Exhibit
        4.1

      


      SECURITIES
        PURCHASE AGREEMENT

      


      THIS SECURITIES
        PURCHASE AGREEMENT
        (this
“Agreement”),
        dated
        as of December 8, 2005, by and among TRIANGLE
        PETROLEUM CORPORATION,
        a Nevada
        corporation (the “Company”),
        and
        the Buyers listed on Schedule I attached hereto (individually, a
“Buyer”
        or
        collectively “Buyers”).

       

      WITNESSETH

      


      WHEREAS,
        the
        Company and the Buyer(s) are executing and delivering this Agreement in reliance
        upon an exemption from securities registration pursuant to Section 4(2) and/or
        Rule 506 of Regulation D (“Regulation
        D”)
        as
        promulgated by the U.S. Securities and Exchange Commission (the “SEC”)
        under
        the Securities Act of 1933, as amended (the “Securities
        Act”);

       

      WHEREAS,
        the
        parties desire that, upon the terms and subject to the conditions contained
        herein, the Company shall issue and sell to the Buyer(s), as provided herein,
        and the Buyer(s) shall purchase up to Fifteen Million Dollars ($15,000,000)
        of
        secured convertible debentures (the “Convertible
        Debentures”),
        which
        shall be convertible into shares of the Company’s common stock, par value
        $0.00001 (the “Common
        Stock”)
        (as
        converted, the “Conversion
        Shares”)
        of
        which Five Million Dollars ($5,000,000) shall be funded within two (2) business
        day following the date hereof (the “First
        Closing”),
        Five
        Million Dollars ($5,000,000) shall be funded two (2) business days prior
        to the
        date the registration statement (the “Registration
        Statement”)
        is
        filed, pursuant to the Investor Registration Rights Agreement dated the date
        hereof, with the United States Securities and Exchange Commission (the
“SEC”)
        (the
“Second
        Closing”),
        and
        Five Million Dollars ($5,000,000) shall be funded within five (5) business
        days
        after the date the Registration Statement is declared effective by the SEC
        (the
“Third
        Closing”)
        (individually referred to as a “Closing”
        collectively referred to as the “Closings”),
        for a
        total purchase price of up to Fifteen Million Dollars ($15,000,000), (the
        “Purchase
        Price”)
        in the
        respective amounts set forth opposite each Buyer(s) name on Schedule I (the
        “Subscription
        Amount”);
        and

       

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

       

      WHEREAS,
        the
        aggregate proceeds of the sale of the Convertible Debentures contemplated
        hereby
        shall be held in escrow pursuant to the terms of an escrow agreement (the
        “Escrow
        Agreement”)
        between the Company, the Buyers, and David Gonzalez, Esq. (the “Escrow
        Agent”).

       

      
        
           

        

        
           

          
            

          

        

        
           

        

         

      

      WHEREAS,
        contemporaneously with the execution and delivery of this Agreement, the
        parties
        hereto and the Company’s subsidiaries are executing and delivering security
        agreements (the “Security
        Agreement”)
        pursuant to which the Company and its subsidiaries have agreed to provide
        the
        Buyer a security interest in Pledged Collateral (as this term is defined
        in the
        Security Agreement) to secure the Company’s obligations under this Agreement,
        the Transaction Documents, or any other obligations of the Company to the
        Buyer;
        and

       

      WHEREAS,
        contemporaneously with the execution and delivery of this Agreement, the
        parties
        hereto are executing and delivering Irrevocable Transfer Agent Instructions
        (the
“Irrevocable
        Transfer Agent Instructions”)

       

      NOW,
        THEREFORE,
        in
        consideration of the mutual covenants and other agreements contained in this
        Agreement the Company and the Buyer(s) hereby agree as follows:

       

      1. PURCHASE
        AND SALE OF CONVERTIBLE DEBENTURES.

       

      (a) Purchase
        of Convertible Debentures.
        Subject
        to the satisfaction (or waiver) of the terms and conditions of this Agreement,
        each Buyer agrees, severally and not jointly, to purchase at each Closing
        and
        the Company agrees to sell and issue to each Buyer, severally and not jointly,
        at each Closing, Convertible Debentures in amounts corresponding with the
        Subscription Amount set forth opposite each Buyer’s name on Schedule I hereto.
        Upon execution hereof by a Buyer, the Buyer shall wire transfer the Subscription
        Amount set forth opposite his name on Schedule I in same-day funds or a check
        payable to “David Gonzalez, Esq., as Escrow Agent for Triangle Petroleum
        Corporation/Cornell Capital Partners, LP”, which Subscription Amount shall be
        held in escrow pursuant to the terms of the Escrow Agreement (as hereinafter
        defined) and disbursed in accordance therewith. Notwithstanding the foregoing,
        a
        Buyer may withdraw his Subscription Amount and terminate this Agreement as
        to
        such Buyer at any time after the execution hereof and prior to the First
        Closing
        Date (as hereinafter defined).

       

      (b) Closing
        Date.
        The
        First Closing of the purchase and sale of the Convertible Debentures shall
        take
        place at 10:00 a.m. Eastern Standard Time on the second (2nd) business day
        following the date hereof, subject to notification of satisfaction of the
        conditions to the First Closing set forth herein and in Sections 6 and 7
        below
        (or such other date as is mutually agreed to by the Company and the Buyer(s))
        (the “First
        Closing Date”),
        the
        Second Closing of the purchase and sale of the Convertible Debentures shall
        take
        place at 10:00 a.m. Eastern Standard Time two (2) business days prior to
        the
        date the Registration Statement is filed with the SEC, subject to notification
        of satisfaction of the conditions to the Second Closing set forth herein
        and in
        Sections 6 and 7 below (or such other date as is mutually agreed to by the
        Company and the Buyer(s)) (the “Second
        Closing Date”),
        and
        the Third Closing of the purchase and sale of the Convertible Debentures
        shall
        take place at 10:00 a.m. Eastern Standard Time on the fifth (5) business
        day
        after the date the Registration Statement is declared effective by the SEC,
        subject to notification of satisfaction of the conditions to the Third Closing
        set forth herein and in Sections 6 and 7 below (or such other date as is
        mutually agreed to by the Company and the Buyer(s)) (the “Third
        Closing Date”)
        (collectively referred to a the “Closing
        Dates”).
        The
        Closing shall occur on the respective Closing Dates at the offices of Yorkville
        Advisors, LLC, 3700 Hudson Street, Suite 3700, Jersey City, New Jersey 07302
        (or
        such other place as is mutually agreed to by the Company and the Buyer(s)).
        

       

      (c) Escrow
        Arrangements; Form of Payment.
        Upon
        execution hereof by Buyer(s) and pending the Closings, the aggregate proceeds
        of
        the sale of the Convertible Debentures to Buyer(s) pursuant hereto shall
        be
        deposited in a non-interest bearing escrow account with the Escrow Agent,
        pursuant to the terms the Escrow Agreement. Subject to the satisfaction of
        the
        terms and conditions of this Agreement, on the Closing Dates, (i) the Escrow
        Agent shall deliver to the Company in accordance with the terms of the Escrow
        Agreement such aggregate proceeds for the Convertible Debentures to be issued
        and sold to such Buyer(s), minus the fees to be paid directly from the proceeds
        the Closings as set forth herein, and (ii) the Company shall deliver
        to
        each Buyer, Convertible Debentures which such Buyer(s) is purchasing in amounts
        indicated opposite such Buyer’s name on Schedule I, duly executed on behalf of
        the Company.

       

      
        
           

        

        
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      2. BUYER’S
        REPRESENTATIONS AND WARRANTIES.

       

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

       

      (a) Investment
        Purpose.
        Each
        Buyer is acquiring the Convertible Debentures and, upon conversion of
        Convertible Debentures, the Buyer will acquire the Conversion Shares then
        issuable, for its own account for investment only and not with a view towards,
        or for resale in connection with, the public sale or distribution thereof,
        except pursuant to sales registered or exempted under the Securities Act;
        provided, however, that by making the representations herein, such Buyer
        reserves the right to dispose of the Conversion Shares at any time in accordance
        with or pursuant to an effective registration statement covering such Conversion
        Shares or an available exemption under the Securities Act.

       

      (b) Accredited
        Investor Status.
        Each
        Buyer is an “Accredited
        Investor”
        as that
        term is defined in Rule 501(a)(3) of Regulation D.

       

      (c) Reliance
        on Exemptions.
        Each
        Buyer understands that the Convertible Debentures are being offered and sold
        to
        it in reliance on specific exemptions from the registration requirements
        of
        United States federal and state securities laws and that the Company is relying
        in part upon the truth and accuracy of, and such Buyer’s compliance with, the
        representations, warranties, agreements, acknowledgments and understandings
        of
        such Buyer set forth herein in order to determine the availability of such
        exemptions and the eligibility of such Buyer to acquire such
        securities.

       

      (d) Information.
        Each
        Buyer and its advisors (and his or, its counsel), if any, have been furnished
        with all materials relating to the business, finances and operations of the
        Company and information he deemed material to making an informed investment
        decision regarding his purchase of the Convertible Debentures and the Conversion
        Shares, which have been requested by such Buyer. Each Buyer and its advisors,
        if
        any, have been afforded the opportunity to ask questions of the Company and
        its
        management. Neither such inquiries nor any other due diligence investigations
        conducted by such Buyer or its advisors, if any, or its representatives shall
        modify, amend or affect such Buyer’s right to rely on the Company’s
        representations and warranties contained in Section 3 below. Each Buyer
        understands that its investment in the Convertible Debentures and the Conversion
        Shares involves a high degree of risk. Each Buyer is in a position regarding
        the
        Company, which, based upon employment, family relationship or economic
        bargaining power, enabled and enables such Buyer to obtain information from
        the
        Company in order to evaluate the merits and risks of this investment. Each
        Buyer
        has sought such accounting, legal and tax advice, as it has considered necessary
        to make an informed investment decision with respect to its acquisition of
        the
        Convertible Debentures and the Conversion Shares.

       

      
        
           

        

        
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      (e) No
        Governmental Review.
        Each
        Buyer understands that no United States federal or state agency or any other
        government or governmental agency has passed on or made any recommendation
        or
        endorsement of the Convertible Debentures or the Conversion Shares, or the
        fairness or suitability of the investment in the Convertible Debentures or
        the
        Conversion Shares, nor have such authorities passed upon or endorsed the
        merits
        of the offering of the Convertible Debentures or the Conversion
        Shares.

       

      (f) Transfer
        or Resale.
        Each
        Buyer understands that except as provided in the Investor Registration Rights
        Agreement: (i) the Convertible Debentures have not been and are not being
        registered under the Securities Act or any state securities laws, and may
        not be
        offered for sale, sold, assigned or transferred unless (A) subsequently
        registered thereunder, or (B) such Buyer shall have delivered to the Company
        an
        opinion of counsel, in a generally acceptable form, to the effect that such
        securities to be sold, assigned or transferred may be sold, assigned or
        transferred pursuant to an exemption from such registration requirements;
        (ii)
        any sale of such securities made in reliance on Rule 144 under the Securities
        Act (or a successor rule thereto) (“Rule 144”)
        may be
        made only in accordance with the terms of Rule 144 and further, if Rule 144
        is
        not applicable, any resale of such securities under circumstances in which
        the
        seller (or the person through whom the sale is made) may be deemed
        to be an
        underwriter (as that term is defined in the Securities Act) may require
        compliance with some other exemption under the Securities Act or the rules
        and
        regulations of the SEC thereunder; and (iii) neither the Company nor any
        other
        person is under any obligation to register such securities under the Securities
        Act or any state securities laws or to comply with the terms and conditions
        of
        any exemption thereunder. The Company reserves the right to place stop transfer
        instructions against the shares and certificates for the Conversion
        Shares.

       

      (g) Legends.
        Each
        Buyer understands that the certificates or other instruments representing
        the
        Convertible Debentures and or the Conversion Shares shall bear a restrictive
        legend in substantially the following form (and a stop -transfer order may
        be
        placed against transfer of such stock certificates):

       

      THE
        SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
        THE
        SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS.
        THE
        SECURITIES HAVE BEEN ACQUIRED SOLELY FOR INVESTMENT PURPOSES AND NOT WITH
        A VIEW
        TOWARD RESALE AND MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED
        IN
        THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER
        THE
        SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS,
        OR AN
        OPINION OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS
        NOT
        REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS. 

       

      
        
           

        

        
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      The
        legend set forth above shall be removed and the Company within two (2) business
        days shall issue a certificate without such legend to the holder of the
        Conversion Shares upon which it is stamped, if, unless otherwise required
        by
        state securities laws, (i) in connection with a sale transaction, provided
        the
        Conversion Shares are registered under the Securities Act or (ii) in connection
        with a sale transaction, after such holder provides the Company with an opinion
        of counsel, which opinion shall be in form, substance and scope customary
        for
        opinions of counsel in comparable transactions, to the effect that a public
        sale, assignment or transfer of the Conversion Shares may be made without
        registration under the Securities Act. 

       

      (h) Authorization,
        Enforcement.
        This
        Agreement has been duly and validly authorized, executed and delivered on
        behalf
        of such Buyer and is a valid and binding agreement of such Buyer enforceable
        in
        accordance with its terms, except as such enforceability may be limited by
        general principles of equity or applicable bankruptcy, insolvency,
        reorganization, moratorium, liquidation and other similar laws relating to,
        or
        affecting generally, the enforcement of applicable creditors’ rights and
        remedies.

       

      (i) Receipt
        of Documents.
        Each
        Buyer and his or its counsel has received and read in their entirety: (i)
        this
        Agreement and each representation, warranty and covenant set forth herein,
        and
        the Transaction Documents (as defined herein); (ii) all due diligence and
        other
        information necessary to verify the accuracy and completeness of such
        representations, warranties and covenants; (iii) the Company’s Form SB-2 filed
        on October 7, 2005; (iv) the Company’s Form 10-QSB for the fiscal quarter ended
        July 31, 2005 and (v) answers to all questions each Buyer submitted to the
        Company regarding an investment in the Company; and each Buyer has relied
        on the
        information contained therein and has not been furnished any other documents,
        literature, memorandum or prospectus.

       

      (j) Due
        Formation of Corporate and Other Buyers.
        If the
        Buyer(s) is a corporation, trust, partnership or other entity that is not
        an
        individual person, it has been formed and validly exists and has not been
        organized for the specific purpose of purchasing the Convertible Debentures
        and
        is not prohibited from doing so.

       

      (k) No
        Legal Advice From the Company.
        Each
        Buyer acknowledges, that it had the opportunity to review this Agreement
        and the
        transactions contemplated by this Agreement with his or its own legal counsel
        and investment and tax advisors. Each Buyer is relying solely on such counsel
        and advisors and not on any statements or representations of the Company
        or any
        of its representatives or agents for legal, tax or investment advice with
        respect to this investment, the transactions contemplated by this Agreement
        or
        the securities laws of any jurisdiction. 

       

      (l) Residency. Each
        Buyer is a resident of the jurisdiction set forth immediately below such
        Buyer’s
        name on Schedule I.

       

      
        
           

        

        
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      3. REPRESENTATIONS
        AND WARRANTIES OF THE COMPANY.

       

      The
        Company represents and warrants as of the date hereof to each of the Buyers
        that, except as set forth in the SEC Documents (as defined herein) or in
        the
        Disclosure Schedule attached hereto (the “Disclosure
        Schedule”):

       

      (a) Organization
        and Qualification.
        The
        Company and its subsidiaries are corporations duly organized and validly
        existing in good standing under the laws of the jurisdiction in which they
        are
        incorporated, and have the requisite corporate power to own their properties
        and
        to carry on their business as now being conducted. Each of the Company and
        its
        subsidiaries is duly qualified as a foreign corporation to do business and
        is in
        good standing in every jurisdiction in which the nature of the business
        conducted by it makes such qualification necessary, except to the extent
        that
        the failure to be so qualified or be in good standing would not have a material
        adverse effect on the Company and its subsidiaries taken as a
        whole.

       

      (b) Authorization,
        Enforcement, Compliance with Other Instruments.
        (i) The Company has the requisite corporate power and authority to
        enter
        into and perform this Agreement, the Security Agreement, the Investor
        Registration Rights Agreement, the Irrevocable Transfer Agent Agreement,
        the
        Escrow Agreement, the Security Agreements, and any related agreements
        (collectively the “Transaction
        Documents”)
        and to
        issue the Convertible Debentures and the Conversion Shares in accordance
        with
        the terms hereof and thereof, (ii) the execution and delivery of the Transaction
        Documents by the Company and the consummation by it of the transactions
        contemplated hereby and thereby, including, without limitation, the issuance
        of
        the Convertible Debentures and the Conversion Shares and the reservation
        for
        issuance and the issuance of the Conversion Shares issuable upon conversion
        or
        exercise thereof, have been duly authorized by the Company’s Board of Directors
        and no further consent or authorization is required by the Company, its Board
        of
        Directors or its stockholders, (iii) the Transaction Documents have been
        duly
        executed and delivered by the Company, (iv) the Transaction Documents constitute
        the valid and binding obligations of the Company enforceable against the
        Company
        in accordance with their terms, except as such enforceability may be limited
        by
        general principles of equity or applicable bankruptcy, insolvency,
        reorganization, moratorium, liquidation or similar laws relating to, or
        affecting generally, the enforcement of creditors’ rights and remedies. The
        authorized officer of the Company executing the Transaction Documents knows
        of
        no reason why the Company cannot file the registration statement as required
        under the Investor Registration Rights Agreement or perform any of the Company’s
        other obligations under such documents. 

       

      (c) Capitalization.
        The
        authorized capital stock of the Company consists of 100,000,000 shares of
        Common
        Stock and zero shares of Preferred Stock of which 18,282,530 shares of Common
        Stock are issued and outstanding. All of such outstanding shares have been
        validly issued and are fully paid and nonassessable. No shares of Common
        Stock
        are subject to preemptive rights or any other similar rights or any liens
        or
        encumbrances suffered or permitted by the Company. As of the date of this
        Agreement, (i) there are no outstanding options, warrants, scrip, rights
        to
        subscribe to, calls or commitments of any character whatsoever relating to,
        or
        securities or rights convertible into, any shares of capital stock of the
        Company or any of its subsidiaries, or contracts, commitments, understandings
        or
        arrangements by which the Company or any of its subsidiaries is or may become
        bound to issue additional shares of capital stock of the Company or any of
        its
        subsidiaries or options, warrants, scrip, rights to subscribe to, calls or
        commitments of any character whatsoever relating to, or securities or rights
        convertible into, any shares of capital stock of the Company or any of its
        subsidiaries, (ii) there are no outstanding debt securities and (iii) there
        are
        no agreements or arrangements under which the Company or any of its subsidiaries
        is obligated to register the sale of any of their securities under the
        Securities Act (except pursuant to the Registration Rights Agreement) and
        (iv)
        there are no outstanding registration statements and there are no outstanding
        comment letters from the SEC or any other regulatory agency. There are no
        securities or instruments containing anti-dilution or similar provisions
        that
        will be triggered by the issuance of the Convertible Debentures as described
        in
        this Agreement. The Company has furnished to the Buyer true and correct copies
        of the Company’s Articles of Incorporation, as amended and as in effect on the
        date hereof (the “Articles
        of Incorporation”),
        and
        the Company’s By-laws, as in effect on the date hereof (the “By-laws”),
        and
        the terms of all securities convertible into or exercisable for Common Stock
        and
        the material rights of the holders thereof in respect thereto other than
        stock
        options issued to employees and consultants. 

       

      
        
           

        

        
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      (d) Issuance
        of Securities.
        The
        Convertible Debentures are duly authorized and, upon issuance in accordance
        with
        the terms hereof, shall be duly issued, fully paid and nonassessable, are
        free
        from all taxes, liens and charges with respect to the issue thereof. The
        Conversion Shares issuable upon conversion of the Convertible Debentures
        have
        been duly authorized and reserved for issuance. Upon conversion or exercise
        in
        accordance with the Convertible Debentures the Conversion Shares will be
        duly
        issued, fully paid and nonassessable.

       

      (e) No
        Conflicts.
        The
        execution, delivery and performance of the Transaction Documents by the Company
        and the consummation by the Company of the transactions contemplated hereby
        will
        not (i) result in a violation of the Articles of Incorporation, any certificate
        of designations of any outstanding series of preferred stock of the Company
        or
        the By-laws or (ii) conflict with or constitute a default (or an event which
        with notice or lapse of time or both would become a default) under, or give
        to
        others any rights of termination, amendment, acceleration or cancellation
        of,
        any agreement, indenture or instrument to which the Company or any of its
        subsidiaries is a party, or result in a violation of any law, rule, regulation,
        order, judgment or decree (including federal and state securities laws and
        regulations and the rules and regulations of The National Association of
        Securities Dealers Inc.’s OTC Bulletin Board on which the Common Stock is
        quoted) applicable to the Company or any of its subsidiaries or by which
        any
        property or asset of the Company or any of its subsidiaries is bound or
        affected. Neither the Company nor its subsidiaries is in violation of any
        term
        of or in default under its Articles of Incorporation or By-laws or their
        organizational charter or by-laws, respectively, or any material contract,
        agreement, mortgage, indebtedness, indenture, instrument, judgment, decree
        or
        order or any statute, rule or regulation applicable to the Company or its
        subsidiaries. The business of the Company and its subsidiaries is not being
        conducted, and shall not be conducted in violation of any material law,
        ordinance, or regulation of any governmental entity. Except as specifically
        contemplated by this Agreement and as required under the Securities Act and
        any
        applicable state securities laws, the Company is not required to obtain any
        consent, authorization or order of, or make any filing or registration with,
        any
        court or governmental agency in order for it to execute, deliver or perform
        any
        of its obligations under or contemplated by this Agreement or the Registration
        Rights Agreement in accordance with the terms hereof or thereof. All consents,
        authorizations, orders, filings and registrations which the Company is required
        to obtain pursuant to the preceding sentence have been obtained or effected
        on
        or prior to the date hereof. The Company and its subsidiaries are unaware
        of any
        facts or circumstance, which might give rise to any of the
        foregoing.

       

      
        
           

        

        
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      (f) SEC
        Documents: Financial Statements.
        Since
        October 31, 2004, the Company has filed all reports, schedules, forms,
        statements and other documents required to be filed by it with the SEC under
        the
        Securities Exchange Act of 1934, as amended (the “Exchange
        Act”)
        (all
        of the foregoing filed prior to the date hereof or amended after the date
        hereof
        and all exhibits included therein and financial statements and schedules
        thereto
        and documents incorporated by reference therein, being hereinafter referred
        to
        as the “SEC
        Documents”).
        The
        Company has delivered to the Buyers or their representatives, or made available
        through the SEC’s website at http://www.sec.gov., true and complete copies of
        the SEC Documents. As of their respective dates, the financial statements
        of the
        Company disclosed in the SEC Documents (the “Financial
        Statements”)
        complied as to form in all material respects with applicable accounting
        requirements and the published rules and regulations of the SEC with respect
        thereto. Such financial statements, to the Company’s knowledge, have been
        prepared in accordance with generally accepted accounting principles,
        consistently applied, during the periods involved (except (i) as may be
        otherwise indicated in such Financial Statements or the notes thereto, or
        (ii)
        in the case of unaudited interim statements, to the extent they may exclude
        footnotes or may be condensed or summary statements) and, fairly present
        in all
        material respects the financial position of the Company as of the dates thereof
        and the results of its operations and cash flows for the periods then ended
        (subject, in the case of unaudited statements, to normal year-end audit
        adjustments). No other information provided by or on behalf of the Company
        to
        the Buyer which is not included in the SEC Documents, including, without
        limitation, information referred to in this Agreement, contains any untrue
        statement of a material fact or omits to state any material fact necessary
        in
        order to make the statements therein, in the light of the circumstances under
        which they were made, not misleading.

       

      (g) 10(b)-5.
        To the
        Company’s knowledge, 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.

       

      (h) Absence
        of Litigation.
        There
        is no action, suit, proceeding, inquiry or investigation before or by any
        court,
        public board, government agency, self-regulatory organization or body pending
        against or affecting the Company, the Common Stock or any of the Company’s
        subsidiaries, wherein an unfavorable decision, ruling or finding would (i)
        have
        a material adverse effect on the transactions contemplated hereby (ii) adversely
        affect the validity or enforceability of, or the authority or ability of
        the
        Company to perform its obligations under, this Agreement or any of the documents
        contemplated herein, or (iii) have a material adverse effect on the business,
        operations, properties, financial condition or results of operations of the
        Company and its subsidiaries taken as a whole.

       

      (i) Acknowledgment
        Regarding Buyer’s Purchase of the Convertible Debentures.
        The
        Company acknowledges and agrees that the Buyer(s) is acting solely in the
        capacity of an arm’s length purchaser with respect to this Agreement and the
        transactions contemplated hereby. The Company further acknowledges that the
        Buyer(s) is not acting as a financial advisor or fiduciary of the Company
        (or in
        any similar capacity) with respect to this Agreement and the transactions
        contemplated hereby and any advice given by the Buyer(s) or any of their
        respective representatives or agents in connection with this Agreement and
        the
        transactions contemplated hereby is merely incidental to such Buyer’s purchase
        of the Convertible Debentures or the Conversion Shares. The Company further
        represents to the Buyer that the Company’s decision to enter into this Agreement
        has been based solely on the independent evaluation by the Company and its
        representatives.

       

      
        
           

        

        
          8

          
            

          

        

        
           

        

         

      

      (j) No
        General Solicitation.
        Neither
        the Company, nor any of its affiliates, nor any person acting on its or their
        behalf, has engaged in any form of general solicitation or general advertising
        (within the meaning of Regulation D under the Securities Act) in connection
        with
        the offer or sale of the Convertible Debentures or the Conversion
        Shares.

       

      (k) No
        Integrated Offering.
        Neither
        the Company, nor any of its affiliates, nor any person acting on its or their
        behalf has, directly or indirectly, made any offers or sales of any security
        or
        solicited any offers to buy any security, under circumstances that would
        require
        registration of the Convertible Debentures or the Conversion Shares under
        the
        Securities Act or cause this offering of the Convertible Debentures or the
        Conversion Shares to be integrated with prior offerings by the Company for
        purposes of the Securities Act.

       

      (l) Employee
        Relations.
        Neither
        the Company nor any of its subsidiaries is involved in any labor dispute
        nor, to
        the knowledge of the Company or any of its subsidiaries, is any such dispute
        threatened. None of the Company’s or its subsidiaries’ employees is a member of
        a union and the Company and its subsidiaries believe that their relations
        with
        their employees are good.

       

      (m) Intellectual
        Property Rights.
        The
        Company and its subsidiaries own or possess adequate rights or licenses to
        use
        all trademarks, trade names, service marks, service mark registrations, service
        names, patents, patent rights, copyrights, inventions, licenses, approvals,
        governmental authorizations, trade secrets and rights necessary to conduct
        their
        respective businesses as now conducted. The Company and its subsidiaries
        do not
        have any knowledge of any infringement by the Company or its subsidiaries
        of
        trademark, trade name rights, patents, patent rights, copyrights, inventions,
        licenses, service names, service marks, service mark registrations, trade
        secret
        or other similar rights of others, and, to the knowledge of the Company there
        is
        no claim, action or proceeding being made or brought against, or to the
        Company’s knowledge, being threatened against, the Company or its subsidiaries
        regarding trademark, trade name, patents, patent rights, invention, copyright,
        license, service names, service marks, service mark registrations, trade
        secret
        or other infringement; and the Company and its subsidiaries are unaware of
        any
        facts or circumstances which might give rise to any of the
        foregoing.

       

      (n) Environmental
        Laws.
        The
        Company and its subsidiaries are (i) in compliance with any and all applicable
        foreign, federal, state and local laws and regulations relating to the
        protection of human health and safety, the environment or hazardous or toxic
        substances or wastes, pollutants or contaminants (“Environmental
        Laws”),
        (ii)
        have received all permits, licenses or other approvals required of them under
        applicable Environmental Laws to conduct their respective businesses and
        (iii)
        are in compliance with all terms and conditions of any such permit, license
        or
        approval.

       

      
        
           

        

        
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      (o) Title.
        Any
        real property and facilities held under lease by the Company and its
        subsidiaries are held by them under valid, subsisting and enforceable leases
        with such exceptions as are not material and do not interfere with the use
        made
        and proposed to be made of such property and buildings by the Company and
        its
        subsidiaries.

       

      (p) Insurance.
        The
        Company and each of its subsidiaries are insured by insurers of recognized
        financial responsibility against such losses and risks and in such amounts
        as
        management of the Company believes to be prudent and customary in the businesses
        in which the Company and its subsidiaries are engaged. Neither the Company
        nor
        any such subsidiary has been refused any insurance coverage sought or applied
        for and neither the Company nor any such subsidiary has any reason to believe
        that it will not be able to renew its existing insurance coverage as and
        when
        such coverage expires or to obtain similar coverage from similar insurers
        as may
        be necessary to continue its business at a cost that would not materially
        and
        adversely affect the condition, financial or otherwise, or the earnings,
        business or operations of the Company and its subsidiaries, taken as a
        whole.

       

      (q) Regulatory
        Permits.
        The
        Company and its subsidiaries possess all material certificates, authorizations
        and permits issued by the appropriate federal, state or foreign regulatory
        authorities necessary to conduct their respective businesses, and neither
        the
        Company nor any such subsidiary has received any notice of proceedings relating
        to the revocation or modification of any such certificate, authorization
        or
        permit.

       

      (r) Internal
        Accounting Controls.
        The
        Company and each of its subsidiaries maintain a system of internal accounting
        controls sufficient to provide reasonable assurance that (i) transactions
        are
        executed in accordance with management’s general or specific authorizations,
        (ii) transactions are recorded as necessary to permit preparation of financial
        statements in conformity with generally accepted accounting principles and
        to
        maintain asset accountability, and (iii) the recorded amounts for assets
        is
        compared with the existing assets at reasonable intervals and appropriate
        action
        is taken with respect to any differences.

       

      (s) No
        Material Adverse Breaches, etc.
        Neither
        the Company nor any of its subsidiaries is subject to any charter, corporate
        or
        other legal restriction, or any judgment, decree, order, rule or regulation
        which in the judgment of the Company’s officers has or is expected in the future
        to have a material adverse effect on the business, properties, operations,
        financial condition, results of operations or prospects of the Company or
        its
        subsidiaries. Neither the Company nor any of its subsidiaries is in breach
        of
        any contract or agreement which breach, in the judgment of the Company’s
        officers, has or is expected to have a material adverse effect on the business,
        properties, operations, financial condition, results of operations or prospects
        of the Company or its subsidiaries.

       

      (t) Tax
        Status.
        The
        Company and each of its subsidiaries has made and filed all federal and state
        income and all other tax returns, reports and declarations required by any
        jurisdiction to which it is subject and (unless and only to the extent that
        the
        Company and each of its subsidiaries has set aside on its books provisions
        reasonably adequate for the payment of all unpaid and unreported taxes) has
        paid
        all taxes and other governmental assessments and charges that are material
        in
        amount, shown or determined to be due on such returns, reports and declarations,
        except those being contested in good faith and has set aside on its books
        provision reasonably adequate for the payment of all taxes for periods
        subsequent to the periods to which such returns, reports or declarations
        apply.
        There are no unpaid taxes in any material amount claimed to be due by the
        taxing
        authority of any jurisdiction, and the officers of the Company know of no
        basis
        for any such claim.

       

      
        
           

        

        
          10

          
            

          

        

        
           

        

         

      

      (u) Certain
        Transactions.
        Except
        for arm’s length transactions pursuant to which the Company makes payments in
        the ordinary course of business upon terms no less favorable than the Company
        could obtain from third parties and other than the grant of stock options
        disclosed in the SEC Documents, none of the officers, directors, or employees
        of
        the Company is presently a party to any transaction with the Company (other
        than
        for services as employees, officers and directors), including any contract,
        agreement or other arrangement providing for the furnishing of services to
        or
        by, providing for rental of real or personal property to or from, or otherwise
        requiring payments to or from any officer, director or such employee or,
        to the
        knowledge of the Company, any corporation, partnership, trust or other entity
        in
        which any officer, director, or any such employee has a substantial interest
        or
        is an officer, director, trustee or partner.

       

      (v) Fees
        and Rights of First Refusal.
        The
        Company is not obligated to offer the securities offered hereunder on a right
        of
        first refusal basis or otherwise to any third parties including, but not
        limited
        to, current or former shareholders of the Company, underwriters, brokers,
        agents
        or other third parties.

       

      4. COVENANTS.

       

      (a) Best
        Efforts.
        Each
        party shall use its best efforts to timely satisfy each of the conditions
        to be
        satisfied by it as provided in Sections 6 and 7 of this Agreement.

       

      (b) Form
        D.
        The
        Company agrees to file a Form D with respect to the Conversion Shares as
        required under Regulation D and to provide a copy thereof to each Buyer promptly
        after such filing. The Company shall, on or before the Closing Date, take
        such
        action as the Company shall reasonably determine is necessary to qualify
        the
        Conversion Shares, or obtain an exemption for the Conversion Shares for sale
        to
        the Buyers at the Closing pursuant to this Agreement under applicable securities
        or “Blue Sky” laws of the states of the United States, and shall provide
        evidence of any such action so taken to the Buyers on or prior to the Closing
        Date.

       

      (c) Reporting
        Status.
        Until
        the earlier of (i) the date as of which the Buyer(s) may sell all of the
        Conversion Shares without restriction pursuant to Rule 144(k) promulgated
        under
        the Securities Act (or successor thereto), or (ii) the date on which (A)
        the
        Buyer(s) shall have sold all the Conversion Shares and (B) none of the
        Convertible Debentures are outstanding (the “Registration
        Period”),
        the
        Company shall file in a timely manner all reports required to be filed with
        the
        SEC pursuant to the Exchange Act and the regulations of the SEC thereunder,
        and
        the Company shall not terminate its status as an issuer required to file
        reports
        under the Exchange Act even if the Exchange Act or the rules and regulations
        thereunder would otherwise permit such termination.

       

      
        
           

        

        
          11

          
            

          

        

        
           

        

         

      

      (d) Use
        of
        Proceeds.
        The
        Company will use the proceeds from the sale of the Convertible Debentures
        for
        general corporate and working capital purposes.

       

      (e) Reservation
        of Shares.
        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 issuance of the Conversion
        Shares. If at any time the Company does not have available such shares of
        Common
        Stock as shall from time to time be sufficient to effect the conversion of
        all
        of the Conversion Shares, 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.

       

      (f) Listings
        or Quotation.
        The
        Company shall promptly secure the listing or quotation of the Conversion
        Shares
        upon each national securities exchange, automated quotation system or The
        National Association of Securities Dealers Inc.’s Over-The-Counter Bulletin
        Board (“OTCBB”)
        or
        other market, if any, upon which shares of Common Stock are then listed or
        quoted (subject to official notice of issuance) and shall use its best efforts
        to maintain, so long as any other shares of Common Stock shall be so listed,
        such listing of all Conversion Shares from time to time issuable under the
        terms
        of this Agreement. The Company shall maintain the Common Stock’s authorization
        for quotation on the OTCBB, Nasdaq Capital Market, Nasdaq National Market,
        American Stock Exchange or New York Stock Exchange.

       

      (g) Fees
        and Expenses.
        

       

      (i) Each
        of
        the Company and the Buyer(s) shall pay all costs and expenses incurred by
        such
        party in connection with the negotiation, investigation, preparation, execution
        and delivery of the Transaction Documents. The Company shall pay Yorkville
        Advisors, LLC a fee equal to eight percent (8%) of the Purchase Price which
        shall be paid pro rata directly from the gross proceeds of each Closing.
        

       

      (ii) The
        Company shall pay a structuring fee to Yorkville Advisors, LLC of Fifteen
        Thousand Dollars ($15,000) which shall be paid directly from the proceeds
        of the
        First Closing. 

       

      (h) Corporate
        Existence.
        So long
        as any of the Convertible Debentures remain 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 each 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(h) will thereafter be applicable
        to
        the Convertible Debentures.

       

      
        
           

        

        
          12

          
            

          

        

        
           

        

         

      

      (i) Transactions
        With Affiliates.
        So long
        as any Convertible Debentures are outstanding, the Company shall not, and
        shall
        cause each of its subsidiaries not to, enter into, amend, modify or supplement,
        or permit any subsidiary to enter into, amend, modify or supplement any
        agreement, transaction, commitment, or arrangement with any of its or any
        subsidiary’s officers, directors, person who were officers or directors at any
        time during the previous two (2) years, stockholders who beneficially own
        five
        percent (5%) or more of the Common Stock, or Affiliates (as defined below)
        or
        with any individual related by blood, marriage, or adoption to any such
        individual or with any entity in which any such entity or individual owns
        a five
        percent (5%) or more beneficial interest (each a “Related
        Party”),
        except for (a) customary employment arrangements and benefit programs on
        reasonable terms, (b) any investment in an Affiliate of the Company, (c)
        any
        agreement, transaction, commitment, or arrangement on an arms-length basis
        on
        terms no less favorable than terms which would have been obtainable from
        a
        person other than such Related Party, (d) any agreement, transaction,
        commitment, or arrangement which is approved by a majority of the disinterested
        directors of the Company; for purposes hereof, any director who is also an
        officer of the Company or any subsidiary of the Company shall not be a
        disinterested director with respect to any such agreement, transaction,
        commitment, or arrangement. “Affiliate”
        for
        purposes hereof means, with respect to any person or entity, another person
        or
        entity that, directly or indirectly, (i) has a ten percent (10%) or more
        equity
        interest in that person or entity, (ii) has ten percent (10%) or more common
        ownership with that person or entity, (iii) controls that person or entity,
        or
        (iv) shares common control with that person or entity. “Control”
        or
“controls”
        for
        purposes hereof means that a person or entity has the power, direct or indirect,
        to conduct or govern the policies of another person or entity.

       

      (j) Transfer
        Agent.
        The
        Company covenants and agrees that, in the event that the Company’s agency
        relationship with the transfer agent should be terminated for any reason
        prior
        to a date which is two (2) years after the Closing Date, the Company shall
        immediately appoint a new transfer agent and shall require that the new transfer
        agent execute and agree to be bound by the terms of the Irrevocable Transfer
        Agent Instructions (as defined herein).

       

      (k) Restriction
        on Issuance of the Capital Stock.
        So long
        as any Convertible Debentures are outstanding, except for exercises or
        conversions of currently outstanding options and warrants disclosed in the
        SEC
        Documents, the Company shall not, without the prior written consent of the
        Buyer(s), (i) issue or sell shares of Common Stock or Preferred 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 granting the holder thereof the right to acquire Common Stock
        without
        consideration or for a consideration less than such Common Stock’s Bid Price
        determined immediately prior to it’s issuance, (iii) enter into any security
        instrument granting the holder a security interest in any and all assets
        of the
        Company, or (iv) file any registration statement on Form S-8.
        Notwithstanding the forgoing, the Company shall be permitted to issue or
        sell
        the following shares of Common Stock or securities convertible or exercisable
        into Common Stock which would otherwise require prior consent of the Buyer(s)
        without the prior consent of the Buyer(s): (w) up to 2,000,000 shares of
        Common
        Stock to be issued to employees, officers or director of the Company pursuant
        to
        the Company’s 2005 Incentive Stock Plan, (x) convertible debentures issued to
        accredited investors with a conversion price of $4.00 or greater (“Permitted
        Debentures”)
        and up
        to 2,500,000 shares of Common Stock underlying such Permitted Debentures,
        (y)
        Warrants to purchase up to 1,250,000 shares of Common Stock (“Permitted
        Warrants”)
        at an
        exercise price of $5.00 or greater and the shares of Common Stock underlying
        such Permitted Warrants, and (z) up to 100,000 shares of Common Stock which
        do
        not fall into any one of the other categories above.

       

      
        
           

        

        
          13

          
            

          

        

        
           

        

         

      

      (l) Neither
        the Buyer(s) nor any of its affiliates have an open short position in the
        Common
        Stock of the Company, and the Buyer(s) agrees that it shall not, and that
        it
        will cause its affiliates not to, engage in any short sales of or hedging
        transactions with respect to the Common Stock as long as any Convertible
        Debentures shall remain outstanding. 

       

      5. TRANSFER
        AGENT INSTRUCTIONS.

       

      (a) The
        Company shall issue the Irrevocable Transfer Agent Instructions to its transfer
        agent irrevocably appointing David Gonzalez, Esq. as the Company’s agent for
        purpose of having certificates issued, registered in the name of the Buyer(s)
        or
        its respective nominee(s), for the Conversion Shares representing such amounts
        of Convertible Debentures as specified from time to time by the Buyer(s)
        to the
        Company upon conversion of the Convertible Debentures, for interest owed
        pursuant to the Convertible Debenture, and for any and all Liquidated Damages
        (as this term is defined in the Investor Registration Rights Agreement).
        David
        Gonzalez, Esq. shall be paid a cash fee of Fifty Dollars ($50) for every
        occasion they act pursuant to the Irrevocable Transfer Agent Instructions.
        The
        Company shall not change its transfer agent unless the subsequent transfer
        agent
        agrees to be bound by the terms of the Irrevocable Transfer Agent Instructions.
        Prior to registration of the Conversion Shares under the Securities Act,
        all
        such certificates shall bear the restrictive legend specified in Section
        2(g) of
        this Agreement. The Company warrants that no instruction other than the
        Irrevocable Transfer Agent Instructions referred to in this Section 5, and
        stop
        transfer instructions to give effect to Section 2(g) hereof (in the case
        of the
        Conversion Shares prior to registration of such shares under the Securities
        Act)
        will be given by the Company to its transfer agent and that the Conversion
        Shares shall otherwise be freely transferable on the books and records of
        the
        Company as and to the extent provided in this Agreement and the Investor
        Registration Rights Agreement. Nothing in this Section 5 shall affect in
        any way
        the Buyer’s obligations and agreement to comply with all applicable securities
        laws upon resale of Conversion Shares. If the Buyer(s) provides the Company
        with
        an opinion of counsel, in form, scope and substance customary for opinions
        of
        counsel in comparable transactions to the effect that registration of a resale
        by the Buyer(s) of any of the Conversion Shares is not required under the
        Securities Act, the Company shall within two (2) business days instruct its
        transfer agent to issue one or more certificates in such name and in such
        denominations as specified by the Buyer. The Company acknowledges that a
        breach
        by it of its obligations hereunder will cause irreparable harm to the Buyer
        by
        vitiating the intent and purpose of the transaction contemplated hereby.
        Accordingly, the Company acknowledges that the remedy at law for a breach
        of its
        obligations under this Section 5 will be inadequate and agrees, in the event
        of
        a breach or threatened breach by the Company of the provisions of this
        Section 5, that the Buyer(s) shall be entitled, in addition to all
        other
        available remedies, to an injunction restraining any breach and requiring
        immediate issuance and transfer, without the necessity of showing economic
        loss
        and without any bond or other security being required.

       

      
        
           

        

        
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      6. CONDITIONS
        TO THE COMPANY’S OBLIGATION TO SELL.

       

      The
        obligation of the Company hereunder to issue and sell the Convertible Debentures
        to the Buyer(s) at the Closings is subject to the satisfaction, at or before
        the
        Closing Dates, of each of the following conditions, provided that these
        conditions are for the Company’s sole benefit and may be waived by the Company
        at any time in its sole discretion:

       

      (a) Each
        Buyer shall have executed the Transaction Documents and delivered them to
        the
        Company.

       

      (b) The
        Buyer(s) shall have delivered to the Escrow Agent the Purchase Price for
        Convertible Debentures in respective amounts as set forth next to each Buyer
        as
        outlined on Schedule I attached hereto and the Escrow Agent shall have delivered
        the net proceeds to the Company by wire transfer of immediately available
        U.S.
        funds pursuant to the wire instructions provided by the Company.

       

      (c) The
        representations and warranties of the Buyer(s) shall be true and correct
        in all
        material respects as of the date when made and as of the Closing Dates as
        though
        made at that time (except for representations and warranties that speak as
        of a
        specific date), and the Buyer(s) shall have performed, satisfied and complied
        in
        all material respects with the covenants, agreements and conditions required
        by
        this Agreement to be performed, satisfied or complied with by the Buyer(s)
        at or
        prior to the Closing Dates. 

       

      (d) No
        litigation, statute, rule, regulation, executive order, decree, ruling or
        injunction shall have been enacted, entered, promulgated or endorsed by or
        in
        any court or governmental authority of competent jurisdiction or any
        self-regulatory organization having authority over the matters contemplated
        hereby which prohibits the consummation of any of the transactions contemplated
        by the is Agreement. 

       

      7. CONDITIONS
        TO THE BUYER’S OBLIGATION TO PURCHASE.

       

      (a) The
        obligation of the Buyer(s) hereunder to purchase the Convertible Debentures
        at
        the First Closing is subject to the satisfaction, at or before the First
        Closing
        Date, of each of the following conditions:

       

      (i) The
        Company shall have executed the Transaction Documents and delivered the same
        to
        the Buyer(s).

       

      (ii) The
        Common Stock shall be authorized for quotation on the OTCBB, trading in the
        Common Stock shall not have been suspended for any reason. 

       

      (iii) 
        The
        representations and warranties of the Company shall be true and correct in
        all
        material respects (except to the extent that any of such representations
        and
        warranties is already qualified as to materiality in Section 3 above, in
        which
        case, such representations and warranties shall be true and correct without
        further qualification) as of the date when made and as of the First Closing
        Date
        as though made at that time (except for representations and warranties that
        speak as of a specific date) and the Company shall have performed, satisfied
        and
        complied in all material respects with the covenants, agreements and conditions
        required by this Agreement to be performed, satisfied or complied with by
        the
        Company at or prior to the First Closing Date. If requested by the Buyer,
        the
        Buyer shall have received a certificate, executed by the President of the
        Company, dated as of the First Closing Date, to the foregoing effect and
        as to
        such other matters as may be reasonably requested by the Buyer including,
        without limitation an update as of the First Closing Date regarding the
        representation contained in Section 3(c) above.

       

      
        
           

        

        
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      (iv) 
        The
        Company shall have executed and delivered to the Buyer(s) the Convertible
        Debentures in the respective amounts set forth opposite each Buyer(s) name
        on
        Schedule I attached hereto.

       

      (v) The
        Buyer(s) shall have received an opinion of counsel from counsel to the Company
        in a form satisfactory to the Buyer(s).

       

      (vi) 
        The
        Company shall have provided to the Buyer(s) a certificate of good standing
        from
        the secretary of state from the state in which the company is
        incorporated.

       

      (vii) The
        Company or the Buyer shall have filed a form UCC-1 or such other forms as
        may be
        required to perfect the Buyer’s interest in the Pledged Property as detailed in
        the Security Agreement and provided proof of such filing to the
        Buyer.

       

      (viii) The
        Company shall have provided to the Buyer an acknowledgement, to the satisfaction
        of the Buyer, from the Company’s independent certified public accountants as to
        its ability to provide all consents required in order to file a registration
        statement in connection with this transaction.

       

      (ix) 
        The
        Company shall have reserved out of its authorized and unissued Common Stock,
        solely for the purpose of effecting the conversion of the Convertible
        Debentures, shares of Common Stock to effect the conversion of all of the
        Conversion Shares then outstanding. 

       

      (x) The
        Irrevocable Transfer Agent Instructions, in form and substance satisfactory
        to
        the Buyer, shall have been delivered to and acknowledged in writing by the
        Company’s transfer agent.

       

      (b) The
        obligation of the Buyer(s) hereunder to accept the Convertible Debentures
        at the
        Second Closing is subject to the satisfaction, at or before the Second Closing
        Date, of each of the following conditions:

       

      (i) The
        Common Stock shall be authorized for quotation on the OTCBB, trading in the
        Common Stock shall not have been suspended for any reason. 

       

      (ii) The
        representations and warranties of the Company shall be true and correct in
        all
        material respects (except to the extent that any of such representations
        and
        warranties is already qualified as to materiality in Section 3 above, in
        which
        case, such representations and warranties shall be true and correct without
        further qualification) as of the date when made and as of the Second Closing
        Date as though made at that time (except for representations and warranties
        that
        speak as of a specific date) and the Company shall have performed, satisfied
        and
        complied in all material respects with the covenants, agreements and conditions
        required by this Agreement to be performed, satisfied or complied with by
        the
        Company at or prior to the Second Closing Date. If requested by the Buyer,
        the
        Buyer shall have received a certificate, executed by the President of the
        Company, dated as of the Second Closing Date, to the foregoing effect and
        as to
        such other matters as may be reasonably requested by the Buyer including,
        without limitation an update as of the Second Closing Date regarding the
        representation contained in Section 3(c) above.

       

      
        
           

        

        
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      (iii) 
        The
        Company shall have executed and delivered to the Buyer(s) the Convertible
        Debentures in the respective amounts set forth opposite each Buyer(s) name
        on
        Schedule I attached hereto.

       

      (iv) 
        The
        Company shall have certified that all conditions to the Second Closing have
        been
        satisfied and that the Company will file the Registration Statement with
        the SEC
        in compliance with the rules and regulations promulgated by the SEC for filing
        thereof two (2) business days after the Second Closing. If requested by the
        Buyer, the Buyer shall have received a certificate, executed by the President
        of
        the Company, dated as of the Second Closing Date, to the foregoing
        effect.

       

      (c) The
        obligation of the Buyer(s) hereunder to accept the Convertible Debentures
        at the
        Third Closing is subject to the satisfaction, at or before the Third Closing
        Date, of each of the following conditions:

       

      (i) The
        Common Stock shall be authorized for quotation on the OTCBB, trading in the
        Common Stock shall not have been suspended for any reason. 

       

      (ii) The
        representations and warranties of the Company shall be true and correct in
        all
        material respects (except to the extent that any of such representations
        and
        warranties is already qualified as to materiality in Section 3 above, in
        which
        case, such representations and warranties shall be true and correct without
        further qualification) as of the date when made and as of the Third Closing
        Date
        as though made at that time (except for representations and warranties that
        speak as of a specific date) and the Company shall have performed, satisfied
        and
        complied in all material respects with the covenants, agreements and conditions
        required by this Agreement to be performed, satisfied or complied with by
        the
        Company at or prior to the Third Closing Date. If requested by the Buyer,
        the
        Buyer shall have received a certificate, executed by two officers of the
        Company, dated as of the Third Closing Date, to the foregoing effect and
        as to
        such other matters as may be reasonably requested by the Buyer including,
        without limitation an update as of the Third Closing Date regarding the
        representation contained in Section 3(c) above.

       

      (iii) 
        The
        Company shall have executed and delivered to the Buyer(s) the Convertible
        Debentures in the respective amounts set forth opposite each Buyer(s) name
        on
        Schedule I attached hereto.

       

      (iv) 
        The
        Company shall have certified that all conditions to the Third Closing have
        been
        satisfied and that the Registration Statement has been declared effective
        by the
        SEC. If requested by the Buyer, the Buyer shall have received a certificate,
        executed by the President of the Company, dated as of the Third Closing Date,
        to
        the foregoing effect.

       

      
        
           

        

        
          17

          
            

          

        

        
           

        

         

      

      8. INDEMNIFICATION.

       

      (a) In
        consideration of the Buyer’s execution and delivery of this Agreement and
        acquiring the Convertible Debentures and the Conversion Shares hereunder,
        and in
        addition to all of the Company’s other obligations under this Agreement, the
        Company shall defend, protect, indemnify and hold harmless the Buyer(s) and
        each
        other holder of the Convertible Debentures and the Conversion Shares, and
        all of
        their officers, directors, employees and agents (including, without
        limitation, those retained in connection with the transactions contemplated
        by
        this Agreement) (collectively, the “Buyer
        Indemnitees”)
        from
        and against any and all actions, causes of action, suits, claims, losses,
        costs,
        penalties, fees, liabilities and damages, and expenses in connection therewith
        (irrespective of whether any such Buyer Indemnitee is a party to the action
        for
        which indemnification hereunder is sought), and including reasonable attorneys’
        fees and disbursements (the “Indemnified
        Liabilities”),
        incurred by the Buyer Indemnitees or any of them as a result of, or arising
        out
        of, or relating to (a) any misrepresentation or breach of any representation
        or
        warranty made by the Company in this Agreement, the Convertible Debentures
        or
        the Investor Registration Rights Agreement or any other certificate, instrument
        or document contemplated hereby or thereby, (b) any breach of any covenant,
        agreement or obligation of the Company contained in this Agreement, or the
        Investor Registration Rights Agreement or any other certificate, instrument
        or
        document contemplated hereby or thereby, or (c) any cause of action, suit
        or
        claim brought or made against such Indemnitee and arising out of or resulting
        from the execution, delivery, performance or enforcement of this Agreement
        or
        any other instrument, document or agreement executed pursuant hereto by any
        of
        the parties hereto, any transaction financed or to be financed in whole or
        in
        part, directly or indirectly, with the proceeds of the issuance of the
        Convertible Debentures or the status of the Buyer or holder of the Convertible
        Debentures the Conversion Shares, as a Buyer of Convertible Debentures in
        the
        Company. To the extent that the foregoing undertaking by the Company may
        be
        unenforceable for any reason, the Company shall make the maximum contribution
        to
        the payment and satisfaction of each of the Indemnified Liabilities, which
        is
        permissible under applicable law.

       

      (b) In
        consideration of the Company’s execution and delivery of this Agreement, and in
        addition to all of the Buyer’s other obligations under this Agreement, the Buyer
        shall defend, protect, indemnify and hold harmless the Company and all of
        its
        officers, directors, employees and agents (including, without limitation,
        those
        retained in connection with the transactions contemplated by this Agreement)
        (collectively, the “Company
        Indemnitees”)
        from
        and against any and all Indemnified Liabilities incurred by the Indemnitees
        or
        any of them as a result of, or arising out of, or relating to (a) any
        misrepresentation or breach of any representation or warranty made by the
        Buyer(s) in this Agreement, instrument or document contemplated hereby or
        thereby executed by the Buyer, (b) any breach of any covenant, agreement
        or
        obligation of the Buyer(s) contained in this Agreement, the Investor
        Registration Rights Agreement or any other certificate, instrument or document
        contemplated hereby or thereby executed by the Buyer, or (c) any cause of
        action, suit or claim brought or made against such Company Indemnitee based
        on
        material misrepresentations or due to a material breach and arising out of
        or
        resulting from the execution, delivery, performance or enforcement of this
        Agreement, the Investor Registration Rights Agreement or any other instrument,
        document or agreement executed pursuant hereto by any of the parties hereto.
        To
        the extent that the foregoing undertaking by each Buyer may be unenforceable
        for
        any reason, each Buyer shall make the maximum contribution to the payment
        and
        satisfaction of each of the Indemnified Liabilities, which is permissible
        under
        applicable law.

       

      
        
           

        

        
          18

          
            

          

        

        
           

        

         

      

      9. GOVERNING
        LAW: MISCELLANEOUS.

       

      (a) 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 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.

       

      (b) Counterparts.
        This
        Agreement may be executed in two or more identical counterparts, all of which
        shall be considered one and the same agreement and shall become effective
        when
        counterparts have been signed by each party and delivered to the other party.
        In
        the event any signature page is delivered by facsimile transmission, the
        party
        using such means of delivery shall cause four (4) additional original executed
        signature pages to be physically delivered to the other party, except for
        signature pages to the Convertible Debentures, within five (5) days of the
        execution and delivery hereof.

       

      (c) Headings.
        The
        headings of this Agreement are for convenience of reference and shall not
        form
        part of, or affect the interpretation of, this Agreement.

       

      (d) Severability.
        If any
        provision of this Agreement shall be invalid or unenforceable in any
        jurisdiction, such invalidity or unenforceability shall not affect the validity
        or enforceability of the remainder of this Agreement in that jurisdiction
        or the
        validity or enforceability of any provision of this Agreement in any other
        jurisdiction.

       

      (e) Entire
        Agreement, Amendments.
        This
        Agreement supersedes all other prior oral or written agreements between the
        Buyer(s), the Company, their affiliates and persons acting on their behalf
        with
        respect to the matters discussed herein, and this Agreement and the instruments
        referenced herein contain the entire understanding of the parties with respect
        to the matters covered herein and therein and, except as specifically set
        forth
        herein or therein, neither the Company nor any Buyer makes any representation,
        warranty, covenant or undertaking with respect to such matters. No provision
        of
        this Agreement may be waived or amended other than by an instrument in writing
        signed by the party to be charged with enforcement.

       

      (f) Notices.
        Any
        notices, consents, waivers, or other communications required or permitted
        to be
        given under the terms of this Agreement must be in writing and will be deemed
        to
        have been delivered (i) upon receipt, when delivered personally; (ii) upon
        confirmation of receipt, when sent by facsimile; (iii) three (3) days after
        being sent by U.S. certified mail, return receipt requested, or (iv) one
        (1) day
        after deposit with a nationally recognized overnight delivery service, in
        each
        case properly addressed to the party to receive the same. The addresses and
        facsimile numbers for such communications shall be:

       

      
        
           

        

        
          19

          
            

          

        

        
           

        

         

      

      
        	
                If
                  to the Company, to:

              	
                Triangle
                  Petroleum Corporation

              
	 	
                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

              
	 	 


      

      If
        to the
        Buyer(s), to its address and facsimile number on Schedule I, with copies
        to the
        Buyer’s counsel as set forth on Schedule I. Each party shall provide five (5)
        days’ prior written notice to the other party of any change in address or
        facsimile number.

       

      (g) Successors
        and Assigns.
        This
        Agreement shall be binding upon and inure to the benefit of the parties and
        their respective successors and assigns. Neither the Company nor any Buyer
        shall
        assign this Agreement or any rights or obligations hereunder without the
        prior
        written consent of the other party hereto.

       

      (h) No
        Third Party Beneficiaries.
        This
        Agreement is intended for the benefit of the parties hereto and their respective
        permitted successors and assigns, and is not for the benefit of, nor may
        any
        provision hereof be enforced by, any other person.

       

      (i) Survival.
        Unless
        this Agreement is terminated under Section 9(l), the representations and
        warranties of the Company and the Buyer(s) contained in Sections 2 and 3,
        the
        agreements and covenants set forth in Sections 4, 5 and 9, and the
        indemnification provisions set forth in Section 8, shall survive the Closing
        for
        a period of two (2) years following the date on which the Convertible Debentures
        are converted in full. The Buyer(s) shall be responsible only for its own
        representations, warranties, agreements and covenants hereunder.

       

      (j) Publicity.
        The
        Company and the Buyer(s) shall have the right to approve, before issuance
        any
        press release or any other public statement with respect to the transactions
        contemplated hereby made by any party; provided, however, that the Company
        shall
        be entitled, without the prior approval of the Buyer(s), to issue any press
        release or other public disclosure with respect to such transactions required
        under applicable securities or other laws or regulations (the Company shall
        use
        its best efforts to consult the Buyer(s) in connection with any such press
        release or other public disclosure prior to its release and Buyer(s) shall
        be
        provided with a copy thereof upon release thereof).

       

      
        
           

        

        
          20

          
            

          

        

        
           

        

         

      

      (k) Further
        Assurances.
        Each
        party shall do and perform, or cause to be done and performed, all such further
        acts and things, and shall execute and deliver all such other agreements,
        certificates, instruments and documents, as the other party may reasonably
        request in order to carry out the intent and accomplish the purposes of this
        Agreement and the consummation of the transactions contemplated
        hereby.

       

      (l) Termination.
        In the
        event that the Closing shall not have occurred with respect to the Buyers
        on or
        before five (5) business days from the date hereof due to the Company’s or the
        Buyer’s failure to satisfy the conditions set forth in Sections 6 and 7 above
        (and the non-breaching party’s failure to waive such unsatisfied condition(s)),
        the non-breaching party shall have the option to terminate this Agreement
        with
        respect to such breaching party at the close of business on such date without
        liability of any party to any other party; provided, however, that if this
        Agreement is terminated by the Buyer(s) pursuant to this Section 9(l), the
        Company shall remain obligated to reimburse the Buyer(s) for the fees and
        expenses of Yorkville Advisors, LLC described in Section 4(g)
        above.

       

      (m) No
        Strict Construction.
        The
        language used in this Agreement will be deemed to be the language chosen
        by the
        parties to express their mutual intent, and no rules of strict construction
        will
        be applied against any party.

       

      


      [REMAINDER
        PAGE INTENTIONALLY LEFT BLANK]


      
        
           

        

        
          21

          
            

          

        

        
           

        

      


      


      IN
        WITNESS WHEREOF,
        the
        Buyers and the Company have caused this Securities Purchase Agreement to
        be duly
        executed as of the date first written above.

       

      


      
        	 	
                COMPANY:

              
	 	
                TRIANGLE
                  PETROLEUM CORPORATION 

              
	 	 
	 	
                By:
                  /s/
                  MARK GUSTAFSON

              
	 	
                Name: Mark
                  Gustafson

              
	 	
                Title: Chief
                  Executive Officer

              
	 	 


      

      


       

      
        
           

        

        
          22

          
            

          

        

        
           

          
          

        

      


      SCHEDULE
        I

       

      SCHEDULE
        OF BUYERS 

      


      
        	
                Name

              	
                Signature

              	
                Address/Facsimile
                  

                Number
                  of Buyer

              	
                Amount
                  of Subscription

              
	 	 	 	 
	 	 	 	 
	
                Cornell
                  Capital Partners, LP

              	
                By: Yorkville
                  Advisors, LLC

              	
                101
                  Hudson Street - Suite 3700

              	
                $15,000,000

              
	 	
                Its: General
                  Partner

              	
                Jersey
                  City, NJ 07303

              	 
	 	 	
                Facsimile: (201)
                  985-8266

              	 
	 	 	 	 
	 	
                By:/s/
                  MARK ANGELO

              	 	 
	 	
                Name: Mark
                  Angelo

              	 	 
	 	
                Its: Portfolio
                  Manager

              	 	 
	 	 	 	 
	
                With
                  a copy to: 

              	
                David
                  Gonzalez, Esq.

              	
                101
                  Hudson Street - Suite 3700

              	 
	 	 	
                Jersey
                  City, NJ 07302

              	 
	 	 	
                Facsimile:
                  (201) 985-8266

              	 
	 	 	 	 


      

      


      
        
           

        

        
          23