Document:

April 1, 2005

                              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.

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 has been dated February 14, 2005 because it was on that date
that all accrued interest on the 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.

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. 2007.

6.     COLLATERAL: The Lender, together with certain Note Holders, 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 McElmo Dome
                   Unit in Montezuma and Dolores Counties of Colorado (the
                   "Interests").  Although the other Note Holders have been
                   repaid in full as of this date, the Lien has not been re-
                   leased even though such Note Holders no longer have an
                   interest therein.  Moreover, on May 21, 2004, Boatright
                   Family LLC ("Boatright") made a loan to the Lender, and a
                   new Deed of Trust, Assignment of Production, and Financing
                   Statement has been placed of record which has placed a Lien
                   on both Lender's and Borrower's Interests in the McElmo Dome
                   Unit and will determine the relative rights as to proceeds
                   under the Deed of Trust as between Lender and Boatright.

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 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 1st day of April, 2005.

BORROWER:

THE BEARD COMPANY

    /s/ Herb Mee, Jr.
___________________________
Herb Mee, Jr., PresidentREPLACEMENT
                              RENEWAL AND EXTENSION
                                 PROMISSORY NOTE

$2,782,900.59                                            Oklahoma City, Oklahoma
                                                               February 14, 2005

     For value received, the undersigned, The Beard Company, an Oklahoma
corporation (the "Maker"), agrees to all of the terms of this Promissory Note
(this "Note") and promises to pay to the order of William M. Beard and Lu Beard
as Trustees of the William M. Beard and Lu Beard 1988 Charitable Unitrust
(individually and collectively called the "Holder"), at Enterprise Plaza, Suite
320, 5600 N. May, Oklahoma City, Oklahoma 73112, or at such other place as may
be designated in writing by the Holder of this Note, the principal sum of Two
Million Seven Hundred Eighty-Two Thousand Nine Hundred and 59/100ths Dollars
($2,782,900.59) plus all interest accruing thereon. This Note will be payable as
follows:

         Prior to Default the unpaid principal balance of this Note will bear
         interest at the rate of ten percent (10%) (the "Applicable Rate").
         Interest will commence to accrue on the unpaid principal balance of
         this Note on the date hereof and thereafter until this Note is paid in
         full. Interest will be computed for the actual number of days elapsed
         at a per diem charge based on a year consisting of three hundred sixty
         (360) days. All payments will be applied first to any accrued interest
         on this Note and the remainder to the principal balance of the Note.
         The outstanding principal balance plus unpaid accrued interest are due
         and payable on April 1, 2007.

         Except as otherwise defined herein, all terms defined in the Restated
and Amended Letter Loan Agreement dated April 1, 2005, between the Maker and the
Holder (the "Loan Agreement") will have the same meanings as therein, and the
Holder recognizes that it is subject to all of the provisions set forth in the
Amendment to Restated and Amended Letter Loan Agreement dated June 25, 2004 (the
"Amended Loan Agreement). Both principal and interest owing pursuant to the
terms of this Note are payable in the lawful currency of the United States of
America and in immediately available funds. All payments made on this Note will
be applied to this Note when received by the Holder hereof in collected funds.
Any sum not paid when due will bear interest at the rate equal to the Applicable
Rate plus five percent (5.0%) and will be paid at the time of, and as a
condition precedent to, the curing of any Event of Default. During the existence
of any Event of Default, the Holder of this Note may apply payments received on
any amount due hereunder or under the terms of any instrument hereafter
evidencing or securing said indebtedness as the Holder may determine.

                                                      ----------------------
                                                           Page 1 of 3 Pages

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

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

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

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

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

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

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

                                                     ------------------------
                                                            Page 2 of 3 Pages

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

         IN WITNESS WHEREOF, the Maker has executed this instrument effective on
the date first above written.

ATTEST:                                  THE BEARD COMPANY

        /s/ Rebecca V. Voth                                 /s/ Herb Mee, Jr.
---------------------------              -----------------------------------
    Rebecca G. Voth, Secretary                      Herb Mee, Jr., President

                                                   -------------------------
                                                           Page 3 of 3 Pages

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