SECURITIES PURCHASE AGREEMENT



         THIS  SECURITIES  PURCHASE  AGREEMENT (this  "AGREEMENT"),  dated as of

October 2, 2006, by and among RADIAL  ENERGY,  INC., a Nevada  corporation  (the

"COMPANY"), and the Buyer listed on Schedule I attached hereto (the "BUYER").



                                   WITNESSETH



         WHEREAS,  the Company and the Buyer are executing and  delivering  this

Agreement in reliance upon an exemption from securities registration pursuant to

Section 4(2) and/or Rule 506 of Regulation D ("REGULATION  D") as promulgated by

the U.S. Securities and Exchange Commission (the "SEC") under the Securities Act

of 1933, as amended (the "SECURITIES ACT");



         WHEREAS,  the parties  desire  that,  upon the terms and subject to the

conditions  contained herein,  the Company shall issue and sell to the Buyer, as

provided  herein,  and the  Buyer  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 Company's common stock, par value

$0.001 (the "COMMON STOCK") (as converted, the "CONVERSION SHARES") of which Two

Million  Dollars  ($2,000,000)  shall be funded  within  Five (5)  business  day

following  the date hereof  (the "FIRST  CLOSING"),  One  Million  Five  Hundred

Thousand  Dollars  ($1,500,000)  shall be  funded  on the date the  registration

statement  (the  "REGISTRATION  STATEMENT")  is filed,  pursuant to the Investor

Registration  Rights  Agreement  dated the date hereof,  with the United  States

Securities and Exchange  Commission (the "SEC") (the "SECOND CLOSING"),  and One

Million Five Hundred Thousand Dollars  ($1,500,000) shall be funded within three

(3)  business  days  after  the  date the  Registration  Statement  is  declared

effective  by the SEC  (the  "THIRD  CLOSING")  (individually  referred  to as a

"CLOSING"  collectively  referred to as the  "CLOSINGS"),  for a total  purchase

price of up to Five Million Dollars ($5,000,000),  (the "PURCHASE PRICE") in the

respective  amounts  set forth  opposite  the  Buyer's  name on  Schedule I (the

"SUBSCRIPTION AMOUNT"); and



         WHEREAS,  contemporaneously  with the  execution  and  delivery of this

Agreement, the parties hereto are executing and delivering a Registration Rights

Agreement (the "INVESTOR  REGISTRATION RIGHTS AGREEMENT")  pursuant to which the

Company has agreed to provide certain  registration  rights under the Securities

Act and the rules and regulations  promulgated there under, and applicable state

securities laws; and



         WHEREAS,  contemporaneously  with the  execution  and  delivery of this

Agreement,  the Company,  the Buyers,  and each wholly owned  subsidiary  of the

Company  are  executing  and  delivering  a Security  Agreement  (the  "SECURITY

AGREEMENT")  pursuant  to which the Company  and its wholly  owned  subsidiaries

agreed to provide the Buyers a security  interest in Pledged  Property  (as this

term is defined in the Security  Agreement) to secure the Company's  obligations

under this Agreement, the Transaction Documents, or any other obligations of the

Company to the Buyer;



         WHEREAS,  contemporaneously  with the  execution  and  delivery of this

Agreement,  the Company and certain  officers of the Company are  executing  and

delivering  Pledge and Escrow Agreements  (collectively,  the "PLEDGE AND ESCROW

AGREEMENT")  pursuant  to which the Company  and  certain of its  officers  have





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agreed to provide the Buyer a security  interest in Pledged Shares (as this term

is  defined  in the  Pledge  and  Escrow  Agreement)  to  secure  the  Company's

obligations  under  this  Agreement,  the  Transaction  Documents,  or any other

obligations of the Company to the Buyer; and



         WHEREAS,  contemporaneously  with the  execution  and  delivery of this

Agreement,  the parties hereto are executing and delivering Irrevocable Transfer

Agent Instructions (the "IRREVOCABLE TRANSFER AGENT INSTRUCTIONS").



         NOW,  THEREFORE,  in  consideration  of the mutual  covenants and other

agreements contained in this Agreement the Company and the Buyer hereby agree as

follows:



     1.   PURCHASE AND SALE OF CONVERTIBLE DEBENTURES.



               (a)   PURCHASE  OF   CONVERTIBLE   DEBENTURES.   Subject  to  the

satisfaction  (or waiver) of the terms and  conditions  of this  Agreement,  the

Buyer  agrees to  purchase at each  Closing  and the Company  agrees to sell and

issue  to  the  Buyer  at  each  Closing,   Convertible  Debentures  in  amounts

corresponding  with the Subscription  Amount set forth opposite the Buyer's name

on Schedule I hereto.



               (b) CLOSING  DATE.  The First Closing of the purchase and sale of

the Convertible  Debentures shall take place at 10:00 a.m. Eastern Standard Time

on  the  fifth  (5th)  business  day  following  the  date  hereof,  subject  to

notification  of  satisfaction  of the conditions to the First Closing set forth

herein and in Sections 6 and 7 below (or such later date as is  mutually  agreed

to by the Company and the Buyer) (the "FIRST CLOSING DATE"),  the Second Closing

of the purchase and sale of the Convertible  Debentures shall take place at 4:00

p.m. Eastern Standard Time on the date the Registration  Statement is filed with

the SEC, subject to notification of satisfaction of the conditions to the Second

Closing set forth herein and in Sections 6 and 7 below (or such later date as is

mutually  agreed to by the Company and the Buyer) (the "SECOND  CLOSING  DATE"),

and the Third  Closing of the  purchase and sale of the  Convertible  Debentures

shall take place at 10:00 a.m. Eastern Standard Time on the third (3rd) business

day  immediately  following  the date the  Registration  Statement  is  declared

effective by the SEC,  subject to notification of satisfaction of the conditions

to the Third  Closing  set forth  herein and in  Sections 6 and 7 below (or such

earlier date as is mutually  agreed to by the Company and the Buyer) (the "THIRD

CLOSING DATE")  (collectively  referred to a the "CLOSING DATES").  Each Closing

shall  occur  on the  respective  Closing  Dates  at the  offices  of  Yorkville

Advisors, LLC, 3700 Hudson Street, Suite 3700, Jersey City, New Jersey 07302 (or

such other place as is mutually agreed to by the Company and the Buyer).



               (c) FORM OF PAYMENT. Subject to the satisfaction of the terms and

conditions of this Agreement, on each Closing Date, (i) the Buyers shall deliver

to the Company such  aggregate  proceeds for the  Convertible  Debentures  to be

issued  and  sold to the  Buyer,  minus  the fees to be paid  directly  from the

proceeds of the Closings as set forth herein, and (ii) the Company shall deliver

to the Buyer,  Convertible  Debentures  which the Buyer is purchasing in amounts

indicated  opposite the Buyer's  name on Schedule I, duly  executed on behalf of

the Company.





                                       2





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     2.   BUYER'S REPRESENTATIONS AND WARRANTIES.



         The Buyer represents and warrants, severally and not jointly, that:



               (a) INVESTMENT  PURPOSE.  The Buyer is acquiring the  Convertible

Debentures  and,  upon  conversion  of  Convertible  Debentures,  the Buyer will

acquire the Conversion Shares then issuable,  for its own account for investment

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