Exhibit
        4.5

      


       

      SECURITY
        AGREEMENT

       

      THIS
        SECURITY AGREEMENT
        (the
“Agreement”), is
        entered into and made effective as of December 8, 2005, by and between
ELMWORTH
        ENERGY CORP., a
        corporation organized under the laws of the province of Alberta with its
        principal place of business at Suite 1110, 521-3rd
        Avenue
        SW, Calgary, Alberta, Canada T2P 3T3 (the “Company”),
        and
        Cornell Capital Partners, LP (the
        “Secured
        Party”).

       

      WHEREAS,
        the
        Company is a wholly owned subsidiary of Triangle Petroleum Corporation, a
        Nevada
        corporation (the “Parent”);

       

      WHEREAS,
        on the
        date hereof, the Parent shall issue and sell to the Secured Party, as provided
        in the Securities Purchase Agreement dated the date hereof, and the Secured
        Party shall purchase up to Fifteen Million Dollars ($15,000,000) of secured
        convertible debentures (the “Convertible
        Debentures”),
        which
        shall be convertible into shares of common stock of the Parent, par value
        $0.0001 (the “Common
        Stock”)
        (as
        converted, the “Conversion
        Shares”),
        in
        the respective amounts set forth opposite each Buyer(s) name on Schedule I
        attached to the Securities Purchase Agreement;

       

      WHEREAS,
        the
        Company shall benefit from the sale of the Convertible Debentures by the
        Parent
        to the Secured Party;

       

      WHEREAS,
        to
        induce
        the Secured Party to enter into the transaction contemplated by the Securities
        Purchase Agreement, the Convertible Debenture, the Investor Registration
        Rights
        Agreement, the Irrevocable Transfer Agent Instructions, and the Escrow Agreement
        (collectively referred to as the “Transaction
        Documents”),
        the
        Company hereby grants to the Secured Party a security interest in and to
        the
        Pledged Property (as defined below) until the satisfaction of the Obligations,
        as defined herein below. 

       

      NOW,
        THEREFORE, in
        consideration of the premises 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.

       

      Section
        1.3. Obligations
        Secured.

       

      The
        obligations secured hereby are any and all obligations of the Company or
        the
        Parent now existing or hereinafter incurred to the Secured Party, whether
        oral
        or written and whether arising before, on or after the date hereof including,
        without limitation, those obligations of the Parent to the Secured Party
        under
        the Transaction Documents, and any other amounts now or hereafter owed to
        the
        Secured Party by the Parent thereunder or hereunder (collectively, the
“Obligations”).

       

      ARTICLE
        2.

       

      PLEDGED
        PROPERTY, ADMINISTRATION OF COLLATERAL AND TERMINATION OF SECURITY
        INTEREST

       

      Section
        2.1. Pledged
        Property.

       

      (a) The
        Company hereby pledges to the Secured Party, and creates in the Secured Party
        for its benefit, a security interest for such time until the Obligations
        are
        paid in full, in and to all of the property of the Company as set forth in
        Exhibit “A”
        attached
        hereto and the products thereof and the proceeds of all such items
        (collectively, the “Pledged
        Property”):

       

      (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. Rights;
        Interests; Etc.

       

      (a) So
        long
        as no Event of Default (as hereinafter defined) shall have occurred
        and be
        continuing:

       

      (i) the
        Company shall be entitled to exercise any and all rights pertaining to the
        Pledged Property or any part thereof for any purpose not inconsistent with
        the
        terms hereof; and

       

      (ii) the
        Company shall be entitled to receive and retain any and all payments paid
        or
        made in respect of the Pledged Property.

       

      
        
           

        

        
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      (b) Upon
        the
        occurrence and during the continuance of an Event of Default:

       

      (i) All
        rights of the Company to exercise the rights which it would otherwise be
        entitled to exercise pursuant to Section 2.2(a)(i) hereof and
        to
        receive payments which it would otherwise be authorized to receive and retain
        pursuant to Section 2.2(a)(ii) hereof shall be suspended, and
        all such
        rights shall thereupon become vested in the Secured Party who shall thereupon
        have the sole right to exercise such rights and to receive and hold as Pledged
        Property such payments; provided,
        however,
        that if
        the Secured Party shall become entitled and shall elect to exercise its right
        to
        realize on the Pledged Property pursuant to Article 5 hereof, then
        all cash
        sums received by the Secured Party, or held by Company for the benefit of
        the
        Secured Party and paid over pursuant to Section 2.2(b)(ii) hereof,
        shall be applied against any outstanding Obligations; and

       

      (ii) All
        interest, dividends, income and other payments and distributions which are
        received by the Company contrary to the provisions of
        Section 2.2(b)(i) hereof shall be received in trust for the
        benefit of
        the Secured Party, shall be segregated from other property of the Company
        and
        shall be forthwith paid over to the Secured Party; or 

       

      (iii) The
        Secured Party in its sole discretion shall be authorized to sell
        any
        or all of the Pledged Property at public or private sale in order to recoup
        all
        of the outstanding principal plus accrued interest owed pursuant to the
        Convertible Debenture as described herein

       

      (c) An
        “Event
        of Default”
        shall
        be deemed to have occurred under this Agreement upon an Event of Default
        under
        the Convertible Debentures.

       

      ARTICLE
        3.

       

      ATTORNEY-IN-FACT;
        PERFORMANCE

       

      Section
        3.1. Secured
        Party Appointed Attorney-In-Fact.

       

      Upon
        the
        occurrence of an Event of Default, 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. 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. 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.

       

      
        
           

        

        
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      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 warrants and represents 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 except for the security interest created by this
        Agreement.

       

      ARTICLE
        5.

       

      DEFAULT;
        REMEDIES; SUBSTITUTE COLLATERAL

       

      Section
        5.1. Default
        and Remedies.

       

      (a) If
        an
        Event of Default occurs, then in each such case the Secured Party may declare
        the Obligations to be due and payable immediately, by a notice in writing
        to the
        Company, and upon any such declaration, the Obligations shall become immediately
        due and payable. 

       

      (b) Upon
        the
        occurrence of an Event of Default, the Secured Party shall: (i) be
        entitled
        to receive all distributions with respect to the Pledged Property, (ii) to
        cause the Pledged Property to be transferred into the name of the Secured
        Party
        or its nominee, (iii) to dispose of the Pledged Property, and (iv) to
        realize upon any and all rights in the Pledged Property then held by the
        Secured
        Party.

       

      Section
        5.2. Method
        of Realizing Upon the Pledged Property; Other Remedies.

       

      Upon
        the
        occurrence of an Event of Default, in addition to any rights and remedies
        available at law or in equity, the following provisions shall govern the
        Secured
        Party’s right to realize upon the Pledged Property:

       

      (a) Any
        item
        of the Pledged Property may be sold for cash or other value in any number
        of
        lots at brokers board, public auction or private sale and may be sold without
        demand, advertisement or notice (except that the Secured Party shall give
        the
        Company ten (10) days’ prior written notice of the time and place or
        of the time after which a private sale may be made (the “Sale
        Notice”)),
        which notice period shall in any event is hereby agreed to be commercially
        reasonable. At any sale or sales of the Pledged Property, the Company may
        bid
        for and purchase the whole or any part of the Pledged Property and, upon
        compliance with the terms of such sale, may hold, exploit and dispose of
        the
        same without further accountability to the Secured Party. The Company will
        execute and deliver, or cause to be executed and delivered, such instruments,
        documents, assignments, waivers, certificates, and affidavits and supply
        or
        cause to be supplied such further information and take such further action
        as
        the Secured Party reasonably shall require in connection with any such
        sale.

       

      
        
           

        

        
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      (b) Any
        cash
        being held by the Secured Party as Pledged Property and all cash proceeds
        received by the Secured Party in respect of, sale of, collection from, or
        other
        realization upon all or any part of the Pledged Property shall be applied
        as
        follows:

       

      (i) to
        the
        payment of all amounts due the Secured Party for the expenses reimbursable
        to it
        hereunder or owed to it pursuant to Section 8.3 hereof;

       

      (ii) to
        the
        payment of the Obligations then due and unpaid.

       

      (iii) the
        balance, if any, to the person or persons entitled thereto, including, without
        limitation, the Company.

       

      (c) In
        addition to all of the rights and remedies which the Secured Party may have
        pursuant to this Agreement, the Secured Party shall have all of the rights
        and
        remedies provided by law, including, without limitation, those under the
        Uniform
        Commercial Code.

       

      (i) If
        the
        Company fails to pay such amounts due upon the occurrence of an Event of
        Default
        which is continuing, then the Secured Party may institute a judicial proceeding
        for the collection of the sums so due and unpaid, may prosecute such proceeding
        to judgment or final decree and may enforce the same against the Company
        and
        collect the monies adjudged or decreed to be payable in the manner provided
        by
        law out of the property of Company, wherever situated. The Secured Party
        may
        proceed against the Company without proceeding first against any other party,
        including, without limitation, the Parent. 

       

      (ii) The
        Company agrees that it shall be liable for any reasonable fees, expenses
        and
        costs incurred by the Secured Party in connection with enforcement, collection
        and preservation of the Transaction Documents, including, without limitation,
        reasonable legal fees and expenses, and such amounts shall be deemed included
        as
        Obligations secured hereby and payable as set forth in Section 8.3
        hereof.

       

      Section
        5.3. Proofs
        of Claim.

       

      In
        case
        of the pendency of any receivership, insolvency, liquidation, bankruptcy,
        reorganization, arrangement, adjustment, composition or other judicial
        proceeding relating to the Company or the property of the Company or of such
        other obligor or its creditors, the Secured Party (irrespective of whether
        the
        Obligations shall then be due and payable as therein expressed or by declaration
        or otherwise and irrespective of whether the Secured Party shall have made
        any
        demand on the Company for the payment of the Obligations), subject to the
        rights
        of Previous Security Holders, shall be entitled and empowered, by intervention
        in such proceeding or otherwise:

       

      
        
           

        

        
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      (i) to
        file
        and prove a claim for the whole amount of the Obligations and to file such
        other
        papers or documents as may be necessary or advisable in order to have the
        claims
        of the Secured Party (including any claim for the reasonable legal fees and
        expenses and other expenses paid or incurred by the Secured Party permitted
        hereunder and of the Secured Party allowed in such judicial proceeding),
        and

       

      (ii) to
        collect and receive any monies or other property payable or deliverable on
        any
        such claims and to distribute the same; and any custodian, receiver, assignee,
        trustee, liquidator, sequestrator or other similar official in any such judicial
        proceeding is hereby authorized by the Secured Party to make such payments
        to
        the Secured Party and, in the event that the Secured Party shall consent
        to the
        making of such payments directed to the Secured Party, to pay to the Secured
        Party any amounts for expenses due it hereunder.

       

      Section
        5.4. 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, 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 to make payment as and when due
        of all or any part of the Obligations; or (c) the Pledged
        Property.

       

      
        
           

        

        
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      Section
        6.2. Financial
        Statements and Reports.

       

      The
        Company shall provide the Security Party with such financial data as the
        Secured
        Party may reasonably request, within a reasonable time after any such request,
        including, without limitation the following financial data:

       

      (a) The
        balance sheet of the Company as of the close of each fiscal year, the statement
        of earnings and retained earnings of the Company as of the close of such
        fiscal
        year, and statement of cash flows for the Company for such fiscal year, all
        in
        reasonable detail, prepared in accordance with generally accepted accounting
        principles consistently applied, certified by the chief executive and chief
        financial officers of the Company as being true and correct and accompanied
        by a
        certificate of the chief executive and chief financial officers of the Company,
        stating that the Company has kept, observed, performed and fulfilled each
        covenant, term and condition of this Agreement and the other Loan Instruments
        during such fiscal year and that no Event of Default hereunder has occurred
        and
        is continuing, or if an Event of Default has occurred and is continuing,
        specifying the nature of same, the period of existence of same and the action
        the Company proposes to take in connection therewith;

       

      (b) A
        balance
        sheet of the Company as of the close of each month, and statement of earnings
        and retained earnings of the Company as of the close of such month, all in
        reasonable detail, and prepared substantially in accordance with generally
        accepted accounting principles consistently applied, certified by the chief
        executive and chief financial officers of the Company as being true and correct;
        and

       

      (c) Copies
        of
        all accountants' reports and accompanying financial reports submitted to
        the
        Company by independent accountants in connection with each annual examination
        of
        the Company.

       

      Section
        6.3. Accounts
        and Reports.

       

      The
        Company shall maintain a standard system of accounting in accordance with
        generally accepted accounting principles consistently applied 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 $50,000 (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 $50,000,
        including any received from any person acting on behalf of the Secured Party
        or
        beneficiary thereof; 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 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.

       

      
        
           

        

        
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      Section
        6.4. Maintenance
        of Books and Records; Inspection.

       

      The
        Company shall maintain its books, accounts and records in accordance with
        generally accepted accounting principles consistently applied, and permit
        the
        Secured Party, its officers and employees and any professionals designated
        by
        the Secured Party in writing, at any time 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.

       

      Section
        6.5. Maintenance
        and Insurance.

       

      (a) The
        Company shall maintain or cause to be maintained, at its own expense, all
        of its
        assets and properties in good working order and condition, subject to ordinary
        wear and tear, 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, which assets and properties are of
        a
        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 the Loan Instruments or applicable law and
        (iv) as may be reasonably requested by Secured Party, all with adequate,
        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.

       

      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 could have a Material
        Adverse Effect, the Company shall defend the Secured Party’s right, title and
        interest in and to each and every part of the Pledged Property, each against
        all
        manner of claims and demands on a timely basis to the full extent permitted
        by
        applicable law.

       

      
        
           

        

        
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      Section
        6.8. Payment
        of Debts, Taxes, Etc.

       

      The
        Company shall pay, or cause to be paid, all of its indebtedness and other
        liabilities and perform, or cause to be performed, all of its obligations
        in
        accordance with the respective terms thereof, and pay and discharge, or cause
        to
        be paid or discharged, all taxes, assessments and other governmental charges
        and
        levies imposed upon it, upon any of its assets and properties on or before
        the
        last day on which the same may be paid without penalty, as well as pay all
        other
        lawful claims (whether for services, labor, materials, supplies or
        otherwise) as and when due.

       

      Section
        6.9. Taxes
        and Assessments; Tax Indemnity.

       

      The
        Company shall (a) file all tax returns and appropriate schedules thereto
        that are required to be filed under applicable law, prior to the date of
        delinquency, (b) pay and discharge all 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 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. 

       

      Section
        6.10. 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. Without limiting
        the
        foregoing, the Company shall pay all of its indebtedness promptly in accordance
        with the terms thereof.

       

      Section
        6.11. Notice
        of Default.
        

       

      The
        Company shall give written notice to the Secured Party of the occurrence
        of any
        default or Event of Default under this Agreement, the Transaction Documents
        or
        any other Loan Instrument or any other agreement of Company for the payment
        of
        money, promptly upon the occurrence thereof.

       

      Section
        6.12. 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
        $50,000, 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.

       

      
        
           

        

        
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      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.

       

      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 Pledged
        Property or of the Company’s capital stock, or offer or agree to do so, or own
        or acquire or agree to acquire any asset or property of any character subject
        to
        any of the foregoing encumbrances (including any conditional sale contract
        or
        other title retention agreement), or assign, pledge or in any way transfer
        or
        encumber its right to receive any income or other distribution or proceeds
        from
        any part of the Pledged Property or the Company’s capital stock; or enter into
        any sale-leaseback financing respecting any part of the Pledged Property
        as
        lessee, or cause or assist the inception or continuation of any of the
        foregoing.

       

      Section
        7.2. Articles,
        By-Laws, Mergers, Consolidations, Acquisitions and Sales.

       

      Without
        the prior express written consent of the Secured Party, which consent shall
        not
        be unreasonably withheld, the Company shall not: (a) Amend its Articles
        of
        Incorporation or By-Laws; (b) be a party to any merger, consolidation or
        corporate reorganization, (c) purchase or otherwise acquire all or
        substantially all of the assets or stock of, or any partnership or joint
        venture
        interest in, any other person, firm or entity, (d) sell, transfer,
        convey,
        grant a security interest in or lease all or any substantial part of its
        assets,
        nor (e) create any subsidiaries nor convey any of its assets to any
        subsidiary in excess of $200,000 in the aggregate.

       

      Section
        7.3. Management,
        Ownership.

       

      The
        Company shall not materially change its ownership, executive staff or management
        without the prior written consent of the Secured Party. The ownership, executive
        staff and management of the Company are material factors in the Secured Party's
        willingness to institute and maintain a lending relationship with the
        Company.

       

      Section
        7.4. Dividends,
        Etc.

       

      Except
        for dividends payable to the Parent, the Company shall not declare or pay
        any
        dividend of any kind, in cash or in property, on any class of its capital
        stock,
        nor purchase, redeem, retire or otherwise acquire for value any shares of
        such
        stock, nor make any distribution of any kind in respect thereof, nor make
        any
        return of capital to shareholders, nor make any payments in respect of any
        pension, profit sharing, retirement, stock option, stock bonus, incentive
        compensation or similar plan (except as required or permitted hereunder),
        without the prior written consent of the Secured Party, which consent shall
        not
        be unreasonably withheld.

       

      
        
           

        

        
          10

          
            

          

        

        
           

        

      

       

      Section
        7.5. Conduct
        of Business.

       

      The
        Company will continue to engage, in an efficient and economical manner, in
        a
        business of the same general type as conducted by it on the date of this
        Agreement.

       

      Section
        7.6. Places
        of Business.

       

      The
        location of the Company’s chief place of business is Alberta, Canada. The
        Company shall not change the location of its chief place of business, chief
        executive office or any place of business disclosed to the Secured Party
        or move
        any of the Pledged Property from its current location without thirty (30)
        days
        prior written notice to the Secured Party in each instance. 

       

      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, 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

              
	 	 
	
                With
                  copy to:

              	
                David
                  Gonzalez, Esq.

              
	 	
                101
                  Hudson Street, Suite 3700

              
	 	
                Jersey
                  City, NJ 07302

              
	 	
                Telephone:      
                  (201)
                  985-8300

              
	 	
                Facsimile:         
                  (201)
                  985-8266

              


         

        
          
             

          

          
            11

            
              

            

          

          
             

          

        

         

        
          	 	 
	
                  And
                    if to the Company:

                	
                  Elmworth
                    Energy Corp.

                
	 	
                  Suite
                    1110, 521-3rd
                    Avenue, SW

                
	 	
                  Calgary,
                    Alberta, Canada T2P 3T3

                
	 	
                  Attention:        
                    Mark Gustafson

                
	 	
                  Telephone:       
                    (403) 262-4471

                
	 	
                  Facsimile:          
                    (403)
                    262-4472

                
	 	 
	
                  With
                    a copy to:

                	
                  Sichenzia
                    Ross Friedman Ference LLP

                
	 	
                  1065
                    Avenue of the Americas

                
	 	
                  New
                    York, NY 10018

                
	 	
                  Attention:        Thomas
                    A. Rose, Esq.

                
	 	
                  Telephone:       (212)
                    930-9700

                
	 	
                  Facsimile:          (212)
                    930-9725

                


        

      

      


      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 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.

       

      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 waiver, 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.

       

      
        
           

        

        
          12

          
            

          

        

        
           

        

      

       

      Section
        8.5. Continuing
        Security Interest.

       

      This
        Agreement shall create a continuing security interest in the Pledged Property
        and shall: (i) remain in full force and effect until payment in full
        of the
        Obligations; and (ii) be binding upon the Company and its successors
        and
        heirs and (iii) inure to the benefit of the Secured Party and its
        successors and assigns. Upon the payment or satisfaction in full of the
        Obligations, 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.

       

      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 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.

       

      


      


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          13

          
            

          

        

        
           

        

      

      


      


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

       

      
        	 	COMPANY:
	 	Elmworth
                Energy Corp.
	 	 	 
	 	By:	
                /s/
                  MARK GUSTAFSON

              
	 	 	
                
                  
                    

                  

                

                Name: Mark
                  Gustafson 

              
	 	 	
                
                  Title: Chief
                    Executive Officer

                

              
	 	 	
                 

              
	 	 	 
	 	 	 
	 	SECURED
                PARTY:
	 	CORNELL
                CAPITAL PARTNERS, LP
	 	 	 
	 	By: 	
                Yorkville
                  Advisors, LLC

              
	 	Its:  	
                General
                  Partner

              
	 	 	 
	 	By:  	
                /s/
                  MARK ANGELO

              
	 	 	
                
                  
Name: Mark
                  Angelo

              
	 	 	
                Title: Portfolio
                  Manager

              


      

      


      


      


      
        
           

        

        
          14

          
            

          

        

        
           

        

      

      


      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, all of which the Company represents and warrants
        will be bona fide and existing obligations of its respective customers, arising
        out of the sale of goods by the Company in the ordinary course of
        business;

       

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

       

      
        
           

        

        
          A-1