Document:

EXHIBIT 10.12

                                     WARRANT

THE SECURITIES  REPRESENTED BY THIS WARRANT HAVE NOT BEEN  REGISTERED  UNDER THE
SECURITIES ACT OF 1933, AS AMENDED,  OR APPLICABLE  STATE  SECURITIES  LAWS. THE
SECURITIES  HAVE BEEN ACQUIRED FOR  INVESTMENT  AND MAY NOT BE OFFERED FOR SALE,
SOLD,  TRANSFERRED  OR  ASSIGNED  IN THE  ABSENCE OF AN  EFFECTIVE  REGISTRATION
STATEMENT FOR THE SECURITIES  UNDER THE  SECURITIES ACT OF 1933, AS AMENDED,  OR
APPLICABLE  STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL IN A FORM REASONABLY
SATISFACTORY  TO THE ISSUER THAT  REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR
APPLICABLE  STATE SECURITIES LAWS OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID
ACT.

                               RADIAL ENERGY INC.

                        WARRANT TO PURCHASE COMMON STOCK

Warrant No.: RENG-1-1               Number of Shares:                  [      ]
                                    Warrant Exercise Price:            $_______
                                    Expiration Date:         September ___, 2011

Date of Issuance: September __, 2006

Radial Energy Inc., a Nevada corporation (the "COMPANY"), hereby certifies that,
for good and valuable  consideration,  the receipt and  sufficiency of which are
hereby acknowledged, CORNELL CAPITAL PARTNERS, LP (the "HOLDER"), the registered
holder hereof or its permitted  assigns,  is entitled,  subject to the terms set
forth below, to purchase from the Company upon surrender of this Warrant, at any
time or times on or after the date hereof, but not after 11:59 P.M. Eastern Time
on the  Expiration  Date (as  defined  herein) [ ] fully paid and  nonassessable
shares of Common Stock (as defined herein) of the Company (the "WARRANT SHARES")
at  the  exercise  price  per  share  provided  in  Section  1(b)  below  or  as
subsequently adjusted;  provided,  however, that in no event shall the holder be
entitled to exercise  this  Warrant or be forced to exercise  this Warrant for a
number of Warrant Shares in excess of that number of Warrant Shares which,  upon
giving effect to such  exercise,  would cause the aggregate  number of shares of
Common Stock beneficially owned by the holder and its affiliates to exceed 4.99%
of the outstanding  shares of the Common Stock  following such exercise,  except
within sixty (60) days of the Expiration Date (however,  such restriction may be
waived by Holder  (but only as to itself and not to any other  holder)  upon not
less than 65 days prior notice to the  Company).  For purposes of the  foregoing
proviso,  the aggregate number of shares of Common Stock  beneficially  owned by
the holder and its affiliates shall include the number of shares of Common Stock
issuable upon  exercise of this Warrant with respect to which the  determination
of such proviso is being made,  but shall  exclude  shares of Common Stock which
would be issuable  upon (i)  exercise  of the  remaining,  unexercised  Warrants
beneficially  owned  by the  holder  and its  affiliates  and (ii)  exercise  or
conversion of the unexercised or unconverted  portion of any other securities of
the  Company  beneficially  owned by the holder and its  affiliates  (including,
without  limitation,  any  convertible  notes or preferred  stock)  subject to a

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limitation  on  conversion  or exercise  analogous to the  limitation  contained
herein.  Except as set forth in the  preceding  sentence,  for  purposes of this
paragraph,  beneficial  ownership shall be calculated in accordance with Section
13(d) of the Securities  Exchange Act of 1934, as amended.  For purposes of this
Warrant,  in  determining  the number of  outstanding  shares of Common  Stock a
holder  shall  rely on the  number of  outstanding  shares  of  Common  Stock as
reflected in (1) the  Company's  most recent Form 10-QSB or Form 10-KSB,  as the
case may be, (2) a more  recent  public  announcement  by the Company or (3) any
other notice by the Company or its transfer  agent  setting  forth the number of
shares of Common Stock outstanding.  Upon the written request of any holder, the
Company  shall  promptly,  but in no  event  later  than  one (1)  Business  Day
following the receipt of such notice,  confirm in writing to any such holder the
number of shares of Common Stock then  outstanding.  In any case,  the number of
outstanding  shares of Common Stock shall be  determined  after giving effect to
the  exercise of Warrants (as defined  below) by such holder and its  affiliates
since the date as of which such number of outstanding shares of Common Stock was
reported.

     Section 1.

          (a) This  Warrant is one of the  warrants  issued  pursuant to Section
4(g) of the Securities  Purchase  Agreement  ("SECURITIES  PURCHASE  AGREEMENT")
dated the date hereof  between  the Company and the Buyers  listed on Schedule I
thereto or issued in exchange or substitution thereafter or replacement thereof.
Each  Capitalized  term used, and not otherwise  defined herein,  shall have the
meaning ascribed thereto in the Securities Purchase Agreement.

          (b) DEFINITIONS. The following words and terms as used in this Warrant
shall have the following meanings:

               (i) "APPROVED STOCK PLAN" means a stock option plan that has been
approved  by the  Board of  Directors  of the  Company  prior to the date of the
Securities Purchase Agreement, pursuant to which the Company's securities may be
issued only to any  employee,  officer or director for services  provided to the
Company.

               (ii) "BUSINESS DAY" means any day other than Saturday,  Sunday or
other day on which  commercial  banks in the City of New York are  authorized or
required by law to remain closed.

               (iii)  "CLOSING  BID PRICE" means the closing bid price of Common
Stock as quoted on the  Principal  Market (as  reported by  Bloomberg  Financial
Markets ("BLOOMBERG") through its "Volume at Price" function).

               (iv) "COMMON  STOCK" means (i) the Company's  common  stock,  par
value $0.001 per share,  and (ii) any capital stock into which such Common Stock
shall have been changed or any capital stock  resulting from a  reclassification
of such Common Stock.

               (v)  "EVENT  OF  DEFAULT"  means an event of  default  under  the
Convertible  Debentures  issued  in  connection  with  the  Securities  Purchase
Agreement.

               (vi) "EXCLUDED  SECURITIES" means, (a) shares issued or deemed to
have been issued by the Company  pursuant to an Approved  Stock Plan, (b) shares
of  Common  Stock  issued  or  deemed  to be  issued  by the  Company  upon  the

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conversion,  exchange or exercise of any right,  option,  obligation or security
outstanding  on the date  prior to date of the  Securities  Purchase  Agreement,
provided  that the terms of such right,  option,  obligation or security are not
amended or otherwise  modified on or after the date of the  Securities  Purchase
Agreement,  and provided that the conversion  price,  exchange  price,  exercise
price or other purchase price is not reduced, adjusted or otherwise modified and
the  number of  shares of Common  Stock  issued  or  issuable  is not  increased
(whether  by  operation  of,  or in  accordance  with,  the  relevant  governing
documents  or  otherwise)  on or  after  the  date  of the  Securities  Purchase
Agreement,  and (c) the shares of Common  Stock issued or deemed to be issued by
the Company upon  conversion  of the  Convertible  Debentures or exercise of the
Warrants.

               (vii) "EXPIRATION DATE" means September ____, 2011.

               (viii) "ISSUANCE DATE" means the date hereof.

               (ix) "OPTIONS" means any rights, warrants or options to subscribe
for or purchase Common Stock or Convertible Securities.

               (x) "PERSON" means an individual,  a limited liability company, a
partnership,  a  joint  venture,  a  corporation,  a  trust,  an  unincorporated
organization and a government or any department or agency thereof.

               (xi)  "PRINCIPAL  MARKET" means on any of (a) the American  Stock
Exchange,  (b) New York Stock Exchange,  (c) the Nasdaq National Market, (d) the
Nasdaq Capital Market, or (e) the Nasdaq OTC Bulletin Board ("OTCBB")

               (xii)  "SECURITIES  ACT"  means the  Securities  Act of 1933,  as
amended.

               (xiii) "VOLUME WEIGHTED AVERAGE PRICE" means, for any security as
of any date, the daily dollar volume-weighted average price for such security on
the  Principal  Market as  reported by  Bloomberg  through its "Volume at Price"
functions,  or, if no dollar volume-weighted  average price is reported for such
security by  Bloomberg,  the  average of the  highest  closing bid price and the
lowest  closing  ask price of any of the  market  makers  for such  security  as
reported in the "pink sheets" by Pink Sheets LLC.

               (xiv)  "WARRANT"  means this Warrant and all  Warrants  issued in
exchange, transfer or replacement thereof.

               (xv)  "WARRANT  EXERCISE  PRICE" shall be [ ] or as  subsequently
adjusted as provided in Section 8 hereof.

          (c) Other Definitional Provisions.

               (i) Except as otherwise  specified herein,  all references herein
(A) to the Company shall be deemed to include the Company's  successors  and (B)
to any applicable  law defined or referred to herein shall be deemed  references
to  such  applicable  law as the  same  may  have  been  or  may be  amended  or
supplemented from time to time.

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               (ii) When used in this Warrant, the words "HEREIN", "HEREOF", and
"HEREUNDER" and words of similar import,  shall refer to this Warrant as a whole
and not to any provision of this Warrant,  and the words "SECTION",  "SCHEDULE",
and  "EXHIBIT"  shall refer to Sections of, and  Schedules and Exhibits to, this
Warrant unless otherwise specified.

               (iii)  Whenever  the  context  so  requires,  the  neuter  gender
includes the masculine or feminine, and the singular number includes the plural,
and vice versa.

Section 2.                 EXERCISE OF WARRANT.

          (a) Subject to the terms and  conditions  hereof,  this Warrant may be
exercised by the holder hereof then registered on the books of the Company,  pro
rata as  hereinafter  provided,  at any time on any Business Day on or after the
opening of business on such  Business Day,  commencing  with the first day after
the date hereof, and prior to 11:59 P.M. Eastern Time on the Expiration Date (i)
by delivery of a written notice, in the form of the subscription notice attached
as EXHIBIT A hereto  (the  "EXERCISE  NOTICE"),  of such  holder's  election  to
exercise this Warrant,  which notice shall specify the number of Warrant  Shares
to be  purchased,  payment  to the  Company  of an amount  equal to the  Warrant
Exercise Price(s)  applicable to the Warrant Shares being purchased,  multiplied
by the number of Warrant Shares (at the applicable Warrant Exercise Price) as to
which this Warrant is being  exercised  (plus any  applicable  issue or transfer
taxes) (the "AGGREGATE  EXERCISE PRICE") in cash or wire transfer of immediately
available  funds  and the  surrender  of  this  Warrant  (or an  indemnification
undertaking  with  respect  to this  Warrant  in the case of its loss,  theft or
destruction)  to a common carrier for overnight  delivery to the Company as soon
as  practicable  following  such date  ("CASH  BASIS") or (ii) if at the time of
exercise,  the  Warrant  Shares  are not  subject to an  effective  registration
statement (after taking into account the timeliness for obtaining  effectiveness
of the  registration  statement and any allowable  grace periods as set forth in
the Registration  Rights Agreement dated September ___, 2006 between the Company
and the  Investors  set fort on Scheduled I attached  thereto) or if an Event of
Default has occurred,  by  delivering  an Exercise  Notice and in lieu of making
payment of the Aggregate Exercise Price in cash or wire transfer,  elect instead
to  receive  upon such  exercise  the "Net  Number"  of  shares of Common  Stock
determined according to the following formula (the "CASHLESS EXERCISE"):

         Net Number = (A X B) - (A X C)
                      ________________
                              B

                  For purposes of the foregoing formula:

                  A = the total  number of Warrant  Shares with respect to which
                  this Warrant is then being exercised.

                  B = the Closing  Bid Price of the Common  Stock on the date of
                  exercise of the Warrant.

                  C =  the  Warrant  Exercise  Price  then  in  effect  for  the
                  applicable Warrant Shares at the time of such exercise.

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          In the event of any exercise of the rights represented by this Warrant
in  compliance  with this  Section 2, the  Company  shall on or before the fifth
(5th)  Business Day  following the date of receipt of the Exercise  Notice,  the
Aggregate  Exercise  Price and this Warrant (or an  indemnification  undertaking
with respect to this Warrant in the case of its loss,  theft or destruction) and
the receipt of the  representations of the holder specified in Section 6 hereof,
if requested  by the Company (the  "EXERCISE  DELIVERY  DOCUMENTS"),  and if the
Common Stock is DTC eligible,  credit such aggregate  number of shares of Common
Stock to which the holder  shall be entitled to the  holder's or its  designee's
balance account with The Depository  Trust Company;  provided,  however,  if the
holder who submitted the Exercise Notice requested  physical  delivery of any or
all of the Warrant Shares,  or, if the Common Stock is not DTC eligible then the
Company shall,  on or before the fifth (5th)  Business Day following  receipt of
the Exercise  Delivery  Documents,  issue and surrender to a common  carrier for
overnight   delivery  to  the  address  specified  in  the  Exercise  Notice,  a
certificate,  registered in the name of the holder,  for the number of shares of
Common  Stock to which the holder  shall be entitled  pursuant to such  request.
Upon delivery of the Exercise Notice and Aggregate Exercise Price referred to in
clause  (i) or (ii)  above the  holder of this  Warrant  shall be deemed for all
corporate  purposes to have  become the holder of record of the  Warrant  Shares
with respect to which this Warrant has been exercised.  In the case of a dispute
as to the  determination of the Warrant Exercise Price, the Closing Bid Price or
the  arithmetic  calculation of the Warrant  Shares,  the Company shall promptly
issue to the holder the number of Warrant  Shares that is not disputed and shall
submit the disputed  determinations or arithmetic calculations to the holder via
facsimile  within  one (1)  Business  Day of receipt  of the  holder's  Exercise
Notice.

          (b) If the  holder  and the  Company  are  unable  to  agree  upon the
determination  of the Warrant  Exercise  Price or arithmetic  calculation of the
Warrant Shares within one (1) day of such disputed  determination  or arithmetic
calculation  being submitted to the holder,  then the Company shall  immediately
submit via  facsimile  (i) the disputed  determination  of the Warrant  Exercise
Price or the Closing Bid Price to an independent,  reputable  investment banking
firm or (ii) the disputed  arithmetic  calculation  of the Warrant Shares to its
independent,  outside accountant. The Company shall cause the investment banking
firm or the  accountant,  as the case may be, to perform the  determinations  or
calculations  and notify the Company and the holder of the results no later than
forty-eight (48) hours from the time it receives the disputed  determinations or
calculations.  Such investment  banking firm's or accountant's  determination or
calculation,  as the case may be,  shall be deemed  conclusive  absent  manifest
error.

          (c) Unless the rights  represented  by this Warrant shall have expired
or shall have been fully  exercised,  the Company shall,  as soon as practicable
and in no event later than five (5) Business  Days after any exercise and at its
own  expense,  issue a new Warrant  identical  in all  respects to this  Warrant
exercised  except it shall  represent  rights to purchase  the number of Warrant
Shares  purchasable  immediately  prior  to such  exercise  under  this  Warrant
exercised,  less the number of Warrant Shares with respect to which such Warrant
is exercised.

          (d) No  fractional  Warrant  Shares are to be issued upon any pro rata
exercise of this  Warrant,  but rather the number of Warrant  Shares issued upon
such  exercise of this Warrant  shall be rounded up or down to the nearest whole
number.

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          (e) If the Company or its Transfer  Agent shall fail for any reason or
for no reason to issue to the  holder  within  ten (10) days of  receipt  of the
Exercise Delivery  Documents,  a certificate for the number of Warrant Shares to
which the holder is entitled or to credit the holder's  balance account with The
Depository  Trust Company for such number of Warrant  Shares to which the holder
is entitled upon the holder's  exercise of this Warrant,  the Company shall,  in
addition to any other remedies under this Warrant or otherwise available to such
holder,  pay as  additional  damages  in  cash to such  holder  on each  day the
issuance of such certificate for Warrant Shares is not timely effected an amount
equal to 0.025% of the  product of (A) the sum of the  number of Warrant  Shares
not issued to the holder on a timely  basis and to which the holder is entitled,
and (B)  the  Closing  Bid  Price  of the  Common  Stock  for  the  trading  day
immediately preceding the last possible date which the Company could have issued
such Common Stock to the holder without violating this Section 2.

          (f) If  within  ten (10)  days  after  the  Company's  receipt  of the
Exercise Delivery  Documents,  the Company fails to deliver a new Warrant to the
holder  for the  number of  Warrant  Shares  to which  such  holder is  entitled
pursuant to Section 2 hereof,  then, in addition to any other available remedies
under this Warrant, or otherwise available to such holder, the Company shall pay
as additional damages in cash to such holder on each day after such tenth (10th)
day that such  delivery of such new Warrant is not timely  effected in an amount
equal to 0.25% of the product of (A) the number of Warrant Shares represented by
the portion of this Warrant which is not being exercised and (B) the Closing Bid
Price of the Common  Stock for the trading day  immediately  preceding  the last
possible  date which the Company  could have  issued such  Warrant to the holder
without violating this Section 2.

          (g) [INSERT IN WARRANT A AND B ONLY] The Company shall have the option
to force the Holder to exercise  this Warrant  (subject to the  limitations  set
forth  below) by  delivering  to the  Holder a notice in the form of the  forced
exercise  notice  attached as EXHIBIT B hereto (the  "FORCED  EXERCISE  NOTICE")
PROVIDED that the following  conditions are satisfied:  (i) the Volume  Weighted
Average  Price  of the  Common  Stock  exceeds  [ ] for  each  of the  five  (5)
consecutive  Trading Days prior to the date of the Forced Exercise Notice,  (ii)
the Registration  Statement relating to the resale of all the shares issuable in
connection  with a Forced  Exercise  Notice is  effective as of the date of such
Forced  Exercise  Notice,  (iii) at least ten (10) Trading Days has elapsed from
any prior forced  exercised  (if any) by the Company under any class of Warrants
issued to the Holder in connection with the Securities Purchase  Agreement.  The
number of shares that the  Company can force the Holder to exercise  pursuant to
any Forced Exercised  Notice shall be limited to the difference  between (i) one
fifth  (1/5) of the  trading  volume  for the Common  Stock  during the five (5)
consecutive  Trading Days immediately  prior to the date of such Forced Exercise
Notice,  and (ii) the number of shares of Common  Stock  acquired  by the Holder
during  the  previous  five  (5)  Trading  Days  through  the  exercise  (either
voluntarily or forced) of any class of Warrants issued to the Holder pursuant to
the Securities Purchase Agreement.

Section 3.                 COVENANTS AS TO COMMON STOCK.  The Company hereby
covenants and agrees as follows:

          (a) This Warrant is, and any Warrants  issued in  substitution  for or
replacement  of this Warrant will upon issuance be, duly  authorized and validly
issued.

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          (b) All Warrant  Shares  which may be issued upon the  exercise of the
rights represented by this Warrant will, upon issuance, be validly issued, fully
paid and nonassessable  and free from all taxes,  liens and charges with respect
to the issue thereof.

          (c) During  the period  within  which the rights  represented  by this
Warrant may be  exercised,  the Company  will at all times have  authorized  and
reserved at least one hundred  percent  (100%) of the number of shares of Common
Stock needed to provide for the exercise of the rights then  represented by this
Warrant and the par value of said shares will at all times be less than or equal
to the applicable  Warrant  Exercise  Price. If at any time the Company does not
have a sufficient  number of shares of Common Stock  authorized  and  available,
then the  Company  shall  call and hold a special  meeting  of its  stockholders
within  sixty  (60) days of that time for the sole  purpose  of  increasing  the
number of authorized shares of Common Stock.

          (d) If at any time  after the date  hereof  the  Company  shall file a
registration statement, the Company shall include the Warrant Shares issuable to
the holder, pursuant to the terms of this Warrant and shall maintain, so long as
any other shares of Common Stock shall be so listed, such listing of all Warrant
Shares from time to time  issuable  upon the exercise of this  Warrant;  and the
Company  shall  so  list on  each  national  securities  exchange  or  automated
quotation  system,  as the case may be, and shall  maintain such listing of, any
other shares of capital stock of the Company  issuable upon the exercise of this
Warrant if and so long as any  shares of the same class  shall be listed on such
national securities exchange or automated quotation system.

          (e)  The  Company   will  not,  by   amendment   of  its  Articles  of
Incorporation or through any reorganization,  transfer of assets, consolidation,
merger, dissolution, issue or sale of securities, or any other voluntary action,
avoid or seek to avoid the  observance or  performance of any of the terms to be
observed  or  performed  by it  hereunder,  but will at all times in good  faith
assist in the  carrying  out of all the  provisions  of this  Warrant and in the
taking of all such action as may  reasonably  be requested by the holder of this
Warrant in order to protect the exercise privilege of the holder of this Warrant
against dilution or other  impairment,  consistent with the tenor and purpose of
this  Warrant.  The  Company  will not  increase  the par value of any shares of
Common Stock  receivable  upon the  exercise of this  Warrant  above the Warrant
Exercise  Price  then in effect,  and (ii) will take all such  actions as may be
necessary or appropriate in order that the Company may validly and legally issue
fully paid and  nonassessable  shares of Common  Stock upon the exercise of this
Warrant.

          (f) This  Warrant will be binding  upon any entity  succeeding  to the
Company by merger,  consolidation or acquisition of all or substantially  all of
the Company's assets.

     Section 4.  TAXES.  The  Company  shall pay any and all  taxes,  except any
applicable  withholding,  which may be payable  with respect to the issuance and
delivery of Warrant Shares upon exercise of this Warrant.

     Section 5.  WARRANT  HOLDER NOT DEEMED A  STOCKHOLDER.  Except as otherwise
specifically  provided  herein,  no holder,  as such,  of this Warrant  shall be
entitled  to vote or  receive  dividends  or be deemed  the  holder of shares of
capital stock of the Company for any purpose,  nor shall  anything  contained in
this Warrant be construed to confer upon the holder hereof,  as such, any of the

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rights of a  stockholder  of the Company or any right to vote,  give or withhold
consent to any corporate  action  (whether any  reorganization,  issue of stock,
reclassification  of stock,  consolidation,  merger,  conveyance or  otherwise),
receive  notice of  meetings,  receive  dividends  or  subscription  rights,  or
otherwise,  prior to the  issuance to the holder of this  Warrant of the Warrant
Shares which he or she is then entitled to receive upon the due exercise of this
Warrant.  In addition,  nothing  contained in this Warrant shall be construed as
imposing  any  liabilities  on such  holder to  purchase  any  securities  (upon
exercise of this Warrant or otherwise) or as a stockholder of the Company except
as set forth in the forced  exercise  privisions,  whether such  liabilities are
asserted by the Company or by  creditors of the  Company.  Notwithstanding  this
Section 5, the Company  will  provide the holder of this  Warrant with copies of
the same notices and other  information given to the stockholders of the Company
generally, contemporaneously with the giving thereof to the stockholders.

     Section 6.  REPRESENTATIONS OF HOLDER.  The holder of this Warrant,  by the
acceptance hereof,  represents that it is acquiring this Warrant and the Warrant
Shares for its own account for investment  only and not with a view towards,  or
for resale in connection  with, the public sale or  distribution of this Warrant
or the Warrant Shares, except pursuant to sales registered or exempted under the
Securities Act; provided,  however,  that by making the representations  herein,
the holder does not agree to hold this Warrant or any of the Warrant  Shares for
any minimum or other  specific  term and  reserves  the right to dispose of this
Warrant and the Warrant  Shares at any time in accordance  with or pursuant to a
registration  statement or an exemption  under the Securities Act. The holder of
this Warrant further  represents,  by acceptance hereof,  that, as of this date,
such  holder  is an  "accredited  investor"  as  such  term is  defined  in Rule
501(a)(1) of Regulation D promulgated by the Securities and Exchange  Commission
under the  Securities  Act (an  "ACCREDITED  INVESTOR").  Upon  exercise of this
Warrant the holder shall, if requested by the Company,  confirm in writing, in a
form satisfactory to the Company, that the Warrant Shares so purchased are being
acquired  solely for the holder's own account and not as a nominee for any other
party,  for  investment,  and not with a view toward  distribution or resale and
that such holder is an  Accredited  Investor.  If such  holder  cannot make such
representations  because  they  would  be  factually  incorrect,  it  shall be a
condition to such  holder's  exercise of this  Warrant that the Company  receive
such other  representations  as the Company  considers  reasonably  necessary to
assure the Company that the  issuance of its  securities  upon  exercise of this
Warrant shall not violate any United States or state securities laws.

     Section 7. OWNERSHIP AND TRANSFER.

          (a) The Company shall maintain at its principal  executive offices (or
such other office or agency of the Company as it may  designate by notice to the
holder hereof),  a register for this Warrant,  in which the Company shall record
the name and address of the person in whose name this  Warrant has been  issued,
as well as the name and  address of each  transferee.  The Company may treat the
person in whose name any Warrant is  registered on the register as the owner and
holder thereof for all purposes, notwithstanding any notice to the contrary, but
in all events  recognizing  any transfers  made in accordance  with the terms of
this Warrant.

     Section 8. ADJUSTMENT OF WARRANT  EXERCISE PRICE AND NUMBER OF SHARES.  The
Warrant  Exercise  Price and the number of shares of Common Stock  issuable upon
exercise of this Warrant shall be adjusted from time to time as follows:

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          (a)  ADJUSTMENT  OF WARRANT  EXERCISE  PRICE AND NUMBER OF SHARES UPON
ISSUANCE OF COMMON STOCK.  If and whenever on or after the Issuance Date of this
Warrant,  the Company issues or sells,  or is deemed to have issued or sold, any
shares of Common Stock (other than Excluded  Securities) for a consideration per
share less than a price (the  "APPLICABLE  PRICE") equal to the Warrant Exercise
Price in effect  immediately  prior to such issuance or sale,  then  immediately
after  such issue or sale the  Warrant  Exercise  Price then in effect  shall be
reduced  to an amount  equal to such  consideration  per  share.  Upon each such
adjustment of the Warrant Exercise Price hereunder, the number of Warrant Shares
issuable upon exercise of this Warrant shall be adjusted to the number of shares
determined by multiplying the Warrant Exercise Price in effect immediately prior
to such  adjustment  by the number of Warrant  Shares  issuable upon exercise of
this  Warrant  immediately  prior to such  adjustment  and  dividing the product
thereof by the Warrant Exercise Price resulting from such adjustment.

          (b) EFFECT ON WARRANT  EXERCISE PRICE OF CERTAIN EVENTS.  For purposes
of determining the adjusted Warrant Exercise Price under Section 8(a) above, the
following shall be applicable:

               (i)  ISSUANCE  OF  OPTIONS.   Except  with  respect  to  Excluded
Securities,  if after the date  hereof,  the  Company in any  manner  grants any
Options  and the lowest  price per share for which one share of Common  Stock is
issuable upon the exercise of any such Option or upon  conversion or exchange of
any  convertible  securities  issuable  upon exercise of any such Option is less
than the Applicable Price, then such share of Common Stock shall be deemed to be
outstanding  and to have been  issued and sold by the Company at the time of the
granting or sale of such Option for such price per share.  For  purposes of this
Section 8(b)(i),  the lowest price per share for which one share of Common Stock
is issuable upon exercise of such Options or upon conversion or exchange of such
Convertible  Securities  shall  be  equal to the sum of the  lowest  amounts  of
consideration (if any) received or receivable by the Company with respect to any
one share of Common Stock upon the granting or sale of the Option, upon exercise
of the  Option  or upon  conversion  or  exchange  of any  convertible  security
issuable  upon  exercise of such Option.  No further  adjustment  of the Warrant
Exercise Price shall be made upon the actual issuance of such Common Stock or of
such convertible securities upon the exercise of such Options or upon the actual
issuance of such Common Stock upon  conversion  or exchange of such  convertible
securities.

               (ii) ISSUANCE OF CONVERTIBLE  SECURITIES.  Except with respect to
Excluded  Securities,  if  the  Company  in  any  manner  issues  or  sells  any
convertible  securities  and the  lowest  price per share for which one share of
Common Stock is issuable upon the  conversion  or exchange  thereof is less than
the  Applicable  Price,  then such share of Common  Stock  shall be deemed to be
outstanding  and to have been  issued and sold by the Company at the time of the
issuance or sale of such  convertible  securities for such price per share.  For
the purposes of this Section 8(b)(ii),  the lowest price per share for which one
share of Common  Stock is issuable  upon such  conversion  or exchange  shall be
equal to the sum of the lowest  amounts of  consideration  (if any)  received or
receivable  by the Company  with  respect to one share of Common  Stock upon the
issuance or sale of the convertible  security and upon conversion or exchange of
such convertible  security.  No further adjustment of the Warrant Exercise Price
shall be made upon the actual  issuance of such Common Stock upon  conversion or
exchange of such convertible  securities,  and if any such issue or sale of such
convertible securities is made upon exercise of any Options for which adjustment

                                       9

<PAGE>

of the  Warrant  Exercise  Price  had been or are to be made  pursuant  to other
provisions of this Section 8(b), no further  adjustment of the Warrant  Exercise
Price shall be made by reason of such issue or sale.

               (iii) CHANGE IN OPTION PRICE OR RATE OF  CONVERSION.  Except with
respect to  Excluded  Securities,  if the  purchase  price  provided  for in any
Options,  the  additional  consideration,   if  any,  payable  upon  the  issue,
conversion or exchange of any convertible  securities,  or the rate at which any
convertible  securities are convertible  into or  exchangeable  for Common Stock
changes at any time,  the Warrant  Exercise  Price in effect at the time of such
change shall be adjusted to the Warrant  Exercise Price which would have been in
effect at such time had such Options or convertible securities provided for such
changed purchase price, additional  consideration or changed conversion rate, as
the case may be, at the time initially granted, issued or sold and the number of
Warrant Shares  issuable upon exercise of this Warrant shall be  correspondingly
readjusted.  For purposes of this Section 8(b)(iii),  if the terms of any Option
or  convertible  security that was  outstanding  as of the Issuance Date of this
Warrant  are  changed  in the  manner  described  in the  immediately  preceding
sentence,  then such Option or convertible  security and the Common Stock deemed
issuable upon exercise,  conversion or exchange  thereof shall be deemed to have
been  issued  as of the date of such  change.  No  adjustment  pursuant  to this
Section 8(b) shall be made if such adjustment would result in an increase of the
Warrant Exercise Price then in effect.

               (iv) CALCULATION OF CONSIDERATION  RECEIVED. If any Common Stock,
Options  or  convertible  securities  are  issued or sold or deemed to have been
issued or sold for cash, the consideration  received therefore will be deemed to
be the gross  amount  received by the Company  therefore.  If any Common  Stock,
Options or convertible  securities are issued or sold for a consideration  other
than cash, the amount of such consideration  received by the Company will be the
fair value of such  consideration,  except where such consideration  consists of
marketable securities, in which case the amount of consideration received by the
Company  will be the market price of such  securities  on the date of receipt of
such  securities.  If any Common Stock,  Options or  convertible  securities are
issued to the owners of the  non-surviving  entity in connection with any merger
in which the  Company  is the  surviving  entity,  the  amount of  consideration
therefore  will be deemed to be the fair value of such portion of the net assets
and  business  of the  non-surviving  entity as is  attributable  to such Common
Stock, Options or convertible securities,  as the case may be. The fair value of
any  consideration  other than cash or securities will be determined  jointly by
the Company and the holders of Warrants  representing at least two-thirds (b) of
the Warrant Shares issuable upon exercise of the Warrants then  outstanding.  If
such  parties  are  unable to reach  agreement  within  ten (10) days  after the
occurrence of an event  requiring  valuation (the "VALUATION  EVENT"),  the fair
value of such  consideration  will be  determined  within five (5) Business Days
after the tenth (10th) day  following  the  Valuation  Event by an  independent,
reputable  appraiser jointly selected by the Company and the holders of Warrants
representing  at  least  two-thirds  (b) of the  Warrant  Shares  issuable  upon
exercise of the Warrants then  outstanding.  The determination of such appraiser
shall be final and binding  upon all  parties and the fees and  expenses of such
appraiser shall be borne jointly by the Company and the holders of Warrants.

               (v)  INTEGRATED  TRANSACTIONS.  In case any  Option  is issued in
connection with the issue or sale of other  securities of the Company,  together
comprising one  integrated  transaction  in which no specific  consideration  is

                                       10

<PAGE>

allocated to such Options by the parties thereto,  the Options will be deemed to
have been issued for a consideration of $.01.

               (vi)  TREASURY  SHARES.  The  number of  shares  of Common  Stock
outstanding  at any given time does not include  shares  owned or held by or for
the account of the Company,  provided however,  the disposition of any shares so
owned or held will be considered an issue or sale of Common Stock.

               (vii) RECORD DATE.  If the Company  takes a record of the holders
of Common Stock for the purpose of  entitling  them (1) to receive a dividend or
other distribution payable in Common Stock, Options or in convertible securities
or (2) to  subscribe  for or  purchase  Common  Stock,  Options  or  convertible
securities,  then such record date will be deemed to be the date of the issue or
sale of the shares of Common  Stock  deemed to have been issued or sold upon the
declaration  of such  dividend or the making of such other  distribution  or the
date of the granting of such right of subscription or purchase,  as the case may
be.

          (c)  ADJUSTMENT  OF  WARRANT   EXERCISE  PRICE  UPON   SUBDIVISION  OR
COMBINATION  OF  COMMON  STOCK.  If the  Company  at any time  after the date of
issuance  of this  Warrant  subdivides  (by any  stock  split,  stock  dividend,
recapitalization  or otherwise) one or more classes of its outstanding shares of
Common  Stock into a greater  number of shares,  any Warrant  Exercise  Price in
effect immediately prior to such subdivision will be proportionately reduced and
the number of shares of Common Stock  obtainable  upon  exercise of this Warrant
will be proportionately  increased. If the Company at any time after the date of
issuance  of this  Warrant  combines  (by  combination,  reverse  stock split or
otherwise) one or more classes of its outstanding  shares of Common Stock into a
smaller number of shares, any Warrant Exercise Price in effect immediately prior
to such combination will be proportionately  increased and the number of Warrant
Shares issuable upon exercise of this Warrant will be proportionately decreased.
Any  adjustment  under this Section 8(c) shall become  effective at the close of
business on the date the subdivision or combination becomes effective.

          (d)  DISTRIBUTION OF ASSETS.  If the Company shall declare or make any
dividend or other  distribution  of its assets (or rights to acquire its assets)
to holders of Common Stock, by way of return of capital or otherwise (including,
without  limitation,  any  distribution  of cash,  stock  or  other  securities,
property or options by way of a dividend, spin off, reclassification,  corporate
rearrangement  or other similar  transaction)  (a  "Distribution"),  at any time
after the issuance of this Warrant, then, in each such case:

               (i) any Warrant Exercise Price in effect immediately prior to the
close of business on the record date fixed for the  determination  of holders of
Common Stock entitled to receive the Distribution shall be reduced, effective as
of the  close  of  business  on  such  record  date,  to a price  determined  by
multiplying such Warrant Exercise Price by a fraction of which (A) the numerator
shall  be the  Closing  Sale  Price  of the  Common  Stock  on the  trading  day
immediately  preceding such record date minus the value of the  Distribution (as
determined in good faith by the Company's Board of Directors)  applicable to one
share of Common Stock,  and (B) the denominator  shall be the Closing Sale Price
of the Common Stock on the trading day  immediately  preceding such record date;
and

                                       11

<PAGE>

               (ii)  either  (A) the number of Warrant  Shares  obtainable  upon
exercise of this  Warrant  shall be increased to a number of shares equal to the
number of shares of Common Stock  obtainable  immediately  prior to the close of
business  on the record  date fixed for the  determination  of holders of Common
Stock entitled to receive the  Distribution  multiplied by the reciprocal of the
fraction set forth in the immediately  preceding clause (i), or (B) in the event
that the  Distribution  is of common  stock of a company  whose  common stock is
traded on a  national  securities  exchange  or a national  automated  quotation
system,  then the holder of this Warrant shall receive an additional  warrant to
purchase  Common  Stock,  the terms of which shall be identical to those of this
Warrant,  except that such warrant shall be  exercisable  into the amount of the
assets that would have been  payable to the holder of this  Warrant  pursuant to
the Distribution had the holder exercised this Warrant immediately prior to such
record date and with an exercise price equal to the amount by which the exercise
price of this Warrant was decreased with respect to the Distribution pursuant to
the terms of the immediately preceding clause (i).

          (e) CERTAIN  EVENTS.  If any event occurs of the type  contemplated by
the  provisions  of  this  Section  8 but  not  expressly  provided  for by such
provisions  (including,  without limitation,  the granting of stock appreciation
rights,  phantom  stock rights or other rights with equity  features),  then the
Company's Board of Directors will make an appropriate  adjustment in the Warrant
Exercise Price and the number of shares of Common Stock obtainable upon exercise
of this  Warrant so as to protect  the  rights of the  holders of the  Warrants;
provided,  except as set forth in section 8(c),that no such adjustment  pursuant
to this Section 8(e) will  increase the Warrant  Exercise  Price or decrease the
number of shares of Common Stock obtainable as otherwise  determined pursuant to
this Section 8.

          (f) NOTICES.

               (i)  Immediately  upon any  adjustment  of the  Warrant  Exercise
Price,  the  Company  will give  written  notice  thereof  to the holder of this
Warrant, setting forth in reasonable detail, and certifying,  the calculation of
such adjustment.

               (ii) The Company will give  written  notice to the holder of this
Warrant at least ten (10) days prior to the date on which the Company closes its
books or takes a record (A) with  respect to any dividend or  distribution  upon
the Common Stock, (B) with respect to any pro rata subscription offer to holders
of  Common  Stock or (C) for  determining  rights to vote  with  respect  to any
Organic Change (as defined  below),  dissolution or  liquidation,  provided that
such  information  shall be made known to the public prior to or in  conjunction
with such notice being provided to such holder.

               (iii) The Company will also give written  notice to the holder of
this  Warrant  at least  ten (10) days  prior to the date on which  any  Organic
Change,   dissolution  or  liquidation  will  take  place,  provided  that  such
information  shall be made known to the public prior to or in  conjunction  with
such notice being provided to such holder.

     Section   9.    PURCHASE    RIGHTS;    REORGANIZATION,    RECLASSIFICATION,
CONSOLIDATION, MERGER OR SALE.

                                       12

<PAGE>

          (a) In addition to any adjustments  pursuant to Section 8 above, if at
any time the Company grants, issues or sells any Options, Convertible Securities
or rights to purchase stock, warrants,  securities or other property pro rata to
the record  holders of any class of Common Stock (the "PURCHASE  RIGHTS"),  then
the  holder  of this  Warrant  will be  entitled  to  acquire,  upon  the  terms
applicable to such Purchase  Rights,  the aggregate  Purchase  Rights which such
holder  could  have  acquired  if such  holder  had held the number of shares of
Common Stock  acquirable  upon  complete  exercise of this  Warrant  immediately
before  the date on which a record is taken for the grant,  issuance  or sale of
such Purchase  Rights,  or, if no such record is taken, the date as of which the
record holders of Common Stock are to be determined for the grant, issue or sale
of such Purchase Rights.

          (b)   Any    recapitalization,    reorganization,    reclassification,
consolidation,  merger, sale of all or substantially all of the Company's assets
to another Person or other  transaction in each case which is effected in such a
way that  holders of Common Stock are  entitled to receive  (either  directly or
upon subsequent  liquidation) stock,  securities or assets with respect to or in
exchange for Common Stock is referred to herein as an "ORGANIC CHANGE." Prior to
the  consummation of any (i) sale of all or  substantially  all of the Company's
assets to an acquiring  Person or (ii) other Organic Change  following which the
Company is not a  surviving  entity,  the  Company  will  secure from the Person
purchasing  such assets or the successor  resulting from such Organic Change (in
each case,  the "ACQUIRING  ENTITY") a written  agreement (in form and substance
satisfactory to the holders of Warrants  representing at least  two-thirds (iii)
of the Warrant Shares  issuable upon exercise of the Warrants then  outstanding)
to deliver to each holder of Warrants in exchange for such Warrants,  a security
of the Acquiring Entity evidenced by a written instrument  substantially similar
in form and  substance  to this Warrant and  satisfactory  to the holders of the
Warrants  (including an adjusted  warrant  exercise price equal to the value for
the Common Stock reflected by the terms of such  consolidation,  merger or sale,
and exercisable for a corresponding  number of shares of Common Stock acquirable
and receivable  upon exercise of the Warrants  without regard to any limitations
on  exercise,  if the value so  reflected  is less than any  Applicable  Warrant
Exercise Price immediately prior to such  consolidation,  merger or sale). Prior
to the  consummation  of any  other  Organic  Change,  the  Company  shall  make
appropriate  provision  (in form and  substance  satisfactory  to the holders of
Warrants representing a majority of the Warrant Shares issuable upon exercise of
the  Warrants  then  outstanding)  to  insure  that each of the  holders  of the
Warrants will  thereafter have the right to acquire and receive in lieu of or in
addition  to (as the case may be) the  Warrant  Shares  immediately  theretofore
issuable and  receivable  upon the exercise of such holder's  Warrants  (without
regard to any  limitations  on  exercise),  such shares of stock,  securities or
assets  that would  have been  issued or payable  in such  Organic  Change  with
respect to or in exchange for the number of Warrant Shares which would have been
issuable and  receivable  upon the exercise of such  holder's  Warrant as of the
date of such Organic  Change  (without  taking into account any  limitations  or
restrictions on the exercisability of this Warrant).

     Section 10. LOST, STOLEN,  MUTILATED OR DESTROYED WARRANT.  If this Warrant
is lost, stolen,  mutilated or destroyed, the Company shall promptly, on receipt
of an indemnification  undertaking (or, in the case of a mutilated Warrant,  the
Warrant),  issue a new Warrant of like denomination and tenor as this Warrant so
lost, stolen, mutilated or destroyed.

                                       13

<PAGE>

     Section 11. NOTICE. Any notices,  consents, waivers or other communications
required or  permitted  to be given under the terms of this  Warrant  must be in
writing  and will be deemed  to have  been  delivered:  (i) upon  receipt,  when
delivered  personally;  (ii)  upon  receipt,  when sent by  facsimile  (provided
confirmation  of  receipt is  received  by the  sending  party  transmission  is
mechanically or electronically generated and kept on file by the sending party);
or (iii) one Business Day after deposit with a nationally  recognized  overnight
delivery  service,  in each case properly  addressed to the party to receive the
same. The addresses and facsimile numbers for such communications shall be:

If to Holder:                       Cornell Capital Partners, LP
                                    101 Hudson Street - Suite 3700
                                    Jersey City, NJ  07302
                                    Attention:        Mark A. Angelo
                                    Telephone:        (201) 985-8300
                                    Facsimile:        (201) 985-8266

With Copy to:                       Troy Rillo, Esq.
                                    101 Hudson Street - Suite 3700
                                    Jersey City, NJ 07302
                                    Telephone:        (201) 985-8300
                                    Facsimile:        (201) 985-8266

If to the Company, to:

With a copy to:

If to a holder of this Warrant,  to it at the address and  facsimile  number set
forth on EXHIBIT C hereto,  with copies to such holder's  representatives as set
forth on EXHIBIT C, or at such other address and facsimile as shall be delivered
to the Company upon the issuance or transfer of this  Warrant.  Each party shall
provide  five days'  prior  written  notice to the other  party of any change in
address or facsimile  number.  Written  confirmation of receipt (A) given by the
recipient of such notice, consent, facsimile, waiver or other communication, (or
(B) provided by a nationally  recognized  overnight  delivery  service  shall be
rebuttable evidence of personal service,  receipt by facsimile or receipt from a
nationally  recognized overnight delivery service in accordance with clause (i),
(ii) or (iii) above, respectively.

                                       14

<PAGE>

     Section 12.  DATE.  The date of this Warrant is set forth on page 1 hereof.
This  Warrant,  in all events,  shall be wholly void and of no effect  after the
close of business on the Expiration Date, except that  notwithstanding any other
provisions  hereof,  the provisions of Section 8(b) shall continue in full force
and effect after such date as to any Warrant Shares or other  securities  issued
upon the exercise of this Warrant.

     Section 13. AMENDMENT AND WAIVER.  Except as otherwise provided herein, the
provisions  of the  Warrants  may be amended and the Company may take any action
herein prohibited, or omit to perform any act herein required to be performed by
it,  only if the  Company has  obtained  the  written  consent of the holders of
Warrants  representing  at least  two-thirds of the Warrant Shares issuable upon
exercise of the Warrants then  outstanding;  provided  that,  except for Section
8(d),  no such action may  increase the Warrant  Exercise  Price or decrease the
number of shares  or class of stock  obtainable  upon  exercise  of any  Warrant
without the written consent of the holder of such Warrant.

     Section 14. DESCRIPTIVE  HEADINGS;  GOVERNING LAW. The descriptive headings
of the  several  sections  and  paragraphs  of this  Warrant  are  inserted  for
convenience  only and do not  constitute a part of this  Warrant.  The corporate
laws of the State of Nevada  shall  govern all issues  concerning  the  relative
rights of the Company and its stockholders.  All other questions  concerning the
construction,  validity,  enforcement and interpretation of this Agreement shall
be governed by the  internal  laws of the State of New  Jersey,  without  giving
effect to any choice of law or conflict of law provision or rule (whether of the
State of New Jersey or any other jurisdictions) that would cause the application
of the laws of any jurisdictions  other than the State of New Jersey. Each party
hereby  irrevocably  submits  to the  exclusive  jurisdiction  of the  state and
federal courts sitting in Hudson County and the United States District Court for
the District of New Jersey,  for the adjudication of any dispute hereunder or in
connection herewith or therewith, or with any transaction contemplated hereby or
discussed herein, and hereby irrevocably waives, and agrees not to assert in any
suit, action or proceeding,  any claim that it is not personally  subject to the
jurisdiction of any such court,  that such suit, action or proceeding is brought
in an inconvenient forum or that the venue of such suit, action or proceeding is
improper.  Each party hereby  irrevocably waives personal service of process and
consents  to process  being  served in any such suit,  action or  proceeding  by
mailing a copy thereof to such party at the address for such notices to it under
this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof.  Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law.

     Section 15. WAIVER OF JURY TRIAL.  AS A MATERIAL  INDUCEMENT FOR EACH PARTY
HERETO TO ENTER INTO THIS WARRANT,  THE PARTIES HERETO HEREBY WAIVE ANY RIGHT TO
TRIAL BY JURY IN ANY LEGAL PROCEEDING  RELATED IN ANY WAY TO THIS WARRANT AND/OR
ANY AND ALL OF THE OTHER DOCUMENTS ASSOCIATED WITH THIS TRANSACTION.

                   REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

                                       15

<PAGE>

         IN WITNESS WHEREOF, the Company has caused this Warrant to be signed as
of the date first set forth above.

                                         RADIAL ENERGY INC.

                                         By:_________________________________
                                         Name:
                                         Title:

                                       16

<PAGE>

                              EXHIBIT A TO WARRANT

                                 EXERCISE NOTICE

                                 TO BE EXECUTED
                BY THE REGISTERED HOLDER TO EXERCISE THIS WARRANT

                               RADIAL ENERGY INC.

         The  undersigned   holder  hereby   exercises  the  right  to  purchase
______________ of the shares of Common Stock ("WARRANT SHARES") of Radial Energy
Inc.  (the  "COMPANY"),  evidenced  by the  attached  Warrant  (the  "Warrant").
Capitalized  terms  used  herein  and  not  otherwise  defined  shall  have  the
respective meanings set forth in the Warrant.

Specify Method of exercise by check mark:

         1.  ___  Cash Exercise

                (a) PAYMENT OF WARRANT  EXERCISE PRICE. The holder shall pay the
                Aggregate  Exercise Price of  $______________  to the Company in
                accordance with the terms of the Warrant.

                (b) DELIVERY OF WARRANT SHARES. The Company shall deliver to the
                holder _________  Warrant Shares in accordance with the terms of
                the Warrant.

         2.  ___  Cashless Exercise

                (a) PAYMENT OF WARRANT EXERCISE PRICE. In lieu of making payment
                of the Aggregate  Exercise  Price,  the holder elects to receive
                upon such  exercise  the Net  Number  of shares of Common  Stock
                determined in accordance with the terms of the Warrant.

                (b) DELIVERY OF WARRANT SHARES. The Company shall deliver to the
                holder _________  Warrant Shares in accordance with the terms of
                the Warrant.

Date: _______________ __, ______

Name of Registered Holder

By:  __________________________________________
Name:
     __________________________________________
Title:
      __________________________________________

<PAGE>

                              EXHIBIT B TO WARRANT

                             FORCED EXERCISE NOTICE

                                 TO BE EXECUTED
      BY THE COMPANY TO FORCE EXERCISE OF THIS AMENDED AND RESTATED WARRANT

                               RADIAL ENERGY INC.

     Radial Energy Inc. a Delaware corporation (the "COMPANY"), hereby exercises
its  right  to  force  the  holder  of  the   attached   Warrant   to   purchase
___________________________  shares of the Company's Common Stock,  evidenced by
the attached Warrant.(1)

         Capitalized  terms used herein and not otherwise defined shall have the
respective meanings set forth in the Warrant.

Specify Method of exercise by check mark:

         1.  ___  Cash Exercise

                (a) PAYMENT OF WARRANT  EXERCISE PRICE. The holder shall pay the
                Aggregate  Exercise Price of  $______________  to the Company in
                accordance with the terms of the Amended and Restated Warrant.

                (b) DELIVERY OF WARRANT SHARES. The Company shall deliver to the
                holder _________  Warrant Shares in accordance with the terms of
                the Amended and Restated Warrant.

Date: _______________ __, ______

Name of Registered Holder

By:  __________________________________________
Name:
     __________________________________________
Title:
      __________________________________________

                                      B-1

<PAGE>

                              EXHIBIT B TO WARRANT

                              FORM OF WARRANT POWER

         FOR VALUE RECEIVED,  the undersigned does hereby assign and transfer to
________________,  Federal Identification No. __________,  a warrant to purchase
____________  shares of the capital stock of Radial Energy Inc.  represented  by
warrant  certificate  no. _____,  standing in the name of the undersigned on the
books of said corporation.  The undersigned does hereby  irrevocably  constitute
and  appoint   ______________,   attorney  to  transfer  the  warrants  of  said
corporation, with full power of substitution in the premises.

Dated:_________________________________     ____________________________________

                                            By:_________________________________
                                            Name:_______________________________
                                           Title:_______________________________

                                      C-1EXHIBIT 10.13

                               SECURITY AGREEMENT

         THIS SECURITY  AGREEMENT  (the  "AGREEMENT"),  is entered into and made
effective  as of October 2, 2006,  by and between  RADIAL  ENERGY INC., a Nevada
corporation  with its  principal  place of  business  located at 1313 East Maple
Street,  Bellingham,  WA 98225 (the  "PARENT"),  and the each  subsidiary of the
Parent  listed  on  Schedule  I  attached  hereto  (each  a  "SUBSIDIARY")   and
collectively  and  together  with the Parent,  the  "COMPANY"),  in favor of the
BUYER(S) (the "SECURED  PARTY")  listed on Schedule I attached to the Securities
Purchase Agreement (the "SECURITIES  PURCHASE  AGREEMENT") dated the date hereof
between the Company and the Secured Party.

         WHEREAS,  The Parent  shall  issue and sell to the  Secured  Party,  as
provided in the  Securities  Purchase  Agreement,  and the  Secured  Party shall
purchase,  up to  Five  Million  Dollars  ($5,000,000)  of  secured  convertible
debentures  (the  "CONVERTIBLE  DEBENTURES"),  which shall be  convertible  into
shares of the Parent's common stock, par value $0.001, in the respective amounts
set forth  opposite each Buyer(s) name on Schedule I attached to the  Securities
Purchase Agreement;

         WHEREAS,  to induce the  Secured  Party to enter  into the  transaction
contemplated by the Securities Purchase Agreement,  the Convertible  Debentures,
the Investor  Registration  Rights  Agreement of even date herewith  between the
Parent and the Secured Party (the "INVESTOR REGISTRATION RIGHTS AGREEMENT"), and
the Irrevocable Transfer Agent Instructions among the Parent, the Secured Party,
the Parent's  transfer  agent,  and David  Gonzalez,  Esq. (the "TRANSFER  AGENT
INSTRUCTIONS")  (collectively referred to as the "TRANSACTION DOCUMENTS"),  each
Company  hereby  grants to the Secured  Party a security  interest in and to the
pledged  property of each Company  identified on EXHIBIT A hereto  (collectively
referred to as the  "PLEDGED  PROPERTY")  to secure all of the  Obligations  (as
defined below).

         NOW,  THEREFORE,  in  consideration  of the  promises  and  the  mutual
covenants herein contained,  and for other good and valuable consideration,  the
adequacy and receipt of which are hereby acknowledged, the parties hereto hereby
agree as follows:

                                   ARTICLE 1.

                         DEFINITIONS AND INTERPRETATIONS

         Section 1.1.      RECITALS.

         The above recitals are true and correct and are incorporated herein, in
their entirety, by this reference.

         Section 1.2.      INTERPRETATIONS.

         Nothing  herein  expressed or implied is intended or shall be construed
to confer  upon any person  other than the  Secured  Party any right,  remedy or
claim under or by reason hereof.

<PAGE>

         Section 1.3.      OBLIGATIONS SECURED.

The  security  interest  created  hereby  in the  Pledged  Property  constitutes
continuing collateral security for all of the following obligations, whether now
existing or hereafter incurred (collectively, the "OBLIGATIONS"):

         (a) for so long as the  Convertible  Debentures  are  outstanding,  the
payment by the  Parent,  as and when due and  payable  (by  scheduled  maturity,
acceleration, demand or otherwise), of all amounts from time to time owing by it
in respect of the Securities Purchase Agreement,  the Convertible Debentures and
the other Transaction Documents; and

         (b) for so long as the Convertible Debentures are outstanding,  the due
performance and observance by the Company of all of its other  obligations  from
time to time existing in respect of any of the Transaction Documents,  including
without limitation,  the Parent's  obligations with respect to any conversion or
redemption rights of the Secured Party under the Convertible Debentures.

                                   ARTICLE 2.

                       PLEDGED PROPERTY; EVENT OF DEFAULT

         Section 2.1.      PLEDGED PROPERTY.

                  (a) As  collateral  security for all of the  Obligations,  the
Company hereby  pledges to the Secured  Party,  and creates in the Secured Party
for its  benefit,  a continuing  security  interest in and to all of the Pledged
Property whether now owned or hereafter acquired.

                  (b)  Simultaneously  with the  execution  and delivery of this
Agreement,  the  Company  shall make,  execute,  acknowledge,  file,  record and
deliver to the Secured Party any documents  reasonably  requested by the Secured
Party to perfect its security interest in the Pledged  Property.  Simultaneously
with the  execution  and  delivery of this  Agreement,  the Company  shall make,
execute,  acknowledge  and  deliver  to the  Secured  Party such  documents  and
instruments, including, without limitation, financing statements,  certificates,
affidavits  and forms as may, in the Secured  Party's  reasonable  judgment,  be
necessary to effectuate,  complete or perfect, or to continue and preserve,  the
security interest of the Secured Party in the Pledged Property,  and the Secured
Party shall hold such documents and instruments as secured party, subject to the
terms and conditions contained herein.

         Section 2.2.      EVENT OF DEFAULT

                  An "EVENT OF DEFAULT"  shall be deemed to have occurred  under
this Agreement upon an Event of Default under and as defined in the  Convertible
Debentures.

                                       2

<PAGE>

                                   ARTICLE 3.

                          ATTORNEY-IN-FACT; PERFORMANCE

         Section 3.1.      SECURED PARTY APPOINTED ATTORNEY-IN-FACT.

         Upon the occurrence and during the  continuance of an Event of Default:
(a) the Company hereby appoints the Secured Party as its attorney-in-fact,  with
full  authority  in the place and  stead of the  Company  and in the name of the
Company or  otherwise,  from time to time in the Secured  Party's  discretion to
take any  action and to  execute  any  instrument  which the  Secured  Party may
reasonably  deem  necessary  to  accomplish  the  purposes  of  this  Agreement,
including,  without  limitation,  to receive and collect  all  instruments  made
payable to the  Company  representing  any  payments  in respect of the  Pledged
Property or any part thereof and to give full  discharge  for the same;  (b) the
Secured Party may demand, collect, receipt for, settle, compromise,  adjust, sue
for, foreclose, or realize on the Pledged Property as and when the Secured Party
may determine,  and (c) to facilitate  collection,  the Secured Party may notify
account debtors and obligors on any Pledged  Property to make payments  directly
to the Secured Party.

         Section 3.2.      SECURED PARTY MAY PERFORM.

         If the Company fails to perform any  agreement  contained  herein,  the
Secured Party, at its option, may itself perform,  or cause performance of, such
agreement,  and  the  expenses  of the  Secured  Party  incurred  in  connection
therewith shall be included in the Obligations secured hereby and payable by the
Company under Section 8.3.

                                   ARTICLE 4.

                         REPRESENTATIONS AND WARRANTIES

         Section 4.1.      AUTHORIZATION; ENFORCEABILITY.

         Each of the parties  hereto  represents  and warrants that it has taken
all action  necessary to authorize the  execution,  delivery and  performance of
this Agreement and the transactions  contemplated hereby; and upon execution and
delivery,  this Agreement shall constitute a valid and binding obligation of the
respective party, subject to applicable bankruptcy, insolvency,  reorganization,
moratorium  and similar laws  affecting  creditors'  rights or by the principles
governing the availability of equitable remedies.

         Section 4.2.      OWNERSHIP OF PLEDGED PROPERTY.

         The Company represents and warrants that it is the legal and beneficial
owner of the Pledged  Property  free and clear of any lien,  security  interest,
option or other charge or  encumbrance  (each, a "Lien") except for the security
interest  created by this Agreement and other Permitted  Liens.  For purposes of
this Agreement,  "Permitted  Liens" means: (1) the security  interest created by
this  Agreement,  (2)  existing  Liens  disclosed  by the Company to the Secured
Party;  (3) inchoate  Liens for taxes,  assessments or  governmental  charges or
levies not yet due, as to which the grace period,  if any,  related  thereto has
not yet expired, or being contested in good faith and by appropriate proceedings
for which adequate  reserves have been  established in accordance with GAAP; (4)

                                       3

<PAGE>

Liens of carriers, materialmen,  warehousemen, mechanics and landlords and other
similar  Liens which  secure  amounts  which are not yet overdue by more than 60
days or which are being contested in good faith by appropriate proceedings;  (5)
licenses,  sublicenses,  leases  or  subleases  granted  to  other  Persons  not
materially  interfering  with the conduct of the  business of the  Company;  (6)
Liens securing  capitalized  lease  obligations and purchase money  indebtedness
incurred  solely for the  purpose of  financing  an  acquisition  or lease;  (7)
easements,   rights-of-way,   restrictions,   encroachments,   municipal  zoning
ordinances  and  other  similar  charges  or   encumbrances,   and  minor  title
deficiencies, in each case not securing debt and not materially interfering with
the conduct of the business of the Company and not  materially  detracting  from
the  value  of the  property  subject  thereto;  (8)  Liens  arising  out of the
existence of judgments or awards which  judgments or awards do not constitute an
Event of  Default;  (9) Liens  incurred  in the  ordinary  course of business in
connection with workers compensation  claims,  unemployment  insurance,  pension
liabilities and social  security  benefits and Liens securing the performance of
bids,  tenders,  leases  and  contracts  in the  ordinary  course  of  business,
statutory obligations,  surety bonds, performance bonds and other obligations of
a like nature  (other  than appeal  bonds)  incurred in the  ordinary  course of
business  (exclusive  of  obligations  in respect of the  payment  for  borrowed
money); (10) Liens in favor of a banking institution arising by operation of law
encumbering  deposits  (including the right of set-off) and contractual  set-off
rights  held by such  banking  institution  and which  are  within  the  general
parameters customary in the banking industry and only burdening deposit accounts
or other funds maintained with a creditor depository institution; (11) usual and
customary  set-off  rights in leases and other  contracts;  and (12)  escrows in
connection with acquisitions and dispositions.

                                   ARTICLE 5.

                    DEFAULT; REMEDIES; SUBSTITUTE COLLATERAL

         Section 5.1       METHOD OF REALIZING UPON THE PLEDGED PROPERTY: OTHER
                           REMEDIES.

         If any Event of Default shall have occurred and be continuing:

         (a) The Secured Party may exercise in respect of the Pledged  Property,
in addition to any other  rights and  remedies  provided for herein or otherwise
available to it, all of the rights and remedies of a secured  party upon default
under the Uniform  Commercial  Code (whether or not the Uniform  Commercial Code
applies  to the  affected  Pledged  Property),  and also  may (i) take  absolute
control of the Pledged Property,  including,  without limitation,  transfer into
the Secured  Party's  name or into the name of its  nominee or nominees  (to the
extent the Secured Party has not  theretofore  done so) and thereafter  receive,
for the  benefit of the Secured  Party,  all  payments  made  thereon,  give all
consents,  waivers and  ratifications  in respect thereof and otherwise act with
respect  thereto as though it were the outright owner thereof,  (ii) require the
Company to  assemble  all or part of the  Pledged  Property  as  directed by the
Secured Party and make it available to the Secured Party at a place or places to
be  designated  by the  Secured  Party  that is  reasonably  convenient  to both
parties,  and the Secured Party may enter into and occupy any premises  owned or
leased by the Company where the Pledged  Property or any part thereof is located
or assembled for a reasonable  period in order to effectuate the Secured Party's
rights and remedies hereunder or under law, without obligation to the Company in
respect of such  occupation,  and (iii) without notice except as specified below
and without any obligation to prepare or process the Pledged  Property for sale,
(A) sell the  Pledged  Property  or any part  thereof in one or more  parcels at

                                       4

<PAGE>

public or private sale, at any of the Secured Party's offices or elsewhere,  for
cash,  on credit or for  future  delivery,  and at such price or prices and upon
such other terms as the Secured Party may deem  commercially  reasonable  and/or
(B) lease,  license or dispose of the Pledged  Property or any part thereof upon
such terms as the Secured Party may deem  commercially  reasonable.  The Company
agrees  that,  to the  extent  notice  of sale or any other  disposition  of the
Pledged Property shall be required by law, at least ten (10) days' notice to the
Company  of the time and place of any public  sale or the time  after  which any
private sale or other  disposition  of the Pledged  Property is to be made shall
constitute reasonable notification.  The Secured Party shall not be obligated to
make any sale or other disposition of any Pledged Property  regardless of notice
of sale having been given.  The Secured  Party may adjourn any public or private
sale from time to time by announcement at the time and place fixed therefor, and
such sale may, without further notice, be made at the time and place to which it
was so adjourned. The Company hereby waives any claims against the Secured Party
arising by reason of the fact that the price at which the Pledged  Property  may
have been sold at a private  sale was less than the price  which might have been
obtained  at a  public  sale  or was  less  than  the  aggregate  amount  of the
Obligations, even if the Secured Party accepts the first offer received and does
not offer such Pledged Property to more than one offeree,  and waives all rights
that the  Company  may  have to  require  that  all or any part of such  Pledged
Property be  marshaled  upon any sale (public or private)  thereof.  The Company
hereby  acknowledges  that  (i) any such  sale of the  Pledged  Property  by the
Secured  Party  may be  made  without  warranty,  (ii)  the  Secured  Party  may
specifically  disclaim any warranties of title,  possession,  quiet enjoyment or
the like,  and (iii) such  actions set forth in clauses (i) and (ii) above shall
not adversely affect the commercial  reasonableness  of any such sale of Pledged
Property.

         (b) Any cash held by the Secured Party as Pledged Property and all cash
proceeds  received by the Secured  Party in respect of any sale of or collection
from, or other  realization  upon, all or any part of the Pledged Property shall
be applied (after  payment of any amounts  payable to the Secured Party pursuant
to Section  8.3  hereof) by the Secured  Party  against,  all or any part of the
Obligations in such order as the Secured Party shall elect,  consistent with the
provisions of the  Securities  Purchase  Agreement.  Any surplus of such cash or
cash proceeds held by the Secured  Party and  remaining  after the  indefeasible
payment  in  full  in  cash of all of the  Obligations  shall  be  paid  over to
whomsoever  shall be  lawfully  entitled  to  receive  the same or as a court of
competent jurisdiction shall direct.

         (c) In the event  that the  proceeds  of any such sale,  collection  or
realization  are  insufficient  to pay all amounts to which the Secured Party is
legally entitled, the Company shall be liable for the deficiency,  together with
interest  thereon  at the  rate  specified  in the  Convertible  Debentures  for
interest  on overdue  principal  thereof or such other rate as shall be fixed by
applicable law,  together with the costs of collection and the reasonable  fees,
costs,  expenses  and other  client  charges of any  attorneys  employed  by the
Secured Party to collect such deficiency.

         (d) The Company hereby  acknowledges that if the Secured Party complies
with any applicable state, provincial, or federal law requirements in connection
with a disposition of the Pledged  Property,  such compliance will not adversely
affect the  commercial  reasonableness  of any sale or other  disposition of the
Pledged Property.

                                       5

<PAGE>

         (e) The  Secured  Party shall not be required to marshal any present or
future collateral  security  (including,  but not limited to, this Agreement and
the Pledged Property) for, or other assurances of payment of, the Obligations or
any of them or to resort to such  collateral  security  or other  assurances  of
payment in any particular order, and all of the Secured Party's rights hereunder
and in respect of such collateral security and other assurances of payment shall
be cumulative and in addition to all other rights,  however existing or arising.
To the extent that the Company  lawfully may, the Company  hereby agrees that it
will not invoke any law relating to the  marshaling  of  collateral  which might
cause delay in or impede the  enforcement  of the Secured  Party's  rights under
this Agreement or under any other  instrument  creating or evidencing any of the
Obligations or under which any of the Obligations is outstanding or by which any
of the Obligations is secured or payment thereof is otherwise  assured,  and, to
the extent  that it lawfully  may,  the Company  hereby  irrevocably  waives the
benefits of all such laws.

         Section 5.2       DUTIES REGARDING PLEDGED PROPERTY.

         The Secured Party shall have no duty as to the collection or protection
of the Pledged  Property or any income thereon or as to the  preservation of any
rights pertaining thereto, beyond the safe custody and reasonable care of any of
the Pledged Property actually in the Secured Party's possession.

                                   ARTICLE 6.

                              AFFIRMATIVE COVENANTS

         The Company  covenants and agrees that,  from the date hereof and until
the Obligations have been fully paid and satisfied or the Convertible Debentures
have been fully converted,  unless the Secured Party shall consent  otherwise in
writing (as provided in Section 8.4 hereof):

         Section 6.1.      EXISTENCE, PROPERTIES, ETC.

                  (a) The Company shall do, or cause to be done, all things,  or
proceed with due  diligence  with any actions or courses of action,  that may be
reasonably necessary (i) to maintain Company's due organization, valid existence
and good  standing  under  the laws of its state of  incorporation,  and (ii) to
preserve  and keep in full  force and effect all  qualifications,  licenses  and
registrations in those  jurisdictions in which the failure to do so could have a
Material Adverse Effect (as defined below); and (b) the Company shall not do, or
cause to be done, any act impairing the Company's  corporate  power or authority
(i) to carry on the Company's business as now conducted,  and (ii) to execute or
deliver this Agreement or any other document  delivered in connection  herewith,
including,  without limitation,  any UCC-1 Financing  Statements required by the
Secured Party (which other loan instruments collectively shall be referred to as
the "LOAN INSTRUMENTS") to which it is or will be a party, or perform any of its
obligations  hereunder or thereunder.  For purpose of this  Agreement,  the term
"MATERIAL  ADVERSE  EFFECT"  shall  mean any  material  and  adverse  affect  as
determined by Secured Party in its reasonable  discretion,  whether individually
or in the  aggregate,  upon  (a) the  Company's  assets,  business,  operations,
properties or condition,  financial or otherwise;  (b) the Company's  ability to
make payment as and when due of all or any part of the  Obligations;  or (c) the
Pledged Property.

                                       6

<PAGE>

         Section 6.2.      FINANCIAL STATEMENTS AND REPORTS.

         The Company shall furnish to the Secured Party within a reasonable time
such financial data as the Secured Party may reasonably request.

         Section 6.3.      ACCOUNTS AND REPORTS.

         The  Company  shall  maintain  a  standard   system  of  accounting  in
accordance with generally accepted accounting  principles  consistently  applied
("GAAP") and provide, at its sole expense, to the Secured Party the following:

                  (a) as  soon  as  available,  a copy of any  notice  or  other
communication  alleging any nonpayment or other material  breach or default,  or
any  foreclosure or other action  respecting any material  portion of its assets
and properties,  received  respecting any of the  indebtedness of the Company in
excess of $250,000 (other than the Obligations),  or any demand or other request
for  payment  under any  guaranty,  assumption,  purchase  agreement  or similar
agreement or arrangement respecting the indebtedness or obligations of others in
excess of $250,000; and

                  (b)  within  fifteen  (15)  days  after  the  making  of  each
submission or filing, a copy of any report, financial statement, notice or other
document,  whether  periodic or otherwise,  submitted to the shareholders of the
Company, or submitted to or filed by the Company with any governmental authority
involving or affecting (i) the Company that could reasonably be expected to have
a Material Adverse Effect;  (ii) the Obligations;  (iii) any part of the Pledged
Property; or (iv) any of the transactions  contemplated in this Agreement or the
Loan  Instruments  (except,  in each case,  to the  extent any such  submission,
filing, report, financial statement, notice or other document is posted on EDGAR
Online).

         Section 6.4.      MAINTENANCE OF BOOKS AND RECORDS; INSPECTION.

         The  Company  shall  maintain  its  books,   accounts  and  records  in
accordance  with GAAP, and permit the Secured Party,  its officers and employees
and any  professionals  designated by the Secured Party in writing,  at any time
during normal business hours and upon reasonable notice to visit and inspect any
of  its  properties  (including  but  not  limited  to the  collateral  security
described in the Transaction  Documents and/or the Loan Instruments),  corporate
books and financial records,  and to discuss its accounts,  affairs and finances
with any employee,  officer or director thereof (it being agreed that, unless an
Event of Default shall have occurred and be  continuing,  there shall be no more
than two (2) such visits and inspections in any Fiscal Year).

         Section 6.5.      MAINTENANCE AND INSURANCE.

                  (a) The Company shall maintain or cause to be  maintained,  at
its own expense, all of its material assets and properties in good working order
and  condition,  ordinary wear and tear excepted,  making all necessary  repairs
thereto and renewals and replacements thereof.

                  (b) The Company shall maintain or cause to be  maintained,  at
its  own  expense,   insurance  in  form,   substance  and  amounts   (including
deductibles),  which the Company  deems  reasonably  necessary to the  Company's
business,  (i) adequate to insure all assets and  properties of the Company of a

                                       7

<PAGE>

character  usually  insured by persons  engaged in the same or similar  business
against  loss or  damage  resulting  from  fire or other  risks  included  in an
extended  coverage  policy;  (ii) against public liability and other tort claims
that may be incurred by the Company; (iii) as may be required by the Transaction
Documents  and/or  applicable  law and (iv) as may be  reasonably  requested  by
Secured Party, all with financially sound and reputable insurers.

         Section 6.6.      CONTRACTS AND OTHER COLLATERAL.

         The Company shall perform all of its obligations  under or with respect
to each instrument,  receivable,  contract and other intangible  included in the
Pledged  Property  to which the Company is now or  hereafter  will be party on a
timely basis and in the manner therein required,  including, without limitation,
this Agreement,  except to the extent the failure to so perform such obligations
would not reasonably be expected to have a Material Adverse Effect.

         Section 6.7.      DEFENSE OF COLLATERAL, ETC.

         The Company  shall defend and enforce its right,  title and interest in
and to any part of: (a) the Pledged Property; and (b) if not included within the
Pledged  Property,  those assets and properties  whose loss would  reasonably be
expected to have a Material  Adverse  Effect,  each against all manner of claims
and demands on a timely  basis to the full extent  permitted by  applicable  law
(other than any such claims and demands by holders of Permitted Liens).

         Section 6.8.      TAXES AND ASSESSMENTS.

         The Company  shall (a) file all  material  tax returns and  appropriate
schedules  thereto that are required to be filed under  applicable law, prior to
the date of delinquency  (taking into account any extensions of the original due
date),  (b) pay and discharge all material taxes,  assessments and  governmental
charges or levies imposed upon the Company,  upon its income and profits or upon
any  properties  belonging  to it, prior to the date on which  penalties  attach
thereto, and (c) pay all material taxes, assessments and governmental charges or
levies  that,  if  unpaid,  might  become  a  lien  or  charge  upon  any of its
properties;  PROVIDED,  HOWEVER,  that the Company in good faith may contest any
such tax,  assessment,  governmental  charge or levy  described in the foregoing
clauses (b) and (c) so long as appropriate  reserves are maintained with respect
thereto if and to the extent required by GAAP.

         Section 6.9.      COMPLIANCE WITH LAW AND OTHER AGREEMENTS.

         The Company shall  maintain its business  operations and property owned
or used in connection  therewith in compliance with (a) all applicable  federal,
state and  local  laws,  regulations  and  ordinances  governing  such  business
operations and the use and ownership of such property,  and (b) all  agreements,
licenses,  franchises,  indentures and mortgages to which the Company is a party
or by which the  Company or any of its  properties  is bound,  except  where the
failure to so comply would not reasonably be expected to have a Material Adverse
Effect.

                                       8

<PAGE>

         Section 6.10.     NOTICE OF DEFAULT.

         The  Company  shall give  written  notice to the  Secured  Party of the
occurrence of any Event of Default.

         Section 6.11.     NOTICE OF LITIGATION.

         The Company shall give notice, in writing,  to the Secured Party of (a)
any actions,  suits or  proceedings  wherein the amount at issue is in excess of
$250,000, instituted by any persons against the Company, or affecting any of the
assets of the Company,  and (b) any dispute,  not resolved  within  fifteen (15)
days of the  commencement  thereof,  between the Company on the one hand and any
governmental  or regulatory  body on the other hand,  which might  reasonably be
expected  to have a  Material  Adverse  Effect  on the  business  operations  or
financial condition of the Company.

         Section 6.13.     FUTURE SUBSIDIARIES.

         If the  Company  shall  hereafter  create or  acquire  any  subsidiary,
simultaneously with the creation or acquisition of such subsidiary,  the Company
shall cause such subsidiary to grant to the Secured Party a security interest of
the same tenor as created under this Agreement.

                                   ARTICLE 7.

                               NEGATIVE COVENANTS

         The Company  covenants and agrees that,  from the date hereof until the
Obligations  have been fully paid and satisfied,  the Company shall not,  unless
the Secured Party shall consent otherwise in writing:

         Section 7.1.      LIENS AND ENCUMBRANCES.

         Directly or indirectly make, create,  incur,  assume or permit to exist
any Lien in, to or against any part of the Pledged Property other than Permitted
Liens.

         Section 7.2.      RESTRICTION ON REDEMPTION AND CASH DIVIDENDS

         Directly or indirectly,  redeem,  repurchase or declare or pay any cash
dividend or  distribution on its capital stock without the prior express written
consent of the Secured Party.

         Section 7.3.      INCURRENCE OF INDEBTEDNESS.

         Directly or indirectly,  incur or guarantee,  assume or suffer to exist
any  indebtedness,  other than the  indebtedness  evidenced  by the  Convertible
Debentures and other Permitted Indebtedness. "PERMITTED INDEBTEDNESS" means: (i)
indebtedness evidenced by Convertible Debentures; (ii) indebtedness described on
the Disclosure Schedule to the Securities Purchase Agreement; (iii) indebtedness
incurred  solely for the purpose of financing  the  acquisition  or lease of any
equipment by the Company,  including  capital lease obligations with no recourse
other than to such equipment;  (iv)  indebtedness (A) the repayment of which has
been  subordinated  to the payment of the  Convertible  Debentures  on terms and
conditions  acceptable to the Secured  Party,  including with regard to interest

                                       9

<PAGE>

payments  and  repayment  of  principal,  (B) which does not mature or otherwise
require or permit  redemption or repayment prior to or on the 91st day after the
maturity date of any Convertible  Debentures then outstanding;  and (C) which is
not secured by any assets of the Company;  (v)  indebtedness  solely between the
Company  and/or  one of its  domestic  subsidiaries,  on the one  hand,  and the
Company and/or one of its domestic subsidiaries, on the other which indebtedness
is not secured by any assets of the Company or any of its subsidiaries, provided
that (x) in each case a majority of the equity of any such  domestic  subsidiary
is directly or  indirectly  owned by the Company,  such  domestic  subsidiary is
controlled by the Company and such domestic  subsidiary  has executed a security
agreement in the form of this Agreement and (y) any such loan shall be evidenced
by an  intercompany  note that is pledged by the Company or its  subsidiary,  as
applicable,  as  collateral  pursuant  to  this  Agreement;  (vi)  reimbursement
obligations  in  respect of  letters  of credit  issued  for the  account of the
Company  or any of its  subsidiaries  for the  purpose of  securing  performance
obligations of the Company or its  subsidiaries  incurred in the ordinary course
of business so long as the  aggregate  face amount of all such letters of credit
does not exceed  $500,000 at any one time;  and (vii)  renewals,  extensions and
refinancing  of any  indebtedness  described  in  clauses  (i) or  (iii) of this
subsection.

         Section 7.4.      PLACES OF BUSINESS.

         Change the  location of its chief place of  business,  chief  executive
office or any place of  business  disclosed  to the Secured  Party,  unless such
change in location is to a different  location  within the United States and the
Company  provides notice to the Secured Party of new location within 10 days' of
such change in location.

                                   ARTICLE 8.

                                  MISCELLANEOUS

         Section 8.1.      NOTICES.

         All notices or other  communications  required or permitted to be given
pursuant to this  Agreement  shall be in writing and shall be considered as duly
given on: (a) the date of  delivery,  if  delivered  in person or by  nationally
recognized  overnight  delivery  service or (b) five (5) days  after  mailing if
mailed from within the  continental  United  States by  certified  mail,  return
receipt requested to the party entitled to receive the same:

If to the Secured Party:    Cornell Capital Partners, LP
                            101 Hudson Street-Suite 3700
                            Jersey City, New Jersey 07302
                            Attention: Mark Angelo
                                       Portfolio Manager
                            Telephone: (201) 986-8300
                            Facsimile: (201) 985-8266

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<PAGE>

With a copy to:             Troy Rillo, Esq.
                            101 Hudson Street, Suite 3700
                            Jersey City, NJ 07302
                            Telephone: (201) 985-8300
                            Facsimile: (201) 985-8266

And if to the Company:      Radial Energy Inc.
                            1313 East Maple Street, Suite 223
                            Bellingham, WA  98225
                            Attention:  Chief Financial Officer
                            Telephone:        (360) 685-4240
                            Facsimile:

With a copy to:             Greenberg Traurig, LLP
                            650 Town Center Drive, Suite 1700
                            Costa Mesa, CA  92626
                            Attention:        Raymond Lee, Esq.
                            Telephone: (714) 708-6510

         Any party may change its  address by giving  notice to the other  party
stating its new address.  Commencing on the tenth (10th) day after the giving of
such notice, such newly designated address shall be such party's address for the
purpose of all notices or other communications required or permitted to be given
pursuant to this Agreement.

         Section 8.2.      SEVERABILITY.

         If  any  provision  of  this   Agreement   shall  be  held  invalid  or
unenforceable,  such  invalidity or  unenforceability  shall attach only to such
provision and shall not in any manner affect or render invalid or  unenforceable
any other  severable  provision of this  Agreement,  and this Agreement shall be
carried out as if any such invalid or unenforceable provision were not contained
herein.

         Section 8.3.      EXPENSES.

         In the  event of an  Event  of  Default,  the  Company  will pay to the
Secured  Party the  amount  of any and all  reasonable  out-of-pocket  expenses,
including  the  reasonable  fees and expenses of its counsel,  which the Secured
Party may incur in connection  with: (i) the custody or preservation  of, or the
sale,  collection from, or other  realization upon, any of the Pledged Property;
(ii) the  exercise  or  enforcement  of any of the rights of the  Secured  Party
hereunder  or (iii) the  failure by the Company to perform or observe any of the
provisions hereof.

                                       11

<PAGE>

         Section 8.4.      WAIVERS, AMENDMENTS, ETC.

         The Secured  Party's delay or failure at any time or times hereafter to
require  strict  performance  by  Company  of any  undertakings,  agreements  or
covenants  shall not waive,  affect,  or diminish any right of the Secured Party
under this Agreement to demand strict compliance and performance  herewith.  Any
waiver by the  Secured  Party of any Event of Default  shall not waive or affect
any other Event of Default, whether such Event of Default is prior or subsequent
thereto and whether of the same or a different type.  None of the  undertakings,
agreements  and  covenants of the Company  contained in this  Agreement,  and no
Event of Default,  shall be deemed to have been waived by the Secured Party, nor
may this  Agreement  be  amended,  changed  or  modified,  unless  such  waiver,
amendment,  change or  modification  is  evidenced by an  instrument  in writing
specifying  such waiver,  amendment,  change or  modification  and signed by the
Secured  Party in the case of any such waiver,  and signed by the Secured  Party
and the Company in the case of any such amendment, change or modification.

         SECTION 8.5.      CONTINUING SECURITY INTEREST; PARTIAL RELEASE.

         (a) This Agreement shall create a continuing  security  interest in the
Pledged Property and shall: (i) remain in full force and effect until payment or
conversion  in full of the  Convertible  Debentures;  (ii) be  binding  upon the
Company and its  successors  and assigns;  and (iii) inure to the benefit of the
Secured Party and its successors and assigns.  Upon the payment or  satisfaction
in full or conversion in full of the Convertible Debentures,  this Agreement and
the  security  interest  created  hereby  shall  terminate,  and, in  connection
therewith,  the Company shall be entitled to the return, at its expense, of such
of the Pledged  Property as shall not have been sold in accordance  with Section
5.2 hereof or  otherwise  applied  pursuant to the terms  hereof and the Secured
Party  shall  deliver  to  the  Company  such  documents  as the  Company  shall
reasonably request to evidence such termination.

         (b)  Effective  upon  the  closing  of a  disposition  of  any  Pledged
Property,  provided  the  Secured  Party  consents  in  writing  prior  to  such
disposition or such disposition is made in the ordinary course of business,  the
security interest granted hereunder in the Pledged Property so disposed of shall
terminate  and the Secured  Party shall  deliver  such  documents as the Company
shall reasonably request to evidence such termination;  provided,  however,  the
security  interest  granted  hereunder in all remaining  Pledged  Property shall
remain in full force and effect.

         Section 8.6.      INDEPENDENT REPRESENTATION.

         Each party hereto  acknowledges  and agrees that it has received or has
had the opportunity to receive  independent  legal counsel of its own choice and
that it has been sufficiently  apprised of its rights and responsibilities  with
regard to the substance of this Agreement.

         Section 8.7.      APPLICABLE LAW:  JURISDICTION.

         This Agreement  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

                                       12

<PAGE>

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
Paragraph.

         Section 8.8.      WAIVER OF JURY TRIAL.

         AS A  FURTHER  INDUCEMENT  FOR THE  SECURED  PARTY TO ENTER  INTO  THIS
AGREEMENT AND TO MAKE THE FINANCIAL  ACCOMMODATIONS TO THE COMPANY,  THE COMPANY
HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING  RELATED IN ANY
WAY TO THIS  AGREEMENT  AND/OR  ANY  AND ALL  OTHER  DOCUMENTS  RELATED  TO THIS
TRANSACTION.

         Section 8.9.      ENTIRE AGREEMENT.

         This Agreement  constitutes the entire  agreement among the parties and
supersedes any prior agreement or  understanding  among them with respect to the
subject matter hereof.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       13

<PAGE>

         IN WITNESS  WHEREOF,  the parties  hereto have  executed  this Security
Agreement as of the date first above written.

                                             COMPANY:
                                             RADIAL ENERGY INC.

                                             By:      /s/ G. LEIGH LYONS
                                                ________________________________
                                             Name:    G. Leigh Lyons
                                             Title:   President

                                       14

<PAGE>

         IN WITNESS  WHEREOF,  the parties  hereto have  executed  this Security
Agreement as of the date first above written.

                                             SECURED PARTY:
                                             CORNELL CAPITAL PARTNERS, LP

                                             BY:      YORKVILLE ADVISORS, LLC
                                             ITS:     GENERAL PARTNER

                                             By:      /s/ MARK ANGELO
                                                ________________________________
                                             Name:    Mark Angelo
                                             Title:   Portfolio Manager

                                       15

<PAGE>

                                   SCHEDULE I

               LEGAL NAMES; ORGANIZATIONAL IDENTIFICATION NUMBERS;
                             STATES OF ORGANIZATION

________________________________________________________________________________

                                    STATE OF         EMPLOYER     ORGANIZATIONAL
COMPANY'S NAME                      ORGANIZATION     ID           ID
________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________

                                       16

<PAGE>

                                    EXHIBIT A
                         DEFINITION OF PLEDGED PROPERTY

         For the purpose of securing prompt and complete payment and performance
by the  Company  of all of the  Obligations,  the  Company  unconditionally  and
irrevocably hereby grants to the Secured Party a continuing security interest in
and to, and lien upon, the following Pledged Property of the Company:

                  (a) all goods of the Company,  including,  without limitation,
machinery,  equipment, furniture,  furnishings,  fixtures, signs, lights, tools,
parts,  supplies  and  motor  vehicles  of every  kind and  description,  now or
hereafter owned by the Company or in which the Company may have or may hereafter
acquire any interest, and all replacements, additions, accessions, substitutions
and proceeds thereof,  arising from the sale or disposition  thereof,  and where
applicable,  the proceeds of insurance  and of any tort claims  involving any of
the foregoing;

                  (b) all inventory of the Company,  including,  but not limited
to, all goods, wares,  merchandise,  parts, supplies,  finished products,  other
tangible  personal  property,  including such inventory as is temporarily out of
Company's  custody or possession  and including any returns upon any accounts or
other  proceeds,  including  insurance  proceeds,  resulting  from  the  sale or
disposition of any of the foregoing;

                  (c)  all  contract  rights  and  general  intangibles  of  the
Company,  including,  without limitation,  goodwill,  trademarks,  trade styles,
trade  names,  leasehold  interests,  partnership  or joint  venture  interests,
patents and patent applications,  copyrights, deposit accounts whether now owned
or hereafter created;

                  (d) all documents, warehouse receipts, instruments and chattel
paper of the Company whether now owned or hereafter created;

                  (e) all accounts and other  receivables,  instruments or other
forms of obligations and rights to payment of the Company  (herein  collectively
referred  to as  "ACCOUNTS"),  together  with the  proceeds  thereof,  all goods
represented  by such  Accounts  and all such goods that may be  returned  by the
Company's  customers,  and  all  proceeds  of any  insurance  thereon,  and  all
guarantees,  securities  and liens which the Company may hold for the payment of
any such  Accounts  including,  without  limitation,  all rights of  stoppage in
transit, replevin and reclamation and as an unpaid vendor and/or lienor;

                  (f) to the  extent  assignable,  all of the  Company's  rights
under all present and future  authorizations,  permits,  licenses and franchises
issued or granted in connection with the operations of any of its facilities;

                  (g) all equity  interests,  securities or other instruments in
other companies, including, without limitation, any subsidiaries, investments or
other entities (whether or not controlled); and

                                       17

<PAGE>

                  (h) all products and proceeds (including,  without limitation,
insurance proceeds) from the above-described Pledged Property.

                                       18

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