Document:

Exhibit 10.38

 

Loan No. TBD

 

LOAN AGREEMENT

 

This LOAN AGREEMENT
(this “Agreement”) is entered Into at Cottonwood Heights, Utah, as of July 3, 2012, between Superior Drilling
Products, LLC, an Utah limited liability company, with its chief executive office located at PO Box 1656, Vernal, Utah
84078 (the “Borrower”) and Proficio Bank, a State Chartered Commercial Bank, with an address of 6985 Union Park
Center, Suite 150, Cottonwood Heights, Utah 84047 (the “Bank”).

 

FOR VALUE RECEIVED,
and in consideration of the granting by the Bank of financial accommodations to or for the benefit of the Borrower, including without
limitation respecting the Obligations (as hereinafter defined), the Borrower represents to and agrees with the Bank, as of the
date hereof and as of the date of each loan, credit and/or other financial accommodation, as follows:

 

1.          
THE LOAN

 

1.1           Loan.
Subject to the terms and conditions of this Agreement, the Bank hereby agrees to make a loan to Meier Properties, Series LLC and
Borrower in the original principal amount of $240,000.00 (the “Loan”). The Loan shall be evidenced by that
certain Term Note, of even date herewith (the “Note”) by Meier Properties, Series LLC and Borrower in favor of the
Bank in the original principal amount of $240,000.00. This Agreement, the Note, and any and all other documents, amendments
or renewals executed and delivered in connection with any of the foregoing are collectively hereinafter referred to as the “Loan
Documents”.

 

1.2           Definitions.
The following definitions shall apply:

 

	 	(a)	“Code” shall mean the Utah Uniform Commercial Code, Section 70A-1-101 et.seq. as amended from time to time.

 

	 	(b)	“Obligation(S)” shall mean, without limitation, all loans, advances, indebtedness, notes, liabilities and amounts, liquidated or unliquidated, owing by the Borrower to the Bank at any time, of each and every kind, nature and description, whether arising under this Agreement or otherwise, and whether secured or unsecured, direct or indirect (that is, whether the same are due directly by the Borrower to the Bank; or are due indirectly by the Borrower to the Bank as endorser, guarantor or other surety, or as borrower of obligations due third persons which have been endorsed or assigned to the Bank, or otherwise), absolute or contingent, due or to become due, now existing or hereafter arising or contracted, including, without limitation, payment when due of all amounts outstanding respecting any of the Loan Documents. Said term shall also include all interest and other charges chargeable to the Borrower or due from the Borrower to the Bank from time to time and all costs and expenses referred to in this Agreement.

 

		(c)	“Person” or “party” shall mean individuals, partnerships, corporations,
limited liability companies and all other entities.

 

All words and terms
used in this Agreement other than those specifically defined herein shall have the meanings accorded to them in the Code.

 

    	 

    	 

    

 

2.          REPRESENTATIONS
AND WARRANTIES

 

2.1          Organization
and Qualification. Borrower is a duly organized and validly existing limited liability company under the laws of the
State of its formation, with the exact legal name set forth in the first paragraph of this Agreement. Borrower is in good
standing under the laws of said State, has the power to own its property and conduct its business as now conducted and as
currently proposed to be conducted, and is duly qualified to do business under the laws of each state where the nature of the
business done or property owned requires such qualification.

 

2.2           Related
Parties. Borrower has no interest in any entities other than those listed on Schedule 2.2, if any, and the Borrower has never
consolidated, merged or acquired substantially all of the assets of any other entity or person other than those listed on Schedule
2.2, if any.

 

2.3           Limited
Liability Company Records. Borrower’s certificate of organization, articles of organization or other charter document
and all amendments thereto have been duly filed and are in proper order. All members of the Borrower are properly reflected on
all books and records of the Borrower, including but not limited to its operating agreement, minute books, bylaws and books of
account, all of which are accurate and up to date and will be so maintained.

 

2.4           Title
to Properties: Absence of Liens. Borrower has good and clear record and marketable title to all of its properties and assets,
and all of its properties and assets are free and clear of all mortgages, liens, pledges, charges, encumbrances and setoffs, except
(a) the mortgages, deeds of trust and security interests as set forth on Schedule 2.4, if any, and (b) the leases of personal property
as set forth on Schedule 2.4, if any.

 

2.5           Places
of Business. Borrower’s chief executive office is correctly stated in the preamble to this Agreement, and Borrower shall,
during the term of this Agreement, keep the Bank currently and accurately informed in writing of each of its other places of business,
and shall not change the location of such chief executive office or open or close, move or change any existing or new place of
business without giving the Bank at least thirty (30) days prior written notice thereof.

 

2.6           Valid
Obligations, The execution, delivery and performance of the Loan Documents have been duly authorized by all necessary action
and each represents a legal, valid and binding obligation of Borrower and is fully enforceable according to its terms, except as
limited by equity or laws relating to the enforcement of creditors’ rights.

 

2.7           Conflicts.
There is no provision in Borrower’s organizational or charter documents, if any, or in any indenture, contract or agreement
to which Borrower is a party which prohibits, limits or restricts the execution, delivery or performance of the Loan Documents.

 

2.8           Governmental
Approvals. The execution, delivery and performance of the Loan Documents does not require any approval of or filing with any
governmental agency or authority.

 

2.9           Litigation,
etc. There are no actions, claims or proceedings pending or to the knowledge of Borrower threatened against Borrower which
might materially adversely affect the ability of Borrower to conduct its business or to pay or perform the Obligations.

 

2.10         Financial
Statements. The Borrower has furnished to the Bank one or more financial statements each of which fairly presents the condition
of the Borrower at the date thereof and the results of the operations of the Borrower for the period indicated, all in conformity
with generally accepted accounting principles, consistently applied.

 

2.11         Changes.
Since the date of the Financial Statements, there have been no changes in the assets, liabilities, financial condition or business
of the Borrower, other than changes in the ordinary course of business, the effect of which have, in the aggregate, been materially
adverse.

 

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2.12         Taxes.
The Borrower has filed all Federal, state and other tax returns required to be filed (except for such returns for which current
and valid extensions have been filed), and all taxes, assessments and other governmental charges due from the Borrower have been
fully paid. The Borrower has established oh its books reserves adequate for the payment of all Federal, state and other tax liabilities
(if any).

 

2.13         Use
of Proceeds. No portion of any loan is to be used for (i) the purpose of purchasing or carrying any “margin security”
or “margin stock” as such terms are used in Regulations U and X of the Board of Governors of the Federal Reserve System,
12 C.F.R. 221 and 224 or (ii) primarily personal, family or household purposes.

 

2.14         Environmental.
As of the date hereof neither the Borrower nor any of Borrower’s agents, employees or independent contractors (1) have caused
or are aware of a release or threat of release of Hazardous Materials (as defined herein) on any of the premises or personal property
owned or controlled by Borrower (“Controlled Property”) or any property abutting Controlled Property (“Abutting
Property”), which could give rise to liability under any Environmental Law (as defined herein) or any other Federal, state
or local law, rule or regulation; (2) have arranged for the transport of or transported any Hazardous Materials in a manner
as to violate, or result in potential liabilities under, any Environmental Law; (3) have received any notice, order or demand from
the Environmental Protection Agency or any other Federal, state or local agency under any Environmental Law; (4) have incurred
any liability under any Environmental Law in connection with the mismanagement, improper disposal or release of Hazardous Materials;
or (5) are aware of any inspection or investigation of any Controlled Property or Abutting Property by any Federal, state or local
agency for possible violations of any Environmental Law.

 

To the best of Borrower’s
knowledge, neither Borrower, nor any prior owner Or tenant of any Controlled Property, committed or omitted any act which caused
the release of Hazardous Materials on such Controlled Property which could give rise to a lien thereon by any Federal, state or
local government. No notice or statement of claim or lien affecting any Controlled Property has been recorded or filed in any public
records by any Federal, state or local government for costs, penalties, fines or other charges as to such property. All notices,
permits, licenses or similar authorizations, if any, required to be obtained or filed in connection with the ownership, operation,
or use of the Controlled Property, including without limitation, the past or present generation, treatment, storage, disposal or
release of any Hazardous Materials into the environment, have been duly obtained or filed.

 

Borrower agrees to
indemnify and hold the Bank harmless from all liability, loss, cost, damage and expense, including attorney fees and costs of litigation,
arising from any and all of its violations of any Environmental Law (including those arising from any lien by any Federal, state
or local government arising from the presence of Hazardous Materials) or from the presence of Hazardous Materials located on or
emanating from any Controlled Property or Abutting Property whether existing or not existing and whether known or unknown at the
time of the execution hereof and regardless of whether or not caused by, or within the control of Borrower. Borrower further agrees
to reimburse Bank upon demand for any costs incurred by Bank in connection with the foregoing. Borrower agrees that its obligations
hereunder shall be continuous and shall survive the repayment of all debts to Bank and shall continue so long as a valid claim
may be lawfully asserted against the Bank.

 

The term “Hazardous
Materials” includes but is not limited to any and all substances (whether solid, liquid or gas) defined, listed, or otherwise
classified as pollutants, hazardous wastes, hazardous substances, hazardous materials, extremely hazardous wastes, or words of
similar meaning or regulatory effect under any present or future Environmental Law or that may have a negative impact on human
health or the environment, including but not limited to petroleum and petroleum products, asbestos and asbestos-containing materials,
polychlorinated biphenyls, lead, radon, radioactive materials, flammables and explosives.

 

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The term “Environmental
Law” means any present and future Federal, state and local laws, statutes, ordinances, rules, regulations and the like, as
well as common law, relating to protection of human health or the environment, relating to Hazardous Materials, relating to liability
for or costs of remediation or prevention of releases of Hazardous Materials or relating to liability for or costs of other actual
or threatened danger to human health or the environment. The term “Environmental Law” includes, but is not limited
to, the following statutes, as amended, any successor thereto, and any regulations promulgated pursuant thereto, and any state
or local statutes, ordinances, rules, regulations and the like addressing similar issues: the Comprehensive Environmental Response,
Compensation and Liability Act; the Emergency Planning and Community Right-to-Know Act; the Hazardous Materials Transportation
Act; the Resource Conservation and Recovery Act (Including but not limited to Subtitle I relating to underground storage tanks);
the Solid Waste Disposal Act; the Clean Water Act; the Clean Air Act; the Toxic Substances Control Act; the Safe Drinking Water
Act; the Occupational Safety and Health Act; the Federal Water Pollution Control Act; the Federal Insecticide, Fungicide and Rodenticide
Act; the Endangered Species Act; the National Environmental Policy Act; and the River and Harbors Appropriation Act.

 

3.           AFFIRMATIVE
COVENANTS

 

3.1           Payments
and Performance. Borrower will duly and punctually payall Obligations becoming due to the Bank and will duly and punctually
perform all Obligations on its part to be done or performed under this Agreement.

 

3.2           Books
and Records: Inspection. Borrower will at all timeskeep properbooksof account in which full, true and correct
entries will be made of its transactions in accordance with generally accepted accounting principles, consistently applied and
which are, in the opinion of a Certified Public Accountant acceptable to Bank, adequate to determine fairly the financial condition
and the results of operations of Borrower. Borrower will at all reasonable times make its books and records available in its offices
for inspection, examination and duplication by the Bank and the Bank’s representatives and will permit inspection of all
of its properties by the Bank and the Bank’s representatives. Borrower will from time to time furnish the Bank with such
information and statements as the Bank may request in its sole discretion with respect to the Obligations.

 

3.3           Financial
Statements. Borrower will furnish to Bank:

 

		(a)	as soon as available to Borrower,
                                         but in any event within 120 days after the close of each fiscal year, a full and complete
                                         signed copy of financial statements, prepared by certified public accountants acceptable
                                         to Bank, on a combined basis with such other entities designated by the Bank, which shall
                                         include a balance sheet of the Borrower, as at the end of such year, and statement of
                                         profit and loss of the Borrower reflecting the results of its operations during such
                                         year, bearing the opinion of such certified public accountants and prepared on a compiled
                                         basis in accordance with generally accepted accounting principles, consistently applied
                                         together with any so-called management letter;

 

		(b)	from time to time, such financial data and information about Borrower as Bank may reasonably request;
and

 

		(c)	any financial data and information about any guarantors of the Obligations as Bank may reasonably
request.

 

3.4           Conduct
of Business. The Borrower will maintain its existence in good standing and comply with all laws and regulations of the United
States and of any state or states thereof and of any political subdivision thereof, and of any governmental authority which may
be applicable to it or to its business; provided that this covenant shall not apply to any tax, assessment or charge which is being
contested in good faith and with respect to which reserves have been established and are being maintained.

 

3.5           Contact
with Accountant. The Borrower hereby authorizes the Bank to directly contact and communicate with any accountant employed by
Borrower in connection with the review and/or maintenance of Borrower’s books and records or preparation of any financial
reports delivered by or at the request of Borrower to Bank.

 

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3.6           Taxes.
Borrower will promptly pay all real and personal property taxes, assessments and charges and all franchise, income, unemployment,
retirement benefits, withholding, sales and other taxes assessed against it or payable by it before delinquent; provided that this
covenant shall not apply to any tax assessment or charge which is being contested in good faith and with respect to which reserves
have been established and are being maintained.

 

3.7           Maintenance.
Borrower will keep and maintain its properties, if any, in good repair, working order and condition. Borrower will immediately
notify the Bank of any loss or damage to or any occurrence which would adversely affect the value of any such property.

 

3.0           Insurance.
Borrower will maintain in force property and casualty insurance on any property of the Borrower, if any, against risks customarily
insured against by companies engaged in businesses similar to that of the Borrower containing such terms and written by such companies
as may be satisfactory to the Bank, such insurance to be payable to the Bank as its interest may appear in the event of loss and
to name the Bank as insured pursuant to a standard loss payee clause; no loss shall be adjusted there under without the Bank’s
approval; and all such policies shall provide that they may not be canceled without first giving at least Thirty (30) days written
notice of cancellation to the Bank. In the event that the Borrower fails to provide evidence of such insurance, the Bank may, at
its option, secure such Insurance and charge the cost thereof to the Borrower. At the option of the Bank, all insurance proceeds
received from any loss or damage to any property shall be applied either to the replacement or repair thereof or as a payment on
account of the Obligations. From and after the occurrence of an Event of Default, the Bank is authorized to cancel any insurance
maintained hereunder and apply any returned or unearned premiums, all of which are hereby assigned to the Bank, as a payment on
account of the Obligations.

 

3.9           Notification
of Default. Immediately upon becoming aware of the existence of any condition or event which constitutes an Event of Default,
or any condition or event which would upon notice or lapse of time, or both, constitute an Event of Default, Borrower shall give
Bank written notice thereof specifying the nature and duration thereof and the action being or proposed to be taken with respect
thereto.

 

3.10         Notification
of Material Litigation. Borrower will immediately notify the Bank in writing of any litigation or of any investigative proceedings
of a governmental agency or authority commenced or threatened against it which would or might be materially adverse to the financial
condition of Borrower or any guarantor of the Obligations.

 

3.11         Pension
Plans. With respect to any pension or benefit plan maintained by Borrower, or to which Borrower contributes (“Plan”),
the benefits under which are guarantied, in whole or in part, by the Pension Benefit Guaranty Corporation created by the Employee
Retirement Income Security Act of 1974, P.L. 93-406, as amended (“ERISA”) or any governmental authority succeeding
to any or all of the functions of the Pension Benefit Guaranty Corporation (“Pension Benefit Guaranty Corporation”),
Borrower will (a) fund each Plan as required by the provisions of Section 412 of the Internal Revenue Code of 1986, as amended;
(b) cause each Plan to pay all benefits when due; (c) furnish Bank (i) promptly with a copy of any notice of each Plan’s
termination sent to the Pension Benefit Guaranty Corporation (ii) no later than the date of submission to the Department of Labor
or to the Internal Revenue Service, as the case may be, a copy of any request for waiver from the funding standards or extension
of the amortization periods required by Section 412 of the Internal Revenue Code of 1986, as amended and (iii) notice of any Reportable
Event as such term is defined In ERISA; and (d) subscribe to any contingent liability insurance provided by the Pension Benefit
Guaranty Corporation to protect against employer liability upon termination of a guarantied pension plan, if available to Borrower.

 

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4.           NEGATIVE
COVENANTS

 

4.1           Financial
Covenants. The Borrower will not at any time or during any fiscal period (as applicable) fail to be in compliance with any
of the financial covenants in this section.

 

		(a)	Definitions. The following definitions shall apply to this Section:

 

(i)           “GAAP”
shall mean generally accepted accounting principles in effect from time to time in the United Slates.

 

		(b)	Asset Retention. Borrower covenants that no assets from any Borrower or any Borrower Affiliate is to be sold without
prior Bank approval for the life of the loan.

 

4.2           Sale
of Interest. There shall not be any sale or transfer of ownership of any interest in the Borrower without the Bank’s
prior written consent

 

4.3           Loans
or Advances. Borrower shall not make any loans or advances to any individual, partnership, corporation, limited liability
company, trust, or other organization or person, including without limitation its officers and employees; provided, however, that
Borrower may make advances to its employees, including its members, officers, with respect to expenses incurred or to be incurred
by such employees in the ordinary course of business which expenses are reimbursable by Borrower; and provided further, however,
that Borrower may extend credit in the ordinary course of business in accordance with customary trade practices.

 

4.4           Investments.
The Borrower shall not make investments in, or advances to, any individual, partnership, corporation, limited liability company,
trust or other organization or person other than as previously specifically consented to in writing by the Bank. The Borrower will
not purchase or otherwise invest in or hold securities, nonoperating real estate or other nonoperating assets or purchase all or
substantially all the assets of any entity other than as previously specifically consented to in writing by the Bank.

 

4.5           Merger.
Borrower shall not merge or consolidate or be merged or consolidated with or into any other entity.

 

4.6           Sale
of Assets. Borrower shall not self, lease or otherwise dispose of any of its assets, except in the ordinary and usual course
of business and except for the purpose of replacing machinery, equipment or other personal property which, as a consequence of
wear, duplication or obsolescence, is no longer used or necessary in the Borrower’s business, provided that fair consideration
is received therefor; provided, however, in no event shall the Borrower sell, lease or otherwise dispose of any equipment purchased
with the proceeds of any loans made by the Bank.

 

4.7           Other
Business. Borrower shall not engage in any business other than the business in which it is currently engaged or a business
reasonably allied thereto.

 

4.8           Change
of Name, etc. Borrower shall not change its legal name or the State or the type of its formation, without giving the Bank at
least 30 days prior written notice thereof.

 

5.           DEFAULT

 

5.1           Default.
“Event of Default” shall mean the occurrence of one or more of any of the following events;

 

		(a)	default of any liability, obligation, covenant or undertaking of the Borrower or any guarantor
of the Obligations to the Bank, hereunder or otherwise, including, without limitation, failure to pay in full and when due any
installment of principal or interest or default of the Borrower or any Bank continuing for 30 days with respect to any default
(other than with respect to the payment of money for which there is no grace period);

 

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		(b)	failure of the Borrower or any guarantor of the Obligations to maintain aggregate collateral security
value satisfactory to the Bank continuing for 30 days;

 

		(c)	default of any material liability, obligation or undertaking of the Borrower or any guarantor of
the Obligations to any other party continuing for 30 days;

 

		(d)	if any statement, representation or warranty heretofore, now or hereafter made by the Borrower
or any guarantor of the Obligations in connection with this Agreement or in any supporting financial statement of the Borrower
or any guarantor of the Obligations shall be determined by the Bank to have been false or misleading in any material respect when
made;

 

		(e)	if the Borrower or any guarantor of the Obligations is a corporation, trust, partnership or limited
liability company, the liquidation, termination or dissolution of any such organization, or the merger or consolidation of such
organization into another entity, or its ceasing to carry on actively its present business or the appointment of a receiver for
its property;

 

		(f)	the death of the Borrower or any guarantor of the Obligations and, if the Borrower or any guarantor
of the Obligations is a partnership or limited liability company, the death of any partner or member;

 

		(g)	the institution by or against
                                         the Borrower or any guarantor of the Obligations of any proceedings under the Bankruptcy
                                         Code 11 USC §101 et seq. or any other law in which the Borrower or
                                         any guarantor of the Obligations is alleged to be insolvent or unable to pay its debts
                                         as they mature, or the making by the Borrower or any guarantor of the Obligations of
                                         an assignment for the benefit of creditors or the granting by the Borrower or any guarantor
                                         of the Obligations of a trust mortgage for the benefit of creditors;

 

		(h)	the service upon the Bank of a writ in which the Bank is named as trustee of the Borrower or any
guarantor of the Obligations;

 

		(i)	a judgment or judgments for the payment of money shall be rendered against the Borrower or any
guarantor of the Obligations, and any such judgment shall remain unsatisfied and in effect for any period of thirty (30) consecutive
days without a stay of execution;

 

		(j)	any levy, lien (including mechanics lien), seizure, attachment, execution or similar process shall
be issued or levied on any of the property of the Borrower or any guarantor of the Obligations;

 

		(k)	the termination or revocation of any guaranty of the Obligations; or

 

		(I)	the occurrence of such a change in the condition or affairs (financial or otherwise) of the Borrower
or any guarantor of the Obligations, or the occurrence of any other event or circumstance, such that the Bank, in its sole discretion,
deems that it is insecure or that the prospects for timely or full payment or performance of any obligation of the Borrower or
any guarantor of the Obligations to the Bank has been or may be impaired.

 

5.2           Acceleration.
If an Event of Default shall occur, at the election of the Bank, all Obligations shall become immediately due and payable without
notice or demand, except with respect to Obligations payable on DEMAND, which shall be due and payable on DEMAND, whether or not
an Event of Default has occurred.

 

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5.3           Nonexclusive
Remedies. All of the Bank’s rights and remedies not only under the provisions of this Agreement but also under any other
agreement or transaction shall be cumulative and not alternative or exclusive, and may be exercised by the Bank at such time or
times and in such order of preference as the Bank in its sole discretion may determine.

 

6.          MISCELLANEOUS

 

6.1           Waivers.
The Borrower waives notice of intent to accelerate, notice of acceleration, notice of nonpayment, demand, presentment, protest
or notice of protest of the Obligations, and all other notices, consents to any renewals or extensions of time of payment thereof,
and generally waives any and all suretyship defenses and defenses in the nature thereof.

 

6.2           Waiver
of Homestead. To the maximum extent permitted under applicable law, the Borrower hereby Waives and terminates any homestead
rights and/or exemptions respecting any of its property under the provisions of any applicable homestead laws, including without
limitation, Utah Code 78-23-4 and hereby agrees not to file a declaration of homestead under Utah Code 78-23-4.

 

6.3           Deposit
Collateral. The Borrower hereby grants to the Bank a continuing lien and security interest in any and all deposits or other
sums at any time credited by or due from the Bank to the Borrower and any cash, securities, instruments or other property of the
Borrower in the possession of the Bank, whether for safekeeping or otherwise, or in transit to or from the Bank (regardless of
the reason the Bank had received the same or whether the Bank has conditionally released the same) as security for the full and
punctual payment and performance of all of the liabilities and obligations of the Borrower to the Bank and such deposits and other
sums may be applied or set off against such liabilities and obligations of the Borrower to the Bank at any time, whether or not
such are then due, whether or not demand has been made and whether or not other collateral is then available to the Bank.

 

6.4           Indemnification.
The Borrower shall indemnify, defend and hold the Bank and its directors, officers, employees, agents and attorneys (each an Indemnitee”)
harmless of and from any claim brought or threatened against any Indemnitee by the Borrower, any guarantor or endorser of the Obligations,
or any other person (as well as from reasonable attorneys’ fees and expenses in connection therewith) on account of the Bank’s
relationship with the Borrower, or any guarantor or endorser of the Obligations (each of which may be defended, compromised, settled
or pursued by the Bank with counsel of the Bank’s election, but at the expense of the Borrower), except for any claim arising
out of the gross negligence or willful misconduct of the Bank. The within indemnification shall survive payment of the Obligations,
and/or any termination, release or discharge executed by the Bank in favor of the Borrower.

 

6.5           Costs
and Expenses. The Borrower shall pay to the Bank on demand any and all costs and expenses (including, without limitation, reasonable
attorneys’ fees and disbursements, court costs, litigation and other expenses) incurred or paid by the Bank in establishing,
maintaining, protecting or enforcing any of the Bank’s rights or the Obligations, including, without limitation, any and
all such costs and expenses incurred or paid by the Bank in defending the Bank’s security interest in, title or right to
any collateral or in collecting or attempting to collect or enforcing or attempting to enforce payment of any Obligation.

 

6.6           Counterparts.
This Agreement may be executed in two or more counterparts, each of which shall be an original, but all of which shall constitute
but one agreement.

 

6.7           Severability.
If any provision of this Agreement or portion of such provision or the application thereof to any person or circumstance shall
to any extent be held invalid or unenforceable, the remainder of this Agreement (or the remainder of such provision) and the application
thereof to other persons or circumstances shall not be affected thereby.

 

6.8           Complete
Agreement. This Agreement and the other Loan Documents constitute the entire agreement and understanding between and among
the parties hereto relating to the subject matter hereof, and supersedes all prior proposals, negotiations, agreements and understandings
among the parties hereto with respect to such subject matter.

 

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6.9           Binding
Effect of Agreement. This Agreement shall be binding upon and inure to the benefit of the respective heirs, executors,
administrators, legal representatives, successors and assigns of the parties hereto, and shall remain in full force and
effect (and the Bank shall be entitled to rely thereon) until released in writing by the Bank. The Bank may transfer and
assign this Agreement and deliver it to the assignee, Who shall thereupon have all of the rights of the Bank; and the Bank
shall then be relieved and discharged of any responsibility or liability with respect to this Agreement. The Borrower may not
assign or transfer any of its rights or obligations under this Agreement. Except as expressly provided herein or in the other
Loan Documents, nothing, expressed or implied, is intended to confer upon any party, other than the parties hereto, any
rights, remedies, obligations or liabilities under or by reason of this Agreement or the other Loan Documents.

 

6.10           Further
Assurances. Borrower will from time to time execute and deliver to Bank such documents, and take or cause to be taken, all
such other or further action, as Bank may request in order to effect and confirm or vest more securely in Bank all rights contemplated
by this Agreement and the other Loan Documents (including, without limitation, to correct clerical errors) or to comply with applicable
statute or law.

 

6.11         Amendments
and Waivers. This Agreement may be amended and Borrower may take any action herein prohibited, or omit to perform any act herein
required to be performed by it, if Borrower shall obtain the Bank’s prior written consent to each such amendment, action
or omission to act. No course of dealing and no delay or omission on the part of Bank in exercising any right hereunder shall operate
as a waiver of such right or any other right and waiver on any one or more occasions shall not be construed as a bar to or waiver
of any right or remedy of Bank on any future occasion.

 

6.12         Terms
of Agreement. This Agreement shall continue in full force and effect so long as any Obligations or obligation of Borrower to
Bank shall be outstanding, or the Bank shall have any obligation to extend any financial accommodation hereunder, and is supplementary
to each and every other agreement between Borrower and Bank and shall not be so construed as to limit or otherwise derogate from
any of the rights or remedies of Bank or any of the liabilities, obligations or undertakings of Borrower under any such agreement,
nor shall any contemporaneous or subsequent agreement between Borrower and the Bank be construed to limit or otherwise derogate
from any of the rights or remedies of Bank or any of the liabilities, obligations or undertakings of Borrower hereunder, unless
such other agreement specifically refers to this Agreement and expressly so provides.

 

6.13         Notices.
Any notices under or pursuant to this Agreement shall be deemed duly received and effective if delivered in hand to any officer
or agent of the Borrower or Bank, or if mailed by registered or certified mail, return receipt requested, addressed to the Borrower
or Bank at the address set forth in this Agreement or as any party may from time to time designate by written notice to the other
party.

 

6.14         Governing
Law. This Agreement shall be governed by the laws of the State of Utah without giving effect to the conflicts of laws principles
thereof.

 

6.15         Reproductions.
This Agreement and all documents which have been or may be hereinafter furnished by Borrower to the Bank may be reproduced by the
Bank by any photographic, photostatic, microfilm, xerographic or similar process, and any such reproduction shall be admissible
in evidence as the original itself in any judicial or administrative proceeding (whether or not the original is in existence and
whether or not such reproduction was made in the regular course of business).

 

    	9

    	 

    

 

6.16         Jurisdiction
and Venue. Borrower irrevocably submits to the nonexclusive jurisdiction of any Federal or state court sitting in Utah, over
any suit, action or proceeding arising out of or relating to this Agreement. Borrower irrevocably waives, to the fullest extent
it may effectively do so under applicable law, any objection it may now or hereafter have to the laying of the venue of any such
suit, action or proceeding brought in any such court and any claim that the same has been brought in an inconvenient forum. Borrower
hereby consents to any and all process which may be served in any such suit, action or proceeding, (i) by mailing a copy thereof
by registered and certified mail, postage prepaid, return receipt requested, to the Borrower’s address shown in this Agreement
or as notified to the Bank and (ii) by serving the same upon the Borrower in any other manner otherwise permitted by law, and agrees
that such service shall in every respect be deemed effective service upon Borrower.

 

6.17         JURYWAIVER.
THE BORROWER AND BANK EACH HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY, AND AFTER AN OPPORTUNITY TO CONSULT WITH LEGAL COUNSEL,
(A) WAIVE ANY AND ALL RIGHTS TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING IN CONNECTION WITH THIS AGREEMENT, THE OBLIGATIONS,
ALL MATTERS CONTEMPLATED HEREBY AND DOCUMENTS EXECUTED IN CONNECTION HEREWITH AND (B) AGREE NOT TO SEEK TO CONSOLIDATE ANY SUCH
ACTION WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE, OR HAS NOT BEEN, WAIVED. THE BORROWER CERTIFIES THAT NEITHER THE
BANK NOR ANY OF ITS REPRESENTATIVES, AGENTS OR COUNSEL HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE BANK WOULD NOT IN THE
EVENT OF ANY SUCH PROCEEDING SEEK TO ENFORCE THIS WAIVER OF RIGHT TO TRIAL BY JURY.

 

	Executed as of July 3, 2012.	 	 
	 	 	 
	Witness:	 	Borrower:
	 	 	Superior Drilling Products, LLC
	 	 	 	 
	Miranda Stumph	 	By:	/s/ Annette D Meier
	 	 	 	Annette D Meier, Member

 

	Accepted: Proficio Bank	 
	 	 
	By:	/s/ Brett Smiley	 
	Name: Brett Smiley	 
	Title: VP / SBA Business Development	 

 

	Loan Agreement - Obligor 2	© 2012 Medici, a division of Welters Kluwer Financial Services

 

    	10

    	 

    

 

LOSS PAYMENT ENDORSEMENT

 

Endorsement to be
attached to and made a part of policy No._________________ dated ______________, of the __________________________ (Insurance
Company), issued to Meier Properties, Series LLC, herein called the named insured.

 

Loss, if any, under
this policy shall be payable to Proficio Bank (the “Beneficiary”), with a principal place of business at 6985 Union
Park Center, Suite 150, Cottonwood Heights, Utah, as lender, pledgee, mortgagee, lienor, security interest holder, entruster, owner
or in any other capacity in which it holds an insurable interest, as its interest may appear. It is understood that the Beneficiary
now has or will acquire, from time to time hereafter, an insurable interest in property insured under this policy, which interest
will be established by written evidence, including without limitation warehouse receipts, bills of lading, assignments, mortgages,
pledges, factoring agreements, accounts receivable financing agreements, security interest agreements, factors lien agreements,
other agreements or documents, financing statements, trust receipts or records maintained by the Beneficiary.

 

This insurance, solely
as to the interest of the Beneficiary therein, shall not be impaired or invalidated, in whole or in part, by reason of any act
or neglect of the named insured or any subsequent owner of any of the property insured under this policy, or by any change in the
title of ownership of such property, or by the occupation of the premises wherein such property is located or by any breach of
or failure to comply with any warranty or condition of the policy over which the Beneficiary has no control. This policy shall
not be canceled or materially changed as to the interest of the Beneficiary, unless at least Thirty (30) days (or in case of war
risk coverage, at least two days) prior written notice of such cancellation or change has been given to the Beneficiary. The Beneficiary
shall have the right, but only if it so elects, to pay any premium which may be or become due under this policy; but shall not,
in any event, have the obligation to do so or any obligation or liability therefor. All other terms and conditions of the policy
to which this endorsement is attached and of which it is a part remain unchanged. This endorsement cannot be changed or terminated
orally.

 

	 	 	 	 
	Date	 	Insurance CompanyExhibit 10.39

 

		
        U.S.
        Small Business Administration

         

        Unconditional
        Guarantee 

  

	SBA Loan #	65911350-04
	 	 
	SBA Loan Name	Superior Drilling, LLC
	 	 
	Guarantor	Meier Family Holding Co, LLC
	 	 
	Borrower	Superior Drilling Products, LLC, Meier Leasing, LLC and Meier Management Company, LLC
	 	 
	Lender	Proficio Bank
	 	 
	Date	December 30, 2013
	 	 
	Note Amount	$627, 000.00

 

		1.	GUARANTEE:

 

Guarantor
unconditionally guarantees payment to Lender of all amounts owing under the Note. This Guarantee remains in effect until the Note
is paid in full. Guarantor must pay all amounts due under the Note when Lender makes written demand upon Guarantor. Lender is not
required to seek payment from any other source before demanding payment from Guarantor.

 

		2.	NOTE:

 

The
“Note” is the promissory note dated December, 2013 in
the principal amount of Six Hundred Twenty-Seven Thousand Dollars and
Zero Cents Dollars, from Borrower to Lender. It
includes any assumption, renewal, substitution, or replacement of the Note, and multiple notes under a line of
credit.

 

		3.	DEFINITIONS:

 

“Collateral”
means any property taken as security for payment of the Note or any guarantee of the Note.

“Loan”
means the loan evidenced by the Note.

“Loan
Documents” means the documents related to the Loan signed by Borrower, Guarantor or any other guarantor, or anyone who pledges
Collateral.

“SBA”
means the Small Business Administration, an Agency of the United States of America.

 

    	SBA Form 148 (10/98) Previous editions obsolete	Page 1/4

    	 

    

 

		4.	LENDER’S GENERAL POWERS:

 

Lender
may take any of the following actions at any time, without notice, without Guarantor’s consent, and without making demand
upon Guarantor:

 

		A.	Modify the terms of the Note or any other Loan Document
except to increase the amountsdue under the Note;

 

		B.	Refrain from taking any action on the Note, the Collateral,
or any guarantee;

 

		C.	Release any Borrower or any guarantor of the Note;

 

		D.	Compromise or settle with the Borrower or any guarantor
of the Note;

 

		E.	Substitute or release any of the Collateral, whether
or not Lender receives anything in return;

 

		F.	Foreclose upon or otherwise obtain, and dispose of, any Collateral at public or private sale, with
or without advertisement;

 

		G.	Bid or buy at any sale of Collateral by Lender or any
other lienholder, at any price Lender chooses; and

 

		H.	Exercise any rights it has, including those in the Note
and other Loan Documents.

 

These
actions will not release or reduce the obligations of Guarantor or create any rights or claims against Lender.

 

		5.	FEDERAL LAW:

 

When
SBA is the holder, the Note and this Guarantee will be construed and enforced under federal law, including SBA regulations. Lender
or SBA may use state or local procedures for filing papers, recording documents, giving notice, foreclosing liens, and other purposes.
By using such procedures, SBA does not waive any federal immunity from state or local control, penalty, tax, or liability. As to
this Guarantee, Guarantor may not claim or assert any local or state law against SBA to deny any obligation, defeat any claim of
SBA, or preempt federal law.

 

		6.	RIGHTS, NOTICES, AND DEFENSES THAT GUARANTOR WAIVES:

 

To
the extent permitted by law,

 

		A.	Guarantor waives all rights to:

 

		1)	Require presentment, protest, or demand upon Borrower;

		2)	Redeem any Collateral before or after Lender disposes
of it;

		3)	Have any disposition of Collateral advertised; and

		4)	Require a valuation of Collateral before or after Lender
disposes of it.

 

		B.	Guarantor waives any notice of:

 

		1)	Any default under the Note;

		2)	Presentment, dishonor, protest, or demand;

		3)	Execution of the Note;

		4)	Any action or inaction on the Note or Collateral, such as disbursements, payment, nonpayment, acceleration,
intent to accelerate, assignment, collection activity, and incurring enforcement expenses;

		5)	Any change in the financial condition or business operations
of Borrower or any guarantor;

		6)	Any changes in the terms of the Note or other Loan Documents, except increases in the amounts due
under the Note; and

		7)	The time or place of any sale or other disposition of
Collateral.

 

		C.	Guarantor waives defenses based upon any claim that:

 

		1)	Lender failed to obtain any guarantee;

		2)	Lender failed to obtain, perfect, or maintain a security
interest in any property offered or taken as Collateral;

		3)	Lender or others improperly valued or inspected the Collateral;

		4)	The Collateral changed in value, or was neglected, lost,
destroyed, or underinsured;

 

    	SBA Form 148 (10/98) Previous editions obsolete	Page 2/4

    	 

    

 

		5)	Lender impaired the Collateral;

		6)	Lender did not dispose of any of the Collateral;

		7)	Lender did not conduct a commercially reasonable sale;

		8)	Lender did not obtain the fair market value of the Collateral;

		9)	Lender did not make or perfect a claim upon the death or disability of Borrower or any guarantor of
the Note;

		10)	The financial condition of Borrower or any guarantor was overstated or has adversely changed;

		11)	Lender made errors or omissions in Loan Documents or administration of the Loan;

		12)	Lender did not seek payment from the Borrower, any other guarantors, or any Collateral before demanding
payment from Guarantor:

		13)	Lender impaired Guarantor’s suretyship rights;

		14)	Lender modified the Note terms, other than to increase amounts due under the Note. If Lender modifies
the Note to increase the amounts due under the Note without Guarantor’s consent, Guarantor will not be liable for the increased
amounts and related interest and expenses, but remains liable for all other amounts;

		15)	Borrower has avoided liability on the Note; or

		16)	Lender has taken an action allowed under the Note, this Guarantee, or other Loan Documents.

 

		7.	DUTIES AS TO COLLATERAL:

 

Guarantor
will preserve the Collateral pledged by Guarantor to secure this Guarantee. Lender has no duty to preserve or dispose of any Collateral.

 

		8.	SUCCESSORS AND ASSIGNS:

 

Under
this Guarantee, Guarantor includes heirs and successors, and Lender includes its successors and assigns.

 

		9.	GENERAL PROVISIONS:

 

		A.	ENFORCEMENT EXPENSES. Guarantor promises to pay all expenses Lender incurs to enforce this Guarantee,
including, but not limited to, attorney’s fees and costs.
	 	 	 

		B.	SBA NOT A CO-GUARANTOR. Guarantor’s liability will continue even if SBA pays Lender. SBA is
not a co-guarantor with Guarantor. Guarantor has no right of contribution from SBA.
	 	 	 

		C.	SUBROGATION RIGHTS. Guarantor has no subrogation rights as to the Note or the Collateral until the
Note is paid in full.
	 	 	 

		D.	JOINT AND SEVERAL LIABILITY. All individuals and entities signing as Guarantor are jointly and severally
liable.
	 	 	 

		E.	DOCUMENT SIGNING. Guarantor must sign all documents necessary at any time to comply with the Loan
Documents and to enable Lender to acquire, perfect, or maintain Lender’s liens on Collateral.
	 	 	 

		F.	FINANCIAL STATEMENTS. Guarantor must give Lender financial
statements as Lender requires.
	 	 	 

		G.	LENDER’S RIGHTS CUMULATIVE, NOT WAIVED. Lender may exercise any of its rights separately
or together, as many times as it chooses. Lender may delay or forgo enforcing any of its rights without losing or impairing any
of them.
	 	 	 

		H.	ORAL STATEMENTS NOT BINDING. Guarantor may not use an oral statement to contradict or alter the written
terms of the Note or this Guarantee, or to raise a defense to this Guarantee.
	 	 	 

		I.	SEVERABILITY. If any part of this Guarantee is found
to be unenforceable, all other parts will remain in effect.
	 	 	 

		J.	CONSIDERATION. The consideration for this Guarantee is
the Loan or any accommodation by Lender as to the Loan.

 

    	SBA Form 148 (10/98) Previous editions obsolete	Page 3/4

    	 

    

 

		10.	STATE-SPECIFIC PROVISIONS:

  

	
         

         

         

         

         

         

         

         

         

 

    	SBA Form 148 (10/98) Previous editions obsolete	Page 4/4

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