Document:

EXHIBIT 4.5

A&P-PATHMARK AMENDED AND RESTATED 

2000 NON-EMPLOYEE DIRECTORS EQUITY PLAN

1.      Purpose

     The purpose of the A&P-Pathmark Amended and Restated 2000 Non-Employee Directors Equity Plan (the “Plan”) is to promote the long-term growth and financial success of the Company by attracting, motivating and retaining non-employee directors of outstanding ability and assisting the Company in promoting a greater identity of interest
between the Company’s non-employee directors and its stockholders. 

2.      Definitions

     For purposes of the Plan, the following terms shall be defined as follows:

      “Annual Meeting” means the annual meeting of the
  Company’s stockholders.

      “Board” means the Board of Directors of the Company. 

        “Change in Control” shall mean any of the following:

        (i)      the acquisition by any Person of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 35% or more of the Common Stock then outstanding, but shall
    not include any such acquisition by any employee benefit plan of the Company, any Person or entity organized, appointed or established by the Company for or pursuant to the terms of any such employee benefit plan; any Person (other than any of
    Fidelity Management & Research Company or Fidelity Management Trust Company or by any fund or account associated with either Fidelity Management & Research Company or Fidelity Management Trust Company) who as of September 19, 2000 was the
    beneficial owner of 15% or more of the shares of Common Stock outstanding on such date unless and until such Person, together with all Affiliates of such Person, becomes the beneficial owner of 35% or more of the shares of Common Stock then
    outstanding whereupon a Change in Control shall be deemed to have occurred;

        (ii)     consummation
      after approval by the shareholders of Pathmark of either (A) a plan of
      complete liquidation or dissolution of Pathmark or (B) a merger, amalgamation
      or consolidation of  Pathmark with any other corporation, the issuance
      of voting securities of Pathmark in connection with a merger or consolidation
      of Pathmark or sale or other disposition of all or substantially all of
      the assets of Pathmark or the acquisition of  assets of another corporation,
      other than, for purposes of Section 7(b)(i) hereof, a merger, amalgamation
      or consolidation with, or sale or other disposition of assets to or acquisition
      of assets of Yucaipa (each, a “Business
      Combination”), unless, in
      each case of a Business 

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    Combination, immediately following such Business Combination, all or substantially all of the individuals and entities who were the beneficial owners of the Common Stock outstanding immediately prior to such Business
    Combination beneficially own, directly or indirectly, more than 50% of the then outstanding shares of common stock and 50% of the combined voting power of the then outstanding voting securities entitled to vote generally in the election of
    directors, as the case may be, of the entity resulting from such Business Combination (including, without limitation, an entity which as a result of such transaction owns the Company or all or substantially all of Pathmark’s assets either
    directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination, of the Common Stock; or

        (iii)      the individuals who, as of September 19, 2000, constitute the Board, and subsequently elected members of the Board whose election is approved or recommended by at least a majority of such
    current members or their successors whose election was so approved or recommended (other than any subsequently elected members whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the
    election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board), cease for any reason to constitute at least a majority of such Board. 

        For purposes of the above definition of Change in Control only, the following defined terms shall apply:

        “Affiliate” means, with respect to any Person, any other entity which (i) is a Subsidiary of such
    Person, (ii) is, directly or indirectly, under common control with such Person, or (iii) is, directly or indirectly, controlling such Person. 

        “Person” means any person, entity or “group” within the meaning of Section 13(d)(3) or
    Section 14(d)(2) of the Exchange Act, except that such term shall not include (i) the Company or any of its subsidiaries, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of the Company, (iii) an underwriter
    temporarily holding securities pursuant to an offering of such securities, (iv) an entity owned, directly or indirectly, by the shareholders of Pathmark in substantially the same proportions as their ownership of stock of Pathmark, or, for purposes
    of Section 7(b)(i) hereof, (v) Yucaipa. 

        “Subsidiary” means with respect to any Person, any entity of which: if a corporation, a majority of the
    total voting power of shares of stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time of determination owned or controlled, directly or indirectly,
    collectively or individually, by such Person or by one or more Affiliates of such Person, and if a partnership, association, limited liability company or other entity, a majority of the partnership, membership or other similar ownership interest
    thereof is at 

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    the time of determination owned or controlled, directly or indirectly, collectively or individually, by such Person or by one or more Affiliates of such Person. 

  
    * * * *

        “Code” means the Internal Revenue Code of 1986, as amended, and the applicable rulings and regulations
    (including any proposed regulations) thereunder. 

        “Common Stock” means the Common Stock of the Company, par value $.01 per share, or such other class
    or kind of shares or other securities as may be applicable under Section 12 below. 

        “Company” means, individually and collectively, The Great Atlantic & Pacific Tea Company, Inc. and
    its Subsidiaries, and any successor thereto. 

        “Date of Grant” means, with respect to any Director Option or Director Unit, the date on which such
    Director Option or Director Unit is granted to a Non-Employee Director. 

        “Director Option” means a right to purchase shares of Common Stock granted to a Non-Employee Director
    pursuant to Section 6 hereof. 

        “Director Unit” means a restricted stock unit granted to a Non-Employee Director pursuant to Section 8
    hereof. 

  
     “Effective Date” means the effective date of the Plan provided for in Section 10 below.

        “Fair Market Value” means, with respect to a share of Common Stock, the fair market value thereof as of
    the relevant date of determination, as determined in accordance with a valuation methodology approved by the Board, and according to the following, as applicable:

        (i)      If the Common Stock is quoted on the New York Stock Exchange (the “NYSE”), in the absence of any
    alternative valuation methodology approved by the Board, the Fair Market Value of a share of Common Stock shall equal the per share closing price quoted on the day immediately prior to the date of grant as reported in the transactions index of each
    such exchange, as published in The Wall Street Journal, or, if no closing price was quoted in any such index for such date, then as of the next preceding date on which such a
    closing price was quoted;

        (ii)     If
      the Common Stock is not quoted on the NYSE, but is publicly traded on another
      national securities exchange or quoted on an automated system, the Fair
      Market Value of a share of Common  Stock shall equal the per share closing
      price quoted on the day immediately prior to the date of grant as reported
      in the transactions index of each such exchange or automated system, as
      published in The Wall
    Street Journal, or, if no closing price
    was quoted in any 

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    such index for such date, then as of the next preceding date on which such a closing price was quoted; and

        (iii)      If the Common Stock is not publicly traded on a national securities exchange or quoted on the NASDAQ National Market or any other automated system, the Fair Market Value of a share of
    Common Stock shall be reasonably determined in good faith by the Board. 

        “Non-Employee Director” means a member of the Board who is not an employee of the Company or any of its
    Subsidiaries and who is an “Independent Director” as such term (or any replacement term) is used under the rules and listing standards of the NASDAQ National Market or any other applicable market or exchange on which the Common Stock is
    then listed. 

        “Pathmark” means Pathmark Stores, Inc., a Delaware corporation, or any successor thereto, and its
    Subsidiaries. 

        “Permanent Disability” means a physical or mental impairment rendering a Non-Employee Director
    substantially unable to function as a member of the Board for any period of six consecutive months. Any dispute as to whether a Non-Employee Director is Permanently Disabled shall be resolved by a physician mutually acceptable to the Non-Employee
    Director and the Company, whose decision shall be final and binding upon the Non-Employee Director and the Company. 

  
     “Person” means any individual, firm, corporation, partnership or other entity.

        “Subsidiary” means (i) a corporation or other entity with respect to which the Company, directly or
    indirectly, has the power, whether through the ownership of voting securities, by contract or otherwise, to elect at least a majority of the members of such corporation’s board of directors or analogous governing body, or (ii) any other
    corporation or other entity in which the Company, directly or indirectly, has an equity or similar interest and which the Board designates as a Subsidiary for purposes of the Plan. 

3.      Administration 

     (a)      Administration by the Board. The Plan shall be administered by the Board, which may adopt rules and regulations it considers necessary or appropriate to carry out the Plan’s purposes. The Board’s interpretation and construction of any Plan provision shall be final and conclusive.
The Board may, but need not, from time to time delegate some or all of its authority under the Plan to a committee consisting of one or more members of the Board, any such delegation to be subject to the restrictions and limits that the Board
specifies at the time of such delegation or thereafter. References in the Plan to the “Board” shall, to the extent consistent with the terms and limitations of any such delegation, be deemed to include a reference to any such committee to
which the Board’s authority hereunder has been delegated. 

     (b)      Award Certificate. The terms and conditions of each grant of Director Options and Director Units under the Plan
shall be embodied in an award agreement or award certificate which shall incorporate the Plan by reference, shall indicate the date on which the 

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Director Options or Director Units were granted and the number of Director Options or Director Units granted on such date. 

4.      Shares Available

     Subject to adjustment as provided in Section 12 hereof, the number of shares of Common Stock that may be issued pursuant to awards under the Plan (the “Section 4 Limit”) shall not exceed, in the aggregate, 780,000 shares. Shares issued under this Plan may be either authorized but unissued shares, treasury shares or any combination thereof.
For purposes of determining the number of shares of Common Stock that remain available for issuance, there shall be added back to the Section 4 Limit and again be available under the Plan any shares of Common Stock tendered to pay the exercise price
of a Director Option. Either authorized and unissued shares of Common Stock or treasury shares may be delivered pursuant to the Plan. 

5.      Eligibility

     Director Options and Director Units shall be granted only to Non-Employee Directors.

6.      Grants of Director Options 

     (a)      General. A Director Option shall entitle a Non-Employee Director to purchase a specified number of shares of Common Stock during a specified period at an exercise price per share of Common Stock determined as provided below. Unless otherwise provided by the Board, all Director Options
provided for herein shall have the general terms and conditions set forth in Section 7 below. 

     (b)      Initial Grants. On the date of the first regularly scheduled meeting of the Board after the Effective Date each
Non-Employee Director shall receive Director Options to purchase 3,000 shares of Common Stock. In addition, on the date of the first Annual Meeting after the Effective Date (the “First Annual
Meeting”) each Non-Employee Director shall receive Director Options to purchase 12,000 shares of Common Stock. The exercise price per share of Common Stock of each Director Option provided for in this
Section 6(b) shall be the Fair Market Value of one share of Common Stock on the Date of Grant. 

     (c)      Annual Grants of Director Options. On the date of each Annual Meeting occurring after the First Annual Meeting, each
Non-Employee Director shall automatically receive Director Options to purchase 5,000 shares of Common Stock or such other number of shares of Common Stock as may be determined by the Board from time to time; provided that the Non-Employee Director shall continue to serve as a director of the Company after such meeting of the Board; and provided, further, that with respect to a Non-Employee Director who, as of any Annual Meeting, has served on the Board for less than one year, such Non-Employee Director
shall receive a pro rated number of Director Options. The exercise price per share of Common Stock of each Director Option provided for in this Section 6(c) shall be the Fair Market Value of one share of Common Stock on the date of the Date of
Grant. 

     (d)      Grants of Director Options to New Directors. On the date that a Non-Employee Director is initially elected or
appointed to the Board, such Non-Employee Director 

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shall receive Director Options to purchase 15,000 shares of Common Stock or such other number of shares of Common Stock as may be determined by the Board from time to time. The exercise price per share of Common Stock of
each Director Option provided for in this Section 6(d) shall be the Fair Market Value of one share of Common Stock on the Date of Grant. 

7.      General Terms and Conditions of Directors Options 

     (a)      Option Term. Each Director Option shall expire on the date of the Annual Meeting held in the fifth calendar year following the date of grant, subject to earlier expiration as provided herein. 

     (b)      Vesting; Accelerated Vesting; Effect of Termination of Service.

        (i)      Vesting Generally. Each Director Option shall vest and become exercisable with respect to one-third of the shares of
    Common Stock subject to such Option (A) if the Date of Grant occurs on the date of an Annual Meeting, on the earlier of the anniversary of the Date of Grant and the date of the Annual Meeting that occur in each of the three calendar years following
    the Date of Grant, or (B) if the Date of Grant does not occur on the date of an Annual Meeting, on each of the first through third anniversaries of the Date of Grant; provided,
    in each case, that the Non-Employee Director continues to serve as a member of the Board on the applicable date. Notwithstanding the preceding sentence, all Director Options shall be considered fully vested and exercisable upon the earlier to occur
    of (X) termination of the Non-Employee Director’s service on the Board by reason of death or Permanent Disability or (Y) a Change in Control. 

        (ii)      Exercise Following Termination of Service. Following termination of a Non-Employee Director’s service on the
    Board, the former Non-Employee Director (or the former Non-Employee Directors’ estate, personal representative or beneficiary, as the case may be) shall have the right, subject to the other terms and conditions hereof, to exercise all Director
    Options that had vested as of or in connection with the termination of service:

        (A)      at any time within two years after the date of termination of service, if such termination was by reason of death, Permanent Disability or retirement from the Board in accordance with the
  retirement policy then in effect for Board members, or

        (B)      in all other cases, at any time within one year after the date of termination of service;

  
    subject, in all cases, to earlier expiration of the Director Option pursuant to Section 7(a) above. 

     (c)      Notice of Exercise. Subject to the other terms and conditions of the Plan, a Non-Employee Director may exercise all
or any portion of a vested Director Option by giving notice of exercise to the Company or its designated agent, provided, however, that no fewer than 10 shares of Common Stock may be purchased upon any exercise of a Director Option unless the

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number of shares purchased at such time is the total number of shares in respect of which the Director Option is then exercisable, and provided,
further, that in no event shall the Option be exercisable for a fractional share. The date of exercise of an Option shall be the later of (i) the date on which the Company or
its agent receives such notice or (ii) the date on which the conditions provided in Sections 7(d) and 7(e) below are satisfied. 

     (d)      Payment. The exercise price of a Director Option may be paid in cash or previously owned shares or a combination
thereof or by any other method approved by the Board. 

     (e)      Limitation on Exercise. A Director Option shall not be exercisable unless the Common Stock subject thereto has been
registered under the Securities Act of 1933, as amended (the “1933 Act”), and qualified under applicable state “blue sky” laws in connection with the
offer and sale thereof, or the Company has determined that an exemption from registration under the 1933 Act and from qualification under such state “blue sky” laws is available. 

     (f)      Issuance of Shares. Subject to the foregoing conditions, as soon as is reasonably practicable after its receipt of a
proper notice of exercise and payment of the exercise price for the number of shares with respect to which a Director Option is exercised, the Company shall deliver to the exercising Non-Employee Director, at the principal office of the Company or
at such other location as may be acceptable to the Company and the Non-Employee Director, one or more stock certificates for the appropriate number of shares of Common Stock issued in connection with such exercise. Such shares shall be fully paid
and nonassessable and shall be issued in the name of the Non-Employee Director. Notwithstanding the foregoing, the Board in its discretion may, subject to rules and procedures as it may adopt from time to time, provide Non-Employee Directors with
the opportunity to defer receipt of shares of Common Stock issuable upon exercise of Director Options. 

     (g)      Change in Control. In the discretion of the Board, the Company may provide for any of the following in the event of
a Change in Control:

        (i)      The continuation of Director Options by the Company (if the Company is the surviving corporation);

        (ii)      The assumption of Director Options by the surviving corporation or its parent;

        (iii)      The substitution by the surviving corporation or its parent of stock  option(s) for Director Options with substantially the same terms; or

     (iv) The cancellation of Director Options upon payment to the Non-Employee Directors of an amount in cash or cash equivalents equal to (1) the Fair Market Value at the time of the Change in
Control of the shares of Common Stock subject to the Director Options, minus (2) the exercise price of the Director Options. 

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8.      Director Units 

     (a)      General. Director Units shall entitle a Non-Employee Director to receive a specified number of shares of Common Stock at a specified time or times or as otherwise provided by the Board, subject to the satisfaction of the conditions to vesting and payment established by the Board and set forth in
the applicable award agreement or certificate. 

     (b)      Grants. As determined by the Board from time to time, on the date of the first Annual Meeting at or following which
the Non-Employee Directors are initially elected or appointed to the Board and/or the date of each Annual Meeting occurring thereafter following which the Non-Employee Director shall continue to serve as a director of the Company, Non-Employee
Directors may receive Director Units covering the number of shares of Common Stock determined by the Board. 

     (c)      Issuance of Shares. As soon as practicable following the satisfaction of the conditions to vesting and payment of
Director Units specified in the applicable award agreement or certificate, the Company shall deliver to the Non-Employee Director one or more stock certificates for the appropriate number of shares of Common Stock. Such shares shall be fully paid
and nonassessable and shall be issued in the name of the Non-Employee Director. The Board in its discretion may, subject to such rules and procedures as it may adopt from time to time, provide Non-Employee Directors with the opportunity to defer
receipt of shares of Common Stock issuable upon settlement of Director Units. 

9.      Transferability

     Director Options and Director Units may not be transferred, pledged, assigned or otherwise disposed of except by will or the laws of descent and distribution or pursuant to a domestic relations
order, provided, however, that Director Options may be transferred to a member or members of a
Non-Employee Director’s immediate family (as defined below) or to one or more trusts or partnerships established in whole or in part for the benefit of one or more of such immediate family members (collectively as “Permitted Transferees”), subject to such rules and procedures as may from time to time be adopted or imposed by the Board. If a Director Option is transferred to a Permitted
Transferee, it shall be further transferable only by will or the laws of descent and distribution or, for no consideration, to another Permitted Transferee of the Non-Employee Director. A Non-Employee Director shall notify the Company in writing
prior to any proposed transfer of a Director Option to a Permitted Transferee and shall furnish the Company, upon request, with information concerning such Permitted Transferee’s financial condition and investment experience. For purposes of
the Plan, a Non-Employee Director’s “immediate family” means any child, stepchild, grandchild, spouse, son-in-law or daughter-in-law and shall include adoptive relationships; provided, however, that if the Company adopts a different definition of “immediate family” (or similar term) in
connection with the transferability of employee stock options awarded to employees of the Company, such definition shall apply, without further action of the Board, to the Plan. 

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10.      Term

     The Effective Date shall be the date of the approval of the Plan of Reorganization of the Company and its parent companies, assuming the Plan is approved by the stockholders of the Company
prior to such date. Unless earlier terminated in accordance with Section 10 below, the Plan shall expire on the date of the Annual Meeting held in 2010. Grants of Director Options and Director Units made in connection with the Annual Meeting held in
2010 shall be the last grants made under the Plan. Expiration of the Plan in connection with the Annual Meeting held in 2010 shall not affect awards of Director Options and Director Units made prior to such Annual Meeting, which awards shall remain
outstanding subject to the terms hereof. 

11.      Amendments

     The Board may at any time and from time to time alter, amend, suspend or terminate the Plan in whole or in part, including without limitation to amend the provisions for determining the amount
of or Directors Options to be issued to a Non-Employee Director, provided, however, that:

        (i)      any amendment which under the requirements of applicable law or stock exchange rule must be approved by the stockholders of the Company shall not be effective unless and until such
    stockholder approval has been obtained in compliance with such law or rule; and

        (ii)     except
    as provided in Section 12 below, the Board may not, without the approval of the
    Company’s stockholders, increase the number of shares available for issuance
    under the Plan  pursuant to Section 4 above or reduce the exercise price of a
    Director Option. 

Subject to Section 17 below, no termination or amendment of the Plan that would adversely affect a Non-Employee Director’s rights under the Plan with respect to any award of Director Options or Director Units made
prior to such action shall be effective as to such Non-Employee Director unless he or she consents thereto. 

12.      Adjustment of and Changes in Shares

     In the event of any merger, consolidation, recapitalization, reclassification, stock dividend, distribution of property, special cash dividend or other change in corporate structure affecting
the shares, the Board, in its discretion, may make (i) such proportionate adjustments as it considers appropriate in the number and kind of shares authorized for issuance hereunder in order to preserve, but not increase, the benefits or potential
benefits intended to be made available hereunder and/or (ii) such other adjustments as it deems appropriate. The Board’s determination as to what, if any, adjustments shall be made shall be final and binding on the Company and all Non-Employee
Directors who receive grants under the Plan. 

13.      No Right to Re-election

     Nothing in the Plan shall be deemed to create any obligation on the part of the Board to nominate any of its members for re-election by the Company’s stockholders, nor confer

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upon any Non-Employee Director the right to remain a member of the Board for any period of time, or at any particular rate of compensation. 

14.      Governing Law

     The Plan and all agreements entered into under the Plan shall be construed in accordance with and governed by the laws of the State of Delaware. 

15.      No Restriction on Right of Company to Effect Corporate Changes 

     The Plan shall not affect in any way the right or power of the Company or its stockholders to make or authorize any or all adjustments, recapitalizations, reorganizations or other changes in
the Company’s capital structure or its business, or any merger or consolidation of the Company, or any issue of stock or of options, warrants or rights to purchase stock or of bonds, debentures, preferred or prior preference stocks whose rights
are superior to or affect the Common Stock or the rights thereof or which are convertible into or exchangeable for Common Stock, or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of its assets or business,
or any other corporate act or proceeding, whether of a similar character or otherwise. 

16.      Unfunded Plan

     The Plan is unfunded. Prior to the payment or settlement of Director Options or Director Units, nothing contained herein shall give any non-Employee Director any rights that are greater than
those of a general creditor of the Company. In its sole discretion, the Board may authorize the creation of trusts or other arrangements to meet the obligations created under the Plan to deliver Common Stock with respect to awards hereunder.

17.      Section 409A

     If any provision of the Plan or any agreement entered into under the Plan causes any person to be subject to the interest and penalties under Section 409A of the Code, such provision shall be
modified to maintain, to the maximum extent practicable, the original intent of the provision without violating the requirements of Section 409A of the Code and, notwithstanding any provision in the Plan or any such agreement to the contrary, the
Board shall have broad authority to amend the Plan and any such agreement to the extent necessary or desirable to ensure that such person is not subject to the interest and penalties under Section 409A of the Code. 

18.      Effect of Merger

     On March 4, 2007, The Great Atlantic & Pacific Tea Company, Inc., a Maryland corporation (“A&P”), Sand Merger Corp., a Delaware corporation (“Merger Sub”), and Pathmark Stores, Inc., a Delaware corporation (for purposes of this Section
18, “Pathmark”) entered into an Agreement and Plan of Merger, as amended by that certain Letter Agreement re: Payment for Fractional Shares, dated June 27,
2007, among Pathmark, A&P and Merger Sub (as so amended, the “Merger Agreement”), which provides for the merger (the “Merger”) of Merger Sub with and into Pathmark, with Pathmark as the surviving corporation. No further grants shall 

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be made under the Plan on or after the effective time of the Merger. Any Director Options and Director Units outstanding at the effective time of the Merger shall be cashed out or converted into options to purchase A&P
common stock as provided in Section 3.3 of the Merger Agreement. Director Options outstanding at the effective time of the Merger that are converted into options to purchase shares of A&P common stock as provided in Section 3.3 of the Merger
Agreement shall otherwise remain in effect following the Merger in accordance with their terms except that (i) they shall be fully vested and exercisable, (ii) they shall be subject to the terms of this amended and restated Plan, and (iii)
employment with A&P and its Subsidiaries shall be treated as employment with Pathmark and its Subsidiaries. 

11exh10-1_note.htm

     

    
      

      

    

     

     

     

     

     

    EXHIBIT
      10.1

     

    SUBORDINATED
      UNSECURED PROMISSORY NOTE

    DATED DECEMBER
      3, 2007

     

    
 

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    THIS
      SUBORDINATED UNSECURED PROMISSORY NOTE (THIS “NOTE”) AND THE
      INDEBTEDNESS EVIDENCED HEREBY ARE SUBORDINATE IN THE MANNER AND TO THE EXTENT
      SET FORTH IN THAT CERTAIN SUBORDINATION AGREEMENT DATED AS OF DECEMBER 3,
      2007 (AS AMENDED, RESTATED SUPPLEMENTED OR OTHERWISE MODIFIED FROM TIME TO
      TIME,
      THE “SUBORDINATION AGREEMENT”) AMONG GALAXY ENERGY CORPORATION,
      THE SUBORDINATED CREDITORS NAMED THEREIN, THE LENDERS NAMED THEREIN, AND
      PROMETHEAN ASSET MANAGEMENT L.L.C., TO THE SENIOR INDEBTEDNESS (AS DEFINED
      IN
      THE SUBORDINATION AGREEMENT); AND EACH HOLDER OF THIS PROMISSORY NOTE (EACH
      A
“HOLDER”, AND COLLECTIVELY THE “HOLDERS”), BY
      ITS ACCEPTANCE HEREOF, SHALL BE BOUND BY THE PROVISIONS OF THE SUBORDINATION
      AGREEMENT.

     

     

     

    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

     

    Subordinated
      Unsecured Promissory Note

    

    December
      3, 2007

    

    $550,000.00                                                                                                                                                                                                   
      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 Five Hundred Fifty Thousand Dollars ($550,000.00),
      together with interest at the rate of eight percent (8.0%) per annum
      (hereinafter “Interest”), such principal and Interest to be payable ON THE LATER
      OF, (i) the date upon which all of the Senior Indebtedness (as defined in the
      Subordination Agreement) has been indefeasibly paid in full, and (ii) one
      hundred twenty (120) days from the date hereof, in each case, in lawful money
      of
      the United States of America, subject, however, to the restrictions contained
      in
      the Subordination Agreement.  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.

    

    

    
      
        Galaxy
          Energy Corporation Subordinated Promissory Note -
          Page 1 of 4

      

      
        
        

        
          

        

      

      
        
        

      

    

    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;

     

    (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,
      subject to the terms, provisions and restrictions contained in the Subordination
      Agreement, 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, the payment on such
      declaration, however, being subject to the subordination provisions of this
      Note.

     

     

    
 

    
      
        Galaxy
          Energy Corporation Subordinated Promissory Note -
          Page 2 of 4

      

      
        
        

        
          

        

      

      
        
        

      

    

    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, subject to the terms, provisions and restrictions contained
      in the Subordination Agreement, 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.

    

    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.

    

    
      
        Galaxy
          Energy Corporation Subordinated Promissory Note -
          Page 3 of 4    

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    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	 
	 	 	 	 

    

    

    

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Galaxy
      Energy Corporation Subordinated Promissory Note - Page
      4 of 4

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