exh10-65_amdagmt.htm


     

    


    


    


    


    


    EXHIBIT
      10.65

    


    AMENDED
      FORBEARANCE AGREEMENT BETWEEN

    GALAXY
      ENERGY CORPORATION AND BRUNER FAMILY TRUST UTD

    MARCH
      28,
      2005 DATED EFFECTIVE JUNE 30, 2007

     

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    AMENDED
      FORBEARANCE AGREEMENT

     

    This
      Amended
      Forbearance Agreement (this “Agreement”) is dated to be effective as of June 30,
      2007, and is entered into by and between Galaxy Energy Corporation, a Colorado
      corporation (“Borrower”) and Bruner Family Trust UTD March 28, 2005 (“Note
      Holder”).

    


    RECITALS:

     

    WHEREAS,
      Borrower
      and Note Holder are parties to that certain Promissory Note in the principal
      amount of $2,600,000, dated January 14, 2004, as amended by that certain Note
      Modification Agreement, dated April 1, 2006 (the Promissory Note and the Note
      Modification Agreement are collectively referred to herein as the
“Note”);

    


    WHEREAS,
      Borrower
      has failed to make the mandatory payment of the principal and interest owing
      as
      required under Section 1 of the Note (the “Primary Payment”); and

     

    WHEREAS,
      Note
      Holder is willing to forbear from enforcing its rights that arise as a result
      of
      the failure by Borrower to make the Primary Payment for a limited period of
      time, provided that Borrower complies with the terms of this Agreement;
      and

    


    WHEREAS,
      Note
      Holder and Borrower evidenced this agreement by means of a Forbearance Agreement
      dated December 1, 2006 (the “Forbearance Agreement”); and

    


    WHEREAS,
      Note
      Holder and Borrower wish to extend the Termination Date stated in the
      Forbearance Agreement to August 31, 2007;

     

    NOW,
      THEREFORE, for
      good and valuable consideration, the receipt and sufficiency of which are hereby
      acknowledged, the parties hereto agree as follows:

    


    1.           Note
      Holder hereby agrees to refrain through 5:00 p.m. Mountain Standard Time on
      August 31, 2007 (the “Termination Date”) from exercising any of its rights and
      remedies under the Note that may exist by virtue of the failure by Borrower
      to
      make the Primary Payment and hereby waives any such rights until the Termination
      Date.

    


    2.  All
      of the other
      terms and provisions of the Forbearance Agreement remain unchanged.

     

    [THE
      REMAINDER OF THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY.]

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF,
      the parties hereto have caused this Agreement to be executed as of the date
      first set forth above, by their respective duly authorized
      officers.

    


    


    
      	
              BORROWER

               

              Galaxy
                Energy Corporation

               

              By:     
                /s/ Christopher S. Hardesty______________

              Name:__Christopher
                S. Hardesty_______________

              Title:   ____SVP
                & CFO_______________________

            	
              NOTE
                HOLDER

               

              Bruner
                Family Trust UTD March 28, 2005

               

               

              By:  /s/ Marc
                E. Bruner, Trustee_____   

              Name:  Marc
                E. Bruner, Trustee___________________

               

               

              By: _/s/
                Cynthia L. Gausvik_______________________

              Name:  Cynthia
                L. Gausvik, Trustee_________________