Exhibit 10.3


         


        May 6, 2009 


        RESTATED AND AMENDED


        LETTER LOAN AGREEMENT


         


        The Beard Company


        Harvey Parkway


        301 N.W. 63rd Street, Suite 400


        Oklahoma City, Oklahoma 73116


         


        Gentlemen:


         


        This Restated and Amended Letter Loan Agreement (this “Agreement”) amends and restates the previous Restated and Amended Letter Loan Agreement between the parties hereto dated March 26, 2004, as amended by the parties on June 25, 2004, and as further restated and amended by the parties on April 1, 2005, on March 3, 2006, on June 13, 2007, and on March 25, 2008.
        


         


        This Agreement sets forth the terms and conditions under which we have agreed to extend the maturity date of the current unpaid balance of $2,250,000.00 of the loan previously made to you in the principal amount of $3,000,000.00 (the “Loan”), which is no longer a revolving loan. Accordingly, as payments are made on the Loan, additional advances will no longer be permitted.


         


        
            	
                        1.     LENDER:

                    	
                        The William M. Beard and Lu Beard

                    


        


        1988 Charitable Unitrust (the “Unitrust”).


         


        
            	
                        2.  

                    	
                        BORROWER:

                    	
                        The Beard Company (the “Company”).

                    


        


         


        
            	
                        3.     AMOUNT:

                    	
                        $2,250,000.00. The Loan shall be evidenced by a promissory note in the amount of $2,250,000.00 dated as of this date (the “Note”). The Borrower shall be permitted to make prepayments without penalty up to the amount of the Note.

                    


        


         


        
            	
                        4.  

                    	
                        INTEREST RATE:

                    	
                        A fixed rate of 10.00%.

                    


        


         


        
            	
                        5.     REPAYMENT:

                    	
                        The outstanding principal balance (the “Indebtedness”) plus unpaid accrued interest shall be due and payable on April 1, 2011.

                    


        


         


        
            

        


        
            	
                        6.  

                    	
                        COLLATERAL:

                    	
                        None.

                    


        


         


        Prior to the date of this Agreement, the Loan has been secured by various Deeds of Trust in favor of Lender and other lenders (collectively, the “Lenders”) covering Borrower’s working and overriding royalty interests in the McElmo Dome Unit in Montezuma and Dolores Counties of Colorado (the “Interests”). Effective as of this date the Borrower has sold all of
        its rights, title and interest in and to the Interests, and Lenders have agreed to release such Deeds of Trust. Borrower and Lender have now agreed that Borrower shall henceforth be unsecured.


         


        
            	
                        7.     COVENANT:

                    	
                        Until the Indebtedness has been paid in full, the Borrower will not sell, transfer, convey or otherwise dispose of, all or a substantial portion of its assets now owned or hereafter acquired, whether pursuant to a single transaction or a series of transactions, and the Borrower will not merge or consolidate with any person or entity or permit any such
                        merger or consolidation with the Borrower. This paragraph specifically excludes (i) asset sales incurred in the normal course of business and (ii) the sale of the Interests being made by Borrower concurrently herewith.

                    


        


         


        It is the desire of Lender that the Indebtedness be converted to an amortizing loan when Borrower has demonstrated the financial capability to commence periodic payments of principal and interest totaling at least $100,000 per quarter. Accordingly, Borrower has agreed that it will meet with Lender annually to review Borrower’s financial progress. No amortization will be required until
        both parties have agreed to same. The sole purpose of this paragraph is to recognize Lender’s desire that, at some point, a meaningful amortization of the Loan is desired.


         


        
            	
                        8.

                    	
                        EVENTS OF

                    


        


        
            	
                         

                    	
                        DEFAULT:

                    	
                        If any of the following conditions or events (“Events of Default”) shall occur and be continuing:

                    


        


         


        
            	
                         

                    	
                        A.

                    	
                        Failure of the Borrower to pay when due any amounts, including principal or interest on the Note (whether at the stated maturity, upon acceleration or otherwise).

                    


        


         


        
            	
                         

                    	
                        B.

                    	
                        Any Event of Default as specified in the Note

                    


        


         


        
            	
                         

                    	
                        C.

                    	
                        Any default or breach in the performance of any covenant, obligation, representation, warranty or provision contained in this Agreement, or in the Note or in any other note or obligation of Borrower to the Unitrust.

                    


        


         


        
            

        


         


        
            	
                         

                    	
                        D.

                    	
                        The Borrower shall: (i) apply for or consent to the appointment of a custodian, receiver, trustee or liquidator of the Borrower or any of its properties, (ii) admit in writing the inability to pay, or generally fail to pay, its debts when they come due, (iii) make a general assignment for the benefit of creditors, (iv) commence any proceeding relating to
                        the bankruptcy, reorganization, liquidation, receivership, conservatorship, insolvency, readjustment of debt, dissolution or liquidation of the Borrower, or if corporate action should be taken by the Borrower for the purpose of effecting any of the foregoing, (v) suffer any such appointment or commencement of a proceeding as described in clause (i) or (iv) of this paragraph, which appointment or proceeding is not terminated or discharged within 60 days, or (vi) become
                        insolvent.

                    


        


         


        THEN upon the occurrence of any Event of Default described in the foregoing paragraphs the unpaid principal amount of and accrued interest on the Loan shall automatically become immediately due and payable, without presentment, demand, protest or other requirements of any kind, all of which are hereby expressly waived by Borrower.


         


        If the foregoing terms and conditions are acceptable to you, please acknowledge your agreement by signing below and returning one copy of this Letter Loan Agreement to us.


         


        Sincerely,


         


        
            	
                        LENDER:

                    	
                         

                    
	
                         

                    	
                         

                    
	
                        THE WILLIAM M. BEARD AND LU BEARD 1988 CHARITABLE UNITRUST

                    	
                         

                    
	
                         

                    	
                         

                    
	
                        /s/  William M. Beard

                    	
                        /s/  Lu Beard

                    
	
                        William M. Beard, Trustee

                    	
                        Lu Beard, Trustee

                    


        


         


        Accepted effective this 6th day of May, 2009


         


        BORROWER:


         


        THE BEARD COMPANY


        
            	
                        /s/ Herb Mee, Jr.  

                    


        


        Herb Mee, Jr., President