Unassociated Document


    MASTER
      SECURITIES AMENDMENT AGREEMENT

     

    


     

    This
      MASTER
      SECURITIES AMENDMENT AGREEMENT
      (this
“Amendment Agreement”), effective as of May 17, 2007 (the “Effective Date”),
      supplements and amends the transaction documents (collectively, the “Transaction
      Documents”) executed and delivered in connection with the private placement (the
“October 2006 Private Placement”) by Radial Energy Inc., a Nevada corporation
      (the “Company”), of its secured convertible debentures and common stock purchase
      warrants to Cornell Capital Partners, LP (the “Buyer”), which securities were
      issued pursuant to the Securities Purchase Agreement dated October 2, 2006
      by
      and between the Company and the Buyer (the “Purchase Agreement”). The
      Transaction Documents are supplemented, modified, and amended as set forth
      in
      this Amendment Agreement. Capitalized terms used and not defined in this
      Amendment Agreement shall have the respective meanings set forth in the Purchase
      Agreement.

     

    RECITALS

    

      
        	
                1.

              	
                The
                  Company and the Buyer are parties to the Purchase Agreement, pursuant
                  to
                  which the Company has issued and sold to the Buyer secured convertible
                  debentures in the aggregate principal amount of $3,500,000 (the
                  “Outstanding Debentures”) and warrants to purchase an aggregate of
                  8,166,667 shares of the Company’s common stock (the “Outstanding
                  Warrants”).

              


        	 	 


      

      
        	
                2.

              	
                In
                  connection with the Purchase Agreement, the Company and the Buyer
                  entered
                  into an Investor Registration Rights Agreement, dated as of October
                  2,
                  2006 (the “Registration Rights Agreement”), pursuant to which the Company
                  agreed to undertake certain registration obligations to the
                  Buyer.

              


        	 	 


      

      
        	
                3.

              	
                In
                  connection with the Purchase Agreement, the Company entered into
                  the
                  Security Agreement dated October 2, 2006 with the Buyer (the “Security
                  Agreement”), pursuant to which the Company granted a security interest in
                  the Company property identified therein to secure the obligations
                  of the
                  Company to the Buyer in respect of the Convertible Debentures.
                  

              


        	 	 


      

      
        	
                4.

              	
                In
                  connection with the Purchase Agreement, certain shareholders of
                  the
                  Company (each, a “Pledgor,” and collectively, the “Pledgors”) entered into
                  the Pledge and Escrow Agreement (the “Pledge and Escrow Agreement”) dated
                  October 2, 2006 in favor of Cornell Capital Partners, LP, in its
                  capacity
                  as collateral agent for the Buyer (the “Collateral Agent”), pursuant to
                  which the Pledgors granted a security interest in the Pledged Shares
                  to
                  secure the obligations of the Company to the Buyer in respect of
                  the
                  Convertible Debentures.

              


        	 	 


      

      
        	
                5.

              	
                In
                  connection with the Purchase Agreement, each of the Company’s officers and
                  directors executed a lock-up agreement (the “Lock-Up Agreements”).
                  

              


      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    NOW,
      THEREFORE, in consideration of the foregoing Recitals and other good and
      valuable consideration, the receipt and sufficiency of which are hereby
      acknowledged, the undersigned parties to this Amendment Agreement, including
      the
      Company and the Buyer, agree as follows: 

     

    

      
        
          1. 
            Outstanding
            Debentures. Subject to the terms hereof, the Company and the Buyer agree
            that the Company shall redeem all of the amounts outstanding under each
            of the
            Outstanding Debentures by paying the Buyer, who is also the holder of
            the
            Outstanding Debentures, in respect of each Outstanding Debenture, an
            amount
            equal to the principal amount of the Outstanding Debenture plus the redemption
            premium as set forth below (the “Redemption Premium”), and accrued interest
            (collectively referred to as the “Redemption Amount”). The Redemption Premium
            shall be eighteen percent (18%) of the principal amount being redeemed.
            

        

      

      
        	 	 	 


        	 	
                1.1

              	
                The
                  Redemption Amount shall be paid on or within ninety (90) days of
                  the date
                  of this Agreement.

              


        	 	 	 


      

      
        	 	
                1.2

              	
                As
                  a condition to the Company’s payment of the Redemption Amount, the Buyer
                  shall have surrendered each of the originally executed Outstanding
                  Debentures to the Company for
                  cancellation.

              


      

      
        	 	 	 


        	 	
                1.3

              	
                The
                  provisions of this Section 1 shall supersede any provisions in
                  the
                  Outstanding Debenture that addresses the same
                  topic.

              


        	 	 	 


      

      
        
          2. 
            Outstanding
            Warrants. The Company and the Buyer agree that the Outstanding Warrants
            previously issued by the Company to the Buyer pursuant to the Purchase
            Agreement
            shall continue to be in full force and effect. 

        

      

      
        	 	 


        
          3. 
            Securities
            Purchase Agreement. The Company and the Buyer agree that, effective as of
            the date of this Amendment Agreement, the Purchase Agreement shall be
            terminated
            and no longer have any force or effect. For the sake of clarity and for
            avoidance of any doubt, the Company and the Buyer agree that the Company
            shall
            have no further obligation to issue to the Buyer, and the Buyer shall
            have no
            further obligation to purchase from the Company, a Convertible Debenture
            in the
            principal amount of $1,500,000, and the Company shall have no further
            obligation
            to issue to the Buyer the D Warrants.

        

        	 	 


      

      
        
          4. 
            Registration
            Rights. Subject to the terms hereof, the Company and the Buyer agree that,
            effective as of the date of this Amendment Agreement, the Registration
            Rights
            Agreement shall be terminated and no longer have any force or
            effect.

        

      

      
        	 	 	 


        	 	
                4.1.

              	
                As
                  a condition to the termination of the Registration Rights Agreement,
                  the
                  Company hereby agrees to undertake the registration obligations
                  to the
                  Buyer as set forth in this subsection 4.1 in respect of the shares
                  underlying the Outstanding Warrants. If the Company shall determine
                  to
                  register any of its securities either for its own account or the
                  account
                  of a security holder or holders, other than a registration relating
                  solely
                  to employee benefit plans, a registration relating to the offer
                  and sale
                  of debt securities, a registration relating to a corporate reorganization
                  or other Rule 145 transaction, or a registration on any registration
                  form
                  that does not permit secondary sales, the Company
                  will:

              


      

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      
        	 	
                (a)

              	
                promptly
                  give written notice of the proposed registration to the Buyer;
                  and

              


      

      
        	 	 	 


        	 	
                (b)

              	
                use
                  its best efforts to include in such registration (and any related
                  qualification under blue sky laws or other compliance) all of the
                  shares
                  of the Company’s common stock underlying the Outstanding
                  Warrants.

              


        	 	 	 


      

      
        	 	
                4.2.

              	
                The
                  Buyer hereby acknowledges that the Company had informed the Buyer
                  of its
                  intention to withdraw its registration statement on Form SB filed
                  with the
                  Securities and Exchange Commission (the “SEC”) on November 1, 2006 and
                  amended on February 21, 2007, registration no. 333-138351 (the
                  “Registration Statement”). The Buyer further acknowledges that it agreed
                  to such withdrawal, pursuant to which agreement the Company filed
                  an
                  application to withdraw the Registration Statement with the SEC
                  on March
                  7, 2007.

              


      

      
        	 	 	 


        	 	
                4.3.

              	
                The
                  Buyer hereby agrees and acknowledges that the Company has no obligations
                  whatsoever to the Buyer in respect of the Liquidated Damages set
                  forth in
                  the Registration Rights Agreement and has not otherwise breached
                  the
                  agreement, and, to the extent the Company may have incurred any
                  obligations to the Buyer in respect of such Liquidated Damages
                  or has
                  otherwise breached the agreement, the Buyer hereby waives any such
                  obligations or breaches.

              


        	 	 	 


      

      
        
          5. 
            Security
            Agreement. The Company and the Buyer agree that, effective as of the date
            of
            this Amendment Agreement, the Security Agreement shall be terminated
            and no
            longer have any force or effect.

        

      

      
        	 	 	 


        	 	
                5.1.

              	
                In
                  connection with the termination of the Security Agreement, the
                  Buyer
                  hereby releases any and all security interests granted by the Company
                  in
                  favor of the Buyer set forth in the Security Agreement, effective
                  upon
                  execution of this Amendment Agreement. The Buyer hereby acknowledges
                  that,
                  effect upon the execution of this Amendment Agreement, all rights
                  of the
                  Buyer in the Pledged Property shall be
                  terminated.

              


        	 	 	 


      

      
        	 	
                5.2.

              	
                The
                  Buyer represents and warrants to the Company that, on or prior
                  to the date
                  of this Amendment Agreement, the Buyer has filed a form UCC-3 or
                  such
                  other forms as may be required to release fully the Buyer’s interests in
                  the Pledged Property as detailed in the Security Agreement. The
                  Buyer
                  shall deliver to the Company such documents as the Company shall
                  reasonably request to evidence such
                  termination.

              


      

      
        	 	 	 


        	 	
                5.3.

              	
                The
                  Buyer shall execute and deliver all such other certificates, instruments
                  and documents, as the Company may reasonably request in order to
                  effect
                  the release of the security interest in the Pledged Property as
                  set forth
                  in the Security Agreement.

              


      

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      
        
          6. 
            Pledge
            and Escrow Agreement. The Collateral Agent (who is also the Buyer) hereby
            agrees that, effective as of the date of this Amendment Agreement, the
            Pledge
            and Escrow Agreement shall be terminated and no longer have any force
            or
            effect.

        

      

      
        	 	 	 


        	 	
                6.1.

              	
                In
                  connection with the termination of the Pledge and Escrow Agreement,
                  the
                  Collateral Agent hereby releases any and all security interests
                  granted by
                  each of the Pledgors as security for the Obligations set forth
                  in the
                  Security Agreement, effective upon execution of this Amendment
                  Agreement.
                  The Collateral Agent hereby acknowledges that, effective upon the
                  execution of this Amendment Agreement, all rights of the Collateral
                  Agent
                  in the Pledged Shares shall be
                  terminated.

              


        	 	 	 


      

      
        	 	
                6.2.

              	
                The
                  parties agree that an executed copy of this Amendment Agreement
                  shall
                  constitute instructions to the Escrow Agent to return to each Pledgor
                  the
                  Pledged Materials with respect to each Pledgor’s Pledged Shares, which
                  materials include without limitation the stock certificates made
                  out in
                  favor of the Pledgor representing the Pledged Shares, together
                  with duly
                  executed stock powers or other transfer documents with medallion
                  bank
                  guarantees and executed in blank by each
                  Pledgor.

              


      

      
        	 	 	 


        	 	
                6.3.

              	
                Promptly
                  upon execution of this Amendment Agreement, the Escrow Agent shall
                  return
                  to each Pledgor the Pledged Materials.

              


        	 	 	 


      

      
        	 	
                6.4.

              	
                The
                  Collateral Agent shall execute and deliver all such other certificates,
                  instruments and documents, as the Company may reasonably request
                  in order
                  to effect the release of the security interest in the Pledged Shares
                  as
                  set forth in the Pledge and Escrow
                  Agreement.

              


      

      
        	 	 


        
          7. 
            Irrevocable
            Transfer Agent Instructions. Subject to the terms hereof, the Company, David
            Gonzales, Esq. (acting as the Escrow Agent), and Transfer Online (the
“Transfer
            Agent”) agree that the Irrevocable Transfer Agent Instructions dated October
            2,
            2006 (the “Prior Instructions”) in connection with the October 2006 Private
            Placement shall be amended to reflect the terms of this Amendment Agreement
            as
            set forth herein, effective upon the execution of this Amendment
            Agreement.

        

        	 	 


      

      
        	 	
                7.1.

              	
                All
                  references in the Prior Instructions to the Debentures and the
                  Conversion
                  Shares, and all provisions and agreements in the Prior Instructions
                  related to such securities, are hereby deleted such that the Prior
                  Instructions, as amended by this Amendment Agreement, shall be
                  applicable
                  only with respect to the Outstanding Warrants and the shares of
                  the
                  Company’s common stock underlying the Outstanding Warrants. Since the
                  Company is no longer obligated to issue to the Buyer the D Warrants,
                  the
                  definition of the Warrant Shares is hereby amended to mean “Up to
                  8,166,667 shares of Common Stock to be issued to the Buyer upon
                  exercise
                  of the Warrants.”

              


        	 	 	 


      

      
        	 	
                7.2.

              	
                The
                  Buyer hereby agrees to and acknowledges the modifications to the
                  Prior
                  Instructions as set forth herein.

              


        	 	 	 


      

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

      
        
          8. 
            Lock-Up
            Agreements. The Company and the Buyer agree that, effective as of the date
            of this Amendment Agreement, the Lock-Up Agreements shall be terminated
            and no
            longer have any force or effect.

        

      

      
        	 	 


        
          9. 
            Miscellaneous.

        

        	 	 


      

      
        	 	
                9.1.

              	
                Amendments;
                  Waivers. No provision of this Amendment Agreement may be waived or
                  amended except in a written instrument signed, in the case of an
                  amendment, by the parties hereto as set forth on the signature
                  pages
                  hereto, in the case of a waiver, by the party against whom enforcement
                  of
                  any such waiver is sought. No waiver of any default with respect
                  to any
                  provision, condition or requirement of this Amendment Agreement
                  shall be
                  deemed to be a continuing waiver in the future or a waiver of any
                  subsequent default or a waiver of any other provision, condition
                  or
                  requirement hereof, nor shall any delay or omission of either party
                  to
                  exercise any right hereunder in any manner impair the exercise
                  of any such
                  right.

              


      

      
        	 	 	 


        	 	
                9.2.

              	
                Amendment
                  Controls. If any topic is addressed both in the a Transaction Document
                  (or any document related thereto) and in this Amendment Agreement,
                  this
                  Amendment Agreement shall control.

              


        	 	 	 


      

      
        	 	
                9.3.

              	
                Construction.
                  The headings herein are for convenience only, do not constitute
                  a part of
                  this Amendment Agreement and shall not be deemed to limit or affect
                  any of
                  the provisions hereof. The language used in this Amendment Agreement
                  will
                  be deemed to be the language chosen by the parties to express their
                  mutual
                  intent, and no rules of strict construction will be applied against
                  any
                  party.

              


      

      
        	 	 	 


        	 	
                9.4.

              	
                Governing
                  Law. This Amendment shall be governed by and interpreted in accordance
                  with the laws of the State of New Jersey without regard to the
                  principles
                  of conflict of laws. The parties further agree that any action
                  between
                  them shall be heard in Hudson County, New Jersey, and expressly
                  consent to
                  the jurisdiction and venue of the Superior Court of New Jersey,
                  sitting in
                  Hudson County and the United States District Court for the District
                  of New
                  Jersey sitting in Newark, New Jersey for the adjudication of any
                  civil
                  action asserted pursuant to this Section
                  9.4.

              


        	 	 	 


      

      
        	 	
                9.5.

              	
                Execution.
                  This Amendment Agreement may be executed in two or more counterparts,
                  all
                  of which when taken together shall be considered one and the same
                  document
                  and shall become effective when counterparts have been signed by
                  each
                  party and delivered to the other party, it being understood that
                  both
                  parties need not sign the same counterpart.


              


      

      
      

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

       

      
        	
                 

                 

                 

              	
                9.6.

              	
                Severability.
                  If any provision of this Amendment Agreement is held to be invalid
                  or
                  unenforceable in any respect, the validity and enforceability of
                  the
                  remaining terms and provisions of this Amendment Agreement shall
                  not in
                  any way be affected or impaired thereby and the parties will attempt
                  to
                  agree upon a valid and enforceable provision that is a reasonable
                  substitute therefor, and upon so agreeing, shall incorporate such
                  substitute provision in this Amendment
                  Agreement.

              


      

       

    

    (Signature
      Page Follows)

     

    
      
        
        

      

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

     

    
      	
              RADIAL
                ENERGY INC.

               

            
	
              By:_/s/
                G. Leigh Lyons________________________________

               
                Name: G. Leigh Lyons

               
                Title: President

            


    

    


    
      	
              CORNELL
                CAPITAL PARTNERS, LP

               

            
	
              By:_/s/
                Mark Angelo_________________________________

               
                Name: Mark Angelo

               
                Title: President

            


    

    


    With
      respect to the Pledge and Escrow Agreement only:

    


    DAVID
      GONZALEZ, ESQ., as
      escrow
      agent

    


    /s/
      David Gonzales_______________________________________

    David
      Gonzales, Esq.

    


    With
      respect to the Irrevocable Transfer Agent Instructions only:

    


    DAVID
      GONZALEZ, ESQ., as escrow agent

    


    
      /s/
        David
        Gonzales_______________________________________

    

    David
      Gonzales, Esq.

     

    TRANSFER
      ONLINE


    
      By:
        /s/ Bryan Cochran_____________________________________

       
        Name: Bryan Cochran

       
        Title: Officer

    

     

    
      
        
        

      

      
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