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EXHIBIT 10.1
SUBORDINATED UNSECURED PROMISSORY NOTE
DATED DECEMBER 3, 2007
THIS
SUBORDINATED UNSECURED PROMISSORY NOTE (THIS
“NOTE” ) AND THE INDEBTEDNESS
EVIDENCED HEREBY ARE SUBORDINATE IN THE MANNER AND TO THE
EXTENT SET FORTH IN THAT CERTAIN SUBORDINATION AGREEMENT DATED
AS OF DECEMBER 3, 2007 (AS AMENDED, RESTATED SUPPLEMENTED
OR OTHERWISE MODIFIED FROM TIME TO TIME, THE
“SUBORDINATION AGREEMENT” ) AMONG
GALAXY ENERGY CORPORATION, THE SUBORDINATED CREDITORS NAMED
THEREIN, THE LENDERS NAMED THEREIN, AND PROMETHEAN ASSET
MANAGEMENT L.L.C., TO THE SENIOR INDEBTEDNESS (AS DEFINED IN
THE SUBORDINATION AGREEMENT); AND EACH HOLDER OF THIS
PROMISSORY NOTE (EACH A “HOLDER”
, AND COLLECTIVELY THE “HOLDERS”
), BY ITS ACCEPTANCE HEREOF, SHALL BE BOUND BY THE PROVISIONS
OF THE SUBORDINATION AGREEMENT.
This Security has not been registered under the Securities Act of
1933 (hereinafter the “1933 Act”) or under applicable
state securities law (hereinafter the “State Acts”) and
may not be sold, assigned, pledged, transferred or hypothecated,
whether or not for consideration, by the holder except upon
issuance to the Company of a favorable written opinion of Counsel
for the Company or upon submission to the Company of such other
evidence as may be satisfactory to counsel to the Company to the
effect that any such sale, assignment, pledge, transfer or
hypothecation will not be in violation of the 1933 Act or the State
Acts.
GALAXY ENERGY CORPORATION
Subordinated Unsecured Promissory Note
December
3, 2007
$550,000.00
Denver, Colorado
FOR
VALUE RECEIVED, Galaxy Energy Corporation , a
Colorado corporation (hereinafter the “Company”)
promises to pay to the order of Bruner Family Trust UTD
March 28, 2005 (hereinafter the “Holder”), the
principal sum of Five Hundred Fifty Thousand Dollars
($550,000.00), together with interest at the rate of eight percent
(8.0%) per annum (hereinafter “Interest”), such
principal and Interest to be payable ON THE LATER OF, (i) the date
upon which all of the Senior Indebtedness (as defined in the
Subordination Agreement) has been indefeasibly paid in full, and
(ii) one hundred twenty (120) days from the date hereof, in each
case, in lawful money of the United States of America, subject,
however, to the restrictions contained in the Subordination
Agreement. Holder shall advance the principal amount of
this Note to the Company in one or more advances and interest shall
accrue from the date of each such advance.
Galaxy Energy Corporation Subordinated Promissory Note -
Page 1 of 4
1. EVENTS OF
DEFAULT.
If one or more of the
following events (hereinafter “events of
default”) shall occur:
(a) default in the payment
of any principal of or interest on this Note and the
continuation of such default for a period of 10
days;
(b) breach of any covenant
contained in this Note and the continuation of such breach
for a period of 30 days or more after written notice
thereof;
(c)
the Company or any of its subsidiaries files or is served
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