EXHIBIT 10.54
FORBEARANCE AGREEMENT BETWEEN GALAXY ENERGY CORPORATION AND
BRUNER FAMILY TRUST UTD MARCH 28, 2005 DATED EFFECTIVE
DECEMBER 1, 2006
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FORBEARANCE AGREEMENT
This Forbearance
Agreement (this "Agreement") is dated to be effective
as of December
1, 2006, and is entered into by and between Galaxy Energy
Corporation, a
Colorado corporation
("Borrower")
and Bruner Family
Trust UTD
March 28, 2005 ("Note Holder").
RECITALS:
WHEREAS,
Borrower and
Note Holder are parties to that certain
Promissory Note in the principal amount of $2,600,000, dated January 14, 2004,
as amended by that certain Note Modification Agreement, dated April
1, 2006 (the
Promissory Note and the Note Modification Agreement are
collectively referred to
herein as the "Note");
WHEREAS, Borrower
has failed to make the mandatory payment of the
principal and
interest owing as required under Section 1 of the Note (the
"Primary Payment"); and
WHEREAS, Note Holder
is willing to forbear from enforcing its rights
that arise as a result of the failure by Borrower to make the Primary Payment
for a limited period of time, provided that Borrower complies
with the terms of
this Agreement.
NOW, THEREFORE, for
good and valuable
consideration, the
receipt and
sufficiency of which
are hereby
acknowledged,
the parties hereto agree as
follows:
I. AGREEMENT
Note Holder
hereby agrees to refrain through 5:00 p.m. Mountain
Standard Time on June 30, 2007 (the "Termination Date") from exercising any of
its rights and
remedies under the
Note that may exist by virtue of the failure
by Borrower to make the Primary Payment and hereby waives any such
rights until
the Termination Date.
1. Except as expressly
provided herein,
the execution and delivery
of this Agreement
shall not: (a) constitute an extension or modification of any
aspect of the Note;
(b) extend the terms
of the Note or the due date of any of
the obligations
set forth in the Note;
(c) give rise to any
obligation on the
part of the Note Holder to extend, modify or waive any term or
condition of the
Note; (d) give rise to any defenses or counterclaims to the right
of Note Holder
to otherwise enforce
its rights and remedies under the Note; or (e) establish a
custom or course of dealing.
2. From and
after the Termination Date, Note Holder shall be entitled
to enforce the Note according to the original terms thereof.
II. REPRESENTATIONS AND WARRANTIES
In consideration
of the limited
agreement of Note Holder to forbear
from the exercise of its rights and remedies as set forth above,
Borrower hereby
represents and warrants to Note Holder as of the date hereof as
follows:
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1. The
execution,
delivery and
performance
of this Agreemen
