
judgment, decree, order or writ or an event that results in the creation of any lien, charge or encumbrance upon any assets of
the Company or the suspension, revocation, impairment, forfeiture, or nonrenewal of any material permit, license, authorization
or approval applicable to the Company, its business or operations or any of its assets or properties. Without limiting the foregoing,
the Company has obtained all waivers reasonably necessary with respect to any preemptive rights, rights of first refusal or similar
rights, including any notice or offering periods provided for as part of any such rights, in order for the Company to consummate
the transactions contemplated hereunder without any third party obtaining any rights to cause the Company to offer or issue any
securities of the Company as a result of the consummation of the transactions contemplated hereunder.

 

(vii)          
Use of Proceeds. The Company shall use the proceeds of this Note solely for the operations of its
business (including, without limitation, for working capital purposes, payment of accounts payable and payment of other indebtedness),
and not for any personal, family or household purpose. 

 

4.                 
Events of Default.

 

(a)              
Upon the occurrence and continuance of an Event of Default (as defined below), at the option of the Holder and upon
written notice to the Company (which election and notice shall not be required in the case of an Event of Default under subsection
(ii) or (iii) below), this Note shall accelerate and all outstanding principal and unpaid accrued interest shall become due and
payable. The occurrence of any one or more of the following shall constitute an “Event of Default”:

 

    	 	3	 

     

    

 

(i)                
The Company fails to pay timely (x) any of the principal amount due under this Note on the date the same becomes
due and payable or (y) any unpaid accrued interest or other amounts due under this Note on the date the same becomes due and payable
and such failure shall continue unremedied for a period of three business days;

 

(ii)              
The Company files any petition or action for relief under any bankruptcy, reorganization, insolvency or moratorium
law or any other law for the relief of, or relating to, debtors, now or hereafter in effect, or makes any assignment for the benefit
of creditors or takes any corporate action in furtherance of any of the foregoing; or

 

(iii)            
An involuntary petition is filed against the Company (unless such petition is dismissed or discharged within
60 days under any bankruptcy statute now or hereafter in effect, or a custodian, receiver, trustee, assignee for the benefit of
creditors (or other similar official) is appointed to take possession, custody or control of any property of the Company).

 

(b)              
The Company shall pay all reasonable attorneys’ fees and court costs incurred by the Holder in enforcing and collecting
this Note.

 

5.                 
Miscellaneous Provisions.

 

(a)              
Waivers. To the extent permitted by applicable law, the Company hereby waives demand, notice, presentment, protest and
notice of dishonor.

 

(b)              
Further Assurances. The Holder agrees and covenants that at any time and from time to time the Holder will promptly
execute and deliver to the Company such further instruments and documents and take such further action as the Company may reasonably
require in order to carry out the full intent and purpose of this Note and to comply with state or federal securities laws or other
regulatory approvals.

 

(c)               
Transfers of Notes. This Note may be transferred only with the prior written consent of the Company.

 

(d)              
Market Standoff. The Holder hereby agrees that the Holder shall not sell, dispose of, transfer, make any short sale
of, grant any option for the purchase of, or enter into any hedging or similar transaction with the same economic effect as a sale
of, any shares of Common Stock (or other securities) of the Company held by the Holder (other than those included in the registration)
during the 180-day period following the effective date of the initial public offering of the Company (or such longer period, not
to exceed 34 days after the expiration of the 180-day period, as the underwriters or the Company shall request in order to facilitate
compliance with NASD Rule 2711 or NYSE Member Rule 472 or any successor or similar rule or regulation). The Holder agrees to execute
and deliver such other agreements as may be reasonably requested by the Company or the managing underwriters that are consistent
with the foregoing or that are necessary to give further effect thereto. In addition, if requested by the Company or the representative
of the underwriters of Common Stock (or other securities of the Company), the Holder shall provide, within 10 days of such request,
such information as may be required by the Company or such representative in connection with the completion of any public offering
of the Company’s securities pursuant to a registration statement filed under the Act. The obligations described in this paragraph
shall not apply to a registration relating solely to employee benefit plans on Form S-1 or Form S-8 or similar forms that may be
promulgated in the future, or a registration relating solely to a transaction on Form S-4 or similar forms that may be promulgated
in the future. In order to enforce the foregoing covenant, the Company may impose stop-transfer instructions with respect to such
Common Stock (or other securities of the Company) until the end of such period. The Holder agrees that any transferee of any of
the Securities (or other securities of the Company) held by the Holder shall be bound by this paragraph. The underwriters of the
Company’s stock are intended third-party beneficiaries of this paragraph and shall have the right, power and authority to
enforce the provisions hereof as though they were a party hereto.

 

    	 	4	 

     

    

 

(e)               
Amendment and Waiver. Any term of this Note may be amended or waived with the written consent of Company and the Holder.
Upon the effectuation of such waiver or amendment in conformance with this paragraph, the Company shall promptly give written notice
thereof to the Holder if the Holder has not previously consented to such amendment or waiver in writing.

 

(f)                
Governing Law. This Note shall be governed by and construed under the laws of the State of Utah, as applied to agreements
among Utah residents, made and to be performed entirely within the State of Utah, without giving effect to conflicts of laws principles.

 

(g)              
Binding Agreement. The terms and conditions of this Note shall inure to the benefit of and be binding upon the respective
successors and assigns of the parties. Nothing in this Note, expressed or implied, is intended to confer upon any third party any
rights, remedies, obligations, or liabilities under or by reason of this Note, except as expressly provided in this Note.

 

(h)              
Counterparts. This Note may be executed in two or more counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument. This Note may also be executed and delivered by facsimile signature,
PDF or any electronic signature complying with the U.S. federal ESIGN Act of 2000 (e.g., www.docusign.com).

 

(i)                
Titles and Subtitles. The titles and subtitles used in this Note are used for convenience only and are not to be considered
in construing or interpreting this Note.

 

(j)                
Notices. All notices required or permitted hereunder shall be in writing and shall be deemed effectively given: (i) upon
personal delivery to the party to be notified, (ii) when sent by confirmed electronic mail or facsimile if sent during normal
business hours of the recipient, if not, then on the next business day, (iii) five days after having been sent by registered
or certified mail, return receipt requested, postage prepaid, or (iv) one day after deposit with a nationally recognized overnight
courier, specifying next day delivery, with written verification of receipt. All communications to a party shall be sent to the
party’s address set forth on the signature page hereto or at such other address(es) as such party may designate by 10 days
advance written notice to the other party hereto. A copy of any notice to the Company shall be sent to Superior Drilling Products,
Inc., Attention: Chris Cashion:, 1583 South 1700 East, Vernal, Utah 84078, e-mail: chrisc@teamsdp.com.

 

(k)              
Expenses. The Company and the Holder shall each bear its respective expenses and legal fees incurred with respect to
the negotiation, execution and delivery of this Note and the transactions contemplated herein.

 

(l)                
Delays or Omissions. It is agreed that no delay or omission to exercise any right, power or remedy accruing to the Holder,
upon any breach or default of the Company under this Note shall impair any such right, power or remedy, nor shall it be construed
to be a waiver of any such breach or default, or any acquiescence therein, or of or in any similar breach or default thereafter
occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or
thereafter occurring. It is further agreed that any waiver, permit, consent or approval of any kind or character by the Holder
of any breach or default under this Note, or any waiver by the Holder of any provisions or conditions of this Note, must be in
writing and shall be effective only to the extent specifically set forth in writing and that all remedies, either under this Note,
or by law or otherwise afforded to the Holder, shall be cumulative and not alternative. This Note shall be void and of no force
or effect in the event that the Holder fails to remit the full principal amount to the Company within five calendar days of the
date of this Note.

 

    	 	5	 

     

    

 

(m)            
Entire Agreement. This Note constitutes the full and entire understanding and agreement between the parties with regard
to the subjects hereof and no party shall be liable or bound to any other party in any manner by any representations, warranties,
covenants and agreements except as specifically set forth herein.

 

(n)              
Exculpation among Holder. The Holder acknowledges that the Holder is not relying on any person, firm or corporation,
other than the Company and its officers and Board members, in making its investment or decision to invest in the Company.

 

(o)              
Negative Pledge. Until the payment in full of the indebtedness under this Note, the Company will not grant, convey,
create or impose any lien or security interest on any of its real or personal property; provided, however, that the
preceding restrictions will not apply to encumbrances or restrictions arising under or by reason of (i) the Company’s loan
documents with its creditors existing as of the date of this Note, including, without limitation the liens and security interests
granted by the Company to secure the Senior Indebtedness (as defined below), (ii) customary provisions restricting assignment of
any agreement entered into in the ordinary course of business and (iii) applicable law.

 

(p)              
Senior Indebtedness. The indebtedness evidenced by this Note is subordinated in right of payment to the prior payment
in full of any Senior Indebtedness in existence on the date of this Note or hereafter incurred. “Senior Indebtedness”
shall mean, unless expressly subordinated to or made on a parity with the amounts due under this Note, all amounts due in connection
with (i) indebtedness of the Company to banks or other lending institutions regularly engaged in the business of lending money
(excluding venture capital, investment banking or similar institutions and their affiliates, which sometimes engage in lending
activities but which are primarily engaged in investments in equity securities), and (ii) any such indebtedness or any debentures,
notes or other evidence of indebtedness issued in exchange for such Senior Indebtedness, or any indebtedness arising from the satisfaction
of such Senior Indebtedness by a guarantor.

 

(q)              
Broker’s Fees. Each party hereto represents and warrants that no agent, broker, investment banker, person or firm
acting on behalf of or under the authority of such party hereto is or will be entitled to any broker’s or finder’s
fee or any other commission directly or indirectly in connection with the transactions contemplated herein, other than fees and
commissions which will be paid by the Company to Roth Capital Partners, LLC. Each party hereto further agrees to indemnify each
other party for any claims, losses or expenses incurred by such other party as a result of the representation in this Section 5(r)
being untrue.

 

[Signature
pages follow]

 

     

     

    

 

In
Witness Whereof, the parties have executed this Promissory Note.

 

	 	COMPANY:
	 	 
	
         

         

         
	SUPERIOR DRILLING PRODUCTS, INC.
	 	 
	 	By:	/s/ Troy Meier
	 	 	 
	 	 	Name: Troy Meier
	 	 	Title:   CEO
	 	 
	 	Address:
	 	1583 South 1700 East

Vernal, Utah 84078

 

 

SIGNATURE
PAGE TO

SUPERIOR
DRILLING PRODUCTS, INC.

PROMISSORY
NOTE

 

     

     

    

 

In
Witness Whereof, the parties have executed this Promissory Note.

  

	 	HOLDER (if an entity):
	 	 
	Name of Holder:	Donald A. Foss Revocable Living Trust
	 	 
	 	By:	/s/ Donald A. Foss, Trustee
	 	 	 
	 	 	Name:	Donald A. Foss
	 	 	Title:	Trustee
	 	 
	 	Address:	 
	 	 	 
	 	 	 

 

	 	HOLDER (if an individual):
	 	 
	Name of Holder:	 
	 	 
	 	 
	Signature:	 
	 	 
	 	 
	 	Address:	 
	 	 	 
	 	 	 

 

 

SIGNATURE
PAGE TO

SUPERIOR
DRILLING PRODUCTS, INC.

PROMISSORY
NOTE

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00261-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00261-of-00352.parquet"}]]