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), PO Box 02-5548, Miami,
Florida, USA, 33102

(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 1200 Smith Street, Suite 1600, Two Allen Center
Building, Houston, Texas, USA, 77002

(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.
 
 

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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.
 
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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/ Michael Laidlaw
                                                                                                                       
Per: Michael Laidlaw, Secretary

RADIAL ENERGY INC.

/s/ G. Leigh Lyons
                                                                                                                       
Per:  G. Leigh Lyons, President
 
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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.
 

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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. Leigh Lyons, 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.
 

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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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