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LOAN AGREEMENT

THIS AGREEMENT is made as of October 2, 2009,

BETWEEN:

EDEN ENERGY CORP., a corporation incorporated under the
laws of Nevada, having an office at 1680- 200 Burrard Street,
Vancouver, British Columbia V6C 3L6

(the “Borrower”)

AND:

D Sharpe Management Inc., a businessman with an address at
1281 Eldon Road, North Vancouver, British Columbia V7R 1T5

(the “Lender”)

WHEREAS:

A.

The Lender is the President and a director of the Borrower. The Borrower has
requested and the Lender has agreed to lend to the Borrower an aggregate
principal amount of up to $1,000,000 (the “Loan”), to be used by the Borrower
for general corporate purposes;

    B.

The Borrower has agreed to provide the Lender with security for the Loan in the
form of a pledge and security agreement (the “Security Agreement”) in the form
attached as Schedule “A” granting to the Lender a first ranking security
interest in all of the present and after acquired property of the Lender (the
“Collateral”); and

    C.

The parties wish to record the terms and conditions of the Loan to be made
pursuant to the terms of this Agreement.

NOW THEREFORE THIS AGREEMENT WITNESSES that pursuant to the premises and in
consideration of the mutual covenants contained in this Agreement and the
agreement of the Lender to advance funds to the Borrower, the parties covenant
and agree as follows:

1.             LOAN

1.1           Loan. The Lender will make the Loan available to the Borrower, to
be drawn down in an initial draw of $500,000 and, upon the provision of 30 days
written notice to the Lender, further draws of not less than $50,000, to an
aggregate maximum of $1,000,000. An advance will be made by the Lender thirty
(30) days following the receipt of a draw request and Borrower’s Certificate in
the form attached as Schedule “B” (“Draw Request”). Each Draw request must
state:

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  (a)

that the Borrower will use the funds to be advanced by the Lender upon receipt
of the Draw Request for the operation of the Borrower’s business;

        (b)

the total amount of all previous draw requests (if any);

        (c)

the amount of funds requested, provided that the sum of the amount requested and
the aggregate amount of all previous draw requests cannot exceed $1,000,000;

        (d)

the details of the Borrower’s bank account into which the funds are to be paid;
and

        (e)

a confirmation that no default exists under this Agreement.

1.2           Closing. Subject to section 1.4 below, the Lender will make the
first advance of $500,000 to the Borrower on execution of this Agreement or such
other date as the parties may agree.

1.3           Interest Rate. The Loan is to bear interest from the date any
funds are advanced to the Borrower to the date of full repayment of all amounts
outstanding under the Loan at 20% per annum, accruing daily before as well as
after maturity, default or judgment (the “Interest Rate”). Interest shall be
payable quarterly, in arrears, commencing January 5, 2010, and quarterly
thereafter, for the initial draw. For subsequent draws, interest shall be
payable three months after such draws, in arrears, and quarterly thereafter.

1.4           Loan Facilitation Fee. The undrawn amount of the Loan shall bear
interest at the rate of 1% per month (the “Loan Facilitation Fee”), which amount
shall be payable quarterly, commencing three months after the date of this
Agreement.

1.5           Conditions Precedent to Advance. The Lender will not have any
obligation to advance all or any portion of the Loan to the Borrower until all
of the following have been fulfilled to the Lender’s satisfaction:

  (a)

the Borrower has executed and delivered this Agreement and the Security
Agreement;

        (b)

the Borrower has executed and delivered to the Lender a Draw Request and
Promissory Note; and

        (c)

all filings necessary or advisable have been made in the appropriate
jurisdictions and there exists valid, perfected and enforceable security over
the Collateral.

1.6           Payment of Principal and Interest. The Borrower will pay to the
Lender in full the principal amount of the Loan and all accrued and unpaid Loan
Facilitation Fee amounts and Interest on the earlier to occur of:

  (a)

October 5, 2010, subject to extension upon mutual agreement of the Lender and
Borrower; or

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  (b)

an Event of Default occurring hereunder.

1.7           Prepayment. The Borrower may prepay the Loan in whole or in part,
at any time and from time to time without notice, bonus or penalty.

1.8           Applications of Payments. All payments of cash made by the
Borrower to the Lender are to firstly be applied to interest, secondly to any
outstanding Loan Facilitation Fee amount and thirdly to the principal balance
outstanding under the Loan.

1.9           Promissory Notes. The Loan is to be evidenced by promissory notes
(each, a “Promissory Note”) in the form attached hereto as Schedule “C”, issued
by the Borrower to the Lender for the amount of each and every advance.

1.10         Manner of Payments. The Borrower will make all payments to the
Lender under this Agreement by wire transfer, cheque, direct deposit or bank
draft in immediately available funds to such account or accounts of the Lender
the Lender may direct from time to time.

1.11         Withholding Taxes. If the Borrower is required by law to withhold
from any payment required to be made to the Lender under this Agreement or a
Promissory Note, any amount on account of any taxes imposed by the laws of
Canada, or the laws applicable therein, the Borrower will make the withholding
and pay the amount withheld to the appropriate governmental authority before
penalties attach or interest accrues. The amount of any payment required to be
made hereunder by the Borrower to the Lender is to be reduced by any amount
withheld and paid in respect of such payment in accordance with this Section.
Upon request of the Lender, the Borrower will deliver to the Lender official tax
receipts evidencing such payments.

2.             SECURITY AGREEMENT

2.1           Security Agreement. The Loan advanced under this Agreement is to
be secured by the Security Agreement in the form required by the Lender, and the
Borrower agrees to execute and deliver, or cause to be delivered, an original
copy of the Security Agreement for at the time of execution of this Agreement.

3.             REPRESENTATIONS AND WARRANTIES

3.1           Representations and Warranties of the Borrower. The Borrower
represents and warrants to the Lender that:

  (a)

it has been duly incorporated, validly exists and is in good standing under the
jurisdiction of its incorporation and each jurisdiction where it carries on
business and has been duly licensed to carry on business in all jurisdictions
where it is carrying on business,

        (b)

it has the power and authority to enter into, execute and deliver and to keep,
observe and perform all of the covenants, agreements and other obligations made
by or imposed on it under this Agreement and the Security Agreement (together
the “Loan Documents”),

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  (c)

the Loan Documents and all other instruments and agreements delivered by the
borrower to the Lender pursuant to this Agreement have been or will be validly
executed by it or on its behalf and, when delivered to the Lender, will be
legal, valid and binding obligations of it, enforceable in accordance with their
respective terms, except as enforcement may be limited by,

          (i)

applicable bankruptcy, insolvency, moratorium, reorganization and similar laws
at the time in effect affecting the rights of creditors generally, and

          (ii)

equitable principles which may limit the availability of certain remedies,
including the remedy of specific performance,

          (d)

the execution, delivery and performance by it of the Loan Documents does not
contravene any material provision of any regulation, order or permit applicable
to it, or cause a breach of or constitute a default under or require any consent
under any agreement or instrument to which it is a party or by which it is bound
except such as have been obtained,

          (e)

there are no suits or judicial proceedings or proceedings before any
governmental commission, board or other agency, actual, pending or to its
knowledge threatened against it which involves a significant risk of a judgment
or liability which, if satisfied, would have an adverse effect upon its
financial position or the ability to meet its obligations under this Agreement
or to grant the Loan Documents,

          (f)

it is not in default under any guarantee, note or other instrument evidencing
any indebtedness, other than as disclosed in writing to the Lender by the
Borrower, and to its knowledge there exists no state of facts which, after
notice or lapse of time or both or otherwise, would constitute such a default,
and

          (g)

no event is outstanding which constitutes, or with notice or lapse of time or
both would constitute, an Event of Default (as defined below).

4.             COVENANTS

4.1           Affirmative Covenants. Until such time that the Loan and any
outstanding Interest are repaid in full, the Borrower will:

  (a)

pay all amounts due and owing to the Lender when due;

        (b)

at all times maintain its corporate existence and be registered or licensed to
carry on business in all jurisdictions where the nature of its business makes it
prudent to do so;

        (c)

preserve and protect the goodwill, assets, business and undertaking of the
Borrower;

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  (d)

maintain adequate records and books of account reflecting all financial
transactions in conformity with generally accepted accounting principles and
provide to the Lender its unaudited quarterly and audited annual financial
statements, including its balance sheet, income statement and statement of cash
flow;

        (e)

comply in all material respects with all material contracts, arrangements,
agreements or understandings entered into by the Borrower;

        (f)

promptly notify the Lender of any changes regarding the Borrower or the
Collateral as necessary to permit the Lender to maintain perfection of their
security interest;

        (g)

materially comply with all applicable environmental laws and promptly provide
notice to the Lender of any material default or breach of any environmental law;

        (h)

pay all taxes and claims when due; and

        (i)

provide to the Lender such further assurances as may be reasonably requested by
the Lender to create, perfect and maintain their interest in the Collateral.

4.2           Negative Covenants. Until such time that the Loan and any
outstanding Interest are repaid in full and without the prior consent of the
Lender, the Borrower will not

  (a)

create, assume or have outstanding any mortgage, pledge, charge, assignment or
other security, whether fixed or floating, on any of its properties, assets or
undertakings ranking or purporting to rank or capable of being enforced in
priority, or pari passu with the Loan and the Loan Documents;

        (b)

guarantee, endorse or otherwise become surety for the obligations of any other
person;

        (c)

reorganize or amalgamate with any other person;

        (d)

make any inter-company loans or shareholder loans or investments, except in the
ordinary course of business;

        (e)

dispose of any of its assets, property or undertaking, except in the ordinary
course of business; or

        (f)

materially change its business.

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5.             EVENTS OF DEFAULT

5.1           Events of Default. Each of the following events constitutes a
default by the Borrower under this Agreement (each, an “Event of Default”),
unless the Lender agrees to waive such default:

  (a)

the Borrower fails to pay any amount owing to the Lender under this Agreement
when due, and such amount remains unpaid for five days;

        (b)

any of the representations or warranties of the Borrower in this Agreement are
misleading, or incorrect in any material respect;

        (c)

the Lender ceases to have a valid, perfected and enforceable charge over the
Collateral;

        (d)

an order is made or a resolution passed for the liquidation or winding-up of the
Borrower; or

        (e)

if the Borrower becomes insolvent, admits in writing its inability to pay its
debts as they become due or otherwise acknowledges its insolvency, commits an
act of bankruptcy, makes an assignment or bulk sale of its assets, is adjudged
or declared bankrupt or makes an assignment for the benefit of creditors or a
proposal or similar action under the Bankruptcy and Insolvency Act (Canada), the
Companies Creditors’ Arrangement Act (Canada) or any similar legislation, or
commences any other proceedings relating to it under any reorganization,
arrangement, readjustment of debt, dissolution or liquidation law or statute of
any jurisdiction whether now or thereafter in effect, or consents to any such
proceeding.

5.2           Remedies For Events of Default. Upon the occurrence of an Event of
Default, the Lender may:

  (a)

immediately declare due and payable the outstanding balance of the Loan and any
unpaid accrued Interest without presentment of the Notes, and without demand,
protest or other notices of any kind, all of which are expressly waived by the
Borrower; and/or

        (b)

exercise any and all rights, powers, remedies and recourses available to the
Lender under the Loan Documents, at law, in equity or otherwise.

5.3           Waiver of Default. The Lender may, in writing in their absolute
discretion at any time and from time to time, waive any breach by the Borrower
of any of its covenants in this Agreement, provided that any such waiver does
not constitute a continuing waiver and does not constitute a waiver of any other
term or provision of this Agreement.

5.4           No Waiver. No failure or delay on the part of the Lender in
exercising any right, power or privilege under this Agreement operates as a
waiver thereof; nor does any single or partial exercise of any right, power or
privilege under this Agreement preclude any other or

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further exercise thereof or the exercise of any other right, power or privilege.
The rights and remedies in this Agreement expressly specified are cumulative and
not exclusive of any rights or remedies which the Lender would otherwise have.
The acceptance by the Lender of any payment of or on account of the Loan after a
default or of any payment on account of any partial default is not to be
construed to be a waiver of any right to take advantage of any future default or
of any past default not completely cured thereby. The Lender may exercise any
and all rights, powers, remedies and recourses available to them under this
Agreement, or any other remedy available to them, concurrently or individually
without the necessity of an election.

6.             GENERAL

6.1           Person. References in this Agreement to a “person” includes any
individual, partnership, joint venture, company, corporation, unincorporated
entity, government entity or other entity, whether having legal status or not,
and includes persons acting in concert with each other.

6.2           Independent Legal Advice. The Lender acknowledges that:

  (a)

this Agreement was prepared by the W.L. Macdonald Law Corporation for the
Borrower;

        (b)

W.L. Macdonald Law Corporation received instructions from the Borrower and does
not represent the Lender in regards to this Agreement;

        (c)

the Lender has been requested to obtain his own independent legal advice on this
Agreement prior to signing this Agreement;

        (d)

the Lender has been given adequate time to obtain independent legal advice;

        (e)

by signing this Agreement, the Lender confirms that he fully understands this
Agreement; and

        (f)

by signing this Agreement without first obtaining independent legal advice, the
Lender waives his right to obtain independent legal advice.

6.3           Currency. All references to dollars or currency in this Agreement
are to Canadian dollars.

6.4           Governing Law. This Agreement and all matters arising under it are
to be governed by and construed in accordance with the laws of the Province of
British Columbia and the federal laws of Canada applicable therein, and each of
the parties submit and attorn to the jurisdiction of the courts of British
Columbia.

6.5           Severability. If any provision of this Agreement or any part
thereof is determined to be invalid, it is to be severable and severed from this
Agreement and the remainder of this Agreement is to be construed as if such
invalid provision or part has been deleted from this Agreement.

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6.6           Gender and Number. Words importing the masculine gender include
the feminine and neuter genders and words in the singular include the plural,
and vice versa.

6.7           Headings. The headings are inserted for convenience only and are
not to affect the interpretation of this Agreement.

6.8           Non-limiting. The word “including”, when following any general
statement, is to be construed as referring to all other things that could
reasonably fall within the scope of such general statement, whether or not
non-limiting language (such as “without limitation”) is used.

6.9           Notice. All notices, demands and payments under this Agreement
must be in writing and may be delivered personally, via e-mail or by facsimile
transmission to the addresses set out on the first page of this Agreement or to
such other addresses as may from time to time be notified in writing by the
parties. All notices will be deemed to have been given and received on the next
business day following the date of transmission or delivery, as the case may be.

6.10         Co-operation. Each of the parties will execute all such further
documents and do all such further things as may reasonably be required by
another party in order to give full effect to this Agreement.

6.11         Fees and Expenses. The Borrower will pay to the Lender all of its
reasonable legal and other fees and disbursements in respect of the Loan,
including the preparation, execution and carrying out of this Agreement and the
Security Agreement, and on default will pay all costs, charges and expenses of
the Lender taken to protect and preserve their security and in enforcing this
Agreement and the Security Agreement. All such costs and expenses are payable by
the Borrower to the Lender on demand, and in default of payment are to bear
interest at the Interest Rate.

6.12         No Prejudice. Nothing in this Agreement is to prejudice or impair
any other right or remedy that the Lender may otherwise have with respect to the
Loan or any rights or remedies the Lender may have with respect to other loans
that may be made to the Borrower.

6.13         No Assignment. No party may assign or transfer its rights under
this Agreement, or any portion of the Loan, without the prior written consent of
the other parties.

6.14         Enurement. This Agreement is binding upon and enures to the benefit
of the Borrower and the Lender and their respective successors and assigns.

6.15         Confidentiality. All documents associated with this transaction are
to be confidential and the parties will not disclose such documents to any other
person except as may be required by law. Each party will use its reasonable
efforts to provide prior notice to the other parties of any such discloser.

6.16         Time. Time is of the essence of this Agreement.

6.17         Entire Agreement; Conflict of Instruments. The Loan Documents
represent the entire agreement between the parties and supersede any prior
arrangements or agreement, whether in writing or not, among the parties.

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6.18         Counterparts. The parties may deliver this Agreement in
counterparts and by facsimile transmission, with the same effect as if all
parties had all signed an original copy of the same agreement, and all
counterparts are to be construed together as one and the same agreement.

AS EVIDENCE OF THEIR AGREEMENT the parties have caused this Loan Agreement to be
executed and delivered as of the date first noted above.

EDEN ENERGY CORP.

Per:     Authorized Signatory  

 

 

    D Sharpe Management Inc.  

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SCHEDULE “A”

Security Agreement

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SCHEDULE “B”

Loan Draw Request
and Borrower’s Certificate

I, Drew Bonnell, the Chief Financial Officer of EDEN ENERGY CORP. (the
“Borrower”) hereby certify, without personal liability, that as of
________________ , 2009:

1.

I am familiar with and have examined the provisions of the Loan Agreement (the
“Agreement”) dated September 1, 2009 between the Borrower and Donald Sharpe (the
“Lender”), and have made reasonable investigations of corporate records and
inquiries of other officers and senior personnel of the Borrower. Terms defined
in the Agreement have the same meanings where used in this certificate.

 

 

2.

The representations and warranties contained in the Agreement are true and
correct.

 

 

3.

No event or circumstance has occurred which constitutes or which, with the
giving of notice, lapse of time, or both, would constitute a breach of any
covenant or other term or condition of the Agreement and there is no reason to
believe that during the next month any such event or circumstance will occur.

 

 

4.

The funds to be advanced by the Lender upon receipt of this Draw Request will be
used for the operation of the Borrower’s business.

 

 

5.

As of this date, the Lender has advanced $ _______________ to the Borrower under
the Agreement.

 

 

6.

I hereby request on behalf of the Borrower that the sum of $ be advanced to the
Borrower by the Lender as a further advance under the Agreement. The advance is
to be made as follows:

 

(a)

[Insert Bank account and wire information or list the cheques required and the
party to whom they are payable]

 

 

7.

I have executed and hereby deliver concurrently with this Draw Request a
Promissory Note in the amount of $ .

Dated this ______day of , 2009.

EDEN ENERGY CORP.

Per:     Name: Drew Bonnell   Title: Chief Financial Officer  

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SCHEDULE “C”

PROMISSORY NOTE

_________________, 2009

TO: DONALD SHARPE (the “Lender”)   1680 - 200 Burrard Street,   Vancouver,
British Colombia V6C 3L6

FOR VALUE RECEIVED, EDEN ENERGY CORP. (the “Borrower”) acknowledges itself
indebted and promises to pay to, or to the order of, the Lender at the address
indicated above the sum of ______________________ ($ ________ ) (the “Principal
Sum”), together with interest on the outstanding balance of the Principle Sum
from time to time at the rate equal to 20% PER ANNUM, both before and after
maturity, on September 1, 2010, subject to any restrictions on such demand as
set out in a Loan Agreement between the Lender and the Borrower dated as of
September 1, 2009. Interest shall be payable quarterly, in arrears, commencing
three months after the date of the promissory note.

If any payment is not made when required to be made in accordance with this
promissory note, interest is to be paid by the Borrower on such overdue amount,
including any accrued and unpaid interest, in the same manner as is paid on the
Principal Sum.

The Borrower waives presentment for payment, protest or notice of protest and
notice of dishonour of this promissory note.

DATED at Vancouver, British Columbia, this ____ day of ________________, 2009.

EDEN ENERGY CORP.

Per: __________________________________

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