PROMISSORY NOTE
$24,000,000 June 24, 1998
BEARD MINING, L.L.C., an Oklahoma limited liability
company ("Maker"), with an address of 5600 North May Avenue,
Suite 320, Oklahoma City, Oklahoma 73112, for value received,
hereby promises to pay to the order of MCNIC Pipeline &
Processing Company, a Michigan corporation ("Payee"), the
principal sum of the lesser of Twenty-Four Million Dollars
($24,000,000), or so much thereof as may be advanced by Payee
from time to time and outstanding under the Loan provided by
Payee to Maker pursuant to the Loan Agreement of even date
herewith between Maker and Payee (the "Loan Agreement"), together
with interest on the outstanding principal amount as provided
herein.
This Note is the Note referred to in the Loan Agreement
as the Note, and is issued pursuant to, and is subject to all the
terms and provisions of, the Loan Agreement. All capitalized
terms used herein but not otherwise defined shall have the
meanings set forth in the Loan Agreement.
Multiple Advances may be made hereunder. Each Advance
owing to Payee pursuant to the Loan Agreement, and all payments
made on account of principal thereof, shall be recorded by Payee
on the grid attached hereto which is part of this Note.
Interest shall accrue monthly on the outstanding
principal balance of the Advances at the rate of eight percent
per annum and shall be payable in arrears as provided below. The
principal amount of this Note and interest accrued thereon shall
be payable in equal monthly installments due on the first day of
each calendar month commencing August 1, 1998 and ending and
including the calendar month in which the Maturity Date occurs.
The amount of each monthly installment shall be the dollar amount
that would be necessary for Maker to pay the principal amount of
each Advance, together with interest thereon from the date of
such Advance as provided above, to Payee in 120 equal monthly
installments commencing August 1, 1998. All outstanding
principal and accrued interest shall be due and payable in full
on the Maturity Date.
Notwithstanding anything to the contrary contained in
this Note, overdue principal, and (to the extent permitted under
applicable law) overdue interest, whether caused by acceleration
of maturity or otherwise, shall bear interest at the rate of 13%
per annum from the date due until paid, and shall be due and
payable on demand.
It is not intended hereby to charge interest at a rate
in excess of the maximum rate of interest permitted to be charged
to Maker under applicable law, but if, notwithstanding such
intention, interest in excess of the maximum rate shall be paid
hereunder, the excess shall be retained by Payee as additional
cash collateral for the payment of this Note, unless such
retention is not permitted by law, in which case the interest
rate on this Note shall be adjusted to the maximum permitted
under applicable law during the period or periods that the
interest rate otherwise provided herein would exceed such rate.
Payments of principal and interest due and payable
hereunder shall be made to Payee at 150 West Jefferson Avenue,
Suite 1700, Detroit, Michigan 48226, or at such other place as
Payee shall have designated to Maker in writing. Payments, when
made, shall be applied first to accrued interest due and then to
the outstanding principal hereunder.
This Note may be prepaid, in whole or in part, at any
time without consent and without penalty, upon the payment of
interest accrued on the amount prepaid. Any partial prepayment
shall be applied as provided above and shall not postpone the due
date of any subsequent payments of principal or interest, unless
Payee otherwise agrees in writing.
This Note is secured by, and the holder of this Note is
entitled to the benefits of the Security Agreement and the Pledge
and Security Agreement described in the Loan Agreement.
Reference is made to the Security Agreement and the Pledge and
Security Agreement for a description of the property covered
thereby and the rights, remedies and obligations of the holder
hereof in respect thereto.
Time is of the essence hereof. At the option of Payee,
payment of the entire unpaid principal amount hereunder and any
and all accrued interest thereon may be accelerated, and such
amounts shall be immediately due and payable without further
notice or demand upon the occurrence of any of the following:
(a) The Maker fails to pay any principal or accrued
interest hereunder when due;
(b) An Event of Default (as such term is defined in
the Loan Agreement) shall occur.
The remedies provided in this Note shall be cumulative,
and shall be in addition to any other rights or remedies now or
hereafter provided by law or equity. No delay, failure or
omission by any holder of this Note, in respect of any default by
Maker, to exercise any right or remedy shall constitute a waiver
of the right to exercise the right or remedy upon any such
default or subsequent default.
Maker and each endorser, surety and guarantor of this
Note, hereby severally waives demand, presentment for payment,
notice of dishonor, notice of acceleration or intent to
accelerate, protest, notice of protest, and diligence in
collecting and assents to any extension of time with respect to
any payment due under this Note, to any substitution or release
of collateral and to the addition or release of any party. No
waiver by the Payee of any payment or other right under this Note
shall operate as a waiver of any other payment or right.
If any of the provisions of this Note shall be held to
be invalid or unenforceable, the determination of invalidity or
unenforceability of any such provision shall not affect the
validity or enforceability of any other provision or provisions
hereof.
This Note shall be binding upon Maker and its
successors and assigns and shall inure to the benefit of and be
enforceable by the Payee and its successors and assigns.
All notices to Maker expressly required in this Note
shall be in writing and shall be made in accordance with Section
11.3 of the Loan Agreement.
At the option of the holder hereof, an action may be
brought to enforce this Note in the District Court in and for
Wayne County, State of Michigan, or in any other court in which
venue and jurisdiction are proper. Maker and each endorser,
surety and guarantor hereof consent to such venue and
jurisdiction, in any action commenced to enforce this Note.
This Note shall be governed by and construed in
accordance with the laws of the State of New York, and Maker
chooses New York law to govern this Note pursuant to N.Y. Gen.
Oblig. Law Section 501401 (Consol. 1995).
BEARD MINING L.L.C., an Oklahoma limited
liability company
By: Beard Technologies, Inc., an
Oklahoma corporation, Member and Manager
HERB MEE, JR.
Herb Mee, Jr.
Vice President
Advances and Payments of Principal and Interest
Aggregate Unpaid
Date Amount of Amount of Principal Amount of Principal Balance Notification
Advance Paid or Prepaid Interest Paid of Advance Made by