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EXHIBIT 10.1
 
UNSECURED PROMISSORY NOTE
DATED MARCH 13, 2008

 
 
 

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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
 
Unsecured Promissory Note

March 13, 2008
$145,000.00                                                                                                                                                  
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 One Hundred
Forty-Five Thousand Dollars ($145,000.00), together with interest at the rate of
eight percent (8.0%) per annum (hereinafter “Interest”), such principal and
Interest to be payable one hundred twenty (120) days from the date hereof in
lawful money of the United States of America.  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.

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 with any petition
for relief under the Bankruptcy Code or any similar federal or state statute
(the “Code”) or the entry by a court of competent jurisdiction of a decree or
order adjudging the company or the subsidiary, as the case may be, a bankrupt or
insolvent or approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of the Company or the
subsidiary under the Code or appointing a receiver, trustee or other similar
official of the Company or the subsidiary or all or substantially all of its
assets or the subsidiary’s assets, or ordering the winding up or liquidation of
its affairs or the subsidiary’s affairs, and the continuation of such decree or
order unstayed and in effect for a period of 60 consecutive days;
 
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(d) the institution by the Company or any of its subsidiaries or the consent to
the institution by the Company or its subsidiary of proceedings to adjudicate
the Company or its subsidiary a bankrupt or insolvent or the filing or consent
by the Company or its subsidiary to the filing of a petition or answer seeking
reorganization or relief under the Code, the consent by the Company or its
subsidiary to the appointment of a receiver, trustee or other similar official
of the Company or its subsidiary or of any substantial part of its property of
its subsidiary’s property, an assignment by the Company or its subsidiary for
the benefit of creditors or the admission by the Company or its subsidiary in
writing of its inability to pay its debts generally as they become due; or
 
(e) a default by the Company in any of its obligations under any other
promissory note or any mortgage, credit agreement or other facility, indenture
agreement, factoring agreement or other instrument under which there may be
issued, or by which there may be secured or evidenced any indebtedness for
borrowed money or money due under any long term leasing or factoring arrangement
of the Company in an amount exceeding $50,000, whether such indebtedness now
exists or shall hereafter be created and such default shall result in such
indebtedness becoming or being declared due and payable prior to the date on
which it would otherwise become due and payable;

then, the Holder of this Note may, by written notice to the Company, declare the
entire unpaid principal of and accrued and unpaid Interest on this Note to be
due and payable and, upon such declaration, the same shall become due and
payable forthwith without further demand or notice.

2. MISCELLANEOUS.
 
2.1. All powers and remedies given by this Note to the Holder hereof shall, to
the extent permitted by law, be deemed cumulative and not exclusive of any other
power or remedy or of any other powers and remedies available to the Holder
hereof, by judicial proceedings or otherwise, to enforce the performance or
observance of the covenants and agreements contained in this Note.  No delay or
omission of the Holder hereof to exercise any right or power accruing upon any
default occurring and continuing as aforesaid shall impair any such right or
power or shall be construed to be a waiver of any such default or any
acquiescence therein.  Every power and remedy given by this Note or by law to
the Holder hereof may be exercised from time to time, and as often as shall be
deemed expedient, by the Holder hereof, all subject, as hereinabove provided, to
the payment of the principal of and the interest on this Note being expressly
subordinated in right of payment to the prior payment in full of all Senior
Indebtedness.
 
2.2. In addition to the payments provided for above, the Company agrees to pay
all expenses incurred, including reasonable attorneys’ fees, if this Note is
placed in the hands of an attorney for collection or if it is collected through
bankruptcy or other judicial proceedings.
 
2.3. The Company, to the extent permitted by law, waives notice, demand,
presentment for payment, protest, the filing of suit or the taking of any other
action by any Holder hereof for the purpose of fixing its liability hereon.
 
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2.4. This Note has been executed and delivered in and shall be governed by and
construed in accordance with the laws of the State of Colorado.

 
IN WITNESS WHEREOF, the Company has executed this Note under seal on the day and
year first above written.

 
GALAXY ENERGY CORPORATION
 
 
 
By:  /s/ Christopher S. Hardesty                          
Christopher S. Hardesty
               Chief Financial Officer

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