Exhibit 10.4

PROMISSORY NOTE

 

$2,250,000.00

Oklahoma City, Oklahoma

 

May 6, 2009

 

For value received, the undersigned, The Beard Company, an Oklahoma corporation
(the “Maker”), agrees to all of the terms of this Promissory Note (this “Note”)
and promises to pay to the order of William M. Beard and Lu Beard as Trustees of
the William M. Beard and Lu Beard 1988 Charitable Unitrust (individually and
collectively called the “Holder”), at Harvey Parkway, 301 N.W. 63rd Street,
Oklahoma City, Oklahoma 73116, or at such other place as may be designated in
writing by the Holder of this Note, the principal sum of Two Million Two Hundred
Fifty Thousand and 00/100ths Dollars ($2,250,000.00) plus all interest accruing
thereon. This Note will be payable as follows:

 

Prior to Default the unpaid principal balance of this Note will bear interest at
the rate of ten percent (10%) (the “Applicable Rate”). Interest will commence to
accrue on the unpaid principal balance of this Note on the date hereof and
thereafter until this Note is paid in full. Interest will be computed for the
actual number of days elapsed at a per diem charge based on a year consisting of
three hundred sixty (360) days. All payments will be applied first to any
accrued interest on this Note and the remainder to the principal balance of the
Note. The outstanding principal balance plus unpaid accrued interest are due and
payable on April 1, 2011.

 

Except as otherwise defined herein, all terms defined in the Restated and
Amended Letter Loan Agreement dated May 6, 2009, between the Maker and the
Holder (the “Loan Agreement”) will have the same meanings as therein, and the
Holder recognizes that it is subject to all of the provisions set forth in the
Loan Agreement. Both principal and interest owing pursuant to the terms of this
Note are payable in the lawful currency of the United States of America and in
immediately available funds. All payments made on this Note will be applied to
this Note when received by the Holder hereof in collected funds. Any sum not
paid when due will bear interest at the rate equal to the Applicable Rate plus
five percent (5.0%) and will be paid at the time of, and as a condition
precedent to, the curing of any Event of Default. During the existence of any
Event of Default, the Holder of this Note may apply payments received on any
amount due hereunder or under the terms of any instrument hereafter evidencing
or securing said indebtedness as the Holder may determine.

 

/s/ HMJr

Page 1 of 3 Pages

 

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The Maker agrees that if, and as often as, this Note is placed in the hands of
an attorney for collection or to defend or enforce any of the Holder’s rights
hereunder, the Maker will pay to the Holder all reasonable attorney’s fees and
all expenses incurred by the Holder in connection therewith.

 

THIS NOTE IS GIVEN BY THE MAKER AND ACCEPTED BY THE HOLDER PURSUANT TO A LENDING
TRANSACTION CONTRACTED, CONSUMMATED, AND TO BE PERFORMED IN OKLAHOMA CITY,
OKLAHOMA COUNTY, OKLAHOMA, AND THIS NOTE SHALL BE CONSTRUED ACCORDING TO THE
LAWS OF THE STATE OF OKLAHOMA. In the event of any Event of Default, the Holder
may request, and the Maker agrees to furnish to the Holder, agreeable collateral
and such security agreements as the Maker may reasonably require to secure the
indebtedness.

 

This Note is issued subject to the terms of the Loan Agreement. On the breach of
any provision of this Note, or any provision of the Loan Agreement, at the
option of the Holder the entire unpaid indebtedness evidenced by this Note will
become due, payable and collectible then or thereafter as the Holder may elect,
regardless of the date of maturity of this Note. Notice of the exercise of such
option is hereby expressly waived. Failure by the Holder to exercise such option
will not constitute a waiver of the right to exercise the same in the event of
any subsequent default.

The failure of the Holder to exercise any of the remedies or options set forth
in this Note, or in any instrument securing payment hereof, upon the occurrence
of one or more Events of Default, shall not constitute a waiver of the right to
exercise the same or any other remedy at any subsequent time in respect to the
same or any other Event of Default. The acceptance by the Holder of any payment
which is less than the total of all amounts due and payable at the time of such
payment shall not constitute a waiver of the right to exercise any of the
foregoing remedies or options at that time or any subsequent time, or nullify
any prior exercise of such remedy or option, without the express consent of the
Holder.

 

Time is of the essence of each obligation of the Maker hereunder.

The makers, endorsers, sureties, guarantors and all other persons who may become
liable for all or any part of this obligation severally waive presentment for
payment, protest, demand and notice of nonpayment. Said parties consent to any
extension of time (whether one or more) of payment hereof, the modification
(whether one or more) of payment hereof, release or substitution of all or part
of the security for the payment hereof or release of any party liable for
payment of this obligation. Any such extension or release may be made without
notice to any such party and without discharging such party’s liability
hereunder.

The Maker has the right to prepay this Note in whole or in part at any time and
from time to time without premium or penalty, but with accrued interest to the
date of the prepayment on the amount prepaid.

/s/ HMJr

Page 2 of 3 Pages

 

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The Maker waives presentment for payment, protest and notice of nonpayment.

 

IN WITNESS WHEREOF, the Maker has executed this instrument effective on the date

first above written.

 

ATTEST:

THE BEARD COMPANY

 

 

/s/  Hue Green

/s/  Herb Mee, Jr.

Hue Green, Secretary

Herb Mee, Jr., President

 

/s/ HMJr

Page 3 of 3 Pages