EXHIBIT 10.1

INVESTMENT AGREEMENT

     THIS INVESTMENT AGREEMENT (the “Agreement”) is dated as of June 28, 2006,
by and between CORNELL CAPITAL PARTNERS, LP, a Delaware limited partnership (the
“Buyer”) and TORRENT ENERGY CORPORATION, a corporation organized and existing
under the laws of the state of Colorado (the “Company”).

Recitals:

     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) 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 Company has authorized the designation of that certain Series
E Convertible Preferred Stock, par value $.01 per share (the "Series E Preferred
Shares"), which are be convertible into shares of the Company’s Common Stock,
par value $.001 per share (the "Common Stock"), in accordance with the terms of
the Certificate of Designations of the Series E Convertible Preferred Stock of
Torrent Energy Corporation attached hereto as Exhibit A (the "Certificate of
Designations");

     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 Twenty Five Thousand
(25,000) shares of Series E Preferred Shares which shall be convertible into
shares of Common Stock (as converted, the “Conversion Shares”) for a purchase
price of One Thousand Dollars ($1000) per share, of which the purchase and sale
of Nine Thousand (9,000) shares of Series E Preferred Shares for a purchase
price of Nine Million Dollars ($9,000,000) shall close within three (3) business
days following the date hereof (the “First Closing”), the purchase and sale of
Eight Thousand Five Hundred (8,500) shares of Series E Preferred Shares for a
purchase price of Eight Million Five Hundred Thousand Dollars ($8,500,000) shall
close on the date the registration statement (the “Registration Statement”) is
filed, pursuant to the Investor Registration Rights Agreement (as defined
below), with the United States Securities and Exchange Commission (the “SEC”)
(the “Second Closing”), and the purchase and sale of Seven Thousand Five Hundred
(7,500) shares of Series E Preferred Shares for a purchase price of Seven
Million Five Hundred Thousand Dollars ($7,500,000) shall close within three (3)
business days following 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 of Twenty Five
Thousand (25,000) shares of Series E Preferred Shares for an aggregate purchase
price of Twenty Five Million Dollars ($25,000,000), (the “Purchase Price”);

     WHEREAS, contemporaneously with the execution and delivery of this
Agreement, the parties hereto are executing and delivering an Investor
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;

--------------------------------------------------------------------------------

     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 premises herein set forth
and certain other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties hereto agree as follows:

Article I. ISSUANCE OF SHARES AND RELATED TRANSACTIONS.

     Section 1.01. Purchase Price. The Purchase Price for the Series E Preferred
Shares shall be paid to the Company in immediately available funds on each
Closing Date (as set forth in Section 1.02 hereof).

     Section 1.02. Closing. The parties to this Agreement shall consummate the
transactions contemplated by this Agreement and the Company shall issue and sell
to the Buyer, as provided herein, and the Buyer shall purchase up to Twenty Five
Thousand (25,000) shares of Series E Preferred Shares, which shall have the
right and designations set forth on the Certificate of Designations. The First
Closing of the purchase and sale of Nine Thousand (9,000) shares of the Series E
Preferred Shares shall take place within three (3) business days following the
date hereof, (or such other 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 Eight Thousand Five Hundred (8,500) shares of the Series E Preferred Shares
shall take place on the date the Registration Statement is filed with the SEC,
(or such other 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 Seven
Thousand Five Hundred (7,500) shares the Series E Preferred Shares shall take
place on the third (3rd) business day following the date the Registration
Statement is declared effective by the SEC, (or such other date as is mutually
agreed to by the Company and the Buyer) (the “Third Closing Date”) (collectively
referred to as the “Closing Dates”); provided, in no event shall a Closing occur
prior to the satisfaction of the conditions precedent set forth in Sections 8, 9
and 10 hereof. The Closings shall take place at the offices of The Buyer or at
such other place as may be mutually agreed upon by the Buyer and the Company.

     Section 1.03. Issuance of Shares. At each Closing, subject to the terms,
restrictions and conditions of this Agreement, the Buyer shall acquire, and the
Company shall sell, issue and deliver to the Buyer shares of Series E Preferred
Shares, which shall have the right and designations set forth on the Certificate
of Designations. All of the Series E Preferred Shares and the Conversion Shares
into which such the Series E Preferred Shares are convertible shall be free and
clear of all liens, claims, pledges, mortgages, restrictions, obligations,
security interests and encumbrances of any kind, nature and description
(collectively, “Encumbrances”).

     Section 1.04. Closing Procedures. Subject to the satisfaction of the terms
and conditions of this Agreement, on each Closing Date, (i) the Buyer shall
deliver to the Company in accordance with the terms of this Agreement such
aggregate proceeds for the Series E Preferred Shares to be issued and sold to
the Buyer at such Closing, minus any unpaid fees described in Section 14.09
hereof which may be paid directly from the gross proceeds of each Closing and
(ii) the Company shall deliver to the Buyer the shares of Series E Preferred
Shares which the Buyer is purchasing.

2

--------------------------------------------------------------------------------

Article II. ADDITIONAL AGREEMENTS.

     Section 2.01. Transaction Documents. Collectively this Agreement, the
Certificate of Designations, the Investor Registration Rights Agreement, the
Irrevocable Transfer Agent Instructions dated the date hereof among the Company,
the Buyer, and ComputerShare Trust Company (the “Transfer Agent Instructions”)
shall be referred to as the “Transaction Documents.”

Article III.

COVENANTS.

     Section 3.01. Access and Inspection, Etc. The Company shall allow the Buyer
and its authorized representatives full access during normal business hours from
and after the date hereof and prior to the Closing Date to all of the
properties, books, contracts, commitments and records of the Company
(collectively, the “Records”) for the purpose of making such investigations as
the Buyer may reasonably request in connection with the transactions
contemplated hereby, and shall cause the Company to furnish the Buyer such
information concerning its affairs as the Buyer may reasonably request provided,
however, that the Buyer and its authorized representative shall agree to hold in
strict confidence and shall not make any disclosure or use any Record or other
information which the Company determines in good faith to be confidential, and
of which determination the Buyer or its authorized representatives are so
notified, unless (i) the release of such Records is ordered pursuant to a final,
non-appealable subpoena or order from a court or government body of competent
jurisdiction, or (ii) the information in such Records has been made generally
available to the public other than by disclosure in violation of this or any
other agreement of which the Buyer has knowledge. The Company has caused and
shall cause its personnel to assist the Buyer in making such investigation and
shall use their best efforts to cause the counsel, accountants, engineers and
other non-employee representatives of the Company to be reasonably available to
Buyer for such purposes.

     Section 3.02. Public Announcements. The parties will consult with each
other before issuing any press releases or otherwise making any public statement
with respect to this Agreement or any of the transactions contemplated hereby
and no party will issue any such press release or make any such public statement
without the prior written consent of the other parties, except as may be
required by law or by the rules and regulations of any governmental authority or
securities exchange.

     Section 3.03. Best Efforts. Subject to the terms and conditions provided in
this Agreement, each of the parties shall use its best efforts in good faith to
take or cause to be taken as promptly as practicable all reasonable actions that
are within its power to cause to be fulfilled those conditions precedent to its
obligations or the obligations of the other parties to consummate the
transactions contemplated by this Agreement and the Transaction Documents that
are dependent upon its actions.

     Section 3.04. Use of Proceeds. The Company covenants to the Buyer that the
net proceeds to be received by the Company in this transaction shall be used for
general corporate and working capital purposes.

     Section 3.05. Listings or Quotation. The Company’s Common Stock shall be
listed or quoted for trading on any of (a) the American Stock Exchange, (b) New
York Stock

3

--------------------------------------------------------------------------------

Exchange, (c) the Nasdaq National Market, (d) the Nasdaq Capital Market, or (e)
the Nasdaq OTC Bulletin Board (“OTC”) (each, a “Primary Market”) and the Company
shall promptly secure the listing or quotation of the Conversion Shares and
Warrant Shares for trading on the same Primary Market upon which the shares of
Common Stock are then listed or quoted.

     Section 3.06. Reservation of Shares. On the date hereof, the Company shall
reserve for issuance to the Buyer 15,000,000 shares for issuance upon
conversions of the Series E Preferred Shares (the “Share Reserve”). The Company
represents that it has sufficient authorized and unissued shares of Common Stock
available to create the Share Reserve after considering all other commitments
that may require the issuance of Common Stock. The Company shall take all action
reasonably necessary to at all times have authorized, and reserved for the
purpose of issuance, such number of shares of Common Stock as shall be necessary
to effect the full conversion of the Series E Preferred Shares. If at any time
the Share Reserve is insufficient to effect the full conversion of the Series E
Preferred Shares, the Company shall increase the Share Reserve accordingly. If
the Company does not have sufficient authorized and unissued shares of Common
Stock available to increase the Share Reserve, the Company shall call and hold a
special meeting of the shareholders within thirty (30) days of such occurrence,
for the sole purpose of increasing the number of shares authorized. The
Company’s management shall recommend to the shareholders to vote in favor of
increasing the number of shares of Common Stock authorized. Management shall
also vote all of its shares in favor of increasing the number of authorized
shares of Common Stock.

     Section 3.07. Further Assurances. The parties shall deliver any and all
other instruments or documents required to be delivered pursuant to, or
necessary or proper in order to give effect to, the provisions of this
Agreement, including, without limitation, to issue the Series E Preferred Shares
and to consummate the transactions contemplated by this Agreement and the
Transaction Documents.

Article IV.

NEGATIVE COVENANTS.

The following covenants shall remain in effect for so long as any Series E
Preferred Shares are outstanding: Section 4.01. Lock-up Agreement. On the date
hereof, the Company shall obtain from each officer and director of the Company a
lock-up agreement in the form attached hereto as Exhibit 4.1. Such lock-up
agreement shall limit sales of the Company’s Common Stock for so long as the
Series E Preferred Shares are outstanding.

     Section 4.02. Corporate Existence. So long as any Series E Preferred Shares
are outstanding, the Company shall not directly or indirectly consummate any
merger, reorganization, restructuring, reverse stock split consolidation, sale
of all or substantially all of the Company’s assets or any similar transaction
or related transactions (each such transaction, an “Organizational Change”)
unless, prior to the consummation an Organizational Change, the Company obtains
the written consent of the Buyer. In any such case, the Company will make
appropriate provision with respect to such holders’ rights and interests to
insure that the provisions of this Section 4.02 will thereafter be applicable to
the Series E Preferred Shares.

     Section 4.03. No Indebtedness. The Company shall not incur any indebtedness
for borrowed money or become a guarantor or otherwise contingently liable for
any

4

--------------------------------------------------------------------------------

such indebtedness except for trade payables or purchase money obligations
incurred in the ordinary course of business.

     Section 4.04. No Other Registration Statements. Except with regard to the
registration statement to be filed pursuant to the Investor Registration Rights
Agreement (the “Permitted Registration Statements”), the Company shall not file
any other registration statements on any form (including but not limited to
forms S-1, SB-2, S-3 and S-8) without the prior written consent of the Buyer.
Notwithstanding the forgoing, the Company (1) shall include the 228,714 shares
of Common Stock held by the Buyer on the Permitted Registration Statements, (2)
may include up to 1,200,000 shares on behalf of Placer Creek on the Permitted
Registration Statements, and (3) the Company may register up to 1,000,000 shares
on a form S-8 registration statement in connection with shares of Common Stock
to be issued under the Company’s 2006 Equity Incentive Plan.

     Section 4.05. The Company shall not directly or indirectly make, create,
incur, assume or permit to exist any assignment, transfer, pledge, mortgage,
security interest or other lien or encumbrance of any nature in, to or against
any part of the assets of the Company or of the Company’s capital stock.

     Section 4.06. Restriction on Issuance of the Capital Stock. So long as any
Series E Preferred Shares are outstanding, the Company shall not, except for the
issuance of up to 1,000,000 shares under the Company’s 2006 Equity Incentive
Plan, and except for exercises or conversions of currently outstanding options
and warrants disclosed in the SEC Documents or in the Disclosure Schedule
attached hereto, without the prior written consent of the Buyer, (i) issue or
sell shares of Common Stock without consideration or for a consideration per
share less than the bid price of the Common Stock determined immediately prior
to its issuance, (ii) issue any preferred stock, warrant, option, right,
contract, call, or other security or instrument

(“Convertible Security”) granting the holder thereof the right to acquire Common
Stock without consideration or for a consideration per share less than the bid
price of the Common Stock determined immediately prior to the issuance of such
Convertible Security, (iii) enter into any security instrument granting the
holder a security interest in any and all assets of the Company or any
subsidiary now existing or later created or acquired, or (iv) file any
registration statement on Form S-8

Article V. REPRESENTATIONS, COVENANTS AND WARRANTIES OF THE COMPANY.

     To induce the Buyer to enter into this Agreement and to consummate the
transactions contemplated hereby, the Company represents and warrants to and
covenants with the Buyer as follows:

     Section 5.01. Organization; Compliance. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the state of
Colorado. The Company is: (a) entitled to own or lease its properties and to
carry on its business as and in the places where such business is now conducted,
and (b) duly licensed and qualified in all jurisdictions where the character of
the property owned by it or the nature of the business transacted by it makes
such license or qualification necessary, except where the failure to do so would
not result in a material adverse effect on the Company.

5

--------------------------------------------------------------------------------

Section 5.02. Capitalization and Related Matters.

     (a) As of the date hereof, the authorized capital stock of the Company
consists of 100,000,000 shares of Common Stock and 25,000,000 shares of
Preferred Shares, par value $.01 (“Preferred Stock”), of which 33,099,941 shares
of Common Stock and zero shares of Preferred Stock are issued and outstanding.
No Common Stock (i) was issued in violation of the preemptive rights of any
shareholder, or (ii) is held as treasury stock.

     (b) Except as set forth in the Company’s the Company’s Form 10-KSB for the
fiscal year ended March 31, 2005 and Form 10-QSB for the fiscal quarter ended
December 31, 2006 (the “SEC Documents”) there are no outstanding securities
convertible into Common Stock or any other capital stock of the Company nor any
rights to subscribe for or to purchase, or any options for the purchase of, or
any agreements providing for the issuance (contingent or otherwise) of, or any
calls, commitments or claims of any character relating to, such capital stock or
securities convertible into such capital stock (collectively, “Securities
Rights”). The Company (i) is not subject to any obligation (contingent or
otherwise) to repurchase or otherwise acquire or retire any of its capital
stock; or (ii) has no liability for dividends or other distributions declared or
accrued, but unpaid, with respect to any capital stock.

     (c) The Company is not a party to any agreement, understanding or
arrangement, direct or indirect, relating to any class or series of the
Company’s capital stock, including, without limitation, any voting agreement,
restriction on resale, shareholder agreement or registration rights agreement,
other than the Permitted Registration Rights Agreements.

     (d) The SEC Documents do not include any untrue statements of material
fact, nor do they omit to state any material fact required to be stated therein
necessary to make the statements made, in light of the circumstances under which
they were made, not misleading.

Section 5.03. Subsidiaries and Investments.

     (a) The SEC Documents disclose with respect to each Subsidiary (as defined
below) (i) its name, (ii) the jurisdiction of its organization, (iii) the number
of its authorized shares or other equity interests, (iv) the number of its
outstanding shares or other equity interests of each class or series, and (v)
the name of the owner and the number and percentage of outstanding shares or
other equity interests of each class or series of such Subsidiary owned of
record and, if different, owned beneficially by the Company and any other
person. All of the outstanding capital stock and other equity interests of each
of the Subsidiaries is validly issued, fully paid and nonassessable and was
issued in compliance with all applicable federal and state securities or “blue
sky” laws and regulations. There are no securities rights relating to any shares
of capital stock, other equity interests or other securities of any of the
Subsidiaries. The Company and the Subsidiaries have good, marketable and
exclusive title to the shares or other equity interests disclosed in the SEC
Documents as being owned by each of them, free and clear of all Encumbrances.
All rights and powers to vote such shares or other equity interests are held
exclusively by the Company, directly or indirectly through one or more of the
Subsidiaries, as the case may be. Each Subsidiary is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of organization, and has the corporate power and authority to own
or lease its properties and to carry on its business as now conducted. For the
purposes hereof, a “Subsidiary” means any corporation, limited liability

6

--------------------------------------------------------------------------------

company, partnership, joint venture or other entity in which the Company owns,
directly or indirectly, more than 20% of the outstanding voting securities or
equity interests.

     (b) Except as disclosed in SEC Documents, the Company does not own, nor has
it ever owned, any equity interest in any corporation, limited liability
company, partnership, joint venture or other entity.

Section 5.04. Execution; No Inconsistent Agreements; Etc.

     (a) This Agreement is a valid and binding agreement of the Company,
enforceable in accordance with its terms, except as such enforcement may be
limited by bankruptcy or similar laws affecting the enforcement of creditors'
rights generally, and the availability of equitable remedies.

     (b) The execution and delivery of this Agreement by the Company does not,
and the consummation of the transactions contemplated hereby will not,
constitute a breach or violation of the charter or bylaws of the Company, or a
default under any of the terms, conditions or provisions of (or an act or
omission that would give rise to any right of termination, cancellation or
acceleration under) any note, bond, mortgage, lease, indenture, agreement or
obligation to which the Company is a party, pursuant to which the Company
otherwise receives benefits, or to which any of the properties of the Company is
subject.

     Section 5.05. Corporate Records. The statutory records, including the stock
register and minute books of the Company, fully reflect all issuances, transfers
and redemptions of its capital stock, correctly show and will correctly show the
total number of shares of its capital stock issued and outstanding on the date
hereof and on the Closing Date, the charter or other organizational documents
and all amendments thereto, and bylaws as amended and currently in force.

Section 5.06. Financial Statements.

     (a) The SEC Documents contain (i) the consolidated audited balance sheet of
the Company as of March 31, 2005 (the “Company Balance Sheet”), and the
consolidated audited consolidated profit and loss statement of the Company for
the fiscal year ended March 31, 2005. All the foregoing financial statements are
referred to herein collectively as the “Company Financial Statements.” (b) The
Company Financial Statements have been and will be prepared in accordance with
U.S. GAAP, applied on a consistent basis (except that the unaudited statements
do not contain all the disclosures required by GAAP), and fairly reflect and
will reflect in all material respects the financial condition of the Company as
at the dates thereof and the results of the operations of the Company for the
periods then ended.

     Section 5.07. Liabilities. The Company has no material debt, liability or
obligation of any kind, whether accrued, absolute, contingent or otherwise,
except: (a) those reflected on the Company Balance Sheet, including the notes
thereto, and (b) liabilities incurred in the ordinary course of business since
April 1, 2005, none of which have had or will have a material adverse effect on
the financial condition of the Company.

     Section 5.08. Absence of Changes. Except as described in the SEC Documents
and in the other Schedules to this Agreement, there has not been any adverse
change in the business, assets, liabilities, results of operations or financial
condition of the Company or in its

7

--------------------------------------------------------------------------------

relationships with suppliers, customers, employees, lessors or others other than
changes in the ordinary course of business, none of which, singularly or in the
aggregate, have had or will have a material adverse effect on the business,
properties or financial condition of the Company.

     Section 5.09. Title to Properties. The Company has good and marketable
title to all of its properties and assets, real and personal, including, but not
limited to, those reflected in the Company Balance Sheet (except as since sold
or otherwise disposed of in the ordinary course of business, or as expressly
provided for in this Agreement), free and clear of all Encumbrances of any kind
or character except: (a) those securing liabilities of the Company incurred in
the ordinary course (with respect to which no material default exists); (b)
liens of real estate and personal property taxes; and (c) imperfections of title
and Encumbrances, if any, which, in the aggregate (i) are not substantial in
amount; (ii) do not detract from the value of the property subject thereto or
impair the operations of the Company or; and (iii) do not have a material
adverse effect on the business, properties or assets of the Company.

     Section 5.10. Compliance With Law. The business and activities of the
Company has at all times been conducted in accordance with its articles of
incorporation and bylaws and any applicable law, regulation, ordinance, order,
License (defined below), permit, rule, injunction or other restriction or ruling
of any court or administrative or governmental agency, ministry, or body, except
where the failure to do so would not result in a material adverse effect on the
Company.

     Section 5.11. Taxes. The Company has duly filed all material federal,
state, local and foreign tax returns and reports, and all returns and reports of
all other governmental units having jurisdiction with respect to taxes imposed
on it or on its income, properties, sales, franchises, operations or employee
benefit plans or trusts, all such returns were complete and accurate when filed,
and all taxes and assessments payable by the Company have been paid to the
extent that such taxes have become due. All taxes accrued or payable by the
Company for all periods through December 1, 2004 have been accrued or paid in
full, whether or not due and payable and whether or not disputed. The Company
has withheld proper and accurate amounts from its employees for all periods in
full compliance with the tax withholding provisions of applicable foreign,
federal, state and local tax laws. There are no waivers or agreements by the
Company for the extension of time for the assessment of any taxes. The tax
returns of the Company have never been examined by any authority or other
administrative body or court of any state or country. There are not now any
examinations of the income tax returns of the Company pending, or any proposed
deficiencies or assessments against the Company of additional taxes of any kind.
The Company shall duly and timely prepare and file all material federal, state,
local and foreign tax returns and reports for 2004, and all returns and reports
of all other governmental units having jurisdiction with respect to taxes
imposed on the Company or on its income, properties, sales, franchises,
operations or employee benefit plans or trusts, and all such returns will be
complete and accurate when filed.

     Section 5.12. Real Properties. The Company does not have an interest in any
real property, except for the Leases (as defined below).

     Section 5.13. Leases of Real Property. All leases pursuant to which the
Company is lessee or lessor of any real property (the “Leases”) are listed in
the SEC Documents and are valid and enforceable in accordance with their terms.
There is not under any of such leases (a) any material default or any claimed
material default by the Company or any event of

8

--------------------------------------------------------------------------------

default or event which with notice or lapse of time, or both, would constitute a
material default by the Company and in respect to which the Company has not
taken adequate steps to prevent a default on its part from occurring, or (b) to
the knowledge of the Company, any material default by any lessee of the Company
or any event of default or event which with notice or lapse of time, or both,
would constitute a material default by any lessee. The copies of the Leases
heretofore furnished to Buyer are true, correct and complete, and such Leases
have not been modified in any respect since the date they were so furnished, and
are in full force and effect in accordance with their terms. The Company is
lawfully in possession of all real properties of which they are a lessee (the
“Leased Properties”).

     Section 5.14. Contingencies. Except as disclosed in the SEC Documents,
there are no actions, suits, claims or proceedings pending, or to the knowledge
of the Company threatened against, by or affecting, the Company in any court or
before any arbitrator or governmental agency that may have a material adverse
effect on the Company or which could materially and adversely affect the right
or ability of the Company to consummate the transactions contemplated hereby. To
the knowledge of the Company, there is no valid basis upon which any such
action, suit, claim, or proceeding may be commenced or asserted against it.
There are no unsatisfied judgments against the Company and no consent decrees or
similar agreements to which the Company is subject and which could have a
material adverse effect on the Company.

     Section 5.15. Products Liability; Warranties; Insurance. The Company will
have not loss, damage, liability, fine, penalty, cost and expense (each, a
“Liability”) that is not fully covered by insurance relating to any product
manufactured, distributed or sold by the Company prior to the Closing, whether
or not such Liability is related to products that are defective or improperly
designed or manufactured or are in breach of any express or implied product
warranty.

Section 5.16. Intellectual Property Rights.

     (a) The Company owns and possesses all right, title and interest in and to,
or has a valid license to use, all of the Proprietary Rights (as defined below)
necessary for the operation of its business as presently conducted and none of
such Proprietary Rights have been abandoned; (b) no claim by any third party
contesting the validity, enforceability, use or ownership of any such
Proprietary Rights has been made, is currently outstanding or, to the knowledge
of the Company, is threatened, and to the knowledge of the Company there is no
reasonable basis for any such claim; (c) neither the Company nor any registered
agent of any of the foregoing has received any notice of, nor is the Company
aware of any reasonable basis for an allegation of, any infringement or
misappropriation by, or conflict with, any third party with respect to such
Proprietary Rights, nor has the Company, or any registered agent of any of them
received any claim of infringement or misappropriation of or other conflict with
any Proprietary Rights of any third party; (d) the Company has not infringed,
misappropriated or otherwise violated any Proprietary Rights of any third
parties, and the Company is not aware of any infringement, misappropriation or
conflict which will occur as a result of the continued operation

9

--------------------------------------------------------------------------------

of the Company as presently operated and as contemplated to be operated or as a
result of the consummation of the transactions contemplated hereby; and (e) all
employees who have contributed to or participated in the conception and/or
development of all or any part of the Proprietary Rights which are not licensed
to the Company from a third party either (i) have been party to a
"work-for-hire" arrangement or agreement with the Company, in accordance with
applicable federal and state law, that has accorded the Company full, effective,
exclusive, and original ownership of all tangible and intangible property
thereby arising, or (ii) have executed appropriate instruments of assignment in
favor of the Company as assignee that have conveyed to the Company full,
effective and exclusive ownership of all tangible and intangible property
thereby arising.

     (f) As used herein, the term “Proprietary Rights” means all proprietary
information of the Company, as the case may be, including all patents, patent
applications, patent disclosures and inventions (whether or not patentable and
whether or not reduced to practice), all trademarks, service marks, trade dress,
trade names, corporate names, domain names, copyrights, all trade secrets,
confidential information, ideas, formulae, compositions, know-how, processes and
techniques, drawings, specifications, designs, logos, plans, improvements,
proposals, technical and computer data, documentation and software, financial,
business and marketing plans, and related information and all other proprietary,
industrial or intellectual property rights relating to the business of the
Company, including those proprietary, industrial or intellectual property rights
found at the Company’s websites listed in the SEC Documents.

     (g) The consummation of the transactions contemplated by this Agreement
will not adversely affect the right of the Company to continue to use the
Proprietary Rights. To the extent that the registration of any Proprietary Right
is required by law, such Proprietary Right has been duly and validly registered
or filed, and any fees that are necessary to maintain in force any Proprietary
Rights or registrations thereof have been paid. The SEC Documents sets forth a
list and description of the copyrights, trademarks, service marks, trade dress,
trade names and domain names used or held by the Company and, where appropriate,
the date, serial or registration number, and place of any registration thereof.

     Section 5.17. Material Contracts. The SEC Documents contain a complete list
of all contracts of the Company that involve consideration in excess of the
equivalent of One Hundred Thousand Dollars ($100,000) or have a term of one year
or more (the “Material Contracts”). Except as disclosed in the SEC Documents:
(a) the Company has performed all material obligations to be performed by them
under all such contracts, and is not in material default thereof, and (b) no
condition exists or has occurred which with the giving of notice or the lapse of
time, or both, would constitute a material default by the Company or accelerate
the maturity of, or otherwise modify, any such contract, and (c) all such
contracts are in full force and effect. No material default by any other party
to any of such contracts is known or claimed by the Company to exist.

Section 5.18. Employee Benefit Matters.

     (a) Except as disclosed in the SEC Documents, the Company does not provide,
nor is it obligated to provide, directly or indirectly, any benefits for
employees other than salaries, sales commissions and bonuses, including, but not
limited to, any pension, profit sharing, stock option, retirement, bonus,
hospitalization, insurance, severance, vacation or other

10

--------------------------------------------------------------------------------

employee benefits (including any housing or social fund contributions) under any
practice, agreement or understanding.

     (b) Each employee benefit plan maintained by or on behalf of the Company or
any other party (including any terminated pension plans) which covers or covered
any employees or former employees of the Company (collectively, the “Employee
Benefit Plan”) is listed in the SEC Documents. The Company has delivered to the
Buyer true and complete copies of all such plans and any related documents. With
respect to each such plan: (a) no litigation, administrative or other proceeding
or claim is pending, or to the knowledge of the Company, threatened or
anticipated involving such plan; (b) there are no outstanding requests for
information by participants or beneficiaries of such plan; and (c) such plan has
been administered in compliance in all material respects with all applicable
laws and regulations.

     (c) The Company has timely made payment in full of all contributions to all
of the Employee Benefit Plans which the Company was obligated to make prior to
the date hereof; and there are no contributions declared or payable by the
Company to any Employee Benefit Plan which, as of the date hereof, has not been
paid in full.

     Section 5.19. Possession of Franchises, Licences, Etc. The Company: (a)
possesses all material franchises, certificates, licenses, permits and other
authorizations (collectively, the “Licences”) from governmental authorities,
political subdivisions or regulatory authorities that are necessary for the
ownership, maintenance and operation of its business in the manner presently
conducted; (b) are not in violation of any provisions thereof; and (c) have
maintained and amended, as necessary, all Licenses and duly completed all
filings and notifications in connection therewith.

     Section 5.20. Environmental Matters. Except as disclosed in the SEC
Documents: (i) the Company is not in violation, in any material respect, of any
Environmental Law (as defined below); (ii) the Company has received all permits
and approvals with respect to emissions into the environment and the proper
collection, storage, transport, distribution or disposal of Wastes (as defined
below) and other materials required for the operation of its business at present
operating levels; and (iii) the Company is not currently liable or responsible
for any material clean up, fines, liability or expense arising under any
Environmental Law, as a result of the disposal of Wastes or other materials in
or on the property of the Company (whether owned or leased), or in or on any
other property, including property no longer owned, leased or used by the
Company. As used herein, (a) “Environmental Laws” means, collectively, the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended, the Superfund Amendments and Reauthorization Act of 1986, the Resource
Conservation and Recovery Act, the Toxic Substances Control Act, as amended, the
Clean Air Act, as amended, the Clean Water Act, as amended, any other
“Superfund” or “Superlien” law or any other federal, or applicable state or
local statute, law, ordinance, code, rule, regulation, order or decree (foreign
or domestic) regulating, relating to, or imposing liability or standards of
conduct concerning, Wastes, or the environment; and (b) “Wastes” means and
includes any hazardous, toxic or dangerous waste, liquid, substance or material
(including petroleum products and derivatives), the generation, handling,
storage, disposal, treatment or emission of which is subject to any
Environmental Law.

     Section 5.21. Agreements and Transactions with Related Parties. Except as
disclosed on the SEC Documents the Company is not, a party to any contract,
agreement, lease

11

--------------------------------------------------------------------------------

or transaction with, or any other commitment to, (a) a shareholder, (b) any
person related by blood, adoption or marriage to shareholder, (c) any director
or officer of the Company, (d) any corporation or other entity in which any of
the foregoing parties has, directly or indirectly, at least five percent (5.0%)
beneficial interest in the capital stock or other type of equity interest in
such corporation or other entity, or (e) any partnership in which any such party
is a general partner or a limited partner having a five percent (5%) or more
interest therein (any or all of the foregoing being herein referred to as a
“Related Party” and collectively as the “Related Parties”). Without limiting the
generality of the foregoing, except as set forth in the SEC Documents, (a) no
Related Party, directly or indirectly, owns or controls any assets or properties
which are or have been used in the business of the Company, and (b) no Related
Party, directly or indirectly, engages in or has any significant interest in or
connection with any business: (i) which is or which within the last two (2)
years has been a competitor, customer or supplier of, or has done business with,
the Company, or (ii) which as of the date hereof sells or distributes products
or provides services which are similar or related to the products or services of
the Company.

     Section 5.22. Business Practices. Except as disclosed in the SEC Documents,
the Company has not, at any time, directly or indirectly, made any contributions
or payment, or provided any compensation or benefit of any kind, to any
municipal, county, state, federal or foreign governmental officer or official,
or any other person charged with similar public or quasi-public duties, or any
candidate for political office. The Company’s books, accounts and records
(including, without limitation, customer files, product packaging and invoices)
accurately describe and reflect, in all material respects, the nature and amount
of the Company’s products, purchases, sales and other transactions. Without
limiting the generality of the foregoing, the Company has not engaged, directly
or indirectly, in: (a) the practice known as “double-invoicing” or the use or
issuance of pro-forma or dummy invoices; or (b) the incorrect or misleading
labeling, marketing or sale of refurbished goods as new goods.

     Section 5.23. Shareholder Matters. None of the matters set forth in this
Agreement require the approval of the Company’s shareholders.

     Section 5.24. Full Disclosure. No representation or warranty of the Company
contained in this Agreement, and none of the statements or information
concerning the Company contained in this Agreement and the Schedules, contains
or will contain any untrue statement of a material fact nor will such
representations, warranties, covenants or statements taken as a whole omit a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.

Article VI. REPRESENTATIONS AND WARRANTIES OF BUYER.

     To induce the Company to enter into this Agreement and to consummate the
transactions contemplated hereby, the Buyer represent and warrant to and
covenant with the Company as follows:

     Section 6.01. Organization. The Buyer is a limited partnership duly
organized, validly existing and in good standing under the laws of the state of
Delaware. The Buyer has all requisite power and authority to execute, deliver
and carry out the terms of this Agreement and the consummation of the
transactions contemplated herein.

Section 6.02. Execution; No Inconsistent Agreements; Etc.

12

--------------------------------------------------------------------------------

     (a) The execution and delivery of this Agreement and the performance of the
transactions contemplated hereby have been duly and validly authorized and
approved by the Buyer and this Agreement is a valid and binding agreement of the
Buyer, enforceable against the Buyer in accordance with its terms, except as
such enforcement may be limited by bankruptcy or similar laws affecting the
enforcement of creditors' rights generally, and the availability of equitable
remedies.

     (b) The execution and delivery of this Agreement by the Buyer does not, and
the consummation of the transactions contemplated hereby will not, constitute a
breach or violation of the charter or bylaws of the Buyer, or a default under
any of the terms, conditions or provisions of (or an act or omission that would
give rise to any right of termination, cancellation or acceleration under) any
material note, bond, mortgage, lease, indenture, agreement or obligation to
which the Buyer is a party, pursuant to which any of them otherwise receive
benefits, or by which any of their properties may be bound.

  Section 6.03.  Securities Laws.        
       (a)  The Buyer is purchasing the Series E  Preferred  Shares 
for investment purposes.    
                                                            

      (b)  Investment Representations. The Buyer  has been  offered 
theopportunity to ask questions of, and receive answers from the Company’s
management, and the Buyer has been given full and complete access to all
available information and data relating to the business and assets of the
Company and has obtained such additional information about the Company as the
Buyer has deemed necessary in order to evaluate the opportunities, both
financial and otherwise, with respect to the Company and, except as set forth
herein, has not relied on any representation, warranty or other statement
concerning the Company and its evaluation of the decision to consummate the
transactions contemplated herein. In its judgment, the Buyer is sufficiently
familiar with the Company to enable the Buyer to proceed with the transactions
contemplated hereby.

     (c) The Buyer is an “accredited investor” as such term is defined in Rule
501 of Regulation D promulgated under the Securities Act of 1933, as amended
(the “Securities Act”).

     (d) The Buyer is a sophisticated investor familiar with the type of risks
inherent in the acquisition of securities such as the Series E Preferred Shares.

Article VII. CONDUCT OF BUSINESS OF THE COMPANY PENDING CLOSING.

The Company covenants and agrees that between the date hereof and the Closing
Date:

     Section 7.01. Business in the Ordinary Course. Except as set forth in the
SEC Documents, the business of the Company shall be conducted only in the
ordinary course, and consistent with past practice. Without limiting the
generality of the foregoing, and except as set forth in the SEC Documents or as
otherwise approved by the Buyer: (a) Except for the transaction contemplated
hereby, the Company shall not enter into any contract, agreement or other
arrangement which would constitute a Material Contract, except for contracts to
sell or supply goods or services to customers in the ordinary

13

--------------------------------------------------------------------------------

course of business at prices and on terms substantially consistent with the
prior operating practices of the Company; (b) except for sales of personal
property in the ordinary course of its business, the Company shall not sell,
assign, transfer, mortgage, convey, encumber or otherwise dispose of, or cause
the sale, assignment, transfer, mortgage, conveyance, encumbrance or other
disposition of any of the assets or properties of the Company or any interest
therein; (c) the Company shall not acquire any material assets, except
expenditures made in the ordinary course of business as reasonably necessary to
enable the Company to conduct its normal business operations and to maintain its
normal inventory of goods and materials, at prices and on terms substantially
consistent with current market conditions and prior operating practices; (d) the
books, records and accounts of the Company shall be maintained in the usual,
regular and ordinary course of business on a basis consistent with prior
practices and in accordance with GAAP; (e) the Company shall use its best
efforts to preserve its business organization, to preserve the good will of its
suppliers, customers and others having business relations with the Company, and
to retain the services of key employees and agents of the Company; (f) except as
it may terminate in accordance with the terms of this Agreement, the Company
shall keep in full force and effect, and not cause a default of any of its
obligations under, each of their contracts and commitments; (g) the Company
shall duly comply in all material respects with all laws applicable to it and to
the conduct of its business; (h) the Company shall not create, incur or assume
any liability or indebtedness, except in the ordinary course of business
consistent with past practices; (i) other than as contemplated in this
Agreement, the Company shall not apply any of its assets to the direct or
indirect payment, discharge, satisfaction or reduction of any amount payable
directly or indirectly to or for the benefit of any shareholder or any Related
Party; and (j) the Company shall not take or omit to take any action which would
render any of the representations or warranties untrue or misleading, or which
would be a breach of any of the covenants.

     Section 7.02. No Material Changes. Except as contemplated in this
Agreement, the Company shall not materially alter its organization,
capitalization, or financial structure, practices or operations. Without
limiting the generality of the foregoing:

  (a)  no change shall be made in the articles of incorporation and bylaws 
of the Company;     
  (b)  no change shall be made in the authorized or issued capital stock of 
the Company;     
  (c)  the Company shall not issue or grant any right or option to purchase or
otherwise acquire any of its capital stock or other securities; 

 

14

--------------------------------------------------------------------------------

     (d) no dividend or other distribution or payment shall be declared or made
with respect to any of the capital stock of the Company; and (e) no change shall
be made affecting the banking arrangements of the Company.

     Section 7.03. Notification. Each party to this Agreement shall promptly
notify the other parties in writing of the occurrence, or threatened occurrence,
of any event that would constitute a breach or violation of this Agreement by
any party or that would cause any representation or warranty made by the
notifying party in this Agreement to be false or misleading in any respect. The
Company will promptly notify the Buyer of any event that could have a material
adverse effect on the business, assets, financial condition or prospects of the
Company. The Company shall have the right to update the Schedules to this
Agreement immediately prior to Closing; provided, if such update discloses any
breach of a representation, warranty, covenant or obligation of the Company, the
Buyer shall have the rights to then exercise its available rights and remedies
hereunder.

Article VIII. CONDITIONS TO OBLIGATIONS OF ALL PARTIES.

     The obligation of the Buyer and the Company to consummate the transactions
contemplated by this Agreement are subject to the satisfaction, on or before
each Closing, of each of the following conditions; any or all of which may be
waived in whole or in part by the joint agreement of the Buyer and the Company:

     Section 8.01. Absence of Actions. No action or proceeding shall have been
brought or threatened before any court or administrative agency to prevent the
consummation or to seek damages in a material amount by reason of the
transactions contemplated hereby, and no governmental authority shall have
asserted that the within transactions (or any other pending transaction
involving the Buyer or the Company when considered in light of the effect of the
within transactions) shall constitute a violation of law or give rise to
material liability on the part of the Company or the Buyer.

     Section 8.02. Consents. The parties shall have received from any suppliers,
lessors, lenders, lien holders or governmental authorities, bodies or agencies
having jurisdiction over the transactions contemplated by this Agreement, or any
part hereof, such consents, authorizations and approvals as are necessary for
the consummation hereof.

Article IX. CONDITIONS TO OBLIGATIONS OF THE BUYER.

     All obligations of the Buyer to consummate the transactions contemplated by
this Agreement are subject to the fulfillment and satisfaction of each and every
of the following conditions on or prior to the Closing, any or all of which may
be waived in whole or in part by the Buyer:

     Section 9.01. Representations and Warranties. The representations and
warranties contained in Section 5 of this Agreement and in any certificate,
instrument, schedule, agreement or other writing delivered by or on behalf of
the Company in connection with the transactions contemplated by this Agreement
shall be true, correct and complete in all material respects (except for
representations and warranties which are by their terms qualified by

15

--------------------------------------------------------------------------------

materiality, which shall be true, correct and complete in all respects) as of
the date when made and shall be deemed to be made again at and as of the Closing
Dates and shall be true, correct and complete at and as of such time in all
material respects (except for representations and warranties which are by their
terms qualified by materiality, which shall be true, correct and complete in all
respects).

     Section 9.02. Certificate of Designations. The Company shall have filed the
Certificate of Designations for the Series E Preferred Shares with the Secretary
of State of the Company’s state of incorporation and provided the Buyer a
stamped filed copy.

     Section 9.03. Compliance with Agreements and Conditions. The Company shall
have performed and complied with all material agreements and conditions required
by this Agreement to be performed or complied with by it prior to or on the
Closing Dates.

     Section 9.04. Absence of Material Adverse Changes. No material adverse
change in the business, assets, financial condition, or prospects of the Company
shall have occurred, no substantial part of the assets of the Company not
substantially covered by insurance shall have been destroyed due to fire or
other casualty, and no event shall have occurred which has had or will have a
material adverse effect on the business, assets, financial condition or
prospects of the Company.

     Section 9.05. Board Approval. The Company’s Board of Directors shall have
taken the action required by them pursuant to this Agreement, including an
amendment to the Company’s articles of incorporation to adopt the rights and
preferences of the Series E Preferred Shares, authorize issuance of the Series E
Preferred Shares and the Conversion Shares to be issued upon conversion of the
Series E Preferred Shares and the reservation of the Conversion Shares to be
issued upon conversion of the Series E Preferred Shares.

     Section 9.06. Other Agreements. The Company shall have executed and
delivered to the Buyer the Transaction Documents all in a form acceptable to the
Buyer.

     Section 9.07. Additional Conditions to the First Closing. Prior to the
First Closing, (a) the Company shall have delivered to the Buyer such other
documents and instruments as the Buyer deems reasonably necessary or desirable
to consummate the transactions contemplated hereby, (b) the Buyer shall have
received an opinion of counsel from counsel to the Company in a form
satisfactory to the Buyer, (c) the Company shall have provided to the Buyer a
certificate of good standing from the secretary of state from the state in which
the company is incorporated, (d) the Company shall have provided to the Buyer an
acknowledgement, to the satisfaction of the Buyer, from the Company’s certified
public accountants as to its ability to provide all consents required in order
to file a registration statement in connection with this transaction.

     Section 9.08. Additional Condition to the Second Closing. The Company shall
have filed the Registration Statement with the SEC in compliance with the rules
and regulations promulgated by the SEC for filing thereof, and the Company shall
have filed it 10-KSB for the year ended March 31, 2005 in compliance with the
rules and regulations promulgated by the SEC for filing thereof.

     Section 9.09. Additional Condition to the Third Closing. The Registration
Statement shall have been declared effective by the SEC.

16

--------------------------------------------------------------------------------

Article X. CONDITIONS TO OBLIGATIONS OF THE COMPANY.

     All of the obligations of the Company to consummate the transactions
contemplated by this Agreement are subject to the fulfillment and satisfaction
of each and every of the following conditions on or prior to the Closing, any or
all of which may be waived in whole or in part by the Company:

     Section 10.01. Representations and Warranties. The representations and
warranties contained in Section 7 of this Agreement and in any certificate,
instrument, schedule, agreement or other writing delivered by or on behalf of
the Buyer in connection with the transactions contemplated by this Agreement
shall be true and correct in all material respects (except for representations
and warranties which are by their terms qualified by materiality, which shall be
true, correct and complete in all respects) when made and shall be deemed to be
made again at and as of the Closing Date and shall be true at and as of such
time in all material respects (except for representations and warranties which
are by their terms qualified by materiality, which shall be true, correct and
complete in all respects).

     Section 10.02. Compliance with Agreements and Conditions. The Buyer shall
have performed and complied with all material agreements and conditions required
by this Agreement to be performed or complied with by the Buyer prior to or on
the Closing Date.

Article XI. EVENTS OF DEAULT.

     Section 11.01. An “Event of Default”, wherever used herein, shall have the
mean ascribed to it in the Certificate of Designations.

     Section 11.02. During the time that any Series E Preferred Shares are
outstanding, if any Event of Default has occurred, all of the outstanding
principal and dividends under the Series E Preferred Shares shall be immediately
due and payable notwithstanding any limitations contained in the Certificate of
Designations or the Transaction Documents. Upon an event of default the Holders
shall have the right (but not the obligation) to convert the entire amount of
the Series E Preferred Shares outstanding as provided for in the Certificate of
Designations. Upon an Event of Default, notwithstanding any other provision
contained herein, in the Certificate of Designations or any Transaction
Document, the Holder shall have no obligation to comply with or adhere to any
limitations, if any, on the conversion or sale of the Series E Preferred Stock.

Article XII. INDEMNITY.

     Section 12.01. Indemnification by the Company. The Company (hereinafter
collectively called the “Company Indemnitor”) shall defend, indemnify and hold
harmless the Buyer, their respective general partners, direct and indirect
parent corporations, subsidiaries and affiliates, their officers, members,
directors, employees, attorneys and agents (hereinafter collectively called the
“Buyer Indemnitees”) against and in respect of any and all loss, damage,
liability, fine, penalty, cost and expense, including reasonable attorneys' fees
and amounts paid in settlement (collectively, the “Buyer Losses”), suffered or
incurred by any Buyer Indemnitee by reason of, or arising out of:

17

--------------------------------------------------------------------------------

     (a) any misrepresentation, breach of warranty or breach or nonfulfillment
of any covenant, obligation or agreement of the Company contained in this
Agreement or in any certificate, schedule, instrument or document delivered to
the Buyer by or on behalf of the Company pursuant to the provisions of this
Agreement (without regard to materiality thresholds contained therein); and (b)
any liabilities of the Company of any nature whatsoever (including tax
liability, penalties and interest), whether accrued, absolute, contingent or
otherwise, (i) existing as of the date of the Company Balance Sheet, and
required to be shown therein in accordance with GAAP, to the extent not
reflected or reserved against in full in the Company Balance Sheet; or (ii)
arising or occurring between April 1, 2005 and the date of this Agreement,
except for liabilities arising in the ordinary course of business, none of which
shall have a material adverse effect on the Company.

     Section 12.02. Indemnification by the Buyer. The Buyer (hereinafter called
the “Buyer Indemnitors”) shall defend, indemnify and hold harmless the Company,
its direct and indirect parent corporations, subsidiaries and affiliates, their
officers, members, directors, employees, attorneys and agents (hereinafter
called “Company Indemnitee”) against and in respect of any and all loss, damage,
liability, cost and expense, including reasonable attorneys' fees and amounts
paid in settlement (collectively, “Company Losses”), suffered or incurred by
Company Indemnitee by reason of or arising out of any misrepresentation, breach
of warranty or breach or non-fulfillment of any material covenant, obligation or
agreement of the Buyer contained in this Agreement or in any other certificate,
schedule, instrument or document delivered to the Company by or on behalf of the
Buyer pursuant to the provisions of this Agreement (without regard to
materiality thresholds contained therein).

Section 12.03.

Defense of Claims.

     (a) Each party seeking indemnification hereunder (an “Indemnitee”): (i)
shall provide the other party or parties (the “Indemnitor”) written notice of
any claim or action by a third party for which an Indemnitor may be liable under
the terms of this Agreement, within ten (10) days after such claim or action
arises and is known to Indemnitee, and (ii) shall give the Indemnitor a
reasonable opportunity to participate in any proceedings and to settle or defend
any such claim or action. The expenses of all proceedings, contests or lawsuits
with respect to such claims or actions shall be borne by the Indemnitor. If the
Indemnitor wishes to assume the defense of such claim or action, the Indemnitor
shall give written notice to the Indemnitee within ten (10) days after notice
from the Indemnitee of such claim or action, and the Indemnitor shall thereafter
assume the defense of any such claim or liability, through counsel reasonably
satisfactory to the Indemnitee, provided that Indemnitee may participate in such
defense at their own expense, and the Indemnitor shall, in any event, have the
right to control the defense of the claim or action. The failure of an
Indemnitee to give any notice required by this Section shall not affect any of
such party’s rights under this Section or otherwise, except and to the extent
that such failure is actually prejudicial to the rights or obligations of the
Indemnitor.

     (b) If the Indemnitor shall not assume the defense of, or if after so
assuming it shall fail to defend, any such claim or action, the Indemnitee may
defend against any such claim or action in such manner as they may deem
appropriate and the Indemnitees may settle such claim or litigation on such
terms as they may deem appropriate but subject to the Indemnitor's approval,
such approval not to be unreasonably withheld; provided, however, that

18

--------------------------------------------------------------------------------

any such settlement shall be deemed approved by the Indemnitor if the Indemnitor
fails to object thereto, by written notice to the Indemnitee, within fifteen
(15) days after the Indemnitor's receipt of a written summary of such
settlement. The Indemnitor shall promptly reimburse the Indemnitee for the
amount of all expenses, legal and otherwise, incurred by the Indemnitee in
connection with the defense and settlement of such claim or action.

     (c) If a non-appealable judgment is rendered against any Indemnitee in any
action covered by the indemnification hereunder, or any lien attaches to any of
the assets of any of the Indemnitee, the Indemnitor shall immediately upon such
entry or attachment pay such judgment in full or discharge such lien unless, at
the expense and direction of the Indemnitor, an appeal is taken under which the
execution of the judgment or satisfaction of the lien is stayed. If and when a
final judgment is rendered in any such action, the Indemnitor shall forthwith
pay such judgment or discharge such lien before any Indemnitee is compelled to
do so.

     Section 12.04. Waiver. The failure of any Indemnitee to give any notice or
to take any action hereunder shall not be deemed a waiver of any of the rights
of such Indemnitee hereunder, except to the extent that Indemnitor is actually
prejudiced by such failure.

Article XIII. TERMINATION.

     Section 13.01. Termination. This Agreement may be terminated at any time on
or prior to the Closing: (a) By mutual consent of the Buyer and the Company; or

     (b) At the election of the Buyer if: (i) a Company has breached or failed
to perform or comply with any of its representations, warranties, covenants or
obligations under this Agreement; or (ii) any of the conditions precedent set
forth in Section 3, 4, 6, 9 or 10 are not satisfied as and when required by this
Agreement; or (iii) the First Closing has not been consummated by within five
(5) business days from the date hereof; or (c) At the election of the Company
if: (i) the Buyer has breached or failed to perform or comply with any of its
representations, warranties, covenants or obligations under this Agreement; or
(ii) any of the conditions precedent set forth in Section 7, 9, or 11 are not
satisfied as and when required by this Agreement; or (iii) the First Closing has
not been consummated by within five (5) business days from the date hereof.

     Section 13.02. Manner and Effect of Termination. Written notice of any
termination (“Termination Notice”) pursuant to this Section 13 shall be given by
the party electing termination of this Agreement (“Terminating Party”) to the
other party or parties (collectively, the “Terminated Party”), and such notice
shall state the reason for termination. The party or parties receiving
Termination Notice shall have a period of ten (10) days after receipt of
Termination Notice to cure the matters giving rise to such termination to the
reasonable satisfaction of the Terminating Party. If the matters giving rise to
termination are not cured as required hereby, this Agreement shall be terminated
effective as of the close of business on the tenth (10th) day following the
Terminated Party's receipt of Termination Notice. Upon termination of this
Agreement prior to the consummation of the Closing and in accordance with the
terms hereof, this Agreement shall become void and of no effect, and none of the
parties shall have any liability to the others, except that nothing contained
herein shall relieve any party from: (a) its obligations under Sections 3.2 and
3.3; or (b) liability for its intentional breach of any

19

--------------------------------------------------------------------------------

representation, warranty or covenant contained herein, or its intentional
failure to comply with the terms and conditions of this Agreement or to perform
its obligations hereunder.

Article XIV. MISCELLANEOUS.

Section 14.01. Notices.

     (a) All notices, requests, demands, or other communications required or
permitted hereunder shall be in writing and shall be deemed to have been duly
given upon receipt if delivered in person, or upon the expiration of two (2)
days after the date sent, if sent by federal express (or similar overnight
courier service) to the parties at the following addresses:

If to the Company, to:  Torrent Energy Corp.    #600, 666 Burrard Street   
Vancouver, British Columbia    Canada V6C 2X8    Attention:   
 
  Mark Gustafson 
(604) 639-3118 
(604) 688-1320    Telephone:    Facsimile:  With a copy to:  Clark Wilson LLP   
#800, 885 W. Georgia Street    Vancouver, British Columbia    Canada V6C 3H1   
Attention:   
 
  Bernard Pinsky 
(604) 643-3153 
(604) 687-6314    Telephone:    Facsimile:  If to the Buyer, to:  Cornell
Capital Partners, LP    101 Hudson Street, Suite 3700    Jersey City, NJ 07302 
  Attention:   
 
  Mark A. Angelo 
(201) 985-8300 
(201) 985-8744    Telephone:    Facsimile:  With copy to:  David Gonzalez, Esq. 
  101 Hudson Street, Suite 3700    Jersey City, NJ 07302    Telephone:   
  (201) 985-8300 
(201) 985-1964    Facsimile: 

Each party shall provide five (5) days’ prior written notice to the other party
of any change in address or facsimile number.

     (b) Notices may also be given in any other manner permitted by law,
effective upon actual receipt. Any party may change the address to which
notices, requests,

20

--------------------------------------------------------------------------------

demands or other communications to such party shall be delivered or mailed by
giving notice thereof to the other parties hereto in the manner provided herein.

     Section 14.02. Survival. The representations, warranties, agreements and
indemnifications of the parties contained in this Agreement or in any writing
delivered pursuant to the provisions of this Agreement shall survive any
investigation heretofore or hereafter made by the parties and the consummation
of the transactions contemplated herein and shall continue in full force and
effect after the Closing.

     Section 14.03. Counterparts; Interpretation. This Agreement may be executed
in any number of counterparts, each of which shall be deemed an original, and
all of which shall constitute one and the same instrument. This Agreement
supersedes all prior discussions and agreements between the parties with respect
to the subject matter hereof, and this Agreement contains the sole and entire
agreement among the parties with respect to the matters covered hereby. All
Schedules hereto shall be deemed a part of this Agreement. This Agreement shall
not be altered or amended except by an instrument in writing signed by or on
behalf of all of the parties hereto. No ambiguity in any provision hereof shall
be construed against a party by reason of the fact it was drafted by such party
or its counsel. For purposes of this Agreement: “herein”, “hereby”, “hereunder”,
“herewith”, “hereafter” and “hereinafter” refer to this Agreement in its
entirety, and not to any particular subsection or paragraph. References to
“including” means including without limiting the generality of any description
preceding such term. Nothing expressed or implied in this Agreement is intended,
or shall be construed, to confer upon or give any person other than the parties
hereto any rights or remedies under or by reason of this Agreement.

     Section 14.04. Governing Law. 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 exclusively in Hudson County, New Jersey, and
expressly consent to the jurisdiction and venue of the Superior Court of New
Jersey, sitting in Hudson County, New Jersey and the United States District
Court of New Jersey, sitting in Newark, New Jersey, for the adjudication of any
civil action asserted pursuant to this paragraph. Each party hereby irrevocably
waives, to the fullest extent it may effectively do so, the defense of an
inconvenient forum to the maintenance of any such action in the forum selected
hereby.

     Section 14.05. Successors and Assigns; Assignment. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective heirs, executors, legal representatives, and successors; provided,
however, that the Company may not assign this Agreement or any rights hereunder,
in whole or in part.

     Section 14.06. Partial Invalidity and Severability. All rights and
restrictions contained herein may be exercised and shall be applicable and
binding only to the extent that they do not violate any applicable laws and are
intended to be limited to the extent necessary to render this Agreement legal,
valid and enforceable. If any terms of this Agreement not essential to the
commercial purpose of this Agreement shall be held to be illegal, invalid or
unenforceable by a court of competent jurisdiction, it is the intention of the
parties that the remaining terms hereof shall constitute their agreement with
respect to the subject matter hereof and all such remaining terms shall remain
in full force and effect. To the extent legally permissible, any illegal,
invalid or unenforceable provision of this Agreement shall be replaced

21

--------------------------------------------------------------------------------

by a valid provision which will implement the commercial purpose of the illegal,
invalid or unenforceable provision.

     Section 14.07. Waiver. Any term or condition of this Agreement may be
waived at any time by the party which is entitled to the benefit thereof, but
only if such waiver is evidenced by a writing signed by such party. No failure
on the part of a party hereto to exercise, and no delay in exercising, any
right, power or remedy created hereunder, shall operate as a waiver thereof, nor
shall any single or partial exercise of any right, power or remedy by any such
party preclude any other future exercise thereof or the exercise of any other
right, power or remedy. No waiver by any party hereto to any breach of or
default in any term or condition of this Agreement shall constitute a waiver of
or assent to any succeeding breach of or default in the same or any other term
or condition hereof.

Section 14.08. Headings. The headings as to contents of particular paragraphs of
this Agreement are inserted for convenience only and shall not be construed as a
part of this Agreement or as a limitation on the scope of any terms or
provisions of this Agreement.

Section 14.09. Expenses.  

     (a)  Structuring Fees. The Company shall pay a structuring fee to Yorkville
Advisors, LLC of Ten Thousand Dollars ($10,000), which shall be paid directly
from the gross proceeds of the First Closing.

     (b) Fees and Expenses. Each of the Company and the Buyer shall pay all
costs and expenses incurred by such party in connection with the negotiation,
investigation, preparation, execution and delivery of this Agreement and all
related documents to this transaction. The Company shall pay the Buyer a fee
equal to seven and one half percent (7.5%) of the Purchase Price, which shall be
paid pro rata directly from the gross proceeds of each Closing.

     Section 14.10. Finder’s Fees. The Buyer represent to the Company that no
broker, agent, finder or other party has been retained by it in connection with
the transactions contemplated hereby and that no other fee or commission have
been agreed to by the Buyer to be paid for or on account of the transactions
contemplated hereby. The Company represents to the Buyer that no broker, agent,
finder or other party has been retained by the Company in connection with the
transactions contemplated hereby and that no other fee or commission has been
agreed by the Company to be paid for or on account of the transactions
contemplated hereby.

     Section 14.11. Acceptance by Fax. This Agreement shall be accepted,
effective and binding, for all purposes, when the parties shall have signed and
transmitted to each other, by telecopier or otherwise, copies of the signature
pages hereto.

     Section 14.12. Attorneys Fees. If any legal action or other proceeding is
brought for the enforcement of this Agreement, or because of an alleged dispute,
breach, default or misrepresentation in connection with any provision of this
Agreement, the prevailing party shall be entitled to recover reasonable
attorneys' fees, court costs and all expenses (including, without limitation,
all such fees, costs and expenses incident to appellate, bankruptcy,
post-judgment and alternative dispute resolution proceedings), incurred in that
action or proceeding, in addition to any other relief to which such party may be
entitled.

22

--------------------------------------------------------------------------------

Section 14.13. NO JURY TRIAL. THE PARTIES HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE THE RIGHT ANY OF THEM MAY HAVE TO A TRIAL BY JURY IN RESPECT
OF ANY LITIGATION BASED HEREON OR ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS AGREEMENT AND ANY DOCUMENT CONTEMPLATED TO BE EXECUTED IN CONJUNCTION
HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY. THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE PARTIES' ACCEPTANCE OF THIS AGREEMENT.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

23

--------------------------------------------------------------------------------

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

COMPANY:
TORRENT ENERGY CORPORATION

By:      Name:  Mark Gustafson  Title:     Director     

BUYER:
CORNELL CAPITAL PARTNERS, LP

By:    Yorkville Advisors, LLC  Its:    General Partner 

By:
_________________________________
Name: Mark A. Angelo
Its: President and Portfolio Manager

24

--------------------------------------------------------------------------------

EXHIBIT 4.1

LOCKUP AGREEMENT

     The undersigned hereby agrees that for so long as the Series E Preferred
Shares are outstanding (the “Lock-up Period”), he, she or it will not, directly
or indirectly, without the prior written consent of the Buyer, issue, offer,
agree or offer to sell, sell, grant an option for the purchase or sale of,
transfer, pledge, assign, hypothecate, distribute or otherwise encumber or
dispose of any securities of the Company, including common stock or options,
rights, warrants or other securities underlying, convertible into, exchangeable
or exercisable for or evidencing any right to purchase or subscribe for any
common stock (whether or not beneficially owned by the undersigned), or any
beneficial interest therein (collectively, the “Securities”) except in
accordance with the volume limitations set forth in Rule 144(e) of the General
Rules and Regulations under the Securities Act of 1933, as amended.

     In order to enable the aforesaid covenants to be enforced, the undersigned
hereby consents to the placing of legends and/or stop-transfer orders with the
transfer agent of the Company’s securities with respect to any of the Securities
registered in the name of the undersigned or beneficially owned by the
undersigned, and the undersigned hereby confirms the undersigned’s investment in
the Company.

Dated: _______________, 2006

Signature

Name:
____________________________________
Address: City, State, Zip Code:

Print Social Security Number
or Taxpayer I.D. Number

--------------------------------------------------------------------------------