Exhibit 10.26


 


AMENDMENT NO. 1 TO PROMISSORY
NOTE


 


This AMENDMENT NO. 1 (“Amendment”), dated as of
October 31, 2007, to PROMISSORY NOTE (“Note”), dated as of June 1, 2007, is
executed by Rocky Mountain Gas, Inc., a Wyoming corporation (“Maker”), and
consented to by PRB Energy, Inc., a Colorado corporation (“Payee”).


 


RECITALS


 


WHEREAS, Maker has executed that certain Note,
pursuant to which, among other things, Maker has promised to pay Payee the
principal sum of $2,750,000, together with interest on the unpaid principal sum
from time to time outstanding at 10% per annum, on or before October 31, 2007;


 


WHEREAS, pursuant to the Note, Maker has paid an
installment of $500,000 to Payee on or about June 21, 2007; and


 


WHEREAS, Maker owes Payee the unpaid principal sum of
$2,250,000, together with interest on the principal sum from time to time
outstanding at 10% per annum, under the Note; and


 


WHEREAS, at Maker’s request, Payee has agreed to
extend the final maturity date of the Note from October 31, 2007, to February
29, 2008, and to provide a schedule for the payment of the unpaid principal sum
and interest.


 


NOW, THEREFORE, Maker amends the Note as follows, and
Payee consents to such Amendment:


 


1.             The
first paragraph of the Note, which begins, “FOR VALUE RECEIVED,” is amended by
replacing the words “on or before October 31, 2007,” with the following text: “on
or before February 29, 2008,”.


 


2.             The
second paragraph of the Note, which begins, “Maker hereby agrees to pay this
Note” is amended by replacing such paragraph in its entirety with the following
text:


 


Maker hereby agrees to pay this Note as follows: in an
installment on June 21, 2007 of $500,000; in an installment on October 31, 2007
of $850,000; in an installment on November 30, 2007 of $400,000; in an installment
on December 31, 2007 of $400,000; in an installment on January 31, 2008 of
$400,000; and payment of the remaining principal outstanding under this Note
plus all accrued interest on February 29, 2008, the final maturity date of this
Note.


 


3.             Except
as otherwise expressly provided by this Amendment, all of the terms,
conditions, and provisions of the Note remain unaltered and in full force and
effect. This Amendment and the Note shall be read and construed as one
agreement.


 


4.             This
Amendment may be executed in any number of counterparts, each of which shall be
deemed an original but all of which shall be deemed but one and the same
instrument.


 


IN WITNESS WHEREOF, the undersigned has executed this
Amendment No. 1 to Promissory Note as of the date first written above.


 


	
  ROCKY MOUNTAIN GAS, INC.

  	 

	
   

  	 

	
   

  	 

	
  By:

  	
    /s/ John F. Reader

  	
   

  	 

	
   

  	
  John F. Reader

  	 

	
   

  	
  Senior Vice
  President

  	 

	
   

  	
   

  	 

	
   

  	
   

  	 

	
   

  	
  CONSENTED TO as
  of the date first written above.

  	 

	
   

  	
   

  	 

	
   

  	
   

  	 

	
  PRB ENERGY, INC.

  	 

	
   

  	
   

  	 

	
   

  	
   

  	 

	 
	
  By:

  	
    /s/ William F. Hayworth

  	
   

  
	 
	
   

  	
  William F. Hayworth

  
	 
	
   

  	
  President &
  Chief Operating Officer