exh10-1_amendment.htm


     

    
      

      

    

     

     

     

     

     

     

     

    EXHIBIT
      10.1

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    NOVEMBER
      2007 AMENDMENT AGREEMENT

     

    THIS
      NOVEMBER 2007 AMENDMENT AGREEMENT (this “Agreement”) is made as
      of November 16, 2007, among Galaxy Energy Corporation, a Colorado corporation
      (“Galaxy” or the “Company”), the Subsidiaries
      (as defined below), HFTP Investments LLC (“HFTP”), Promethean I
      Master, Ltd. (f/k/a Gaia Offshore Master Fund, Ltd. ) (“Prom
      I”), Caerus Partners LLC (“Caerus Partners”),
      Promethean II Master, L.P. (“Prom II”) and Leonardo, L.P.
      (“Leonardo” and, collectively with HFTP, Prom I, Caerus
      Partners and Prom II, the “Buyers”).

     

    W
      I T N E
      S S E T H:

     

    WHEREAS,
      the Company, Caerus Fund Ltd. (“Caerus Fund”) and certain of
      the Buyers (the “2005 Buyers”) entered into that certain
      Securities Purchase Agreement, dated as of May 31, 2005 (as amended, restated,
      supplemented or otherwise modified and in effect from time to time, the
“2005 Purchase Agreement”), pursuant to which the Company
      issued to the 2005 Buyers senior secured convertible notes in an aggregate
      original principal amount of $10,000,000 (such notes, together with any
      promissory notes or other securities issued in exchange or substitution therefor
      or replacement thereof, and as any of the same may be amended, restated,
      supplemented or otherwise modified and in effect from time to time, the
“2005 Notes”; the shares of common stock, par value $0.001 per
      share (the “Common Stock”), of the Company, issuable upon
      conversion of the Notes being referred to herein as the “Conversion
      Shares”), and the 2005 Buyers were granted perpetual overriding royalty
      interests in the hydrocarbon production on the Company’s and Dolphin’s
      properties pursuant to those certain Conveyances of Overriding Royalty
      Interests, dated May 31, 2005;

     

    WHEREAS,
      the Company entered into that certain Waiver and Amendment, dated as of December
      1, 2005, with Caerus Fund, AG Offshore Convertibles, Ltd. (“AG
      Offshore”) and certain of the Buyers;

     

    WHEREAS,
      the Company entered into that certain Waiver and Agreement, dated as of July
      7,
      2006, with Caerus Fund, AG Offshore and certain of the Buyers;

     

    WHEREAS,
      HFTP transferred to Prom II, among other things, a portion of the 2005 Note
      originally issued by the Company to HFTP, pursuant to that certain Supplementary
      Agreement, dated as of October 31, 2006, among HFTP, Prom II and the other
      parties thereto, and in connection with such transfer, Prom II became a Buyer
      under, among other things, the 2005 Purchase Agreement;

     

    WHEREAS,
      the Company entered into that certain November 2006 Waiver and Amendment
      Agreement, dated as of November 29, 2006, with the Buyers;

     

    WHEREAS,
      Caerus Fund transferred to Caerus Partners its entire interest in, among other
      things, the 2005 Note originally issued by the Company to Caerus Fund, pursuant
      to that certain Securities Transfer Agreement, dated as of December 31, 2006,
      between Caerus Fund and Caerus Partners, and in connection with such transfer,
      Caerus Partners became a Buyer under, among other things, the 2005 Purchase
      Agreement;

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    WHEREAS,
      the Buyers believe that certain events have taken place that constitute events
      of default and/or triggering events under the terms of the Transaction
      Documents;

     

    WHEREAS,
      in light of the current financial condition of the Company and the Existing
      Defaults, the Company and the Buyers hereby deem it advisable and in the best
      interests of the parties to amend each of the 2005 Purchase Agreement and the
      2005 Notes as provided herein.

     

    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.  Amendment
      of the 2005 Notes.

     

    a.  Each
      of
      the Buyers, severally and not jointly, hereby agrees with the Company that,
      as
      of the date first above written, each of the 2005 Notes is hereby amended to
      insert the following definitions as new subsections (xvi) and (xvii),
      respectively, of Section 2(a) of each of the 2005 Notes immediately following
      subsection 2(a)(xv) and the current definitions set forth in paragraphs (xvi)
      and (xvii) and thereafter are hereby renumbered accordingly:

     

    “(xvi)                      “Installment
      Amount” means the lesser of (A) the outstanding Principal and (B) a
      principal amount equal to the product of (a) Five Hundred Thousand Dollars
      ($500,000) and (b) the Holder’s Allocation Percentage.  In the event
      the Holder shall sell or otherwise transfer any portion of this Note, the
      transferee shall be allocated a pro rata portion of the applicable Installment
      Amount equal to the product of (x) the Installment Amount and (y) a fraction
      of
      which the numerator is the principal amount of the Note transferred and of
      which
      the denominator is the original aggregate principal amount of the
      Note.

    


    (xvii)                      “Installment
      Date” means each of November 16, 2007 (the date of that certain
      November 2007 Amendment Agreement, among the Company, the Holder and the other
      parties thereto (the “November 2007 Amendment”)), and the first
      Business Day of each calendar month through and including the calendar month
      immediately preceding the Maturity Date.”

    


    b.  Each
      of
      the Buyers, severally and not jointly, hereby agrees with the Company that,
      as
      of the date first above written, each of the 2005 Notes is hereby amended to
      insert the following definitions as new subsections (xxii) and (xxiii) of
      Section 2(a) of each of the 2005 Notes immediately following Section 2(a)(xxi)
      and replacing the previously existing definitions (and such previously existing
      definitions are hereby deleted) of “Maturity Date” and
“Maturity Date Acceleration Event,” respectively, as
      follows:

     

    “(xxii)                      “Maturity
      Date” means the earliest of (A) October 1, 2008, (B) the
      date of a Maturity Date Acceleration Event (as defined herein), and (C) such
      date as all amounts due under this Note have been fully paid.

    


    
      
        
        

      

      
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    (xxiii)                      “Maturity
      Date Acceleration Event” means any principal amount of the March 2005
      Notes is outstanding on the Business Day immediately preceding the maturity
      date
      of any of the March 2005 Notes or any other date on which the principal of
      the
      March 2005 Notes is due and payable.”

    


    c.  Each
      of
      the Buyers, severally and not jointly, hereby agrees with the Company that,
      as
      of the date first above written, each of the 2005 Notes is hereby amended to
      insert a new subsection (ix) in Section 2(d) of each of the 2005 Notes, such
      paragraph to immediately follow Section 2(d)(viii) and to read in its entirety
      as follows:

     

    “(ix)  Application
      of Conversion Amounts.  Any principal amount which the Holder
      converts in accordance with this Section 2 will be deducted first from the
      last
      scheduled payment of principal due under this Note (i.e., the principal amount
      payable on the Maturity Date), and then sequentially from the immediately
      preceding payments of principal due under this Note (i.e., the Installment
      Amounts and the Mandatory Early Redemption Amount), unless the Holder specifies
      otherwise in a Conversion Notice (in which case, the principal which Holder
      converts in accordance herewith shall be applied as so specified in such
      Conversion Notice).

    


    d.  Each
      of
      the Buyers, severally and not jointly, hereby agrees with the Company that,
      as
      of the date first above written, each of the 2005 Notes is hereby amended to
      insert the following sentence in Section 2(f)(i) of each of the 2005 Notes,
      such
      sentence to immediately follow the initial sentence thereof and to read in
      its
      entirety as follows:

     

    “Notwithstanding
      the foregoing, this Section 2(f)(i) shall be of no force or effect on or after
      the date of the November 2007 Amendment (the “November Amendment
      Date”) unless and until an Event of Default or a Triggering Event shall
      have occurred after such date.”

     

    e.  Each
      of
      the Buyers, severally and not jointly, hereby agrees with the Company that,
      as
      of the date first above written, each of the 2005 Notes is hereby amended to
      insert the following sentence in Section 2(f)(iii) of each of the 2005 Notes,
      such sentence to immediately follow the last sentence thereof and to read in
      its
      entirety as follows:

     

    “Notwithstanding
      the foregoing, this Section 2(f)(iii) shall be of no force or effect on or
      after
      the November Amendment Date unless and until an Event of Default or a Triggering
      Event shall have occurred after such date.”

     

    f.  Each
      of
      the Buyers, severally and not jointly, hereby agrees with the Company that,
      as
      of the date first above written, each of the 2005 Notes is hereby amended to
      insert a new subsection (vi) in Section 2(f) of each of the 2005 Notes, such
      paragraph to immediately follow Section 2(f)(v) and to read in its entirety
      as
      follows:

     

    “(vi)                      Adjustment
      of Fixed Conversion Price upon Issuance of Common Stock as Payment of Permitted
      Subordinated Indebtedness or March 2005 Notes.  If and whenever on
      or after the November Amendment Date, the Company issues any Shares in payment,
      or upon conversion, of principal or interest under any Permitted Subordinated
      

     

     

    
      
        
        

      

      
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    Indebtedness
      or the March 2005 Notes (to the extent permitted by, and subject to the
      conditions of, Section 4(w) of the Securities Purchase Agreement) at a
      Subordinated Indebtedness Issue Price (as defined below) less than the
      Applicable Price, then immediately after such issue the Fixed Conversion Price
      then in effect shall be reduced to the Subordinated Indebtedness Issue
      Price.  For purposes hereof, “Subordinated Indebtedness Issue
      Price” means the quotient of (A) the aggregate principal and/or
      interest as to which Shares are issued as payment thereon, or upon conversion
      thereof, divided by (B) the number of Shares so issued, and any Shares so
      issued shall be deemed to have been issued at the Subordinated Indebtedness
      Issue Price.”

     

    g.  Each
      of
      the Buyers, severally and not jointly, hereby agrees with the Company that,
      as
      of the date first above written, Section 3(b) of each of the 2005 Notes is
      hereby deleted in its entirety and is replaced with “[Intentionally
      Omitted.]”.

     

    h.  Each
      of
      the Buyers, severally and not jointly, hereby agrees with the Company that,
      as
      of the date first above written, each of the 2005 Notes is hereby amended to
      restate Section 3(d) to each of the 2005 Notes, such Section to read in its
      entirety as follows:

     

    “(d)                      Adjustment
      of Fixed Conversion Price Upon Redemption at Option of Holder.  In
      the event that Holder delivers to the Company a Notice of Redemption at Option
      of Holder Upon Triggering Event (the date on which such notice is delivered,
      the
“Triggering Event Notice Date”) and the Company does not, on or
      prior to the first Business Day after the Triggering Event Notice Date, either
      pay the applicable Redemption Price (and the applicable Redemption Price of
      each
      of the Other Notes) or deliver to the Holder (and the holder of each of the
      Other Notes) a notice, duly executed by the Chief Executive Officer or Chief
      Financial Officer of the Company, to the effect that the Company shall file
      a
      voluntary case under Title 11, U.S. Code and any other applicable Bankruptcy
      Laws within four (4) Business Days of the date of delivery by the Company to
      the
      Holder of such notice (a “Bankruptcy Notice”), the Fixed
      Conversion Price with respect to all the Principal shall be adjusted to the
      lowest Weighted Average Price of the Common Stock during the period beginning
      on
      and including the Triggering Event Notice Date and ending on and including
      the
      first Business Day following the Triggering Event Notice Date.  In the
      event that the Company delivers to the Holder a Bankruptcy Notice and the
      Company does not file a voluntary case under Title 11, U.S. Code and any other
      applicable Bankruptcy Laws within five (5) Business Days of the Triggering
      Event
      Notice Date, the Fixed Conversion Price with respect to all the Principal shall
      be adjusted to the lowest Weighted Average Price of the Common Stock during
      the
      period beginning on and including the Triggering Event Notice Date and ending
      on
      and including the fifth Business Day following the Triggering Event Notice
      Date.  Notwithstanding anything to the contrary in this Section 3, (i)
      the Company’s delivery of a Bankruptcy Notice shall not affect the Company’s
      obligation to pay the Redemption Price (together with any Interest thereon)
      to
      the Holder or the Holder’s rights and remedies with respect to any failure of
      the Company to pay the Redemption Price to the Holder, and (ii) subject to
      Section 5, until the Redemption Price is paid in full, the principal of this
      Note to be redeemed pursuant to this Section 3(d) (together with any Interest
      thereon) may be converted, in whole or in part, by the Holder into Common Stock
      pursuant to Section 2.

     

    
      
        
        

      

      
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    i.  Each
      of
      the Buyers, severally and not jointly, hereby agrees with the Company that,
      as
      of the date first above written, each of the 2005 Notes is hereby amended to
      insert the following sentence in Section 6(a) of each of the 2005 Notes, such
      sentence to immediately follow the last sentence thereof and to read in its
      entirety as follows:

     

    “Notwithstanding
      the foregoing, the Company may only elect an Interest Conversion with respect
      to
      any Interest payable on any Interest Payment Date if the Holder has agreed
      in
      writing to the Company’s election of such Interest Conversion.”

     

    j.  Each
      of
      the Buyers, severally and not jointly, hereby agrees with the Company that,
      as
      of the date first above written, Section 6 of each of the 2005 Notes is hereby
      re-titled “Interest; Installment Redemption.” and each of the 2005 Notes
      is hereby amended to insert new subsections (f), (g) and (h) in Section 6 of
      each of the 2005 Notes, such subsections to immediately follow Section 6(e)
      and
      to read in their entirety as follows:

     

    “(f)                      Installment
      Redemption.  With respect to each Installment Date, the Company
      shall redeem all of the outstanding Installment Amount in accordance with this
      Section 6 (an “Installment Redemption”).  Upon an
      Installment Redemption, the Installment Amount shall be redeemed by the Company
      on such Installment Date, by the Company’s payment to the Holder on such
      Installment Date, by wire transfer of immediately available funds, of an amount
      in cash equal to the Installment Amount.  If the Company fails to
      redeem any Installment Amount which is outstanding on the applicable Installment
      Date by payment to the Holder of the Installment Amount, then in addition to
      any
      remedy the Holder may have under this Note (including Section 3) and the
      Securities Purchase Agreement (including indemnification pursuant to Section
      8
      thereof or at law or in equity), the Installment Amount payable in respect
      of
      such unredeemed Installment Amount shall bear interest at the rate of 2.0%
      per
      month (prorated for partial months) until paid in
      full.  Notwithstanding anything to the contrary in this Section 6, but
      subject to Section 5, until the Installment Amount (together with any interest
      thereon) is paid in full, the Installment Amount (together with any interest
      thereon) may be converted, in whole or in part, by the Holder into Common Stock
      pursuant to Section 2.

    


    (g)           Mandatory
      Early Redemption.  If any Principal remains outstanding on March
      1, 2008 (the “Mandatory Early Redemption Date”), then the
      Company shall redeem a principal amount (the “Mandatory Early Redemption
      Amount”) of this Note equal to the lesser of (i) the outstanding
      Principal and (ii) a principal amount equal to the product of (a) Six Million
      Dollars ($6,000,000) and (b) the Holder’s Allocation Percentage (such product,
      the “MaximumMandatory Early Redemption
      Amount”), by payment on the Mandatory Early Redemption Date to the
      Holder, by wire transfer of immediately available funds, of an amount equal
      to
      the Mandatory Early Redemption Amount; provided, however, that the
      Maximum Mandatory Early Redemption Amount shall be reduced by any payments
      made
      by the Company to the Holders pursuant to Section 6(h) hereof prior to the
      Mandatory Early Redemption Date.  For the avoidance of doubt, the
      Company agrees that the failure of the Company to pay the Mandatory Early
      Redemption Amount on the Mandatory Early Redemption Date shall constitute an
      Event of Default and any portion of the Mandatory Early Redemption Amount not
      paid on the Mandatory Early Redemption Date shall bear interest at a rate of
      

     

     

    
      
        
        

      

      
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      two
        percent (2%) per month until paid in full.  Notwithstanding anything
        to the contrary in this Section 6, but subject to Section 5, until the Mandatory
        Early Redemption Amount (together with any Interest thereon) is paid in full,
        the Mandatory Early Redemption Amount (together with any Interest thereon)
        may
        be converted, in whole or in part, by the Holder into Common Stock pursuant
        to
        Section 2.

    

     

    (h)           Redemption
      Upon Sale of Assets.  Upon the sale of any Collateral, in
      accordance with Section 4(h) of the Securities Purchase Agreement, the Company
      shall, immediately following the consummation of such sale, redeem a principal
      amount (in each case, a “Sale Redemption Amount”) equal to the
      lesser of (i) the outstanding Principal and (ii) a principal amount equal to
      the
      product of (a) the proceeds from such sale or transfer and (b) the Holder’s
      Allocation Percentage, by payment to the Holder, by wire transfer of immediately
      available funds, of an amount equal to the Sale Redemption
      Amount.  Notwithstanding anything to the contrary in this Section 6,
      but subject to Section 5, until the Sale Redemption Amount (together with any
      Interest thereon) is paid in full, the Sale Redemption Amount (together with
      any
      Interest thereon) may be converted, in whole or in part, by the Holder into
      Common Stock pursuant to Section 2.”

     

    k.  Each
      of
      the Buyers, severally and not jointly, hereby agrees with the Company that,
      as
      of the date first above written, each of the 2005 Notes is hereby amended to
      insert the following clause immediately prior to the period at the end of the
      first sentence of Section 7(a) of each of the 2005 Notes, such clause to read
      in
      its entirety as follows:

     

    “;
      and
      provided further that, if the Weighted Average Price of Common Stock on each
      of
      the Trading Days during the twenty (20) Trading Days prior to the Company
      Alternative Redemption Date, and the closing price per share of Common Stock
      on
      the Trading Day immediately preceding the Company Alternative Redemption Date,
      is less than the Fixed Conversion Price, the Conditions to Company Alternative
      Redemption set forth in clauses (i), (ii), (iv) and (vii) of Section 7(c) shall
      be deemed to be satisfied”

     

    l.  Each
      of
      the Buyers, severally and not jointly, hereby agrees with the Company that,
      as
      of the date first above written, each of the 2005 Notes is hereby amended to
      restate clause (ii) of Section 7(c) of each of the 2005 Notes, such restated
      clause to read in its entirety as follows:

     

    “(ii)
      on
      each day during the period beginning ninety (90) days prior to the Company
      Alternative Redemption Notice Date and ending on and including the applicable
      Company Alternative Redemption Date, the Common Stock is quoted on the OTC
      Bulletin Board or listed on a national securities exchange and has not been
      suspended from trading on such market or exchange;”

     

    m.  Each
      of
      the Buyers, severally and not jointly, hereby agrees with the Company that,
      as
      of the date first above written, each of the 2005 Notes is hereby amended to
      restate clause (vi) of Section 7(c) of each of the 2005 Notes, such restated
      clause to read in its entirety as follows:

     

    
      
        
        

      

      
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    “(vi)
      on
      each day during the period beginning ninety (90) days prior to the Company
      Alternative Redemption Date, the Company and its Subsidiaries otherwise shall
      have been in compliance in all material respects and shall not have breached
      or
      been in breach of any material provision or covenant of the Securities Purchase
      Agreement, the Security Documents, the Registration Rights Agreement, or any
      of
      the Notes;”

     

    n.  Each
      of
      the Buyers, severally and not jointly, hereby agrees with the Company that,
      as
      of the date first above written, each of the 2005 Notes is hereby amended to
      insert a new subsection (e) in Section 7 of each of the 2005 Notes, such
      subsection to immediately follow Section 7(d) and to read in its entirety as
      follows:

     

    “(ix)  Application
      of Amounts Redeemed Pursuant to Company Alternative
      Redemption.  Any principal amount which the Company redeems in
      accordance with this Section 7 will be deducted first from the last scheduled
      payment of principal due under this Note (i.e., the principal amount payable
      on
      the Maturity Date), and then sequentially from the immediately preceding
      payments of principal due under this Note (i.e., the Installment Amounts and
      the
      Mandatory Early Redemption Amount), unless the Holder specifies otherwise in
      a
      notice to the Company delivered within three (3) days of the Holder’s receipt of
      the applicable Company Alternative Redemption Notice (in which case, the
      principal redeemed in accordance herewith shall be applied as so specified
      in
      such notice from the Holder).

     

    o.  Each
      of
      the Buyers, severally and not jointly, hereby agrees with the Company that,
      as
      of the date first above written, each of the 2005 Notes is hereby amended to
      restate clause (i) of Section 10(a), such restated clause to read in its
      entirety as follows:

     

    “(i)
      default in payment of any Principal of this Note, including without limitation
      payment of any Installment Amount or the Mandatory Early Redemption Amount,
      any
      Interest on this Note, any Company Alternative Redemption Price or any Change
      of
      Control Redemption Price, when and as due;”

     

    p.  Each
      of
      the Buyers, severally and not jointly, hereby agrees with the Company that,
      as
      of the date first above written, each of the 2005 Notes is hereby amended to
      delete the “or” prior to clause (ix) of Section 10(a) of each of the 2005 Notes
      and insert the following clauses (x) and (xi) in Section 10(a), such clauses
      to
      immediately follow clause (ix) thereof and to read in their entirety as
      follows:

     

    “(x)
      any
      breach of, default under, or other failure to comply with, the November 2007
      Amendment; or (xi) any violation or breach of Sections 4(u), 4(v) or 4(w) of
      the
      Securities Purchase Agreement.”

     

    q.  Each
      of
      the Buyers, severally and not jointly, hereby agrees with the Company that,
      as
      of the date first above written, each of the 2005 Notes is hereby amended to
      restate the last sentence of Section 10(a) of each of the 2005 Notes, such
      restated sentence to read in its entirety as follows:

     

    
      
        
        

      

      
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    “Within
      two (2) Business Days after the occurrence of any Event of Default or Triggering
      Event, the Company shall deliver written notice thereof to the Holder and
      contemporaneously Publicly Disclose such occurrence and the remedies available
      to the holders of the Notes.  For purposes hereof, “Publicly
      Disclose” shall mean the Company’s public dissemination of information
      through the filing via the Electronic Data Gathering, Analysis, and Retrieval
      system of the SEC of a annual report on Form 10­K, quarterly report on Form
      10­Q or current report on Form 8-K disclosing such information pursuant to
      the requirements of the 1934 Act.”

     

    r.  Each
      of
      the Buyers, severally and not jointly, hereby agrees with the Company that,
      as
      of the date first above written, each of the 2005 Notes is hereby amended to
      restate Section 10(c) of each of the 2005 Notes, such Section to read in its
      entirety as follows:

     

    “(c)                      Adjustment
      of Conversion Price Upon Acceleration.  In the event that this
      Note becomes due and payable pursuant to Section 10(b) hereof (the date on
      which
      this Note becomes due and payable pursuant to Section 10(b) hereof, the
“Acceleration Date”) and the Company does not, on or prior to
      the first Business Day after the Acceleration Date, either pay the applicable
      Acceleration Amount (and the applicable Acceleration Amount of each of the
      Other
      Notes) or deliver to the Holder (and the holder of each of the Other Notes)
      a
      Bankruptcy Notice, the Fixed Conversion Price with respect to all the Principal
      shall be adjusted to the lowest Weighted Average Price of the Common Stock
      during the period beginning on and including the Acceleration Date and ending
      on
      and including the first Business Day following the Acceleration
      Date.  In the event that the Company delivers to the Holder a
      Bankruptcy Notice and the Company does not file a voluntary case under Title
      11,
      U.S. Code and any other applicable Bankruptcy Laws within five (5) Business
      Days
      of the Acceleration Date, the Fixed Conversion Price with respect to all the
      Principal shall be adjusted to the lowest Weighted Average Price of the Common
      Stock during the period beginning on and including the Acceleration Date and
      ending on and including the fifth Business Day following the Acceleration
      Date.  Notwithstanding anything to the contrary in Section 6, (i) the
      Company’s delivery of a Bankruptcy Notice shall not affect the Company’s
      obligation to pay the Acceleration Amount (together with any Interest thereon)
      to the Holder or the Holder’s rights and remedies with respect to any failure of
      the Company to pay the Acceleration Amount to the Holder, and (ii) subject
      to
      Section 5, until the Principal (together with any interest thereon) is paid
      in
      full, the Principal (together with interest thereon) may be converted, in whole
      or in part, by the Holder into Common Stock pursuant to Section 2.

     

    s.  As
      amended hereby, each of the 2005 Notes remain in full force and
      effect.

     

    2.  Amendment
      to the 2005 Purchase Agreement.

     

    a.  Each
      of
      the Buyers, severally and not jointly, hereby agrees with the Company that,
      as
      of the date first above written, the 2005 Purchase Agreement is hereby amended
      to insert a new sentence into Section 4(h) of the 2005 Purchase Agreement,
      such
      sentence to immediately follow the first sentence thereof and to read in its
      entirety as follows:

     

    
      
        
        

      

      
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    “Notwithstanding
      the foregoing, the provisions of this Section 4(h) shall not apply to any Future
      Offering unless a Related Party is purchasing securities of the Company in
      such
      Future Offering or a Related Party is otherwise participating (other than acting
      on behalf of the Company) in such Future Offering.”

    


    b.  Each
      of
      the Buyers, severally and not jointly, hereby agrees with the Company that,
      as
      of the date first above written, the 2005 Purchase Agreement is hereby amended
      to insert a new sentence into Section 4(r) of the 2005 Purchase Agreement,
      such
      sentence to immediately follow the last sentence thereof and read in its
      entirety as follows:

     

    “Notwithstanding
      the foregoing, the Company may consummate a reverse split of the Common Stock
      approved by the Board of Directors and the shareholders of the
      Company.”

    


    c.  Each
      of
      the Buyers, severally and not jointly, hereby agrees with the Company that,
      as
      of the date first above written, the 2005 Purchase Agreement is hereby amended
      to insert new subsections (u), (v) and (w) into Section 4 of the 2005 Purchase
      Agreement, such subsections to immediately follow Section 4(t) thereof and
      to
      read in their entirety as follows:

     

    “(u)                      Sale
      of Collateral.  During the Reporting Period, neither the Company
      nor any of the Subsidiaries shall sell, transfer, assign or dispose of any
      Collateral (as defined in the Security Agreement), except for (a) a sale of
      Collateral to a third-party that is not a Related Party of the Company in an
      arms-length transaction approved by at least two-thirds (2/3) of the aggregate
      principal amount of the Notes then outstanding, and so long as all of the
      proceeds from such sale or transfer are used solely to redeem principal of the
      Notes, in accordance with Section 6(h) of each of the Notes, or (b) a sale
      of
      Hydrocarbons by the Company or the Subsidiaries to customers in the ordinary
      course of business, in each case to the extent such sale is not otherwise
      prohibited by this Agreement, the Notes or the other Transaction
      Documents.

    


    (v)           Cash
      Payments on Permitted Subordinated Indebtedness or the March 2005
      Notes.  During the Reporting Period, the Company shall not, nor
      will it permit any of its Subsidiaries to, make any cash payments, in payment
      of
      principal, interest, premium or otherwise, on any Permitted Subordinated
      Indebtedness (as defined in the Notes) or the March 2005 Notes.

     

    (w)           Conversion
      of any Permitted Subordinated Indebtedness or the March 2005
      Notes.  During the Reporting Period, the Company shall not convert
      or permit the conversion of any Permitted Subordinated Indebtedness or the
      March
      2005 Notes into shares of Common Stock, or otherwise issue any shares of Common
      Stock as payment of principal, interest or any other amounts payable under,
      or
      otherwise issue shares of Common Stock in respect of, any Permitted Subordinated
      Indebtedness or the March 2005 Notes; provided, however, that the Company may
      issue shares of Common Stock in payment, or upon conversion, of principal or
      interest under any Permitted Subordinated Indebtedness or the March


     

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

      2005
        Notes, so long as such shares of Common Stock are subject to a restriction
        to
        the effect that no such shares may be resold or otherwise transferred prior
        to
        the first date on which each of the Notes have been paid or redeemed in full;
        and provided further that, notwithstanding the foregoing, the Company may
        pay up
        to an aggregate of $800,000 of principal and/or interest under the March
        2005
        Notes through the issuance of shares of Common Stock, where the foregoing
        restriction on transfer and resale terminates on March 31, 2008 (even if
        each of
        the Notes has not been paid or redeemed in full).  The Company shall
        take all steps necessary to effectuate the foregoing restriction, including
        placing a legend on the certificates representing any such shares of Common
        Stock and issuing stop transfer instructions to the Company’s transfer agent
        with respect to the restriction on such shares of Common
        Stock.

    

     

    d.  As
      amended hereby, the 2005 Purchase Agreement remains in full force and
      effect.

     

    3.  Covenants.

     

    a.  Disclosure
      of Transactions and Other Material Information.  Prior to 9:00
      a.m., New York time, on the first Business Day (as defined in the 2005 Notes)
      following the date hereof, the Company shall file a Form 8-K (the
“Amendment Form 8-K”) with the Securities and Exchange
      Commission (the “SEC”) describing the
      terms of each of this Agreement and including as exhibits to such Form 8-K
      this
      Agreement, in the form required by the 1934 Act.  From and after the
      filing of this Amendment Form 8-K with the SEC, no Buyer shall be in possession
      of any material nonpublic information received from the Company or any of their
      respective officers, directors, employees or agents.

     

    b.  Issuance
      of Amended and Restated 2005 Notes.  Promptly following the date
      hereof, and in no event later than three (3) Business Days following the date
      hereof, the Company shall issue to each of the Buyers an amended and restated
      2005 Note, in a form acceptable to such Buyer, which Note shall reflect the
      terms of the 2005 Notes as amended through the date hereof (each, individually,
      a “New 2005 Note”).  Upon the issuance by the Company
      to each Buyer of such New 2005 Note, the 2005 Note previously held by such
      Buyer
      (each individually, the “Original 2005 Note”) will be void and
      of no further force and effect, and such Buyer shall promptly return such
      Original 2005 Note to the Company for cancellation.

     

    c.  Fees.  Within
      two (2) Business Days following the execution of this Agreement by the Company
      and the Buyers, the Company shall reimburse each Buyer for all of the
      out-of-pocket fees, costs and expenses (including, but not limited to,
      attorneys’ fees, costs and expenses) incurred by such Buyer in connection with
      the negotiation and documentation of this Amendment.

     

    4.  Representations
      and Warranties of the Company.  The Company represents and
      warrants to each of the Buyers that:

     

    a.  Authorization;
      Enforcement; Validity.  Each of the Company and the Subsidiaries
      has the requisite corporate power and authority to enter into and perform its
      

     

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

      obligations
        under this Agreement, the 2005 Purchase Agreement (as amended hereby), and
        the
        2005 Notes (as amended hereby), and to issue the Conversion Shares issuable
        upon
        conversion of the 2005 Notes (as amended hereby) in accordance with the terms
        of
        the 2005 Notes (as amended hereby).  The execution and delivery of
        this Agreement by the Company and the Subsidiaries and the consummation of
        the
        transactions contemplated hereby and thereby and by the 2005 Purchase Agreement
        (as amended hereby) and the 2005 Notes (as amended hereby), including the
        issuance of the Conversion Shares issuable upon conversion of the 2005 Notes
        (as
        amended hereby), have been duly authorized by the respective boards of directors
        of the Company and the Subsidiaries, and no further consent or authorization
        is
        required by the Company, the Subsidiaries or their respective boards of
        directors or shareholders.  This Agreement has been duly executed and
        delivered by the Company, and each of the Agreement, the 2005 Purchase Agreement
        (as amended hereby) and the 2005 Notes (as amended hereby) constitutes a
        valid
        and binding obligation of each of the Company and the Subsidiaries, enforceable
        against each of the Company and the Subsidiaries in accordance with its
        terms.

    

     

    b.  Issuance
      of Securities.  Upon issuance in accordance with the 2005 Notes
      (as amended hereby), the Conversion Shares issuable upon conversion of the
      2005
      Notes (as amended hereby) will be validly issued, fully paid and nonassessable
      and free from all taxes and Liens (as defined in the 2005 Purchase Agreement
      (as
      amended hereby)) with respect to the issue thereof, with the holders being
      entitled to all rights accorded to a holder of the Common Stock.  Each
      of the amendment of the 2005 Notes pursuant hereto and the issuance by the
      Company of the Conversion Shares issuable upon conversion of the 2005 Notes
      (as
      amended hereby) is exempt from registration under the Securities Act of 1933,
      as
      amended, and applicable state securities laws.

     

    c.  No
      Conflicts.  The execution and delivery of this Agreement by each
      of the Company and the Subsidiaries, the performance by each of the Company
      and
      the Subsidiaries of their respective obligations hereunder, under the 2005
      Purchase Agreement (as amended hereby) and under the 2005 Notes (as amended
      hereby) and the consummation by each of the Company and the Subsidiaries of
      the
      transactions contemplated hereby, by the 2005 Purchase Agreement (as amended
      hereby), and by the 2005 Notes (as amended hereby) (including the reservation
      for issuance and issuance of the Conversion Shares issuable upon conversion
      of
      the 2005 Notes (as amended hereby)) will not (i) result in a violation of the
      articles of incorporation or the bylaws of the Company or the organizational
      documents of any Subsidiary; (ii) conflict with, or constitute a breach or
      default (or an event which, with the giving of notice or lapse of time or both,
      constitutes or would constitute a breach or default) under, or give to others
      any right of termination, amendment, acceleration or cancellation of, or other
      remedy with respect to, any agreement, indenture or instrument to which the
      Company or any of the Subsidiaries is a party; or (iii) result in a violation
      of
      any law, rule, regulation, order, judgment or decree (including federal and
      state securities laws and regulations) applicable to the Company or any of
      the
      Subsidiaries or by which any property or asset of the Company or any of the
      Subsidiaries is bound or affected.  The Company is not required to
      obtain any consent, authorization or order of or, except as required by
Section 3 above, make any filing or registration with, any court or
      governmental agency or any regulatory or self-regulatory agency in order for
      it
      to execute, deliver or perform any of its obligations under, or contemplated
      by,
      this Agreement, the 2005 Notes (as amended hereby), the 2005 Purchase Agreement
      (as amended hereby) or any of the other Transaction Documents.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    d.  Payments
      on and Violations of Permitted Subordinated Indebtedness or March 2005
      Notes.  Neither the Company nor any of its Subsidiaries (i) has
      made any cash payments on any Permitted Subordinated Indebtedness or the March
      2005 Notes or (ii) otherwise breached or violated any provision of any
      subordination agreement entered into by the Company or any of its Subsidiaries
      with respect to any Permitted Subordinated Indebtedness or the March 2005
      Notes.

     

    e.  No
      Violation of Security Documents.  Neither the Company nor any of
      its Subsidiaries has breached or violated any of the provisions of the Security
      Documents (as defined in the 2005 Notes) or taken any action that would impair,
      or otherwise adversely affect, the rights of any of the Buyers or the Collateral
      Agent (as defined in the Security Documents) under the Security Documents or
      otherwise with respect to the Collateral (as defined in the Security
      Documents).

     

    5.  Representation
      and Warranties of Each of the Buyers.  Each of the Buyers
      represents and warrants to the Company that (a) such Buyer 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, and (b) 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.

     

    6.  Acknowledgment
      of the Company and the Subsidiaries.  The Company and each of the
      Subsidiaries hereby irrevocably and unconditionally acknowledge, affirm and
      covenant to each of the Buyers that:

     

    a.  none
      of
      the Buyers is in default under any of the Transaction Documents (as defined
      in
      the 2005 Purchase Agreement (as amended hereby)) or otherwise has breached
      any
      obligations to the Company or any of the Subsidiaries; and

     

    b.  there
      are
      no offsets, counterclaims or defenses to the Liabilities or Obligations,
      including the liabilities and obligations of the Company under the 2005 Purchase
      Agreement (as amended hereby) and the 2005 Notes (as amended hereby), or to
      the
      rights, remedies or powers of the Buyers in respect of any of the Liabilities
      or
      Obligations or any of the Transaction Documents, and the Company and each of
      the
      Subsidiaries agree not to interpose (and each does hereby waive and release)
      any
      such defense, set-off or counterclaim in any action brought by the Buyers with
      respect thereto.

     

    7.  Avoidance
      of Doubt.  The parties hereto hereby agree, for the avoidance of
      doubt, that (a) the term “Securities Purchase Agreement” as
      used in the Transaction Documents shall mean the 2005 Purchase Agreement, as,
      and to the extent, amended by this Agreement, (b) the term “2005
      Notes” as used in the Transaction Documents shall mean the 2005 Notes,
      as, and to the extent, amended by this Agreement, (c) the term
“Notes” as used in the Transaction Documents shall include the
      2005 Notes, as, and to the extent, amended by this Agreement; (d) the terms
      “Liabilities” and “Obligations” as used in the
      Transaction Documents shall include all liabilities and obligations of the
      Company under this Agreement, under the 2005 Purchase Agreement (as amended
      hereby), under each of the 2005 Notes (as amended hereby) and under


     

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

      the
        other
        Transaction Documents, and each of the parties hereto agrees not to take
        any
        contrary positions; and (e) the term “March 2005 Notes” as used
        in the Transaction Documents shall mean the March 2005 Notes, as amended
        through
        the date of this Agreement and as may be amended from time to hereafter (to
        the
        extent permitted by the Transaction Documents (as amended
        hereby)).  Further, for purposes of clarification, the parties hereby
        agree that the Allocation Percentage for each of the Buyers as of the date
        hereof is as follows:  (a) HFTP – 25.07%; (b) Prom I – 13.33%; (c)
        Caerus Partners – 1.67%; (d) Prom II – 26.60%; and Leonardo –
33.33%.

    

     

    8.  Reservation
      of Rights.  Each of the Buyers hereby agrees not to declare the
      2005 Notes due and payable immediately, in accordance with Section 10(b) of
      the
      2005 Notes as a result of any Event of Default (as defined in the 2005 Notes)
      that occurred prior to the date hereof, or as a result of any Triggering Event
      (as defined in the 2005 Notes) that occurred prior to the date hereof, in each
      case, so long as (and only so long as) after the date hereof each of the Company
      and the Subsidiaries is in compliance with, and has not violated or breached
      any
      of, the terms of each of the Transaction Documents, including the 2005 Purchase
      Agreement (as amended hereby), the 2005 Notes (as amended hereby) and this
      Agreement.  The Company acknowledges and agrees that none of the
      Buyers has hereby waived (a) any breach, default, Event of Default or Triggering
      Event that may be continuing under any of the Transaction Documents or (b)
      any
      of such Buyer’s rights or remedies arising from any such breach, default, Event
      of Default or Triggering Event or otherwise available under the Transaction
      Documents or at law, and each of the Buyers expressly reserves all such rights
      and remedies.

     

    9.  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,
      and none of the Buyers shall be responsible in any way for the performance
      of
      the obligations of any of the other Buyers hereunder, under the 2005 Purchase
      Agreement (as amended hereby), any of the 2005 Notes (as amended hereby) or
      under any of the other Transaction Documents.  Each of the Buyers
      shall be responsible only for its own agreements and covenants hereunder, under
      the 2005 Purchase Agreement (as amended hereby), under the 2005 Notes (as
      amended hereby) and under the other 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, 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, in the 2005 Purchase Agreement (as amended hereby), in any of the 2005
      Notes (as amended hereby) 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, the 2005 Purchase Agreement (as amended
      hereby), the 2005 Notes (as amended hereby) and the other Transaction Documents,
      and it shall not be necessary for any of the other Buyers to be joined as an
      additional party in any proceeding for such purpose.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    10.  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.

     

    11.  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, the 2005 Purchase Agreement (as amended hereby),
      the
      2005 Notes (as amended hereby) and the other Transaction Documents.

     

    12.  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.

     

    13.  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 New York, without giving effect
      to any choice of law or conflict of law provision or rule (whether of the State
      of New York or any other jurisdiction) that would cause the application of
      the
      laws of any jurisdiction other than the State of New York.  Each party
      hereby irrevocably submits to the exclusive jurisdiction of the state and
      federal courts sitting in the City of New York, borough of Manhattan, 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.

     

    14.  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) with the same force and effect as if such facsimile or “.pdf”
signature page were an original 

     

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

      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.

    

     

    15.  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.

     

    16.  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 rule of strict construction will be applied against any
      party.

     

    17.  Merger.  This
      Agreement, the 2005 Purchase Agreement (as amended hereby), the 2005 Notes
      (as
      amended hereby), and the other Transaction Documents 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.

     

    18.  Ratification
      by Guarantors.  By execution hereof, each of the Subsidiaries
      hereby acknowledges and agrees that it has reviewed this Agreement and hereby
      ratifies and confirms its obligations under the Transaction Documents, including
      such obligations that relate to the 2005 Purchase Agreement (as amended hereby)
      and the 2005 Notes (as amended hereby).

     

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


    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    


    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:
                

            	/s/ Marc
              A. Bruner	 
	 	Name:	Marc
              Bruner	 
	 	Title:	President	 
	 	 	 	 


    

    
       

      
        	 	SUBSIDIARIES:	 
	 	 	 	 
	 	DOLPHIN
                ENERGY CORPORATION 	 
	 	 	 	 
	
                 

              	
                By:
                  

              	/s/ Christopher
                S.
                Hardesty	 
	 	Name:	Christopher
                S. Hardesty	 
	 	Title:	Treasurer
&
                Secretary	 
	 	 	 	 


      

      
         

        
          	 	PANNONIAN
                  INTERNATIONAL, LTD. 	 
	 	 	 	 
	
                   

                	
                  By:
                    

                	/s/ C.
                  D.
                  Gritz	 
	 	Name:	C.
                  D. Gritz	 
	 	Title:	COO	 
	 	 	 	 


        

         

         

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

    

     

    
       

      
        	 	BUYERS:	 
	 	 	 	 
	 	HFTP
                INVESTMENT L.L.C. 	 
	 	 	 	 
	 	By:	Promethean
                Asset Management L.L.C. 	 
	 	Its: 	Investment
                Manager 	 
	 	 	 	 
	
                 

              	
                By:
                  

              	/s/ James
                F. O'Brien	 
	 	Name:	James
                F. O'Brien	 
	 	Title:	Partner
                and Authorized
                Signatory	 
	 	 	 	 


      

      
        
           

          
            	 	PROMETHEAN
                    I MASTER LTD. 	 
	 	 	 	 
	 	By:	Promethean
                    Asset Management L.L.C. 	 
	 	Its: 	Investment
                    Manager 	 
	 	 	 	 
	
                     

                  	
                    By:
                      

                  	/s/ James
                    F. O'Brien	 
	 	Name:	James
                    F. O'Brien	 
	 	Title:	Partner
                    and Authorized
                    Signatory	 
	 	 	 	 


          

          
            
               

              
                	 	CAERUS
                        PARTNERS LLC	 
	 	 	 	 
	 	By:	Promethean
                        Asset Management L.L.C. 	 
	 	Its: 	Investment
                        Manager 	 
	 	 	 	 
	
                         

                      	
                        By:
                          

                      	/s/ James
                        F. O'Brien	 
	 	Name:	James
                        F. O'Brien	 
	 	Title:	Partner
                        and Authorized
                        Signatory	 
	 	 	 	 


              

              
                
                   

                  
                    	 	PROMETHEAN
                            II MASTER, L.P. 	 
	 	 	 	 
	 	By:	Promethean
                            Asset Management L.L.C. 	 
	 	Its: 	Investment
                            Manager 	 
	 	 	 	 
	
                             

                          	
                            By:
                              

                          	/s/ James
                            F. O'Brien	 
	 	Name:	James
                            F. O'Brien	 
	 	Title:	Partner
                            and Authorized
                            Signatory	 
	 	 	 	 


                  

                   

                  
                    
                      
                      

                    

                    
                      
                      

                      
                        

                      

                    

                    
                      
                      

                    

                  

                

              

            

          

        

      

    

    
       

      
        	 	LEONARDO,
                L.P.	 
	 	 	 	 
	 	By:	Leonardo
                Capital Management, Inc.	 
	 	Its: 	General
                Partner	 
	 	 	 	 
	 	 	By:     
                Angelo, Gordon & Co., L.P.	 
	 	 	Its:      
                Director	 
	 	 	 	 
	
                 

              	
                By:
                  

              	/s/ John
                M. Angelo	 
	 	Name:	John
                M. Angelo	 
	 	Title:	Chief
                Executive Officer