exh10-1_amdagmt.htm


     

    
      

      

    

     

     

     

     

    EXHIBIT
      10.1

     

    OCTOBER
      2007 AMENDMENT AND AGREEMENT TO 2005 SUBORDINATED
      NOTES

    
 

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    OCTOBER
      2007 AMENDMENT AND AGREEMENT

     

    AS
      TO
      2005 SUBORDINATED NOTES

     

    


     

    THIS
      OCTOBER 2007 AMENDMENT AND AGREEMENT AS TO 2005 SUBORDINATED NOTES (this
“Agreement”) is made as of October 31, 2007, among Galaxy
      Energy Corporation, a Colorado corporation (“Galaxy” or the
“Company”), Bank Sal. Oppenheim jr. & Cie., Clarion Finanz
      AG, Capriccio Investments Inc., Desmodio Management Inc., Centrum Bank AG,
      Finter Bank Zurich, Julius Baer Fund Trading, Vanguard Capital Limited, Rahn
      & Bodmer and Bost & Co. (collectively, the
“Buyers”).

     

    W
      I T N E
      S S E T H:

     

    WHEREAS,
      the Company and the Buyers entered into that certain Securities Purchase
      Agreement (the “2005 Subordinated Note Purchase Agreement”),
      dated as of March 1, 2005, pursuant to which the Company issued to the Buyers,
      among other things, senior subordinated convertible notes (as amended by that
      certain Waiver and First Amendment to March 2005 Notes and Warrants, dated
      as of
      May 31, 2005, and in effect as of the date thereof, without amendment or
      modification thereafter, the “2005 Subordinated Notes”) and
      warrants (the “2005 Warrants”), dated March 1, 2005 to purchase
      an aggregate of 1,637,235 shares (the
“WarrantShares”) (subject to adjustment as
      provided therein) of the Common Stock of the Company and, in connection
      therewith, entered into that certain Subordination Agreement, dated as of May
      31, 2005, with the Subsidiaries, the Buyers, holders of secured notes issued
      in  2004 (the “2004Noteholders”) and
      an agent for the 2004 Noteholders (the “2005 Subordination
      Agreement”); and

     

    WHEREAS,
      the 2005 Subordinated Notes had a stated maturity date of April 30, 2007;
      and

     

    WHEREAS,
      Galaxy and the Buyers entered into the April 2007 Waiver, Amendment and
      Agreement as to 2005 Subordinated Notes which, among other things, provided
      for
      the extension of the maturity date of the 2005 Subordinated Notes to October
      31,
      2007; and

     

    WHEREAS,
      Galaxy requires an extension of the maturity date of the 2005 Subordinated
      Notes; and

     

    NOW,
      THEREFORE, in consideration of the agreements, provisions and covenants
      contained herein and for other good and valuable consideration, the receipt
      and
      sufficiency of which are hereby acknowledged, each of the undersigned agrees
      as
      follows:

     

    1.           Extension
      of Maturity Date and Confirmation of Subordination.

     

    a.  Each
      of
      the Buyers, severally and not jointly, hereby agrees with the Company that
      the
      first sentence of Section 2(a)(xvi) of each of the Notes held by such Buyer
      is
      hereby amended and restated in its entirety as follows:

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    “(xvi)     “Maturity
      Date” means the earliest of (A) February 29, 2008, and (B) such date as
      all amounts due under this Note have been fully paid.”

    


    b.           Each
      of the Buyers, severally and not jointly, hereby agrees and confirms that the
      2005 Subordinated Notes continue to be subordinate pursuant to the terms of
      the
      2005 Subordination Agreement.

    


    2.  Representations
      and Warranties of the Company.  The Company represents and
      warrants to each of the Buyers that the Company has the requisite corporate
      power and authority to enter into and perform its obligations under this
      Agreement, the Notes (as amended hereby), and the Warrants.  The
      execution and delivery of this Agreement by the Company and the consummation
      of
      the transactions contemplated hereby have been duly authorized by the board
      of
      directors of the Company, and no further consent or authorization is required
      of
      any of the Company or its Board of Directors or shareholders (under applicable
      law, the rules and regulations of the Principal Market (as defined in the Notes)
      or otherwise.  This Agreement has been duly executed and delivered by
      the Company, and each of this Agreement, the Notes (as amended hereby), and
      the
      Warrants constitutes a valid and binding obligation of each of the Company
      enforceable against the Company in accordance with its
      terms.  

     

    3.           Representation
      and Warranties of Each of the Buyers.  Each of the Buyers, jointly
      and not severally, represents and warrants to the Company that with respect
      to
      such Buyer, it is a validly existing corporation, partnership, limited liability
      company or other entity and has the requisite corporate, partnership, limited
      liability or other organizational power and authority to enter into and perform
      its obligations under this Agreement.  This Agreement has been duly
      and validly authorized, executed and delivered on behalf of such Buyer and
      is a
      valid and binding agreement of such Buyer, enforceable against such Buyer in
      accordance with its terms.

     

    4.  Independent
      Nature of the Buyers.  The obligations of each of the Buyers
      hereunder are several and not joint with the obligations of the other
      Buyers.  Each of the Buyers shall be responsible only for its own
      agreements and covenants hereunder and under the other documents executed in
      connection with the 2005 Subordinated Notes (the “Transaction
Documents”).  The decision of each of the Buyers to
      enter into this Agreement has been made by each such party independently of
      any
      of the other Buyers and independently of any information, materials, statements
      or opinions as to the business, affairs, operations, assets, properties,
      liabilities, results of operations, condition (financial or otherwise) or
      prospects of the Company or any of its Subsidiaries which may have been made
      or
      given by any of the other Buyers or by any agent or employee of any of the
      other
      Buyers, and none of the Buyers nor any of their respective agents or employees
      shall have any liability to any of the other Buyers (or any other Person)
      relating to or arising from any such information, materials, statements or
      opinions.  Nothing contained herein or in any of the other Transaction
      Documents, and no action taken by any of the Buyers pursuant hereto or thereto,
      shall be deemed to constitute any of the Buyers as a partnership, an
      association, a joint venture or any other kind of entity, or create a
      presumption that any of the Buyers are in any way acting in concert or as a
      group with respect to such obligations or the transactions contemplated hereby
      or thereby.  Each of the Buyers shall be entitled to independently
      protect and enforce its rights, including the rights arising out of this
      Agreement and the other Transaction Documents (in each case as amended hereby),
      and it shall 

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

       

      not
        be
        necessary for any of the other Buyers to be joined as an additional party
        in any
        proceeding for such purpose.

    

     

    5.  Successors
      and Assigns.  This Agreement shall be binding upon and shall inure
      to the benefit of the parties hereto and their respective successors and
      permitted assigns.  The successors and assigns of such entities shall
      include their respective receivers, trustees or
      debtors-in-possession.

     

    6.  Further
      Assurances.  The Company hereby agrees from time to time, as and
      when requested by any Buyer, to execute and deliver or cause to be executed
      and
      delivered, all such documents, instruments and agreements, including secretary’s
      certificates, stock powers and irrevocable transfer agent instructions, and
      to
      take or cause to be taken such further or other action, as such Buyer may
      reasonably deem necessary or desirable in order to carry out the intent and
      purposes of this Agreement and the other Transaction Documents.

     

    7.  Rules
      of Construction.  All words in the singular or plural include the
      singular and plural and pronouns stated in either the masculine, the feminine
      or
      neuter gender shall include the masculine, feminine and neuter, and the use
      of
      the word “including” in this Agreement shall be by way of example rather than
      limitation.

     

    8.  Governing
      Law; Jurisdiction; Jury Trial.  All questions concerning the
      construction, validity, enforcement and interpretation of this Agreement shall
      be governed by the internal laws of the State of Colorado, without giving effect
      to any choice of law or conflict of law provision or rule (whether of the State
      of Colorado or any other jurisdiction) that would cause the application of
      the
      laws of any jurisdiction other than the State of Colorado.  Each party
      hereby irrevocably submits to the exclusive jurisdiction of the state and
      federal courts sitting in the City of Denver, for the adjudication of any
      dispute hereunder or in connection herewith or with any transaction contemplated
      hereby or discussed herein, and hereby irrevocably waives, and agrees not to
      assert in any suit, action or proceeding, any claim that it is not personally
      subject to the jurisdiction of any such court, that such suit, action or
      proceeding is brought in an inconvenient forum or that the venue of such suit,
      action or proceeding is improper.  Each party hereby irrevocably
      waives personal service of process and consents to process being served in
      any
      such suit, action or proceeding by mailing a copy thereof to such party at
      the
      address for such notices to it under this Agreement and agrees that such service
      shall constitute good and sufficient service of process and notice
      thereof.  Nothing contained herein shall be deemed to limit in any way
      any right to serve process in any manner permitted by law.  EACH PARTY
      HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST,
      A
      JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION
      HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED
      HEREBY.

     

    9.  Counterparts.  This
      Agreement may be executed in two or more identical counterparts, all of which
      shall be considered one and the same agreement and shall become effective when
      counterparts have been signed by each party and delivered to each other
      party.  In the event that any signature to this Agreement or any
      amendment hereto is delivered by facsimile transmission or by e-mail delivery
      of
      a “.pdf” format data file, such signature shall create a valid and binding
      obligation of the party executing (or on whose behalf such signature is
      executed) 

     

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

       

      with
        the
        same force and effect as if such facsimile or “.pdf” signature page were an
        original thereof.  No party hereto shall raise the use of a facsimile
        machine or e-mail delivery of a “.pdf” format data file to deliver a signature
        to this Agreement or any amendment hereto or the fact that such signature
        was
        transmitted or communicated through the use of a facsimile machine or e-mail
        delivery of a “.pdf” format data file as a defense to the formation or
        enforceability of a contract, and each party hereto forever waives any such
        defense.

    

     

    10.  Section
      Headings.  The section headings herein are for convenience of
      reference only, and shall not affect in any way the interpretation of any of
      the
      provisions hereof.

     

    11.  No
      Strict Construction.  The language used in this Agreement will be
      deemed to be the language chosen by the parties to express their mutual intent,
      and no rules of strict construction will be applied against any
      party.

     

    12.  Merger.  This
      Agreement and the other Transaction Documents, as amended hereby, represent
      the
      final agreement of each of the parties hereto with respect to the matters
      contained herein and may not be contradicted by evidence of prior or
      contemporaneous agreements, or prior or subsequent oral agreements, among any
      of
      the parties hereto.

     

     [Remainder
      of page intentionally left blank; Signature page
      follows]


    
      
         

      

      
        4

        
          

        

      

      
         

      

    


    IN
      WITNESS WHEREOF, this Agreement has been duly executed and delivered by each
      of
      the undersigned as of the date first above written.

     

    
      	 	
              COMPANY:

               

              GALAXY
                ENERGY CORPORATION

               

            
	 	
               

              By:      __________________________    

              Name: __________________________

              Title:   __________________________

               

            


    

    



    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
       

      
        	 	
                BUYERS:

                 

                BANK
                  SAL. OPPENHEIM JR. & CIE.

              
	 	
                 

                By:      __________________________    

                Name: __________________________

                Title:   __________________________

                 

              


      

       

      
         

        
          	 	
                  CLARION
                    FINANZ AG

                
	 	
                   

                  By:      __________________________    

                  Name: __________________________

                  Title:   __________________________

                   

                


        

        


         

        
          	 	
                  CAPPRICCIO
                    INVESTMENTS INC.

                
	 	
                   

                  By:      __________________________    

                  Name: __________________________

                  Title:   __________________________

                   

                


        

        


         

        
          	 	
                  DESMODIO
                    MANAGEMENT INC.

                
	 	
                   

                  By:      __________________________    

                  Name: __________________________

                  Title:   __________________________

                   

                


        

        


         

        
          	 	
                  CENTRUM
                    BANK AG

                
	 	
                   

                  By:      __________________________    

                  Name: __________________________

                  Title:   __________________________

                   

                


        

        




      
        
           

        

        
           

          
            

          

        

        
           

        

      


       

      
        	 	
                FINTER
                  BANK ZURICH

              
	 	
                 

                By:      __________________________    

                Name: __________________________

                Title:   __________________________

                 

              


      

      


       

      
        	 	
                JULIUS
                  BAER FUND TRADING

              
	 	
                 

                By:      __________________________    

                Name: __________________________

                Title:   __________________________

                 

              


      

      


       

      
        	 	
                VANGUARD
                  CAPITAL LIMITED

              
	 	
                 

                By:      __________________________    

                Name: __________________________

                Title:   __________________________

                 

              


      

      


       

      
        	 	
                RAHN
                  & BODMER

              
	 	
                 

                By:      __________________________    

                Name: __________________________

                Title:   __________________________

                 

              


      

      

         

        
          	 	
                  BOST
                    & CO.

                
	 	
                   

                  By:      __________________________    

                  Name: __________________________

                  Title:   __________________________