Document:

EXHIBIT 10.68

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED,
ASSIGNED, PLEDGED, OR HYPOTHECATED ABSENT AN EFFECTIVE REGISTRATION THEREOF
UNDER SUCH ACT OR COMPLIANCE WITH RULE 144 PROMULGATED UNDER SUCH ACT, OR UNLESS
THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL, IN FORM AND SUBSTANCE REASONABLY
SATISFACTORY TO THE COMPANY AND ITS COUNSEL AND FROM ATTORNEYS REASONABLY
ACCEPTABLE TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT
REQUIRED.

                           U.S. HELICOPTER CORPORATION

                                     WARRANT

         This Warrant is issued in connection with that certain Convertible Note
Purchase Agreement (the "Agreement") dated as of July 11, 2007 by and between
U.S. HELICOPTER CORPORATION, a Delaware corporation (the "Company"), and DR.
LAWRENCE MARABLE (the "Holder"). Capitalized terms used herein, but not
otherwise defined, shall have the meaning given to them in the Agreement.

         THIS CERTIFIES THAT, for value received, the Holder or its registered
assigns is entitled to purchase from the Company at any time or from time to
time during the period specified in Paragraph 2 hereof 312,500 (THREE HUNDRED
TWELVE THOUSAND FIVE HUNDRED) fully paid and non-assessable shares of the
Company's Common Stock, $.001 par value per share (the "Common Stock"), at an
exercise price per share equal to $0.50 per share (the "Exercise Price").

         The term "Warrant Shares," as used herein, refers to the shares of
Common Stock purchasable hereunder. The Warrant Shares and the Exercise Price
are subject to adjustment as provided in Paragraph 4 hereof. This Warrant is
subject to the following terms, provisions, and conditions:

         1. MANNER OF EXERCISE; ISSUANCE OF CERTIFICATES; PAYMENT FOR SHARES.
Subject to the provisions hereof, this Warrant may be exercised by the holder
hereof, in whole or in part, by the surrender of this Warrant, together with a
completed exercise agreement in the form attached hereto (the "Exercise
Agreement"), to the Company during normal business hours on any business day at
the Company's principal executive offices (or such other office or agency of the
Company as it may designate by notice to the holder hereof), and upon (i)
payment to the Company in cash, by certified or official bank check or by wire
transfer for the account of the Company of the Exercise Price for the Warrant
Shares specified in the Exercise Agreement or (ii) if the resale of the Warrant
Shares by the holder is not then registered pursuant to an effective
registration statement under the Securities Act of 1933, as amended (the
"Securities Act"), delivery to the Company of a written notice of an election to
effect a "Cashless Exercise" (as defined in Section 11(c) below) for the Warrant
<PAGE>

Shares specified in the Exercise Agreement. The Warrant Shares so purchased
shall be deemed to be issued to the holder hereof or such holder's designee, as
the record owner of such shares, as of the close of business on the date on
which this Warrant shall have been surrendered, the completed Exercise Agreement
shall have been delivered, and payment shall have been made for such shares as
set forth above. Certificates for the Warrant Shares so purchased, representing
the aggregate number of shares specified in the Exercise Agreement, shall be
delivered to the holder hereof promptly after this Warrant shall have been so
exercised. The certificates so delivered shall be in such denominations as may
be requested by the holder hereof and shall be registered in the name of such
holder or such other name as shall be designated by such holder. If this Warrant
shall have been exercised only in part, then, unless this Warrant has expired,
the Company shall, at its expense, at the time of delivery of such certificates,
deliver to the holder a new Warrant in substantially identical form and dated as
of the date of such exercise representing the number of shares with respect to
which this Warrant shall not then have been exercised.

         2. PERIOD OF EXERCISE. This Warrant is exercisable at any time or from
time to time on or after the date hereof and before 5:00 p.m., New York, New
York time on the fifth anniversary of such date (the "Exercise Period").

         3. CERTAIN AGREEMENTS OF THE COMPANY. The Company hereby covenants and
agrees as follows:

                  (a) SHARES TO BE FULLY PAID. All Warrant Shares will, upon
         issuance in accordance with the terms of this Warrant, be validly
         issued and outstanding, fully paid, and nonassessable and free from all
         taxes, liens, and charges with respect to the issue thereof.

                  (b) RESERVATION OF SHARES. During the Exercise Period, the
         Company shall at all times have authorized, and reserved free of
         preemptive rights and other similar contractual rights of stockholders,
         for the purpose of issuance upon exercise of this Warrant, a sufficient
         number of shares of Common Stock to provide for the exercise of this
         Warrant.

                  (c) LISTING. The Company shall promptly secure the listing of
         the shares of Common Stock issuable upon exercise of the Warrant upon
         each national securities exchange or automated quotation system, if
         any, upon which shares of Common Stock are then listed (subject to
         official notice of issuance upon exercise of this Warrant) and shall
         maintain, so long as any other shares of Common Stock shall be so
         listed, such listing of all shares of Common Stock from time to time
         issuable upon the exercise of this Warrant.

                   (d) SUCCESSORS AND ASSIGNS. This Warrant will be binding upon
         any entity succeeding to the Company by merger, consolidation, or
         acquisition of all or substantially all the Company's assets.

                                      -2-
<PAGE>

                  (e) NOTICES OF RECORD DATE, ETC. In the event of:

                           (i) any taking by the Company of a record of the
holders of Common Stock for the purpose of determining the holders who are
entitled to receive any dividend or other distribution,

                           (ii) any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the Company, or any
transfer of all or substantially all the assets of the Company to, or
consolidation or merger of, the Company with or into any person,

                           (iii) any voluntary or involuntary dissolution,
liquidation or winding- up of the Company, or

                           (iv) a sale of substantially all of the outstanding
capital stock of the Company or the issuance of new shares representing the
majority of the Company's right to vote,

then and in each such event the Company will mail to the Holder a notice
specifying the record date for voting or the date of closing, as applicable, of
any event (i) through (iv) above. Such notice shall be delivered to the Holder
at least 20 days prior to the date of the relevant event.

         4. ADJUSTMENT AND ANTIDILUTION PROVISIONS. On or after the date of
issuance of this Warrant, the Warrant Exercise Price and number of shares
issuable pursuant to this Warrant shall be subject to adjustment as follows:

                  (a) In case the Company shall (i) declare a dividend or make a
         distribution on its outstanding shares of Common Stock in shares of
         Common Stock, (ii) subdivide or reclassify its outstanding shares of
         Common Stock into a greater number of shares, or (iii) combine or
         reclassify its outstanding shares of Common Stock into a smaller number
         of shares, the Exercise Price in effect at the time of the record date
         for such dividend or distribution or of the effective date of such
         subdivision, combination or reclassification shall be adjusted so that
         it shall equal the price determined by multiplying the Exercise Price
         by a fraction, the denominator of which shall be the number of shares
         of Common Stock outstanding after giving effect to such action, and the
         numerator of which shall be the number of shares of Common Stock
         immediately prior to such action. Such adjustment shall be made each
         time any event listed above shall occur.

                  (b) Whenever the Exercise Price payable upon exercise of each
         Warrant is adjusted pursuant to Subsection (a) above, the number of
         shares purchasable upon exercise of this Warrant shall simultaneously
         be adjusted by multiplying the number of shares initially issuable upon
         exercise of this Warrant by the Exercise Price in effect on the date
         hereof and dividing the product so obtained by the Exercise Price, as
         adjusted.

                  (c) All calculations under this Section 4 shall be made to the
         nearest cent or to the nearest one-hundredth of a share, as the case
         may be. Anything in this Section 4 to the contrary notwithstanding, the
         Company shall be entitled, but shall not be required, to make such
         changes in the Exercise Price in addition to those required by this
         Section 4, as it shall determine, in its sole discretion, to be
         advisable in order that any dividend or distribution in shares of
         Common Stock, or any subdivision, reclassification or combination of
         Common Stock, hereafter made by the Corporation shall not result in any
         Federal Income tax liability to the holders of the Common Stock or
         securities convertible into Common Stock (including warrants).

                                      -3-
<PAGE>

                   (e) Whenever the Exercise Price is adjusted, as herein
         provided, the Corporation shall promptly cause a notice setting forth
         the adjusted Exercise Price and adjusted number of shares issuable upon
         exercise of each Warrant to be mailed to the Holder, at its last
         address appearing in the Company's Warrant Register. The Company may
         retain a firm of independent certified public accountants selected by
         the Board of Directors (who may be the regular accountants employed by
         the Company) to make any computation required by this Section 4, and a
         certificate signed by such firm shall be conclusive evidence of the
         correctness of such adjustment absent a showing of mathematical or
         other error.

         5. ISSUE TAX. The issuance of certificates for Warrant Shares upon the
exercise of this Warrant shall be made without charge to the holder of this
Warrant or such shares for any issuance tax or other costs in respect thereof,
provided that the Company shall not be required to pay any tax which may be
payable in respect of any transfer involved in the issuance and delivery of any
certificate in a name other than the holder of this Warrant.

         6. NO RIGHTS OR LIABILITIES AS A SHAREHOLDER. This Warrant shall not
entitle the holder hereof to any voting rights or other rights as a shareholder
of the Company. No provision of this Warrant, in the absence of affirmative
action by the holder hereof to purchase Warrant Shares, and no mere enumeration
herein of the rights or privileges of the holder hereof, shall give rise to any
liability of such holder for the Exercise Price or as a shareholder of the
Company, whether such liability is asserted by the Company or by creditors of
the Company.

         7. TRANSFER, EXCHANGE, AND REPLACEMENT OF WARRANT.

                  (a) RESTRICTION ON TRANSFER. This Warrant and the rights
         granted to the holder hereof are transferable, in whole or in part,
         upon surrender of this Warrant, together with a properly executed
         assignment in the form attached hereto, at the office or agency of the
         Company referred to in Paragraph 7(e) below, provided, however, that
         any transfer or assignment shall be subject to the conditions set forth
         in Paragraph 7(f) hereof. Until due presentment for registration of
         transfer on the books of the Company, the Company may treat the
         registered holder hereof as the owner and holder hereof for all
         purposes, and the Company shall not be affected by any notice to the
         contrary.

                  (b) WARRANT EXCHANGEABLE FOR DIFFERENT DENOMINATIONS. This
         Warrant is exchangeable, upon the surrender hereof by the holder hereof
         at the office or agency of the Company referred to in Paragraph 7(e)
         below, for new Warrants of like tenor representing in the aggregate the
         right to purchase the number of shares of Common Stock which may be
         purchased hereunder, each of such new Warrants to represent the right
         to purchase such number of shares as shall be designated by the holder
         hereof at the time of such surrender.

                                      -4-
<PAGE>

                  (c) REPLACEMENT OF WARRANT. Upon receipt of evidence
         reasonably satisfactory to the Company of the loss, theft, destruction,
         or mutilation of this Warrant and, in the case of any such loss, theft,
         or destruction, upon delivery of an indemnity agreement reasonably
         satisfactory in form and amount to the Company, or, in the case of any
         such mutilation, upon surrender and cancellation of this Warrant, the
         Company, at its expense, will execute and deliver, in lieu thereof, a
         new Warrant of like tenor.

                  (d) CANCELLATION; PAYMENT OF EXPENSES. Upon the surrender of
         this Warrant in connection with any transfer, exchange, or replacement
         as provided in this Paragraph 7, this Warrant shall be promptly
         canceled by the Company. The Company shall pay all taxes (other than
         securities transfer taxes) and all other expenses (other than legal
         expenses, if any, incurred by the holder or transferees) and charges
         payable in connection with the preparation, execution, and delivery of
         Warrants pursuant to this Paragraph 7.

                  (e) REGISTER. The Company shall maintain, at its principal
         executive offices (or such other office or agency of the Company as it
         may designate by notice to the holder hereof), a register for this
         Warrant, in which the Company shall record the name and address of the
         person in whose name this Warrant has been issued, as well as the name
         and address of each transferee and each prior owner of this Warrant.

                  (f) EXERCISE OR TRANSFER WITHOUT REGISTRATION. If, at the time
         of the surrender of this Warrant in connection with any exercise,
         transfer, or exchange of this Warrant, this Warrant (or, in the case of
         any exercise, the Warrant Shares issuable hereunder), shall not be
         registered under the Securities Act of 1933, as amended (the
         "Securities Act") and under applicable state securities or blue sky
         laws, the Company may require, as a condition of allowing such
         exercise, transfer, or exchange, (i) that the holder or transferee of
         this Warrant, as the case may be, furnish to the Company a written
         opinion of counsel, which opinion and counsel are reasonably acceptable
         to the Company, to the effect that such exercise, transfer, or exchange
         may be made without registration under said Act and under applicable
         state securities or blue sky laws, (ii) that the holder or transferee
         execute and deliver to the Company an investment letter in form and
         substance reasonably acceptable to the Company and (iii) that the
         transferee be an "accredited investor" as defined in Rule 501(a) of
         Regulation D promulgated under the Securities Act; provided that no
         such opinion, letter or status as an "accredited investor" shall be
         required in connection with a transfer pursuant to Rule 144 under the
         Securities Act. The first holder of this Warrant, by taking and holding
         the same, represents to the Company that such holder is acquiring this
         Warrant for investment and not with a view to the distribution thereof.

         8. REGISTRATION RIGHTS. The holder of this Warrant shall have the same
registration rights for the Warrant Shares as are described in the Agreement.

         9. NOTICES. All notices, requests, and other communications required or
permitted to be given or delivered hereunder to the holder of this Warrant shall
be in writing, and shall be personally delivered, or shall be sent by certified
or registered mail or by recognized overnight mail courier, postage prepaid and
addressed, to such holder at the address shown for such holder on the books of
the Company, or at such other address as shall have been furnished to the
Company by notice from such holder. All notices, requests, and other
communications required or permitted to be given or delivered hereunder to the
Company shall be in writing, and shall be personally delivered, or shall be sent
by certified or registered mail or by recognized overnight mail courier, postage
prepaid and addressed, to the office of the Company at 6 East River Piers, Suite

                                      -5-
<PAGE>

216, Downtown Manhattan Heliport, New York, New York 10004, Attention: Chief
Executive Officer, or at such other address as shall have been furnished to the
holder of this Warrant by notice from the Company. Any such notice, request, or
other communication may be sent by facsimile, but shall in such case be
subsequently confirmed by a writing personally delivered or sent by certified or
registered mail or by recognized overnight mail courier as provided above. All
notices, requests, and other communications shall be deemed to have been given
either at the time of the receipt thereof by the person entitled to receive such
notice at the address of such person for purposes of this Paragraph 9, or, if
mailed by registered or certified mail or with a recognized overnight mail
courier two business days following deposit with the United States Post Office
or such overnight mail courier, if postage is prepaid and the mailing is
properly addressed, as the case may be.

         10. GOVERNING LAW. THIS WARRANT SHALL BE ENFORCED, GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD
TO THE PRINCIPLES OF CONFLICT OF LAWS. THE PARTIES HERETO HEREBY SUBMIT TO THE
EXCLUSIVE JURISDICTION OF THE UNITED STATES FEDERAL COURTS LOCATED IN NEW YORK,
NEW YORK WITH RESPECT TO ANY DISPUTE ARISING UNDER THIS WARRANT, THE AGREEMENTS
ENTERED INTO IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY. BOTH PARTIES IRREVOCABLY WAIVE THE DEFENSE OF AN INCONVENIENT FORUM TO
THE MAINTENANCE OF SUCH SUIT OR PROCEEDING. BOTH PARTIES FURTHER AGREE THAT
SERVICE OF PROCESS UPON A PARTY MAILED BY FIRST CLASS MAIL SHALL BE DEEMED IN
EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON THE PARTY IN ANY SUCH SUIT OR
PROCEEDING. NOTHING HEREIN SHALL AFFECT EITHER PARTY'S RIGHT TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW. BOTH PARTIES AGREE THAT A FINAL
NON-APPEALABLE JUDGMENT IN ANY SUCH SUIT OR PROCEEDING SHALL BE CONCLUSIVE AND
MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON SUCH JUDGMENT OR IN ANY OTHER
LAWFUL MANNER. THE PARTY WHICH DOES NOT PREVAIL IN ANY DISPUTE ARISING UNDER
THIS WARRANT SHALL BE RESPONSIBLE FOR ALL FEES AND EXPENSES, INCLUDING
ATTORNEYS' FEES, INCURRED BY THE PREVAILING PARTY IN CONNECTION WITH SUCH
DISPUTE.

         11. MISCELLANEOUS.

                  (a) AMENDMENTS. This Warrant and any provision hereof may only
         be amended by an instrument in writing signed by the Company and the
         holder hereof.

                  (b) DESCRIPTIVE HEADINGS. The descriptive headings of the
         several paragraphs of this Warrant are inserted for purposes of
         reference only, and shall not affect the meaning or construction of any
         of the provisions hereof.

                  (c) CASHLESS EXERCISE. In lieu of a monetary payment of the
         aggregate Exercise Price, the Holder may elect to receive, without the
         payment of any additional consideration, shares equal to the value of
         this Warrant or portion thereof by the surrender of such Warrant to the
         Company with the "cashless exercise" election marked in the form of
         Subscription Notice. Thereupon, the Company shall issue to the Holder,
         such number of fully paid and non-assessable shares as is computed
         using the following formula:

                                      -6-
<PAGE>

                                                        X  =   Y(A-B)
                                                                  A

where             X=       the number of Shares to be issued to the Holder
                           pursuant to this Section 11(c) upon such cashless
                           exercise election.

                  Y=       the number of shares covered by this Warrant in
                           respect of which the cashless exercise election is
                           made.

                  A=       the Fair Market Value (as defined in Article V
                           hereof) of one Share, as at the time the cashless
                           exercise election is made.

                  B=       the Exercise Price in effect under this Warrant at
                           the time the cashless exercise election is made.

                  For purposes of this section, "Fair Market Value" means the
         value of a share of Common Stock on a particular date, determined as
         follows: (i) if the Common Stock is not listed on such date on any
         national securities exchange but is traded in the over-the-counter
         market, the closing "bid" quotations of a share of Common Stock on such
         date (or if none, on the most recent date on which there were bid
         quotations of a share of Common Stock), as reported on the National
         Association of Securities Dealers, Inc. Automated Quotation System, or,
         if not so reported, as reported by the National Quotation Bureau,
         Incorporated, or any other similar service selected by the Board; or
         (ii) if the Common Stock is listed on such date on one or more national
         securities exchanges, the last reported sale price of a share of Common
         Stock on such date as recorded on the composite tape system, or, if
         such system does not cover the Common Stock, the last reported sale
         price of a share of Common Stock on such date on the principal national
         securities exchange on which the Common Stock is listed, or if no sale
         of Common Stock took place on such date, the last reported sale price
         of a share of Common Stock on the most recent day on which a sale of a
         share of Common Stock took place as recorded by such system or on such
         exchange, as the case may be; or (iii) if the Common Stock is neither
         listed on such date on a national securities exchange nor traded in the
         over-the-counter market, as determined by the Company.

                  (e) REMEDIES. The Company acknowledges that a breach by it of
         its obligations hereunder will cause irreparable harm to the holder, by
         vitiating the intent and purpose of the transaction contemplated
         hereby. Accordingly, the Company acknowledges that the remedy at law
         for a breach of its obligations under this Warrant will be inadequate
         and agrees, in the event of a breach or threatened breach by the
         Company of the provisions of this Warrant, that the holder shall be
         entitled, in addition to all other available remedies at law or in
         equity, and in addition to the penalties assessable herein, to an
         injunction or injunctions restraining, preventing or curing any breach
         of this Warrant and to enforce specifically the terms and provisions
         thereof, without the necessity of showing economic loss and without any
         bond or other security being required.

                                      -7-
<PAGE>

         IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by
its duly authorized officer.

                                            U. S. HELICOPTER
CORPORATION

                                            By:      /S/ JOHN G. MURPHY
                                                     ---------------------------
                                                     John G. Murphy
                                                     Chief Executive Officer and
                                                     President

Dated:  July 11, 2007

                                      -8-
<PAGE>

                           FORM OF EXERCISE AGREEMENT

                                                        Dated: ________ __, 200_

To:      ______________________

The undersigned, pursuant to the provisions set forth in the within Warrant,
hereby agrees to purchase ________ shares of Common Stock covered by such
Warrant, and makes payment herewith in full therefor at the price per share
provided by such Warrant in cash or by certified or official bank check or by
wire transfer for the account of the Company to [INSERT THE COMPANY'S WIRE
TRANSFER DETAILS] in the amount of $________, or, if the resale of such Common
Stock by the undersigned is not currently registered pursuant to an effective
registration statement under the Securities Act of 1933, as amended, by
surrender of securities issued by the Company (including a portion of the
Warrant) having a market value (in the case of a portion of this Warrant,
determined in accordance with Section 11(c) of the Warrant) equal to $_________.
Please issue a certificate or certificates for such shares of Common Stock in
the name of and pay any cash for any fractional share to:

                                        Name:     _____________________________

                                        Signature:_____________________________

                                        Address:  _____________________________

                                        Note: The above signature should
                                        correspond exactly with the name on the
                                        face of the within Warrant,
                                        if applicable.

and, if said number of shares of Common Stock shall not be all the shares
purchasable under the within Warrant, a new Warrant is to be issued in the name
of said undersigned covering the balance of the shares purchasable thereunder
less any fraction of a share paid in cash.

<PAGE>

                               FORM OF ASSIGNMENT

         FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and
transfers all the rights of the undersigned under the within Warrant, with
respect to the number of shares of Common Stock covered thereby set forth herein
below, to:

NAME OF ASSIGNEE                    ADDRESS                     NO. OF SHARES
----------------                    -------                     -------------

, and hereby irrevocably constitutes and appoints ___________________________ as
agent and attorney-in-fact to transfer said Warrant on the books of the
within-named corporation, with full power of substitution in the premises.

Dated:   ________ __, 200_

In the presence of:                               _____________________________

                                        Name:     _____________________________

                                        Signature:_____________________________

                                        Address:  _____________________________

                                        Note: The above signature should
                                        correspond exactly with the name on the
                                        face of the within Warrant,
                                        if applicable.June 13, 2007

 

RESTATED AND AMENDED

LETTER LOAN AGREEMENT

 

The Beard Company

5600 N. May Avenue, Suite 320

Oklahoma City, Oklahoma 73112

 

Gentlemen:

 

This Restated and Amended Letter Loan Agreement supersedes and replaces 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 and March 3, 2006. 

 

This Restated and Amended Letter Loan Agreement sets forth the terms and conditions under which we have agreed to continue $2,782,900.59 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.
 

 

	
            3.   AMOUNT:
 	
            $2,782,900.59.  The Loan shall be evidenced by a promissory note in the amount of $2,782,900.59 dated February 14, 2005* (the “Note”).  The Borrower shall be permitted to make prepayments without penalty up to the amount of the Note.
 

_______________

*The Note (which has been styled as the “THIRD REPLACEMENT RENEWAL AND EXTENSION PROMISSORY NOTE”) has been dated February 14, 2005 because it was on that date that all accrued interest on a former note was paid and a principal repayment was made which reduced the principal balance under the Loan Agreement from $2,785,000.00 down to $2,782,900.59. The original Unitrust Note and all replacement notes are hereinafter referred to, individually and collectively, as “the Prior Unitrust 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, 2009.

 

	
            6.   COLLATERAL:
 	
            The Lender, together with certain Note Holders (other than Boatright), has previously filed a Deed of Trust, Assignment of Production, and Financing Statement of record (a “Lien”) on Borrower’s working and overriding royalty interests in the 
 

 

	
             
 	
            Page 1 of 4
 

 

 

McElmo Dome Unit in Montezuma and Dolores Counties of Colorado (the “Interests”).  Although the  other Note Holders (other than Boatright Family LLC  (“Boatright”) have been repaid in full as of this date, the Lien has not been released even though such Note Holders no longer have an interest therein.

 

On July 22, 2005, Borrower delivered to Boatright a note In the principal amount of $390,000.00 (the “Company Boatright Note”), and an Amended and Restated Deed of Trust, Assignment of Production, and Financing Statement was placed of record (the “2005 Deed of Trust”) which placed an additional Lien on Borrower’s Interests in the McElmo Dome Unit and will determine the relative rights as to proceeds under the 2005 Deed of Trust as between Lender and Boatright.

 

On June 8, 2007, Borrower delivered to First Fidelity Bank, N.A. (the “Bank”) a note in the principal amount Of $1,500,000.00 (the “Bank Note”) and a new Deed of Trust, Assignment of Production, and Financing Statement was placed of record (the “2007 Deed of Trust”) which placed an additional Lien on Borrower’s Interests in the McElmo Dome Unit.  The Lender, the Borrower and Boatright executed a Subordination Agreement whereby both the Unitrust and Boatright agreed to subordinate their respective notes and Liens to the Bank Note.

 

	
            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 asset sales incurred in the normal course of business.
 

 

	
            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 
 

 

	
             
 	
            Page 2 of 4
 

 

 

this Letter Loan 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 13th  day of June, 2007.

 

BORROWER:

 

THE BEARD COMPANY

 

	
             
 	
            /s/ Herb Mee, Jr.
 

	
             
  	
            Herb Mee, Jr., President
  

 

	
             
 	
            Page 3 of 4

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