Exhibit 10(v)
November 7, 2002
SUPPLEMENTAL
LETTER LOAN AGREEMENT
The Beard Company
5600 N. May Avenue, Suite 320
Oklahoma City, Oklahoma 73112
Gentlemen:
This Supplemental Letter Loan Agreement supplements the previous Amended Letter
Loan Agreement between the parties hereto dated October 3, 2002.
This Supplemental Letter Loan Agreement sets forth the terms and conditions
under which we have agreed to supplement your existing $3,000,000 long-term line
of credit with a short-term revolving loan to you in the principal amount of
$150,000.00 (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 $150,000.00. The Loan shall be evidenced by a promissory
note in the amount of $150,000.00 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: The outstanding principal balance (the "Indebtedness") plus
unpaid accrued interest shall be due and payable on October
31, 2003. The parties agree that any payments made by Borrower
to Lender shall be applied first to this Loan.
6. COLLATERAL: The Lender, together with certain Note Holders, have
previously filed a Deed of Trust, Assignment of Production,
and Financing Statement of record (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.
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 De-
fault") shall occur and be continuing:
A. Failure of the Borrower to pay when due any amounts, in-
cluding principal or interest on the Note (whether at the
stated maturity, upon acceleration or otherwise).
B. Any Event of Default as 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 ap-
pointment 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, in-
solvency, readjustment of debt, dissolution or liquida-
tion 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 proceed-
ing 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
WILLIAM M. BEARD LU BEARD
William M. Beard, Trustee Lu Beard, Trustee
Accepted effective this 7th day of November, 2002.
BORROWER:
THE BEARD COMPANY
HERB MEE, JR.
Herb Mee, Jr., President