Document:

Exhibit 10.2

        ASSIGNMENT AND BILL OF SALE

         

        State: Colorado 

         

        Counties: Montezuma and Dolores

         

        
            	
                        Seller:

                    	
                        Beard Oil Company

                    

        

        
            	
                         

                    	
                        Harvey Parkway

                    

        

        
            	
                         

                    	
                        301 N.W. 63rd Street, Suite 400

                    

        

        
            	
                         

                    	
                        Oklahoma City, OK 73116

                    

        

         

        
            	
                         

                    	
                        The Beard Company

                    

        

        
            	
                         

                    	
                        Harvey Parkway

                    

        

        
            	
                         

                    	
                        301 N.W. 63rd Street, Suite 400

                    

        

        
            	
                         

                    	
                        Oklahoma City, OK 73116

                    

        

         

        
            	
                        Buyer:

                    	
                        Charles R. Wiggins 

                    	
                        (50%)

                    

        

        
            	
                         

                    	
                        P. O. Box 10862

                    

        

        
            	
                         

                    	
                        Midland, Texas 79702

                    

        

         

        
            	
                         

                    	
                        Ken Kamon (50%)

                    

        

        
            	
                         

                    	
                        P. O. Box 10589

                    

        

        
            	
                         

                    	
                        Midland, Texas 79702

                    

        

         

        Effective Date: March 1, 2009

         

                     For adequate consideration, the receipt and sufficiency of which is acknowledged, Seller, named above, sells, assigns, and transfers, to Buyer, named above, and Buyer's successors and assigns, all of Seller's rights, title, interests, and properties described in paragraphs 1. through 12. below, and the corresponding rights,
        estates, powers and privileges appurtenant to those rights, interests, and properties, all collectively referred to in this Assignment as the "Assets." 

         

        1.         The rights, title, and interests of Seller, of whatever kind or character in and to the lands specifically described on Exhibit “A” (the "Lands"), even though the interests of Seller and the Lands may be incorrectly described, or a description of an interest is omitted from Exhibit "A"; and, the rights, title, and interests of Seller in,
        to, under, or derived from all oil, gas, carbon dioxide and mineral leases and leasehold fee or mineral interests and all other interests of whatever character, insofar as the same covers or relates to the Lands described in Exhibit "A" even though an interest may be incorrectly described or omitted from Exhibit "A.” It is expressly understood that Seller is hereby conveying all of its rights, title, and interests to all depth intervals, from the surface down to and including the
        basement rock, in lands included within the boundaries of the McElmo Dome (Leadville) Unit and the Doe Canyon (Deep) Unit whether or not said lands are described on Exhibit “A.” Exhibit "A" is attached to and made a part of this Assignment and Bill of Sale for all purposes.

         

        
            

        

         

        2.         The rights, title, and interests of Seller in, to, and under oil, gas, carbon dioxide and mineral leases (the "Leases") covering the Lands described in Exhibit "A," including any renewals, extensions, or ratifications, and the oil and gas and carbon dioxide leasehold estates and other interests in the lands described on Exhibit "A." 

         

        3.         The rights, title, and interests of Seller in all rights, privileges, benefits, and powers conferred on the holder of the Leases and Lands with respect to the use and occupation of the surface and the subsurface depths under the Lands and Leases.

         

        4.         The rights, title, and interests of Seller in any pooled or unitized acreage or rights included, in whole or in part, within the Lands, including all oil and gas and carbon dioxide production from the pool or unit allocated to such properties (including, without limitation, units formed under orders, rules, regulations, or other official acts of any
        state or other authority having jurisdiction and so called "working interest units" created under operating agreements or otherwise) and interests in any wells within the unit or pool associated with such properties, whether the unitized or pooled oil and gas and carbon dioxide production comes from wells located within or without the areas covered by the Lands, and all tenements, hereditaments, and appurtenances belonging to the properties.

         

        5.         The rights, title, and interests of Seller in all of the permits, licenses, servitudes, easements, rights of way, orders, gas and carbon dioxide purchase and sale contracts, crude oil purchase and sale contracts or agreements, surface leases, farmin and farmout agreements, acreage contribution agreements, operating agreements, unit agreements,
        processing agreements, options, leases of equipment or facilities, and other contracts, agreements, and rights, and any amendments, which are owned by Seller, in whole or in part, whether or not the same appear of record in the county where the Lands are located, and which are appurtenant to, affect, are used or held for use in connection with either the ownership, operation, production, treatment or marketing of oil and gas and carbon dioxide, or any or all of them, and the sale or
        disposal of water, hydrocarbons, carbon dioxide or associated substances from the Lands and Leases.

         

        6.         The rights, title, and interests of Seller in the personal and/or real property located in or on the Lands and Leases or used in their operation, which are owned by Seller or by a third person on behalf of Seller, in whole or in part, including, without limitation, crude oil, condensate, or products (in storage or in pipelines), wells, well
        equipment, casing, tanks, boilers, buildings, tubing, pumps, motors, valves, fixtures, machinery and other equipment, pipelines, gathering systems, power lines, telephone lines, roads, field processing plants, and all other improvements used in operations. IT IS AGREED THAT THE PERSONAL PROPERTY, AND ANY PERSONAL PROPERTY THAT BECAME CLASSIFIED OTHERWISE BY VIRTUE OF BEING PERMANENTLY ATTACHED TO REAL PROPERTY, IS BEING SOLD AS IS AND WHERE IS, WITHOUT WARRANTY OF
        MERCHANTABILITY, CONDITION OR FITNESS FOR A PARTICULAR PURPOSE, EITHER EXPRESS OR IMPLIED.

         

        7.         To the extent transferable, the benefit of and the right to enforce the rights, covenants, and warranties, if any, under the terms and conditions of any of the agreements and contracts described in paragraph 5. above, which Seller is entitled to enforce, with respect to the Assets, 

         

        
            

        

        against Seller's predecessors in title to the Assets and against any other party to such agreements and contracts.

         

        8.         To the extent necessary to allow Buyer to have full use of and access to the Lands, Seller grants such right of ingress and egress, rights of way and easements, and their full and uninterrupted use, across any lands which Seller may own or where Seller may be the lessee under an oil, gas, carbon dioxide and mineral lease(s), over or through which
        Buyer crosses or has the right to cross for use and access to the Lands described in Exhibit "A." This grant is limited to the rights of Seller to grant such rights of ingress and egress, rights of way, and easements under agreements, deeds, or leases through which Seller claims title.

         

        9.         All of Seller’s carbon dioxide in storage, including carbon dioxide placed in storage before the Effective Date.

         

        
            	
                        10.

                    	
                        All of Seller’s rights, title and interests in the H. T. Boyd net profits interest.

                    

        

         

        11.       All other rights and obligations arising under contract or otherwise by law, or by the occurrence of conditions precedents, which may or may not yet have occurred, owned in whole or in part by Seller, which rights and obligations are incidental to the Assets described in paragraphs 1. through 11. above, including the right, if any, to operate the
        Assets.

         

        This Assignment and Bill of Sale is made subject to all applicable taxes, including, but not limited to, severance taxes, excise taxes and ad valorem taxes (if applicable). Buyer hereby agrees to pay all sales taxes (if applicable) to Seller, and Seller shall remit such sales taxes to the proper taxing authority. All ad valorem, personal, severance and property taxes assessed to the property and interest
        (including wells) conveyed hereby shall be prorated as of the effective date of this Assignment.

         

        TO HAVE AND TO HOLD the Assets unto Buyer and its successors and assigns forever; provided, however, this Assignment is made by Seller and accepted by Buyer subject to the following terms, representations, agreements, and provisions:

         

        1.         Seller represents and agrees that its joint interest account with the operator of wells on the Lands and Leases is current, and that all joint interest billings and severance and ad valorem taxes assessed, due and payable on the Assets have been fully paid for all time periods up to and including Kinder Morgan CO2 Company LP’s February, 2009
        billing period (Invoice Date: 03/06/2009). Seller acknowledges Buyer has materially relied upon this representation in accepting this Assignment.

         

        2.         From time to time, whether at or after closing, as requested by Buyer, its successors or assigns, Seller will execute and deliver any and all documents and take such other reasonable actions as may be necessary to fully convey and transfer the Assets to Buyer.

         

        3.         Seller shall indemnify and hold Buyer, its directors, officers, employees, and agents harmless from and against any and all liability, liens, demands, judgments, suits, and claims of any kind or character arising out of, in connection with, or resulting from Seller's ownership of 

         

        
            

        

        the Assets, for all periods prior to the Effective Date. Seller shall remain responsible for all claims relating to the drilling, operating, production, and sale of hydrocarbons from the Assets and the proper accounting and payment to parties for their interests and any payments, refunds, or penalties to any party or entity, insofar as any claims relate to periods of time prior to the Effective Date.
        Buyer shall indemnify and hold Seller harmless from and against any and all liability, liens, demands, judgments, suits, and claims of any kind or character arising out of, in connection with, or resulting from Buyer's ownership of the Assets, for periods from and after the Effective Date. Buyer shall be responsible for all claims relating to the drilling, operating, production, and sale of hydrocarbons from the Assets and the proper accounting and payment to parties for their
        interests, and any payments, refunds, or penalties to any party or entity as such claims relate to periods from and after the Effective Date.

         

        4.         Seller shall be entitled to all proceeds accruing to the Assets prior to the Effective Date of this Assignment and Bill of Sale and shall be responsible for operating expenses, capital expenditures, all taxes, and other obligations on the Assets prior to the Effective Date. Buyer shall be entitled to all proceeds accruing to the Assets after the
        Effective Date and shall be responsible for the operating expenses, capital expenditures, all taxes, and other obligations on the Assets after the Effective Date. Within ninety (90) days after the execution of this Assignment, Seller will furnish Buyer a statement (the “Statement”) covering: (a) operating expenses and capital expenditures incurred after the Effective Date and paid by Seller; and, (b) revenues received by Seller from production attributable to the Assets
        after the Effective Date. If Buyer agrees with the Statement, then payment by Buyer or Seller, as the case may be, based upon the information contained in the Statement shall occur within fifteen (15) days after receipt of the Statement by Buyer.

         

        5.         This Assignment and Bill of Sale is made expressly subject to all valid and existing leases, contracts, easements, and other instruments affecting all or any part of the Assets, together with any and all existing overriding royalties and other interests payable out of production from all or any part of the Lands, as shown of record.

         

                    Seller hereby warrants and guarantees that the interest assigned herein represents equivalent to or not greater than a .00355 decimal working interest and equivalent to or not less than a .0035 decimal net revenue interest in the McElmo Dome (Leadville) Unit, and is free and clear from all former and other grants, bargains, sales, liens,
        taxes, assessments, preferential rights, and encumbrances of any kind.

         

                    Seller represents that, to its best knowledge, there is no claim, demand, filing, cause of action, administrative proceeding, lawsuit, or other litigation pending that could now or later adversely affect the ownership of the Assets, other than proceedings relating to the industry generally and to which Seller is not a named
        party.

         

                    It is the intention and agreement of Seller and Buyer that the provisions of this Assignment and Bill of Sale shall be severable. Should the whole or any portion of a section or paragraph be judicially held to be void or invalid, such holding shall not affect other portions which can be given effect without the invalid or void
        portion.

         

        
            

        

        The provisions of this Assignment shall be binding on and inure to the benefit of Buyer and Seller and their respective affiliates, heirs, devisees, legal or personal representatives, successors, and assigns and shall constitute covenants running with the Lands and the Assets.

         

        This Assignment is executed by Seller and Buyer as of the date of the acknowledgments of their signatures below, but is effective as of the Effective Date stated above.

         

        
            	
                        SELLER:

                    	
                        BEARD OIL COMPANY, a Delaware corporation

                    
	
                         

                    	
                         

                    
	
                         

                    	
                        By  /s/ Herb Mee, Jr.

                    
	
                        ATTEST:

                    	
                        Herb Mee, Jr., President

                    
	
                         

                    	
                         

                    
	
                        By  /s/ Hue Green

                    	
                         

                    
	
                        Hue Green, Secretary

                    	
                         

                    
	
                         

                    	
                         

                    
	
                         

                    	
                        THE BEARD COMPANY, an Oklahoma corporation

                    
	
                         

                    	
                         

                    
	
                         

                    	
                        By  /s/ Herb Mee, Jr.

                    
	
                        ATTEST:

                    	
                        Herb Mee, Jr., President

                    
	
                         

                    	
                         

                    
	
                        By  /s/ Hue Green

                    	
                         

                    
	
                        Hue Green, Secretary

                    	
                         

                    
	
                         

                    	
                         

                    
	
                        BUYER:

                    	
                         

                    
	
                         

                    	
                        /s/  Charles R. Wiggins

                    
	
                         

                    	
                        Charles R. Wiggins (50%)

                    
	
                         

                    	
                         

                    
	
                         

                    	
                        /s/  Ken Kamon

                    
	
                         

                    	
                        Ken Kamon (50%)

                    

        

         

         

        STATE OF OKLAHOMA

         

        COUNTY OF OKLAHOMA

         

        BEFORE ME, a notary public in and for said county and state on this the 5th day of May, 2009, personally appeared Herb Mee, Jr., known to me to be the identical person who subscribed his name to the foregoing instrument as President of Beard Oil Company, and acknowledged to me that he executed the same as his free and voluntary act and deed, and as the free and voluntary act
        and deed of such corporation, for the uses and purposes therein set forth.

         

        IN WITNESS WHEREOF, I have hereunto set my official signature and affixed my notary seal the day and year first above written.

         

         

        
            

        

         

        
            	
                        My Commission Expires:

                    	
                        /s/  Linda Shrum

                    
	
                        11/06/2010

                    	
                        Notary Public, State of Oklahoma

                    
	
                         

                    	
                        Commission No. 06010868

                    
	
                         

                    	
                        Printed Name:  Linda Shrum

                    
	
                         

                    	
                         

                    

        

         

        STATE OF OKLAHOMA

         

        COUNTY OF OKLAHOMA

         

        BEFORE ME, a notary public in and for said county and state on this the 5th day of May, 2009, personally appeared Herb Mee, Jr., known to me to be the identical person who subscribed his name to the foregoing instrument as President of The Beard Company, and acknowledged to me that he executed the same as his free and
        voluntary act and deed, and as the free and voluntary act and deed of such corporation, for the uses and purposes therein set forth.

         

        IN WITNESS WHEREOF, I have hereunto set my official signature and affixed my notary seal the day and year first above written.

         

        
            	
                        My Commission Expires:

                    	
                        /s/  Linda Shrum

                    
	
                        11/06/2010

                    	
                        Notary Public, State of Oklahoma

                    
	
                         

                    	
                        Commission No. 06010868

                    
	
                         

                    	
                        Printed Name:  Linda Shrum

                    
	
                         

                    	
                         

                    

        

         

        STATE OF TEXAS

         

        COUNTY OF MIDLAND

         

        BEFORE ME, a notary public in and for said county and state on this the 4th day of May, 2009, personally appeared Charles R. Wiggins and Ken Kamon, known to me to be the identical persons who subscribed their names to the foregoing instrument, and acknowledged to me that they executed the same as their free and voluntary act
        and deed.

         

        IN WITNESS WHEREOF, I have hereunto set my official signature and affixed my notary seal the day and year first above written.

         

        
            	
                        My Commission Expires:

                    	
                        /s/  Nancy Marshall

                    
	
                        9/28/2010

                    	
                        Notary Public, State of Texas

                    
	
                         

                    	
                        Printed Name:  Nancy Marshall

                    
	
                         

                    	
                         

                    

        

         

        

        
            

        

        Exhibit “A”

         

        Attached to that certain Assignment and Bill of Sale, Beard Oil Company and The Beard Company, Grantor, Charles R. Wiggins (50%) and Ken Kamon (50%), Grantee

         

        The following lands are located in Dolores County, Colorado:

         

        T40N-R18W, NMPM

        Section 3: Lots 7 & 8

        Section 9: Lot 1

        Section 10: Lots 4 & 5

        Section 15: NW/4

        Section 16: NE/4NE/4

        Section 21: SW/4SE/4

        Section 22: SE/4NW/4

        Containing 434.13 acres, more or less (Tr. 32 Doe Canyon Unit, Federal Lease C-18398)

         

        The following lands are located in Montezuma and Dolores Counties, Colorado:

         

        T39N-R18W, NMPM

        Section 18: Lots 5-9, 16, 17, 18, SE/4 

        Section 29: N/2NE/4 

        Containing 554.68 acres, more or less (Tr. 2-67, Federal Lease C-18415) 

         

        The following lands are located in Montezuma County, Colorado:

         

        T38N-R18W, NMPM

        Section 15: E/2NW/4, W/2NE/4 

        Containing 160 acres, more or less (Tr. 2-65, Fee)

         

        T37N-R17W, NMPM

        Section 5: Lots 5, 6 

        Containing 15.59 acres, more or less (Tr. 2-68, Federal Lease C-18847)

         

        T38N-R18W, NMPM

        Section 3: S/2

        Section 4: W/2SW/4 

        Containing 400 acres, more or less (Tr. 2-71A, Federal Lease C-21440A)

         

        T38N-R18W, NMPM

        Section 4: Lot 5, S/2NE/4 

        Containing 126.46 acres, more or less (Tr. 2-71B, Federal Lease C-21440A)

         

        T38N-R18W, NMPM

        Section 10: NE/4 

        Containing 160 acres, more or less (Tr. 2-103, Fee)

         

        
            

        

        Page 2 of 5

         

        T38N-R18W, NMPM

        Section 10: W/2 

        Containing 320 acres, more or less (Tr. 2-110, Fee)

         

        T38N-R18W, NMPM

        Section 4: Lots 7, 8, S/2NW/4 

        Containing 172.72 acres, more or less (Tr. 2-119, Fee)

         

        T38N-R18W, NMPM

        Section 3: Lot 5, SE/4NE/4

        Containing 86.30 acres, more or less (Tr. 2-122, Fee)

         

        T37N-R17W, NMPM

        Section 3: Lots 16, 17 

        Containing 79.99 acres, more or less (Tr. 2-146, Fee) 

         

        T39N-R18W, NMPM

        Section 28: S/2NW/4, SW/4 

        Containing 240 acres, more or less (Tr. 2-153, Fee) 

         

        T39N-R18W, NMPM

        Section 33: E/2NW/4, S/2NE/4 

        Containing 160 acres, more or less (Tr. 2-154, Fee)

         

        T39N-R18W, NMPM

        Section 33: SW/4

        Containing 160 acres, more or less (Tr. 2-155, Fee)

         

        T39N-R18W, NMPM

        Section 30: Lots 5, 6, 9, 10 (NW/4)

        Containing 160 acres, more or less (Tr. 2-157, Fee)

         

        T39N-R18W, NMPM  

        Section 30: SE/4 

        Containing 160 acres, more or less (Tr. 2-158, Fee) 

         

        T39N-R18W, NMPM

        Section 29: N/2NW/4, SE/4NW/4, S/2NE/4 

        Containing 200 acres, more or less (Tr. 2-159, Fee) 

         

        T39N-R18W, NMPM

        Section 32: SW/4 

        Containing 160 acres, more or less (Tr. 2-161, Fee) 

        Page 3 of 5

         

        
            

        

         

        T39N-R19W, NMPM

        Section 34: SW/4, W/2SE/4

        Containing 240 acres, more or less (Tr. 3-36, Federal Lease C-19666)

         

        T37N-R20W, NMPM

        Section 11: NE/4NE/4, W/2NE/4, NW/4, N/2SW/4, SW/4SW/4, NW/4SE/4 

        Containing 440 acres, more or less (Tr. 4-6, Federal Lease C-30617)

         

        T38N-R19W, NMPM  

        Section 31: NE/4 

        Containing 160 acres, more or less (Tr. 4-44, Federal Lease C-24214)

         

        T37N-R19W, NMPM

        Section 9: Tract 57

        Section 16: Tract 57, Lots 2, 3, 4, N/2NW/4, SW/4NW/4

        Containing 373.94 acres, more or less (Tr. 4-59A, Federal Lease C-33303) 

         

        T37N-R19W, NMPM

        Section 16: Lots 6, 7, 8, W/2SW/4, SE/4SW/4, S/2SE/4

        Containing 265.48 acres, more or less (Tr. 4-59B, Federal Lease C-33302) 

         

        T37N-R19W, NMPM

        Section 14: W/2 

        Containing 320 acres, more or less (Tr. 4-60, Federal Lease C-33301) 

         

        T37N-R19W, NMPM

        Section 13: Lots 1, 2, 3, NW/4, W/2SW/4 

        Containing 274.30 acres, more or less (Tr. 4-61A, Federal Lease C-33300) 

         

        T37N-R19W, NMPM

        Section 14: E/2

        Containing 320 acres, more or less (Tr. 4-61B, Federal Lease C-33301) 

         

        T37N-R19W, NMPM  

        Section 24: NW/4NW/4 

        Containing 40 acres, more or less (Tr. 4-61C, Federal Lease C-37436) 

         

        T37N-R19W, NMPM

        Section 25: S/2SW/4 

        Containing 80 acres, more or less (Tr. 4-62, Federal Lease C-37437) 

         

        T37N-R19W, NMPM  

        Section 26: NE/4 

        Containing 160 acres, more or less (Tr. 4-63, Federal Lease C-37438) 

        Page 4 of 5

         

        
            

        

         

        T38N-R19W, NMPM

        Section 32: N/2SE/4

        Containing 80 acres, more or less (Tr. 4-80, Fee)

         

        T37N-R19W, NMPM

        Section 1: Tract 54

        Section 11: Tract 54

        Section 12: Tract 54 

        Containing 320 acres, more or less (Tr. 4-84, Fee) 

         

        T37N-R17W, NMPM

        Section 10: Lot 4 

        Containing 34.99 acres, more or less (Tr. 5-55, Fee)

         

        T37N-R17W, NMPM

        Section 14: Lots 1, 2 & 3 (E/2NE/4)

        Containing 80 acres, more or less (Tr. 5-69, Fee)

         

        T37N-R17W, NMPM

        Section 14: A tract of land in the W/2SE/4 more fully described in Book 317 Page 297 of said county records

        Containing 6.11 acres, more or less (Tr. 5-71, Fee)

         

        T37N-R17W, NMPM  

        Section 14: E/2SE/4, except a tract of land more fully described in Book 391 Page 87 of said county records and except a tract of land in Sec. 14 described as follows: beginning at a point on the West right-of-way line of county land; whence the southeast corner of Sec. 14 bears S 1 deg. 58 min. E a distance of 652.4 ft.; thence S 89 deg. 09 min. W 145 ft. to a point; thence N 34 deg. 38 min. W 85.9 ft.
        to a point; thence N 43 deg. 56 min. E 156.7 ft. to a point; thence N 89 deg. 44 min. E 86.7 ft. to a point; thence S 00 deg. 30 min. W 181.8 ft. to the point of beginning

        Containing 72.80 acres, more or less (Tr. 5-72A, Fee)

         

        T37N-R17W, NMPM

        Section 14: A tract of land described as follows: beginning at a point on the west right-of-way line of county land; whence the southeast corner of Sec. 14 bears S 1 deg. 58 min. E a distance of 652.4 ft.; thence S 89 deg. 09 min. W 145 ft. to a point; thence N 34 deg. 38 min. W 85.9 ft. to a point; thence N 43 deg. 56 min. E 156.7 ft to a point; thence N 89 deg. 44 min. E 86.7 ft. to a point; thence S 00
        deg. 30 min. W 181.8 ft. to the point of beginning.

        Containing .64 acres, more or less (Tr. 5-72B, Fee)

         

        T37N-R17W, NMPM

        Section 14: A tract of land in the E/2SE/4 more fully described in Book 391 Page 87 of said county records

        Containing 6.56 acres, more or less (Tr. 5-73, Fee)

        Page 5 of 5

         

        
            

        

         

        T37N-R20W, NMPM

        Section 34: Lots 1-4, E/2E/2 

        Containing 374.88 acres, more or less (Tr. 6-62, Federal Lease C-21445) 

         

        T36N-R18W, NMPM

        Section 12: N/2

        Section 22: W/2W/2, NE/4NW/4, SE/4SW/4 

        Section 27: W/2W/2, NE/4NW/4, E/2SW/4 

        Containing 840 acres, more or less (Tr. 7-12, Federal Lease C-18396) 

         

        T36N-R18W, NMPM

        Section 14: S/2SW/4 

        Containing 80 acres, more or less (Tr. 7-13, Federal Lease C-18701)

         

        T36N-R18W, NMPM  

        Section 8: All

        Section 9: W/2

        Section 20: NW/4, SE/4

        Section 29: NW/4, W/2SE/4, NE/4SE/4

        Containing 1560 acres, more or less (Tr. 7-16, Federal Lease C-19347)

         

        T36N-R18W, NMPM

        Section 15: E/2SW/4

        Containing 80 acres, more or less (Tr. 7-20, Federal Lease C-22446)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

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