Document:

EXHIBIT 10.2

                                        Franklin , Indiana        April 22, 2005
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PROPOSITION                             J. Andrew Woods, Seller
                                        ----------------------------------------
                                        Mutual Savings Bank, Purchaser

     The  undersigned,   hereinafter  called  purchaser,  having  inspected  the
premises and relying entirely for its condition upon his own examination  hereby
agrees to purchase from the owner  through you as his broker the property  known
as 72 East Jefferson  Street  located in the City of Franklin  County of Johnson
State of Indiana.  Purchaser  hereby further agrees to pay for said property the
sum of Two Hundred Fifteen  Thousand and no/100  ($215,000.00)  Dollars upon the
following terms and or conditions, viz:

     -    inspection of real estate  (mechanical,  electrical,  plumbing,  roof,
          etc.) at  purchasers  expense

     -    a satisfactory review by purchaser's architect that ground level floor
          is consistent with that of purchaser's adjacent property

     -    satisfaction  by  purchaser  that no  environmental  issues  exist  at
          subject property

     -    all internal furnishings: (furniture and pictures) remain the property
          of the seller and are not included in this transaction

     -    closing costs to be paid by purchaser

All risk of loss  shall  be borne by  Seller  until  time of  transfer  of title
Purchaser to have complete possession 30 days after closing.

Rents,  if any, to be prorated to date of closing.  Insurance  to be  (prorated)
(cancelled) at date of closing.

Interest on encumbrances assumed by the buyer to be prorated to date of closing.

Taxes on said real estate shall be handled in  accordance  with  paragraph #2 as
hereinafter set forth:

No. 1     Purchaser  will assume and agree to pay all  installments  of taxes on
          said real estate  beginning  with the  installment  due and payable in
          _______________, 19____, and all installments subsequent thereto.

No. 2     All taxes assessed for any prior  calendar year and remaining  unpaid,
          shall  be paid by  seller,  and all  taxes  assessed  for the  current
          calendar  year  shall  be  prorated  between  seller  and  buyer  on a
          calendar-year  basis  as of the day  immediately  prior to the date of
          closing this  transaction.  If the tax rate for taxes  assessed in the
          current  year  has  not  been   determined   at  the  closing  of  the
          transaction,  said rate to be assumed to be the same as the prior year
          for the purpose of such proration.

Purchaser  will  assume  and  agree  to  pay  all   assessments   for  municipal
improvements which are completed after date of this Proposition.

Purchaser shall be furnished,  at seller's  expense a complete and  merchantable
abstract of title to date as quickly as the same can be prepared,  said abstract
to show a merchantable or insurable title to said real estate in the name of the
grantors who will execute a general  warranty deed conveying said real estate in
the same condition as it now is, ordinary wear and tear excepted, free and clear
of  all  liens  and  encumbrances   except  as  stated  herein  and  subject  to
restrictions  and easements of record,  if any. If said abstract fails to show a
merchantable  title,  or if there is no abstract  of title to said real  estate,
then in  either  of those  events  purchaser  shall be  furnished,  at  seller's
expense, an owner's policy of title insurance.  Provided,  however,  that in the
event this  proposition  provides  for a  conditional  sale of said real estate,
seller will execute to buyer a conditional  sales  contract upon standard  form.
All other terms of this paragraph to remain the same.

This  transaction  is to be closed  within 30 days after said  abstract  showing
merchantable title or binder for title insurance is delivered.

This offer is void,  if not accepted in writing on or before 12:00  o'clock noon
of _________ day of ___________________, 19___.

The above sales price includes all improvements,  permanently installed, such as
electrical or gas fixtures, heating equipment, hot water heaters,  incinerators,
window shades,  curtain and drapery poles and fixtures,  Venetian blinds,  storm
doors and windows,  linoleum,  screens,  awnings and TV antennas,  and all other
personal  property  except as shown above which belong to the above property and
are now on the premises or  elsewhere.  All said items are now or will be at the
date of closing fully paid for by seller.
<PAGE>

Purchaser  deposits  herewith  One Thousand and no/100  Dollars  ($1,000.00)  as
earnest  money  to  apply  upon  the  cash  payment  provided  herein  with  the
understanding  that said deposit shall be returned to purchaser  promptly in the
event  this  Proposition  is not  accepted.  In the event  this  Proposition  is
accepted,  and purchaser shall,  without legal cause, fail or refuse to complete
the  purchase of said real estate in  accordance  with the terms and  conditions
hereof,  said earnest money deposit shall be forfeited by the undersigned as and
for liquidated damages for purchaser's failure so to perform.

It is expressly  agreed that all terms and conditions are included herein and no
verbal agreements of any kind shall be binding or recognized.

                                          Mutual Savings Bank
                                       -------------------------------------
                                    By: /s/ Robert D. Heuchan
                                       -------------------------------------
                                        Robert D. Heuchan, President Purchaser.

     $______________________,   Indiana  _______________,   19____  RECEIVED  OF
_______________________________     Earnest     Money     in    the    sum    of
_______________________________($________________   )  Dollars  to  be  applied,
refunded or forfeited,  as provided in  Proposition  submitted  herewith for the
purchase of real estate located:  _______________________________________ ,

                                        __________________________   R.E. Broker
                                     By:
                                        --------------------------------------

<PAGE>

As the  owner  of the  property  described  herein  ______  hereby  accept  this
proposition this _____ day of ____________, 19___

and ___________________ agree to pay to ________________________________________
Real  Estate  Broker  the  sum  of   ___________________________________________
($______________) Dollars commission for services rendered in this transaction.

                                         /s/ J. Andrew Woods
                                        ----------------------------------------
                                         J. Andrew Woods

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                                   PROPOSITION

                                     BETWEEN

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                                       AND

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                                    PROPERTY

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                          Date __________________ 19___

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                                 LEGAL FORMS BY
                                   STATIONERS
                                  INCORPORATED
                             36 N. PENNSYLVANIA ST.
                                  INDIANAPOLIS
                 ---------------------------------------------EXHIBIT 10.3

                             FIRST AMENDMENT TO THE
                              THIRD CENTURY BANCORP
                EMPLOYEE STOCK OWNERSHIP PLAN AND TRUST AGREEMENT

     Pursuant to rights  reserved under Section 9.1 of the Third Century Bancorp
Employee Stock Ownership Plan and Trust Agreement (as effective January 1, 2004)
(the "Plan"),  Mutual Savings Bank, by action of its Board of Directors,  amends
the Plan,  effective with respect to distributions of benefits on or after March
28, 2005, as follows.

     Section 6.10 of the Plan shall be amended by changing the  mandatory  small
benefit cashout  threshold from five thousand  dollars  ($5,000) to one thousand
dollars ($1,000) and applying that threshold to the Participant's  entire vested
account balance.

     This First Amendment has been executed this 14th day of April, 2005.

                                      MUTUAL SAVINGS BANK

                                      Signature   /s/ Robert D. Heuchan
                                                --------------------------------

                                      Printed Name    Robert D. Heuchan
                                                   -----------------------------

                                      Title            President
                                            ------------------------------------Exhibit 10.1

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER ANY FEDERAL OR STATE SECURITIES
LAWS AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR OTHERWISE DISPOSED OF ABSENT
REGISTRATION UNDER THE SECURITIES ACT OF 1933 AND ANY APPLICABLE STATE
SECURITIES LAWS UNLESS AND UNTIL THE HOLDER HEREOF PROVIDES (i) INFORMATION
REASONABLY NECESSARY TO CONFIRM THAT SUCH REGISTRATION IS NOT REQUIRED OR (ii)
AN OPINION OF COUNSEL TO THE EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED.

                    CONVERTIBLE SUBORDINATED PROMISSORY NOTE

$__________.00                                      _________________, 2005

     THE BEARD COMPANY, an Oklahoma corporation (the "Company"), promises to pay
to the order of _______________________________ at Suite 320, 5600 North May
Avenue, Oklahoma City, Oklahoma 73112, or at such other place as may be
designated in writing by the Holder, the amount of ________________________
DOLLARS ($___________.00) and interest thereon at the rate stated below.

     The holder of this Note shall be referred to as the "Holder."

     This Note is part of a series of promissory notes issued in connection with
a private offering (the "Private Placement Offering") made by the Company
pursuant to a Private Placement Memorandum dated December 21, 2004, as amended
on December 29, 2004, and as amended by Supplement #1 dated January 11, 2005.
The promissory notes shall be referred to collectively as the "Notes."

                              1. Terms of the Note

     1.1 Payment of Principal and Interest.

     (a) Prior to an Event of Default, the unpaid principal balance of this Note
will accrue interest at 12% per annum. Commencing on August 15, 2005, and
continuing on each February 15 and August 15 thereafter until the Maturity Date
the Company shall pay all accrued interest.

     (b) All interest will be computed on the basis of a 360 day year for the
actual number of days in the period for which interest is payable.

     (c) The entire unpaid principal balance of this Note plus all accrued
interest shall be due and payable without notice on February 15, 2010 (the
"Maturity Date").

     (d) All payments received by the Holder shall be applied first to interest
and any balance shall be applied to principal. During the existence of any Event
of Default, the Holder may apply payments received as the Holder may determine.

     (e) The obligations of the Company to pay principal and interest and any
other amounts under this Note are collectively referred to as the "Obligations."

     1.2 Payments. Whenever any payment required by this Note is due on a day
other than a Business Day, the payment shall be made on the next succeeding
Business Day and the payment shall include interest for the days the payment due
date was so extended.

     1.3 Expenses. The Company will pay to the Holder its reasonable attorneys'
fees, court costs, and other expenses incurred in collecting this Note.

     1.4 Additional Interest. Any amount not paid when due shall accrue interest
at the rate specified above plus 3% per annum (the "Additional Interest") and
all Additional Interest shall be paid as a condition precedent to curing any
Event of Default hereunder.

     1.5 Security and Collateral Agent Agreement. This Note shall be subject to
all the terms and condition of the Security And Collateral Agent Agreement dated
as of January 26, 2005, between InvesTrust, N.A. as the Collateral Agent, the
Company, and Beard Technologies, Inc. in the form attached hereto as Exhibit B
(the "Security Agreement") until the Security Agreement is terminated.

     1.6 Events of Default. Events of Default are: (a) the Company's failure to
pay any Obligation when due that is not cured within 30 days; (b) the occurrence
of any "Event of Default" as defined in the Security Agreement; or (c) the
Company's failure to perform its obligations under Section 2.9 of this Note when
due.

     1.7 Acceleration. Subject to the provisions of the Security Agreement, upon
the occurrence of an Event of Default, the Holder may at any time thereafter
declare the Obligations evidenced hereby immediately due and payable.

                           2. Conversion of the Note

     2.1 Conversion Agent. The Company shall initially serve as its own
conversion agent. The Company may appoint another conversion agent at any time.
The Company shall send Holder written notice within 30 days of any change of
conversion agent. References in this Note to the "Conversion Agent" shall refer
to the Company unless the Company has appointed another conversion agent in
which case "Conversion Agent" shall mean the acting conversion agent appointed
by the Company.

     2.2 Conversion Privilege. At any time following the date of original
issuance of this Note and prior to the close of business on the business day
immediately preceding February 15, 2010, the Holder of this Note may convert
such Note or any portion thereof into shares of the Company's common stock (the
"Common Stock") (the shares of Common Stock issuable upon such conversion, the
"Conversion Shares"), at the Conversion Price then in effect. The number of
shares of Common Stock issuable upon conversion of this Note shall be determined
by dividing the principal amount of the Note or portion thereof surrendered for
conversion by the Conversion Price in effect on the conversion date. The initial
conversion price of the Note is $1.00 per share (the "Conversion Price") and is
subject to adjustment as provided in Section 2.7.

     Upon conversion of only a portion of the principal balance of the Notes
surrendered for conversion, the Company shall issue and deliver upon the written
order of the Holder, at the expense of the Company, a new Note for any remaining
unpaid principal balance so surrendered as well as a certificate or certificates
for the number of shares of Common Stock to which such Holder is entitled, as
provided below. The Holder is not entitled to any rights of a holder of Common
Stock until such Holder has converted this Note into Common Stock.

     2.3 Conversion Procedure. To convert this Note, the Holder must (i)
complete and manually sign the Conversion Notice, a form of which is attached
hereto as Exhibit A and deliver it to the Conversion Agent (ii) surrender the
Note to the Conversion Agent, (iii) furnish appropriate endorsements and
transfer documents to the Conversion Agent and (iv) pay any transfer or other
tax, if required. The date on which the Holder satisfies all of the foregoing
requirements is the conversion date. As soon as practicable after the conversion
date, the Company shall deliver to the Holder through its transfer agent a
certificate for the number of whole shares of Common Stock issuable upon the
conversion.

     No fractional shares of Common Stock shall be issued upon conversion of the
Note. If more than one Note shall be surrendered for conversion at one time by
the same holder, the number of full shares which shall be issuable upon
conversion shall be computed on the basis of the aggregate principal amount of
the Notes (or specified portions thereof to the extent permitted hereby) so
surrendered. If any fractional share of Common Stock would be issuable upon the
conversion of any Note or Notes, the Conversion Agent shall make an adjustment
thereof in cash at the current market value thereof. For these purposes, the
current market value of a share of Common Stock shall be the closing price on
the first business day immediately preceding the day on which the Note or Notes
are deemed to have been converted.

     The person in whose name the certificate is registered shall be deemed to
be a stockholder of record on the conversion date; provided, however, that no
surrender of this Note on any date when the stock transfer books of the Company
shall be closed shall be effective to constitute the person or persons entitled
to receive the shares of Common Stock upon such conversion as the record holder
or holders of such shares of Common Stock on such date, but such surrender shall
be effective to constitute the person or persons entitled to receive such shares
of Common Stock as the record holder or holders thereof for all purposes at the
close of business on the next succeeding day on which such stock transfer books
are open; provided, further, that such conversion shall be at the Conversion
Price in effect on the date that this Note shall have been surrendered for
conversion, as if the stock transfer books of the Company had not been closed.
Upon conversion of this Note, Holder shall no longer be a Holder of this Note.

     No payment or adjustment will be made for accrued interest on a converted
Note or for dividends or distributions on shares of Common Stock issued upon
conversion of a Note, but if any Holder surrenders this Note for conversion
between the record date for the payment of an installment of interest and the
next interest payment date, then, notwithstanding such conversion, the interest
payable on such interest payment date shall be paid to the Holder on such record
date.

     If the Holder converts more than one Note at the same time, the number of
shares of Common Stock issuable upon the conversion shall be based on the
aggregate principal amount of Notes converted.

     2.4 Forced Conversion. At any time after February 15, 2007, if the weighted
average sales price of the Company's common stock has been more than two times
the Conversion Price for sixty (60) consecutive trading days, the Company may
give the Note holders written notice that they must convert their Notes within
thirty (30) days after the date of such notice or that the Notes will terminate
and become void as of 5:00 p.m., New York time on the thirty-first (31st) day
(the "Forced Conversion Date") after the date of such notice.

     Upon such Forced Conversion, the person or persons entitled to receive the
shares of Common Stock issuable upon such conversion will be treated for all
purposes as the record holder or holders of such Common Stock on the Forced
Conversion Date whether or not such holder or holders shall have surrendered
their Notes to the Conversion Agent. Upon the Forced Conversion Date, the
principal balance of the Notes shall be deemed paid and all interest on the
Notes shall cease to accrue. As soon as practicable after the surrender in
accordance with the procedures set forth in Section 2.3, the Company shall then
issue and the Conversion Agent shall deliver to such holder a certificate or
certificates for the number of shares of Common Stock to which such holder shall
be entitled.

     2.5 Taxes on Conversion. If the Holder converts a Note, he shall pay any
documentary, stamp or similar issue or transfer tax due on the issue of shares
of Common Stock upon such conversion. The Conversion Agent may refuse to deliver
the certificates representing the Common Stock being issued in a name other than
the Holder's name until the Conversion Agent receives a sum sufficient to pay
any tax which will be due because the shares are to be issued in a name other
than the Holder's name. Nothing herein shall preclude any tax withholding
required by law or regulations.

     2.6 Company To Provide Stock. The Company shall reserve out of its
authorized but unissued Common Stock a sufficient number of shares of Common
Stock to permit the conversion of all outstanding Notes for shares of Common
Stock. The shares of Common Stock or other securities issued upon conversion of
this Notes shall bear the following legend:

          THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER ANY FEDERAL OR STATE
          SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR
          OTHERWISE DISPOSED OF ABSENT REGISTRATION UNDER THE SECURITIES ACT OF
          1933 AND ANY APPLICABLE STATE SECURITIES LAWS UNLESS AND UNTIL THE
          HOLDER HEREOF PROVIDES (i) INFORMATION REASONABLY NECESSARY TO CONFIRM
          THAT SUCH REGISTRATION IS NOT REQUIRED OR (ii) AN OPINION OF COUNSEL
          TO THE EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED.

     The Company covenants that all shares of Common Stock delivered upon
conversion of the Notes, shall be duly authorized, validly issued, fully paid
and non-assessable and shall be free from preemptive rights and free of any lien
or adverse claim.

     2.7 Adjustment of Conversion Price. The Conversion Price shall be that
price set forth in Section 2.2 of this Note and shall be adjusted from time to
time by the Conversion Agent in the event the Company shall (i) pay a dividend
or other distribution in shares of Common Stock to holders of Common Stock, (ii)
subdivide its outstanding Common Stock into a greater number of shares, (iii)
combine its outstanding Common Stock into a smaller number of shares or (iv)
reclassify its outstanding Common Stock, the Conversion Price in effect
immediately prior thereto shall be adjusted so that the Holder of any Note
thereafter surrendered for conversion shall be entitled to receive the number of
shares of Common Stock which it would have owned or have been entitled to
receive had such Note been converted immediately prior to the happening of such
event. An adjustment made pursuant to this Section 2.7 shall become effective
immediately after the record date in the case of a dividend or distribution and
shall become effective immediately after the effective date in the case of
subdivision, combination or reclassification.

     2.8 Notice of Adjustment. Whenever the Conversion Price is adjusted the
Company shall promptly mail to the Holder a notice of the adjustment briefly
stating the facts requiring the adjustment and the manner of computing it.

     2.9 Notice of Certain Transactions. In case:

     (a) the Company shall declare a dividend (or any other distribution) on its
Common Stock (other than in cash out of retained earnings); or

     (b) of any reclassification of the Common Stock of the Company (other than
a subdivision or combination of its outstanding Common Stock, or a change in par
value, or from par value to no par value, or from no par value to par value), or
of any consolidation or merger to which the Company is a party and for which
approval of any stockholders of the Company is required, or of the sale or
transfer of all or substantially all of the assets of the Company; or

     (c) of the voluntary or involuntary dissolution, liquidation or winding-up
of the Company;

     the Company shall cause to be mailed to each the Holder at its address
appearing below or such other address as specified by the Holder, as promptly as
possible but in any event at least ten days prior to the applicable date
hereinafter specified, a notice stating (i) the date on which a record is to be
taken for the purpose of a dividend, or, if a record is not to be taken, the
date as of which the holders of Common Stock of record to be entitled to such
dividend is to be determined, or (ii) the date on which such reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation or winding-up is
expected to become effective or occur, and the date as of which it is expected
that holders of Common Stock of record shall be entitled to exchange their
Common Stock for securities or other property deliverable upon such
reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding-up. Failure to give such notice, or any defect therein,
shall not affect the legality or validity of such dividend, distribution,
reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding-up.

     2.10 Effect of Reclassification, Consolidation, Merger or Sale on
Conversion Privilege. If any of the following shall occur, namely: (i) any
reclassification or change of outstanding shares of Common Stock (other than a
change in par value, or from par value to no par value, or from no par value to
par value, or as a result of a subdivision or combination); (ii) any
consolidation, combination or merger to which the Company is a party other than
a merger in which the Company is the continuing corporation and which does not
result in any reclassification of, or change (other than a change in name, or
par value, or from par value to no par value, or from no par value to par value,
or as a result of a subdivision or combination) in, outstanding shares of Common
Stock; or (iii) any sale or conveyance of all or substantially all of the assets
of the Company ("Asset Sale"), then lawful provision shall be made so that the
Holder shall thereafter be entitled to receive upon conversion of the Note, at a
per share valuation equal to the Conversion Price then in effect, the number of
shares of stock or other securities or property of the successor Company
resulting from such reclassification, consolidation, consolidation, combination,
merger, or Asset Sale that the Holder of the would have been entitled to receive
in such reclassification, consolidation, consolidation, combination, merger, or
Asset Sale if the Note had been converted immediately before such
reclassification, consolidation, consolidation, combination, merger, or Asset
Sale, all subject to further adjustment as provided herein. The foregoing
provisions of this Section 2.10 shall similarly apply to successive
reorganizations, consolidations, mergers, sales and transfers and to the stock
or securities of any other Company that are at the time receivable upon the
conversion of the Notes.

                          3. Subordination of the Note

     3.1 Note Subordinate to Senior Indebtedness. The Obligations are and shall
be junior and subordinate in right of payment, exercise of remedies, and all
other respects to the prior indefeasible payment in full of the Senior
Indebtedness. Without limiting the foregoing, the priority of the security
interest granted in the Security Agreement shall be subordinate in all respects
to the priority of any security interest or lien granted to or for the benefit
of the holders of the Senior Indebtedness. So long as there is no default under
any of the Senior Indebtedness and the Company's payment of the Obligations
would not result in a default thereunder, the Company may pay the Obligations in
accordance with the terms of this Note. The provisions of this Section 3.1 are
made for the benefit of the holders of Senior Indebtedness. The holders of the
Senior Indebtedness need not prove reliance on these subordination provisions.

     3.2 Default on Senior Indebtedness. In the event and during the
continuation of any default in the payment of principal, premium, interest or
any other payment due on any Senior Indebtedness, or in the event that any event
of default with respect to any Senior Indebtedness shall have occurred and be
continuing and shall have resulted in such Senior Indebtedness becoming or being
declared due and payable prior to the date on which it would otherwise have
become due and payable (unless and until such event of default shall have been
cured or waived or shall have ceased to exist and such acceleration shall have
been rescinded or annulled) or in the event any judicial proceeding such event
of default, then no payment shall be made by the Company with respect to the
principal of, or interest on, this Note; provided, however, nothing in this
Section shall prohibit the Holder from accelerating the Obligations due under
this Note. In the event that, notwithstanding the foregoing, any payment shall
be received by the Holder when such payment is prohibited by this Section 3.2,
such payment shall be held in trust for the benefit of, and shall be paid over
or delivered to, the holders of Senior Indebtedness or their respective
representatives, or to the trustee or trustees under any indenture pursuant to
which any of such Senior Indebtedness may have been issued, as their respective
interests may appear, but only to the extent that the holders of the Senior
Indebtedness (or their representative or representatives or a trustee) notify
the Holder within 30 days of such payment of the amounts then due and owing on
the Senior Indebtedness and only the amounts specified in such notice to the
Holder shall be paid to the holders of Senior Indebtedness; provided, however,
that holders of Senior Indebtedness shall not be entitled to receive payment of
any such amounts to the extent that such holders would be required by the
subordination provisions of such Senior Indebtedness to pay such amounts over to
the obligees on trade accounts payable or other liabilities arising in the
ordinary course of the Company's business.

     3.3 Definition of Senior Indebtedness. "Senior Indebtedness" means, unless
expressly subordinated to or made on a parity with the amounts due under this
Note, the principal of (and premium, if any), unpaid interest on, penalties,
amounts reimbursable, fees, expenses, costs of enforcement and any other amounts
due in connection with (i) indebtedness of the Company, or with respect to which
the Company is a guarantor, to banks, commercial finance lenders, insurance
companies, leasing or equipment financing institutions or other lending
institutions regularly engaged in the business of lending money (excluding
venture capital, investment banking or similar institutions which sometimes
engage in lending activities but which are primarily engaged in investments in
equity securities), which is for money borrowed, or purchase or leasing of
equipment in the case of lease or other equipment financing, whether or not
secured, 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.

                        4. Piggyback Registration Rights

     4.1 Participation. Subject to Section 4.2 and 4.3 hereof, if at any time
after the date hereof the Company proposes to file a Registration Statement
(other than a registration on Form S-4 or S-8 or any successor form to such
Forms or any registration of securities as it relates to an offering and sale to
management of the Company pursuant to any employee stock plan or other employee
benefit plan arrangement) with respect to an offering that includes any shares
of Common Stock, then the Company shall give notice of the proposed filing (the
"Piggyback Notice") to all Registrable Security Holder as promptly as
practicable (but in no event less than fifteen (15) days before the anticipated
filing date). The Piggyback Notice shall offer the Registrable Security Holders
the opportunity to register such number of shares of Registrable Securities as
the Registrable Security Holders may request and shall set forth (i) the
anticipated filing date of such Registration Statement and (ii) the number of
shares of Common Stock that is proposed to be included in such Registration
Statement. The Company shall include in such Registration Statement such shares
of Registrable Securities for which it has received written requests to register
such shares within ten (10) days after the Piggyback Notice has been given.

     4.2 Underwriter's Cutback. Notwithstanding the foregoing, if a Registration
pursuant to this Article 4 involves an underwritten offering and the managing
underwriter or underwriters of such proposed underwritten offering delivers an
opinion to the Registrable Security Holders that the total or kind of securities
which such Registrable Security Holders and any other persons or entities intend
to include in such offering are reasonably likely to significantly adversely
affect the price, timing or distribution of the securities offered in such
offering, then the Company shall include in such Registration:

     (a) If such Registration was a primary registration by the Company of its
securities, the Company will include in such Registration to the extent of the
number of securities which the managing underwriter advises can be sold in such
Underwritten Offering: first, the securities proposed by the Company to be sold
for its own account; second, any Registrable Securities requested to be included
in such Registration by the Registrable Security Holders, pro rata on the basis
of the number of securities sought to be sold by the requesting Registrable
Security Holders; and third, other securities of the Company proposed to be
included in such Registration, allocated among the Company and the holders
thereof in accordance with the priorities then existing among the Company and
such holders.

     (b) If such Registration was requested other than by the Registrable
Security Holders or the Company, the Company will include in such Registration
to the extent of the number of securities which the managing underwriter advises
can be sold in such Underwritten Offering: first, the securities proposed to be
sold by the security holder initiating the Registration; second, any Registrable
Securities requested to be included in such Registration, pro rata on the basis
of the number of securities sought to be sold by the requesting Registrable
Security Holders; third, any securities of the Company proposed by any other
Persons to be included in such Registration, pro rata on the basis of the number
of securities proposed to be sold by the requesting Persons; and fourth the
securities proposed by the Company to be sold for its own account.

     4.3 Limitation on Participation. Holders of Registrable Securities that are
able to sell 100% of their Registrable Securities without registration under
Rule 144 of the Securities Act of 1933, as amended, within a period of three
consecutive months are not entitled to any Piggyback Registration Rights under
this Article 4.

     4.4 Expenses. The Company will pay all Registration Expenses in connection
with each registration of Registrable Securities requested pursuant to this
Article 4.

     4.5 Company Control. The Company may decline to file a Registration
Statement after giving the Piggyback Notice, or withdraw a Registration
Statement after filing and after such Piggyback Notice, but prior to the
effectiveness of the Registration Statement, provided that the Company shall
promptly notify each Registrable Security Holder in writing of any such action
and provided further that the Company shall bear all reasonable expenses
incurred by such Registrable Security Holder or otherwise in connection with
such withdrawn Registration Statement.

                5. Collateral Agent; Grant of Security Interest

     5.1 Appointment of Collateral Agent. By acceptance of this Note the Holder
appoints InvesTrust, N.A. (with its successors and assigns, the "Collateral
Agent") as collateral agent under the Security Agreement and authorizes the
Collateral Agent to take the actions and to exercise the powers provided in the
Security Agreement.

     5.2 Security Interest. The Company shall cause its wholly owned subsidiary,
Beard Technologies, Inc. to enter into the Security Agreement for the benefit of
all of the holders of the Notes.

     5.3 Indemnification. To the extent that the Collateral Agent is not
reimbursed and indemnified by Borrower or BTI as required in the Security
Agreement, to the extent of its Pro Rata Share the Holder shall reimburse and
indemnify the Collateral Agent from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses, advances, or disbursements of any kind or nature whatsoever that may
be imposed on, incurred by, or asserted against the Collateral Agent in any way
relating to or arising out of the Notes, the Security Agreement, or any action
taken or omitted by the Collateral Agent under the Security Agreement. The
Holder shall not be liable for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses, advances
or disbursements for which there has been a final judicial determination that
such liability resulted from the Collateral Agent's gross negligence or willful
misconduct. The obligations of the Holder under this section shall survive the
payment in full of the Obligations and the termination of the Security
Agreement.

     5.4 Pro Rata Share. "Pro Rata Share" means the percentage obtained by
dividing (i) the principal amount outstanding under this Note by (ii) the total
principal amount outstanding under all of the Notes.

     5.5 Communication with Collateral Agent. By acceptance of this Note the
Holder agrees to promptly provide, upon written request of Collateral Agent,
written confirmation of the Holder's status as the holder of this Note and the
amounts of principal, interest, and other sums owing on this Note.

                                6. Miscellaneous

     6.1 Governing Law. This Note and the legal relations between the Company
and the Holder shall be governed by the laws of the State of Oklahoma without
giving effect to any conflict of law provision (whether of the State of Oklahoma
or any other jurisdiction) that would cause the application of the law of any
other jurisdiction.

     6.2 Pari Passu Notes. The payment of all or any portion of the Obligations
shall be pari passu in right of payment and in all other respects to the other
Notes issued by the Company in the Private Placement Offering. If the Holder
receives payments in excess of its Pro Rata Share of the Company's payments to
the holders of all of the Notes, the Holder shall hold the excess payment in
trust for the benefit of the holders of the other Notes and shall pay such
amounts held in trust to the other holders upon demand by the holders.

     6.3 Usury. All agreements between the Company and Holder are limited so
that in no event whatsoever, whether by the disbursement of proceeds or
otherwise, shall the amount of interest or finance charge (as defined by
applicable law) paid or agreed to be paid by the Company to the Holder exceed
the highest lawful contractual rate of interest or the maximum finance charge
permissible under applicable law. If fulfillment of any agreement between the
Company and the Holder, at the time the performance of such agreement becomes
due, involves exceeding such highest lawful contractual rate or such maximum
permissible finance charge, then the obligation to fulfill the agreement shall
be reduced so that such obligation does not exceed such highest lawful
contractual rate or maximum permissible finance charge. If by any circumstance
the Holder shall ever receive as interest or finance charge an amount that would
exceed the amount allowed by applicable law, the excess shall be deemed applied
to the principal of the Obligations. All interest and finance charges paid or
agreed to be paid to the Holder shall be prorated, allocated, and spread
throughout the full period of this Note. This paragraph shall control all other
provisions of this Note, the Security Agreement, and any other documents
executed in connection with this Note.

     6.4 Notices. Any notice, request or other communication required or
permitted hereunder shall be given in accordance with the Subscription
Agreement.

     IN WITNESS WHEREOF, the Company has executed this instrument effective the
date first above written

                                     THE BEARD COMPANY, an Oklahoma corporation

                                     By
                                         Herb Mee, Jr., President

                                                                       EXHIBIT A

                                CONVERSION NOTICE

To convert this Note into common stock of the Company, check the box:  [  ]

To convert only part of this Note, state the amount:

                                 [ $__________ ]

If you want the stock certificate made out in another person's name, fill in the
form below:

_________________________________________________________________
  (Insert other person's social security or tax I.D. number)
_________________________________________________________________

_________________________________________________________________

_________________________________________________________________
    (Print or type assignee's name, address and zip code)
_________________________________________________________________

Date: ____________________                _______________________
                                              (Signature)

_________________________________________________________________
(Sign exactly as your name appears on this Note)
<PAGE>

                                                                       EXHIBIT B

                           FORM OF SECURITY AGREEMENT

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