LOAN AGREEMENT
THIS
AGREEMENT,
dated
for reference the 24th day of May, 2007, is made
| BETWEEN: |
COACH
CAPITAL LLC,
having an address of EPS-D (2016), XX Xxx 00-0000, Xxxxx, Xxxxxxx,
XXX,
00000
|
(hereinafter
referred to as the “Lender”)
| AND: |
RADIAL
ENERGY INC.,
a
company incorporated under the laws of the State of Nevada, having
an
office at 0000 Xxxxx Xxxxxx, Xxxxx 0000, Two Xxxxx Xxxxxx Xxxxxxxx,
Xxxxxxx, Xxxxx, XXX, 00000
|
(hereinafter
referred to as the “Borrower”)
WHEREAS
the
Borrower wishes to borrow and the Lender is willing to lend to the Borrower
the
sum of One Million, Three Hundred Thousand Dollars in US funds (US$1, 300,000)
on the terms hereinafter set out.
NOW
THEREFORE THIS AGREEMENT WITNESSES
that in
consideration of the premises and the mutual covenants and agreements
hereinafter set forth, the parties hereto agree as follows:
| 1. |
Definitions
|
Where
used in this Agreement, the following words and phrases shall have the following
meaning:
| (a) |
“Agreement”
means this Agreement and the schedules hereto, as at any time amended
or
modified and in effect;
|
| (b) |
“Charter”
means the Memorandum and Articles, the Articles and By-Laws or other
constating documents of the Borrower, as at any time amended or modified
and in effect;
|
| (c) |
“Event
of Default” means any event specified in subsection
7.1;
|
| (d) |
“Lender’s
Security” means the Note;
|
| (e) |
“Loan”
means the loan by the Lender to the Borrower established pursuant
to
subsection 3.1; and
|
| (f) |
“Note”
means the non-interest bearing promissory note to be made by the
Borrower
to the Lender as evidence of the Loan which shall substantially be
in the
form set out in Schedule “A”.
|
| 2. |
INTERPRETATION
|
| 2.1 |
Governing
Law
|
This
Agreement is governed by the laws of the State of Nevada and the parties attorn
to the non-exclusive jurisdiction of the courts of Nevada for the resolution
of
all disputes under this Agreement.
| 2.2 |
Severability
|
If
any
one or more of the provisions contained in this Agreement is found to be
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein will not in any
way
be affected or impaired thereby.
| 2.3 |
Parties
in Interest
|
This
Agreement enures to the benefit of and is binding on the parties hereto and
their respective successors and permitted assigns.
| 2.4 |
Headings
and Marginal
References
|
The
division of this Agreement into sections, subsections, paragraphs and
subparagraphs and the insertion of headings are for convenience of reference
only and do not affect the construction or interpretation of this
Agreement.
| 2.5 |
Currency
|
All
statements of, or references to, dollar amounts in this Agreement means lawful
currency of the United States of America.
| 3. |
THE
LOAN
|
| 3.1 |
Establishment
of the Loan
|
The
Lender agrees, on the terms and conditions set forth in this Agreement, to
lend
to the Borrower the sum of One Million, Three Hundred Thousand Dollars
($1,300,000).
| 3.2 |
Evidence
of Indebtedness
|
Indebtedness
of the Borrower to the Lender in respect of the Loan will be evidenced by the
Note, which will be made by the Borrower to the Lender at the time funds are
advanced, a copy of which form is attached hereto as Schedule “A”.
| 3.3 |
Repayment
of the Loan
|
The
Borrower will repay the Loan upon demand from the Lender. The Borrower may
repay
the Loan at any time without penalty, bonus or charges and must pay the Loan
immediately after repaying
the convertible debts issued by Cornell Capital Partners LP and before the
repayment to any other long term debt currently outstanding or not yet
incurred.
| 3.4 |
Interest
|
The
Loan
will be subject to a Two Percent (2%) interest charge calculated monthly and
payable on a monthly basis on the seventeenth day of each month the Agreement
is
in effect commencing June 17, 2007.
In
the
event the Borrower is unable to pay any interest charge due and owing to the
Lender on the required date, the Lender may, at its option, grant an extension
in respect of the interest payment in question or render the whole Loan due
and
payable.
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| 3.5 |
Conversion
into Securities
|
During
the term of the Agreement, the Lender will have the option to convert the Loan,
or any portion thereof, into securities of the Borrower.
In
the
event the Lender wishes to convert the loan into shares, the shares will be
offered at a price per share of (a) $1.0536 (the “Fixed Conversion Price”) or
(b) ninety percent (90%) of the lowest daily volume weighted average price
during the fifteen (15) trading days immediately preceding the Conversation
Date
(the “Market Conversion Price”).
In
any
event, no amount of the Loan will be convertible into shares of the Borrower
until such time as the Borrower has repaid the convertible debts issued by
Cornell Capital Partners LP.
A
Notice
of Conversion is attached hereto as Schedule “B”.
| 4. |
SECURITY
FOR THE LOAN
|
| 4.1 |
Costs,
Charges and Expenses
|
The
Borrower will assume and pay all costs, charges and expenses, including
reasonable solicitors’ costs, charges and expenses on a special costs basis,
which may be incurred by the Lender in respect of this Agreement or the Lender’s
Security or which may be incurred by the Lender in respect of any proceedings
taken or things done by the Lender in connection therewith to collect, protect,
realize or enforce the Lender’s Security.
| 5. |
REPRESENTATIONS
AND WARRANTIES
|
| 5.1 |
Representations
and Warranties
|
The
Borrower represents and warrants to the Lender that:
|
(a)
|
the
Borrower is a corporation duly incorporated, validly existing and
in good
standing under the laws of the State of
Nevada;
|
|
(b)
|
the
Borrower has all requisite corporate power and authority to enter
into
this Agreement and to grant the Lender’s Security and to carry out the
obligations contemplated herein and
therein;
|
|
(c)
|
this
Agreement and the Lender’s Security have been duly and validly authorized,
executed and delivered by the Borrower and are valid obligations
of it;
and
|
|
(d)
|
no
Event of Default and no event which, with the giving of notice or
lapse of
time would become an Event of Default, has occurred or is
continuing.
|
| 5.2 |
Survival
of Representations and
Warranties
|
All
representations and warranties made herein will survive the delivery of this
Agreement to the Lender and no investigation at any time made by or on behalf
of
the Lender shall diminish in any respect whatsoever its rights to rely on those
representations and warranties. All statements contained in any certificate
or
other instrument delivered by or on behalf of the Borrower under or pursuant
to
this Agreement will constitute representations and warranties made by the
Borrower thereunder.
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| 6. |
COVENANTS
OF THE BORROWER
|
The
Borrower covenants and agrees with the Lender that, at all times during the
currency of this Agreement, it will:
|
(a)
|
pay
the Loan and all other monies required to be paid to the Lender pursuant
to this Agreement in the manner set forth
herein;
|
|
(b)
|
duly
observe and perform each and every of its covenants and agreements
set
forth in this Agreement and the Lender’s
Security;
|
|
(c)
|
provide
the Lender with immediate notice of any Event of Default;
and
|
|
(d)
|
do
all things necessary to obtain and maintain the Lender’s Security in good
standing and make payment of all fees and charges in respect
thereto.
|
| 7. |
EVENT
OF DEFAULT
|
| 7.1 |
Definition
of Event of Default
|
The
Loan,
costs and any other money owing to the Lender under this Agreement will
immediately become payable upon demand by the Lender or, unless otherwise waived
in writing by the Lender, in any of the following events:
|
(a)
|
if
the Borrower defaults in any payment when due under this
Agreement;
|
|
(b)
|
if
the Borrower commits any default under any of the Lender’s Security
instruments;
|
|
(c)
|
if
the Borrower becomes insolvent or makes a general assignment for
the
benefit of its creditors, or if any order is made or an effective
resolution is passed for the winding-up, merger or amalgamation of
the
Borrower or if the Borrower is declared bankrupt or if a custodian
or
receiver be appointed for the Borrower under the applicable bankruptcy
or
insolvency legislation, or if a compromise or arrangement is proposed
by
the Borrower to its creditors or any class of its creditors, or if
a
receiver or other officer with like powers is appointed for the
Borrower;
|
|
(d)
|
if
the Borrower defaults in observing or performing any other covenant
or
agreement of this Agreement on its part to be observed or performed
and
such default has continued for a period of seven (7) days after notice
in
writing has been given by the Lender to the Borrower specifying the
default.
|
| 8. |
GENERAL
|
| 8.1 |
Waiver
or Modification
|
No
failure on the part of the Lender in exercising any power or right hereunder
will operate as a waiver of power or right nor will any single or partial
exercise of such right or power preclude any other right or power hereunder.
No
amendment, modification or waiver of any condition of this Agreement or consent
to any departure by the Borrower therefrom will be effective unless it is in
writing signed by the Lender. No notice to or demand on the Borrower will
entitle the Borrower to any other further notice or demand in similar or other
circumstances unless specifically provided for in this Agreement.
-
4
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| 8.2 |
Time
|
Time
is
of the essence of this Agreement.
| 8.3 |
Further
Assurances
|
The
parties to this Agreement will do, execute and deliver or will cause to be
done,
executed and delivered all such further acts, documents and things as may be
reasonably required for the purpose of giving effect to this
Agreement.
| 8.4 |
Assignment
|
The
Borrower may not assign this Agreement or its interest herein or any part hereof
except with the prior written consent of the Lender.
| 9. |
NOTICES
|
| 9.1 |
Anynotice
under this Agreement will be given in writing and may be sent by
fax,
telex, telegram or may be delivered or mailed by prepaid post addressed
to
the party to which notice is to be given at the address indicated
above,
or at another address designated by that party in
writing.
|
| 9.2 |
If
notice is sent by fax, telex, telegram or is delivered, it will be
deemed
to have been given at the time of transmission or
delivery.
|
| 9.3 |
If
notice is mailed, it will be deemed to have been received 48 hours
following the date of mailing of the
notice.
|
| 9.4 |
If
there is an interruption in normal mail service due to strike, labour
unrest or other cause at or before the time a notice is mailed the
notice
will be sent by fax, telex, telegram or will be
delivered.
|
| 10. |
AMENDMENTS
|
This
Agreement may be amended, waived, discharged, or terminated only by instrument
in writing signed by the party against whom enforcement of the amendment,
waiver, discharge or termination is sought.
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| 11. |
EXECUTION
IN COUNTERPART
|
This
Agreement may be signed in counterpart and each such counterpart, whether in
original or facsimile form, together shall constitute a true original and
provide satisfactory evidence that this Agreement has been duly executed by
the
parties hereto.
IN
WITNESS WHEREOF
the
Lender and the Borrower have executed and delivered this Agreement as of the
day
and year first written above.
COACH
CAPITAL LLC
/s/
Xxxxxxx
Xxxxxxx
Per: Xxxxxxx
Xxxxxxx, Secretary
RADIAL
ENERGY INC.
/s/
G.
Xxxxx Xxxxx
Per:
G.
Xxxxx
Xxxxx, President
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6
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SCHEDULE
“A”
to
the
Loan Agreement dated for reference the 24th
day of
May, 2007
between
Coach Capital LLC and Radial Energy Inc.
PROMISSORY
NOTE
Principal
Amount: US
$1,300,000
For
value
received, Radial
Energy Inc. (the
"Borrower") hereby promises to pay to Coach
Capital LLC
(the
"Lender") the principal sum of One Million, Three Hundred Thousand Dollars
in US
funds (US$1,300,000) upon the earlier of:
| (i) |
demand:
|
| (ii) |
any
change of control of the Borrower ("control" being defined as ownership
of
or control of direction over, directly or indirectly, 20% or more
of the
outstanding voting securities of the Borrower);
and
|
| (iii) |
the
occurrence of an Event of Default (as defined in the Loan Agreement
between the Borrower and the Lender dated for reference May 17,
2007),
|
together
with any interest calculated at a rate of two percent (2%) on a monthly basis
that remains unpaid upon repayment of the Loan. All payments under this
promissory note will be made by cheque, bank draft or wire transfer (pursuant
to
wire transfer instructions provided by the Lender from time to time) and
delivered to the Lender.
The
undersigned is entitled to prepay this promissory note, in whole or in part,
without notice or penalty. The undersigned waives demand and presentment
for
payment, notice of non-payment, protest, notice of protest and notice of
dishonour. This promissory note will be governed by and construed in accordance
with the laws of the State of Nevada.
Dated:
May 24, 2007.
RADIAL
ENERGY INC.
Per: G.
Xxxxx
Xxxxx, President
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SCHEDULE
“B”
to
the
Loan Agreement dated for reference the 24th
day of
May, 2007
between
Coach Capital LLC and Radial Energy Inc.
CONVERSION
FORM
TO: Radial
Energy Inc.
(Company)
The
undersigned Holder of a Loan in the amount of One Million, Three Hundred
Thousand Dollars in US funds (US$1,300,000) hereby irrevocably elects to
convert
the said Loan (or $ ______________ thereof) into securities in accordance
with
the Terms and Conditions of the Loan Agreement and directs that the securities
issuable and deliverable upon the conversion be issued and delivered to the
address indicated below.
| Dated: | |
| (Signature of Holder) |
(Name
of Holder)
(Address
of Holder)
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