Exhibit 10(q)
June 30, 2001
AMENDED
LETTER LOAN AGREEMENT
The Beard Company
5600 N. May Avenue, Suite 320
Oklahoma City, Oklahoma 73112
Gentlemen:
This Amended Letter Loan Agreement supersedes the previous Amended Letter Loan
Agreement between the parties hereto dated March 31, 2001.
This Amended Letter Loan Agreement sets forth the terms and conditions under
which we have agreed to extend a revolving loan to you in the principal amount
of $2,000,000.00 (the "Loan").
1. LENDER: The William M. Beard and Lu Beard
1988 Charitable Unitrust (the "Unitrust").
2. BORROWER: The Beard Company.
3. AMOUNT: Such amounts as the Borrower may request from time to
time up to $2,000,000.00. The Loan shall be evidenced
by a promissory note in the amount of $2,000,000.00 dated
as of today (the "Note"). The Borrower shall be permitted
to obtain advances, make prepayments, and obtain
additional advances, up to the amount of the Note.
4. INTEREST RATE: A fixed rate of 10.00%.
5. REPAYMENT: Accrued interest shall be due and payable semi-
annually, beginning December 31, 2001 and semi-
annually thereafter, with the outstanding principal
balance (the "Indebtedness") plus unpaid accrued
interest due and payable on June 30, 2003.
6. COLLATERAL: A. Until the Indebtedness has been paid in full, the
Borrower agrees that it will not create, grant, assume
or suffer to exist any lien, mortgage or encumbrance
(a "Lien") on its working and overriding
royalty interests in the McElmo Dome Unit in
Montezuma and Dolores Counties of Colorado
("Interests"). The Borrower will not sell,
transfer, convey or otherwise dispose of any of the
Interests, whether pursuant to a single transaction or a
series of transactions.
B. At any time while there is Indebtedness outstanding
under the Note, the Trustees of the Unitrust may
request, and the Borrower agrees to grant to the
Unitrust, a Lien on its Interests, and in such event
the Borrower will immediately furnish such Assignments,
Transfer Orders, Security Agreements or other documents
as the Trustees may require in order to secure the
Indebtedness.
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, reorganiza-
tion, 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
WILLAIM M. BEARD LU BEARD
William M. Beard, Trustee Lu Beard, Trustee
Accepted effective this 30th day of June, 2001.
BORROWER:
THE BEARD COMPANY
HERB MEE, JR.
Herb Mee, Jr., President