LIBERTY
April 30, 1996
Mr. Herb Mee, Jr.
Carbonic Reserves
10110 Huebner Road
San Antonio, Texas 78240
Dear Mr. Mee:
This writing will serve as the Third Amendment to that certain
Loan Agreement (Agreement) dated May 19, 1995 between Carbonic
Reserves, a Nevada corporation (Borrower), The Beard Company
(Guarantor) and Liberty Bank and Trust Company of Oklahoma City,
N.A. (Bank) amended November 13, 1995 (First Amendment) and March
12, 1996 (Second Amendment). All defined terms shall have the
meanings ascribed to them in the Agreement. In consideration of
the mutual promises herein contained, Borrower, Guarantor and
Bank hereby agree as follows:
o Maturity Date as set forth on page six (6) of the Agreement
is hereby deleted in its entirety and the following
substituted in lieu thereof:
The date when all principal of and interest on the
Indebtedness (including the Note) shall become fully due and
payable to the Bank which date shall occur upon the
happening of the earlier of (i) October 31, 1997; or (ii) an
Event of Default.
o Prime Rate as set forth on page six (6) of the Agreement is
hereby deleted in its entirety and the following substituted
in lieu thereof.
That fluctuating annual rate of interest formally designated
by the Bank, from time to time (whether or not published),
as its "National Prime Rate". As of the date hereof, the
Prime Rate is 8.25% per annum. The Bank may, from time to
time, extend credit to anyone at rates of interest varying
from, and having no relationship to, the Prime Rate.
o The last sentence of Section 3 as set forth on page seven
(7) of the Agreement is deleted in its entirety and the
following substituted in lieu thereof:
The Bank's commitment hereunder shall expire on October 31,
1997.
o The third sentence of Section 3.3 as set forth on page seven
(7) of the Agreement is deleted in its entirety and the
following substituted in lieu thereof:
Prior to an Event of Default, interest on the Note shall be
payable monthly beginning on the 31st day of May, 1996, and
continuing on the last day of each month thereafter until
the Maturity Date.
o Section 3.9 as set forth on page nine (9) of the Agreement
is deleted in its entirety.
o The last sentence of Section 6.2.5.1 as set forth on page 13
of the Agreement is deleted in its entirety and the
following substituted in lieu thereof:
Current Ratio is defined generally as current assets divided
by current liabilities less redeemable preferred dividends
payable.
o Section 6.2.5.3 as set forth on page 13 of the Agreement is
deleted in its entirety and the following substituted in
lieu thereof:
Borrower will maintain Tangible Net Worth of not less than
$5,000,000.00; and
o Section 6.2.5.4 as set forth on page 14 of the Agreement is
deleted in its entirety and the following substituted in
lieu thereof:
Without the Bank's written consent, the Borrower shall not
incur, create or suffer any "Capital Expenditure" during
Borrower's fiscal year 1996 in excess of "Excess Cash Flow."
"Excess Cash Flow" shall be defined as net income of the
Borrower for the prior four (4) quarters (excluding inter-
company and Affiliate interest expense) plus depreciation
and amortization for the prior four (4) quarters MINUS
current maturities of long term debt and capitalized leases
and redeemable preferred dividends payable, all calculated
in accordance with GAAP. "Capital Expenditures" shall
include any investment that would be capitalized and
depreciated in accordance with GAAP.
Please indicate your agreement to this Third Amendment by
executing and returning to Bank the original of this writing.
Thank you.
Sincerely,
JUDY BARRETT FELDER
Judy Barrett Felder
Vice President
AGREED AND ACCEPTED this 24th day of May, 1996 effective April
30, 1996.
"BORROWER"
CARBONIC RESERVES, a Nevada corporation
By: HERB MEE, JR.
Herb Mee, Jr., Vice President
"GUARANTOR"
THE BEARD COMPANY, an Oklahoma corporation
By: HERB MEE, JR.
Herb Mee, Jr., President