Exhibit 10.1
AMENDED AND RESTATED PROMISSORY NOTE
| $12,500,000.00 |
April 20,
2015 |
WHEREAS, the Maker
(as defined below) previously executed that certain Promissory Note dated May 9, 2014, in the principal amount of Twelve Million
Five Hundred Thousand Dollars ($12,500,000.00) for the benefit of the Payee (as defined below) (the “Initial Note”);
and
WHEREAS, the Maker
and the Payee desire to amend and restate the Initial Note to, among other things, change the repayment schedule and the interest
rate;
NOW, THEREFORE, the
Initial Note is hereby amended and restated in its entirety to read as follows:
FOR VALUE RECEIVED,
the undersigned, HARD ROCK SOLUTIONS, LLC, a Utah limited liability company with its principal place of business at 2221 N. 3250
W. Vernal, Utah 84078 and SUPERIOR DRILLING SOLUTIONS, LLC, f/k/a Superior Drilling Products, LLC, a Utah limited liability company
with its principal place of business at 2221 N. 3250 W. Vernal, Utah 84078, (hereinafter collectively the “Maker”),
hereby promise to pay to the order of WMAFC, INC, f/k/a HARD ROCK SOLUTIONS, INC., a Texas corporation with its principal place
of business at 7507 County Road 72, Windsor, Colorado 80550 (the “Payee”), the principal sum of Twelve Million
Five Hundred Thousand and No/00 Dollars ($12,500,000.00) together with interest on the outstanding balance of the principal sum
at the rates and commencing at the times and pursuant to the terms hereinafter provided until this promissory note (“Promissory
Note”) is paid in full.
1. Terms. Capitalized
terms used herein without definition have the meanings ascribed to them in that certain Membership Interest Purchase Agreement
dated January 28, 2014 by and between Maker, Payee and James D. Isenhour, an individual (the “Purchase Agreement”).
2. Principal and Interest.
This Promissory Note shall bear interest from the date hereof until May 29, 2015 (for the actual number of days occurring in the
period for which interest is payable) at an adjustable interest rate per annum equal to the Prime Rate in effect. The term “Prime
Rate” shall mean the annual rate of interest specified by JP Morgan Chase Bank, N.A., as its prime rate, which may change
from time to time. Any change in the interest rate payable hereunder will take effect on the date of the change to the Prime Rate.
Commencing on May 29, 2015, the forgoing Prime Rate shall no longer apply and this Promissory Note shall forevermore bear interest
at a fixed interest rate equal to 5.25% per annum (“Fixed Rate”). All accrued and unpaid interest on this Promissory
Note shall be due and payable by Maker to Payee as follows:
(i)
Commencing on May 29, 2015, a principal payment of $2,500,000.00 plus accrued interest at the Prime Rate in effect for the period;
(ii)
Commencing on January 15, 2016, a principal payment of $2,500,000.00 plus accrued interest at the Fixed Rate in effect for the
period;
(iii)
Commencing on July 15, 2016, a principal payment of $2,500,000.00 plus accrued interest at the Fixed Rate in effect for the period;
(iv)
Commencing on January 16, 2017, a principal payment of $2,500,000.00 plus accrued interest at the Fixed Rate in effect for the
period; and
(v)
On July 14, 2017, the final payment of the entire remaining principal balance of this Promissory Note in the amount of $2,500,000.00
plus accrued interest at the Fixed Rate in effect for the period is due in full.
3. Maturity
Date. The entire outstanding principal balance of this Promissory Note, together with all accrued but unpaid interest thereon,
shall be due and payable in full on July 14, 2017 (or, if such date is not a business day, then on the immediately preceding business
day), or upon any earlier acceleration of the Maker’s obligations hereunder, unless such obligations are earlier satisfied
in accordance with the terms hereof.
4. Default. If
Maker fails to pay, within fifteen (15) days, any principal of or interest on this Promissory Note when due (“Default”),
the holder of this Promissory Note or any part thereof may thereafter provide Maker written notice of the Default, and if Maker
continues to be in Default for thirty (30) days or more after receipt of written notice, Payee may declare the principal balance
hereof and the interest accrued hereon to be immediately due and payable.
A default under the
terms of the Security and Pledge Agreement securing this Promissory Note (hereinafter “Security Agreement”)
also is a default under this Promissory Note. If Maker is in default under the terms of the Security Agreement, Payee shall provide
Maker with written notice specifying such default and allow thirty (30) days from receipt of said notice to cure the default. Maker
shall not be in default under the terms of the Security Agreement until such notice has been given and Maker has failed to cure
the default within the thirty (30) day grace period. In the event of a default under the Security Agreement which is not cured
within the time period specified herein, Payee, at Payee’s option, may also accelerate the entire balance of this Promissory
Note.
If Payee elects to
accelerate the balance of this Promissory Note as permitted herein, the entire balance of principal, together with interest to
the date of default and all other amounts due under this Note or the Security Agreement shall, from the date of default, bear interest
at the rate of nine percent (9.00%) per annum (“Default Interest Rate”), and all such amounts shall be immediately
due and payable in full. Interest shall continue to accrue on the full amount of principal, interest and such other amounts due
as of the default date until the default has been cured. The Payee shall have the right to recover from Maker an additional amount
equal to Payee's reasonable costs in enforcing this Promissory Note and the Security Agreement in the event of default, including
reasonable attorney's fees and other costs related to the default, whether or not suit is commenced, and whether or not Payee elects
to accelerate the balance. All such reasonable fees and costs must be paid before a default will be cured.
4. Prepayment.
Maker may, at any time, prepay the outstanding balance of principal and interest due under this Promissory Note in whole or in
part, without premium or penalty. In the event of prepayment, there shall become due and payable an amount equal to all accrued
interest attributable to that portion of the outstanding principal balance of the Promissory Note being prepaid at that time. Partial
prepayments shall not defer the due dates for, or the amounts of, succeeding payments.
5. Payments and Computations.
All payments on account of indebtedness evidenced by this Promissory Note shall be made on the day when due in lawful money of
the United States. Payments are to be made at such place as Payee or the legal holders of this Promissory Note may, from time to
time, in writing appoint, and in the absence of such appointment, then at the place provided in the Notice section of the Purchase
Agreement.
6. Applicable
Law. Maker represents and agrees that this instrument and the rights and obligations of all parties hereunder shall be
governed by and construed under the laws of the State of Colorado without regard to the conflicts of law principles.
7. Severability.
The parties hereto intend and believe that each provision in this Promissory Note comports with all applicable local, state and
federal laws and judicial decisions. However, if any provision or provisions, or if any portion of any provision or provisions,
of this Promissory Note is found by a court of law to be in violation of any applicable local, state or federal ordinance, statute,
law, administrative or judicial decision, or public policy, and if the court should declare that portion, provision or provisions
to be illegal, invalid, unlawful, void or unenforceable as written, then it is the intent of Maker and Payee that such portion,
provision or provisions be given force to the fullest possible extent that they are legal, valid and enforceable, that the remainder
of this Promissory Note shall be construed as if the illegal, invalid, unlawful, void or unenforceable portion, provision or provisions
were not contained herein, and that the rights, obligations and interest of Maker and Payee or the legal holders hereof under the
remainder of this Promissory Note shall continue in full force and effect.
8. Maximum
Interest. Payee and Maker intend to contract in strict compliance with applicable usury law from time to time in effect.
In furtherance thereof Payee and Maker hereby stipulate and agree that none of the terms and provisions contained herein shall
ever be construed to create a contract to pay, for the use, forbearance or detention of money, interest in excess of the maximum
amount of interest permitted to be charged by applicable law from time to time in effect. Neither Maker nor any present or future
guarantors, endorsers, or other Persons hereafter becoming liable for payment of any indebtedness hereunder shall ever be liable
for unearned interest thereon or shall ever be required to pay interest thereon in excess of the maximum amount that may be lawfully
contracted for, charged, or received under applicable law from time to time in effect, and the provisions of this section shall
control over all other provisions hereof which may be in conflict or apparent conflict herewith. Payee expressly disavows any intention
to contract for, charge, collect or receive excessive or unearned interest or finance charges in the event the maturity of any
indebtedness hereunder is accelerated or upon the occurrence of any other event. If the maturity of any indebtedness hereunder
is accelerated for any reason, any such indebtedness is prepaid and as a result any amounts that constitute interest are in excess
of the legal maximum, or Payee or any other holder of any or all of the indebtedness hereunder shall otherwise charge, receive,
or collect, or any Person shall pay, moneys which would otherwise increase the interest on any or all of the indebtedness hereunder
to an amount in excess of that permitted by applicable law then in effect, then all sums that constitute interest in excess of
such legal limit shall, without penalty, be promptly applied to reduce the then outstanding principal of the related indebtedness
or, at Payee’s or holder’s option, promptly returned to Maker or the other payor thereof, as applicable, upon such
determination. In determining whether or not the interest paid or payable, under any specific circumstance, exceeds the maximum
amount permitted under applicable law, Payee and Maker (and any other payors thereof) shall to the greatest extent permitted under
applicable law, characterize any non-principal payment as an expense, fee or premium rather than as interest, exclude voluntary
prepayments and the effects thereof, and amortize, prorate, allocate, and spread the total amount of interest throughout the entire
contemplated term of the instruments evidencing the indebtedness hereunder in accordance with the amounts outstanding from time
to time thereunder and the maximum legal rate of interest from time to time in effect under applicable law in order to lawfully
contract for, charge, collect, or receive the maximum amount of interest permitted under applicable law. As used in this section
the term “applicable law” means the laws of the State of Colorado including the Laws of the United States of America,
as such Laws now exist or may be changed or amended or come into effect in the future.
9. Purchase
Agreement. This Promissory Note is the Note referred to in the Purchase Agreement. Payment of this Promissory Note is subject
to the Purchase Agreement and the parties hereto agree that this Promissory Note shall not be effective until the occurrence of
the Closing and the satisfaction of any obligations as specifically set forth in the Purchase Agreement.
10. Assignment.
Payee may assign this Promissory Note in whole or in part or any right to the proceeds hereof, provided that Payee gives Maker
prior written notice of any such assignment.
11. Notices.
All notices and other communications provided for hereunder shall be in writing (including facsimile communication) and mailed,
telegraphed, telecopied or delivered to the addresses provided for in the Purchase Agreement or, as to each party, at such other
address as designated by that party in a written notice to the other party. All notices and communications shall be deemed to have
been validly served, given or delivered (i) three (3) business days following deposit in the United States mail, with proper postage
prepaid; (ii) upon delivery if delivered by hand to the party to be notified; or (iii) the following day if sent by facsimile transmission.
12. Waiver.
Maker and-all parties now or hereafter liable for the payment hereof, whether as endorser, guarantor, surety or otherwise, generally
waive demand, presentment for payment, notice of dishonor, protest and notice of protest, notice of intent to accelerate and notice
of acceleration, and diligence in collecting or bringing suit against any party hereto, and agree to all extensions, renewals,
indulgences, releases or changes which from time to time may be granted by the holder hereof and to all partial payments hereon,
with or without notice before or after maturity.
13. Attorney’s
Fees. Should the indebtedness represented by this Promissory Note or any part hereof be collected at law or in equity or
through any bankruptcy, receivership, probate or other court proceedings or if this Promissory Note is placed in the hands of attorneys
for collection after any default, Payee and all endorsers, guarantors and sureties of this Promissory Note jointly and severally
agree to pay to the holder of this Promissory Note in addition to the principal and interest due and payable hereon all the costs
and expenses of said holder in enforcing this Promissory Note including, without limitation, reasonable attorneys’ fees and
legal expenses.
14. Collateral.
This Promissory Note is secured by a first lien security interest in all of the collateral described in the Security Agreement.
15. Promissory
Note. This Promissory Note shall constitute a modification and a renewal of the Initial Note, and shall supersede the Initial
Note.
Time is of the essence as to all dates set
forth herein.
[Signature page
follows]
Maker has executed
and delivered this Promissory Note as of the day and year first set forth above.
| MAKER: |
HARD ROCK SOLUTIONS, LLC |
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a Utah limited liability company |
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By Its Manager: |
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Superior Drilling Solutions, LLC f/k/a Superior Drilling
Products, LLC, |
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a Utah limited liability company |
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By: /s/ Troy Meier |
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Troy Meier, President |
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SUPERIOR DRILLING SOLUTIONS, LLC f/k/a Superior Drilling
Products, LLC, |
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a Utah limited liability company |
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By: /s/ Troy Meier |
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Troy Meier, President |
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| AGREED TO AND ACCEPTED on this 22nd day of April, 2015. |
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WMAFC, INC. f/k/a HARD ROCK SOLUTIONS, INC., |
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a Texas corporation |
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By: /s/ James D. Isenhour |
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James D. Isenhour, President |
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