NOTE ASSUMPTION AGREEMENT AND RELEASE
This Note
Assumption Agreement and Release (this "Agreement") is made as
of
July 22, 2005 (the "Effective Date"), by and among William Beard and Lu
Beard,
as trustees for The William M. Beard and Lu Beard
1988 Charitable Unitrust
("Unitrust"), The Beard Company ("Company"), and Boatright Family, L.L.C.
("Boatright").
RECITALS
Whereas, the
Company has previously executed and delivered to Unitrust that
certain 10% Participating Note, dated May 21, 2004, in the
original principal
amount of $500,000.00 (the "Company Unitrust Note"), upon which, as of the
Effective Date, the unpaid principal balance is $384,101.80 and all accrued
interest has been paid in full; and
Whereas,
Unitrust has
previously executed
and delivered to Boatright that
certain Promissory Note (the "Unitrust
Boatright Note") dated
May 21, 2004, in
the original principal amount of $500,000,
upon which, as of the Effective Date,
the unpaid principal balance is $388,817.92 and all
accrued interest has
been
paid in full.
Whereas, the
Company has previously executed and delivered, for the benefit
of McElmo Dome Nominee, LLC as nominee (in such
capacity, the "Nominee") for
Boatright and others, two certain deeds of
trust (collectively,
the "2004 Deed
of Trust"), each dated May 21, 2004 and titled
Deed of Trust,
Assignment
of
Production, Security Agreement and Financing
Statement, one such
deed of trust
to the public trustee of Montezuma
County, Colorado and one such deed of
trust
to the public trustee of Dolores County,
Colorado, covering certain undivided
interests in oil, gas, and mineral
leases (the
"Collateral"),
each given,
in
part, in consideration of, and to secure, the loan made by the Unitrust to
the
Company evidenced by the Company Unitrust
Note.
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, Unitrust, Company, and
Boatright agree as follows:
1. Recitals.
Each of the parties
acknowledge
and confirm the
accuracy of
the recitals set forth above.
2. Boatright Representations and Warranties. Boatright represents and
warrants that Boatright is the sole holder and
owner of the Unitrust
Boatright
Note, free of all claims and
encumbrances.
3. Unitrust Representations and Warranties. Unitrust represents and
warrants that Boatright is the sole holder and owner of
the Company
Unitrust
Note, free of all claims and
encumbrances.
4. Assumption of
Obligations and
