Document:

Exhibit 10.4

PROMISSORY NOTE

 

	
            $2,250,000.00
 	
            Oklahoma City, Oklahoma
 
	
             
 	
            May 6, 2009
 

 

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 Harvey Parkway, 301 N.W. 63rd Street, Oklahoma City, Oklahoma 73116, or at such other place as may be designated in writing by the Holder of this Note, the principal sum of Two Million Two Hundred Fifty Thousand and 00/100ths Dollars ($2,250,000.00) 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, 2011.

 

Except as otherwise defined herein, all terms defined in the Restated and Amended Letter Loan Agreement dated May 6, 2009, 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 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.

 

/s/ HMJr

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.  On the breach of any provision of this Note, or any provision of the Loan Agreement, 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.

/s/ HMJr

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/  Hue Green
 	
            /s/  Herb Mee, Jr.
 
	
            Hue Green, Secretary
 	
            Herb Mee, Jr., President
 

 

/s/ HMJr

Page 3 of 3 PagesExhibit 10.5

 

May 7, 2009

 

(FFB Logo)

 

By Fax 405-228-7472  

 

McAfee & Taft

A Professional Corporation

10th Floor, Two Leadership Square

211 North Robinson

Oklahoma City, OK 73102-7103

 

Attn: James W. Sharrock

 

	
             
 	
            The Beard Company
 

 

Dear Mr. Sharrock:

 

This is to advise you that First Fidelity Bank, N.A. (“Lender”), is the owner and holder of that certain Promissory Note, executed by The Beard Company (“Borrower”), in the original principal amount of $1,000,000.00 dated as of December 8, 2008, (the “Lender Note”), and beneficiary under that certain Amended and Restated Deed of Trust, Assignment of Production, Security Agreement and Financing Statement dated December 8, 2008, covering certain oil, gas, carbon dioxide, and mineral interests described therein, and filed for record under filing number 561232 in the records of Montezuma County, Colorado and at Book 379 Page 425 of the records of Dolores County Colorado (the “Lender Deed of Trust”), securing payment of the Lender Note.

This will further advise you that as of May 7, 2009, the unpaid principal balance of the Lender Note is $500,000 and unpaid interest accrued is $4,166.67 and that interest will continue to accrue on the Lender Note at the rate of $83.33 per day for each day following May 7, 2009.  The term “payoff amount” will refer to the total of principal and unpaid and accrued interest as of the date such payoff amount is received by the Lender.  Funds received after 5:00 P.M. of any day will be deemed received as of the following day that the Lender is regularly open for business.  

Lender also has in its possession a promissory note (the “(2007 Note”) dated June 8, 2007 in the original principal amount of $1,500,000.00, a Change in Terms Agreement (the “First Change Agreement”) dated October 11, 2007 and a second Change in Terms Agreement (the “Second Change Agreement”) dated March 25, 2008, both modifying the terms of the 2007 Note.  The 2007 Note was secured by a deed of trust dated June 8, 2007 and recorded under filing number 549553 in the records of Montezuma County, Colorado and Book 363, Page 390 of the records of Dolores County, Colorado, and the 2007 Note as modified by the Second 

 

 

 

 

Change Agreement was secured by a deed of trust dated March 25, 2008 and recorded under filing number 558197 in the records of Montezuma County, Colorado and Book 375 Page 388 of the records of Dolores County, Colorado.  

The 2007 Note, as modified by the First Change Agreement and the Second Change Agreement previously evidenced the indebtedness currently evidenced by the Lender Note, and has been replaced by the Lender Note.  

This will confirm that upon receipt of the payoff amount, Lender will mark the Lender Note, the 2007 Note, the First Change Agreement and the Second Change Agreement “paid in full”, and execute, acknowledge and deliver a Request for Release of Deed of Trust for both Montezuma and Dolores Counties in form sufficient to fully and finally release the lien of the Lender Deed of Trust and the deeds of trust securing the 2007 Note and deliver same to you, as Escrow Agent.

If you have any questions, please contact Sheila Barfield at (405) 416-2662.

	
             
 	
            Sincerely,
 

	
             
 	
            /s/ Danny B. Lawson
 

	
             
 	
            Danny B. Lawson
 

	
             
 	
            Executive Vice-PresidentExhibit 10.6

 

RELEASE

OF

AMENDED AND RESTATED NOMINEE AND SUBORDINATION AGREEMENT

 

This Release of Amended and Restated Nominee and Subordination Agreement (the “Release”) is made as of the 8th day of May, 2009 (“Effective Date”), by and among William M. Beard and Lu Beard, as Trustees of The William M. Beard and Lu Beard 1988 Charitable Unitrust (“Unitrust”), Boatright Family, L.L.C. (“Boatright”), McElmo Dome Nominee, LLC, a limited liability company (“Nominee”) and The Beard Company (the “Company”).  

Whereas, the Company, Unitrust, Boatright, and Nominee (each, a “Party”) have previously executed and delivered that certain Amended and Restated Nominee and Subordination Agreement dated March 25, 2008 (the “2008 Agreement”), related to the appointment of Nominee to act as nominee on behalf of Unitrust and Boatright in connection certain deeds of trust covering certain properties in Dolores and Montezuma County, Colorado, and establishing priorities of the liens created by such deeds of trust against such properties as between Unitrust and Boatright.  Except as otherwise defined in this Release, capitalized terms used in this Release shall have the meanings set forth in the 2008 Agreement.

Whereas, the Company has previously executed and delivered the Company Boatright Note to Boatright; and

Whereas, the Company has executed and delivered the 2008 Unitrust Note to Unitrust; and 

Whereas, to secure payment of the loans evidenced by the 2008 Unitrust Note and the Company Boatright Note (collectively, the “2008 Subordinated Notes”) the Company has executed and delivered to the public trustees of Montezuma County and Dolores County, Colorado, that certain Amended and Restated Deed of Trust, Assignment of Production, Security Agreement, and Financing Statement, dated as of March 25, 2008 (the “2008 Nominee Deed of Trust”), covering certain oil, gas, and mineral interests (collectively, the “Collateral”), for the benefit of the Nominee; and 

Whereas, the Company has sold the Collateral and paid the Company Boatright Note in full; and 

Whereas, Unitrust has agreed to release its lien on the Collateral. 

Now, therefore, in consideration of the foregoing premises, the mutual covenants and agreements contained in this Agreement, and other good and valuable considerations, the receipt and adequacy of which are hereby acknowledged, the Company, Unitrust, Boatright, and Nominee hereby agree as follows:

1.     Release of 2008 Nominee Deed of Trust.  Unitrust, Boatright and Nominee each hereby releases the 2008 Nominee Deed of Trust and directs the public trustee(s) to execute and file such documentation as may be necessary or appropriate to evidence such release in the 

 

applicable public records, and agrees to execute such additional releases, requests for action by the public trustee, and other documents as may be reasonably requested by the Company to evidence the release of the 2008 Nominee Deed of Trust. 

2.         Termination of Nominee Agreement and Mutual Release.  The Nominee Agreement is hereby terminated.  Unitrust, Boatright and Nominee each do hereby release and discharge each other Party from any and all claims, liabilities, demands, and causes of action, known or unknown, fixed or contingent, arising in under or with respect to the 2008 Nominee Agreement.

3.         Binding Effect.  This Agreement shall be binding upon the respective successors and assigns of the parties hereto.

4.         Governing Law.  The provisions of this Agreement shall be construed in accordance with the laws of the State of Oklahoma.

5.         Counterparts.  This Agreement may be executed in any number of counterparts, each of which shall be deemed as original, but all of which together shall constitute one and the same agreement.

IN WITNESS WHEREOF, the parties hereto have executed this Release, Subordination and Amended and Restated Nominee Agreement as of the Effective Date stated above. 

	
            “UNITRUST”
 	
            THE WILLIAM M. BEARD AND LU BEARD 1988 CHARITABLE UNITRUST
 

	
             
 	
            By  /s/ William Beard  
 

William Beard, Trustee

	
             
 	
            By  /s/ Lu Beard  
 

Lu Beard, Trustee

	
            “NOMINEE”
 	
            MCELMO DOME NOMINEE, LLC, an Oklahoma limited liability company
 

	
             
 	
            By  /s/ William Beard  
 

William Beard, Member

 

	
             
 	
            By:
 	
            BOATRIGHT FAMILY L.L.C., Member
 

 

	
             
 	
            By  /s/ Peter Boatright  
 

	
             
 	
            Peter Boatright, Manager
 

	
            “BOATRIGHT”
 	
            BOATRIGHT FAMILY L.L.C., an Oklahoma limited liability company
 

	
             
 	
            By  /s/ Peter Boatright  
 

Peter Boatright, Manager

 

 

	
            “COMPANY”
 	
            THE BEARD COMPANY
 

	
             
 	
            By  /s/ Herb Mee, Jr.  
 

Herb Mee, Jr., President

 

	
            STATE OF OKLAHOMA
 	
            )
 

)  SS.

	
            COUNTY OF OKLAHOMA
 	
            )
 

The foregoing instrument was acknowledged before me this 5th day of May, 2009, by William Beard, Trustee of The William M. Beard and Lu Beard 1988 Charitable Unitrust.

	
             
 	
            /s/ Hue Green  
 

Notary Public

	
            My Commission Expires:
 	
            Commission No. 08003924
 

4/07/2012

(SEAL)

	
            STATE OF OKLAHOMA
 	
            )
 

)  SS.

	
            COUNTY OF OKLAHOMA
 	
            )
 

The foregoing instrument was acknowledged before me this 5th day of May, 2009, by Lu Beard, Trustee of The William M. Beard and Lu Beard 1988 Charitable Unitrust.

	
             
 	
            /s/ Hue Green  
 

Notary Public

	
            My Commission Expires:
 	
            Commission No. 08003924
 

4/07/2012

(SEAL)

	
            STATE OF OKLAHOMA
 	
            )
 

)  SS.

	
            COUNTY OF OKLAHOMA
 	
            )
 

The foregoing instrument was acknowledged before me this 5th day of May, 2009, by William Beard, Member of McElmo Dome Nominee LLC, an Oklahoma limited liability company, on behalf of the limited liability company.

	
             
 	
            /s/ Hue Green  
 

 

Notary Public

	
            My Commission Expires:
 	
            Commission No. 08003924
 

4/07/2012

(SEAL)

	
            STATE OF OKLAHOMA
 	
            )
 

)  SS.

	
            COUNTY OF OKLAHOMA
 	
            )
 

The foregoing instrument was acknowledged before me this ___ day of May, 2009, by Peter Boatright, as Manager of BOATRIGHT FAMILY L.L.C., as member of McElmo Dome Nominee LLC, an Oklahoma limited liability company, on behalf of the limited liability company.

	
             
 	
            /s/ Hue Green  
 

Notary Public

	
            My Commission Expires:
 	
            Commission No. 08003924
 

4/07/2012

(SEAL)

	
            STATE OF OKLAHOMA
 	
            )
 

)  SS.

	
            COUNTY OF OKLAHOMA
 	
            )
 

The foregoing instrument was acknowledged before me this ___ day of May, 2009, by Peter Boatright, Manager of Boatright Family L.L.C., an Oklahoma limited liability company, on behalf of the limited liability company.

	
             
 	
            /s/ Hue Green  
 

Notary Public

	
            My Commission Expires:
 	
            Commission No. 08003924
 

4/07/2012

(SEAL)

	
            STATE OF OKLAHOMA
 	
            )
 

)  SS.

	
            COUNTY OF OKLAHOMA
 	
            )
 

The foregoing instrument was acknowledged before me this 5th day of May, 2009, by Herb Mee, Jr., President of The Beard Company, an Oklahoma corporation, on behalf of the corporation.

	
             
 	
            /s/ Hue Green  
 

Notary Public

	
            My Commission Expires:
 	
            Commission No. 08003924
 

 

4/07/2012

(SEAL)

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