Document:

Exhibit
      4.20

    

    THE
      SECURITIES REPRESENTED HEREBY MAY NOT BE TRANSFERRED UNLESS (I) SUCH SECURITIES
      HAVE BEEN REGISTERED FOR SALE PURSUANT TO THE SECURITIES ACT OF 1933, AS
      AMENDED, (II) SUCH SECURITIES MAY BE SOLD PURSUANT TO RULE 144(K), OR (III)
      THE
      COMPANY HAS RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT THAT
      SUCH TRANSFER MAY LAWFULLY BE MADE WITHOUT REGISTRATION UNDER THE SECURITIES
      ACT
      OF 1933 OR QUALIFICATION UNDER APPLICABLE STATE SECURITIES LAWS.

    

    SUBJECT
      TO THE PROVISIONS OF SECTION 10 HEREOF, THIS WARRANT SHALL BE VOID AFTER 5:00
      P.M. EASTERN TIME ON JANUARY 23, 2007 (THE “EXPIRATION DATE”).

    

    No.
      CB-2

    

    TRIANGLE
      PETROLEUM CORPORATION

    

    WARRANT
      TO PURCHASE 312,500 SHARES OF

    COMMON
      STOCK, PAR VALUE $0.00001 PER SHARE

    

    For
      VALUE
      RECEIVED, Centrum AG (“Warrantholder”), is entitled to purchase, subject to the
      provisions of this Warrant, from Triangle Petroleum Corporation, a Nevada
      corporation (“Company”), at any time not later than 5:00 P.M., Eastern time, on
      the Expiration Date (as defined above), at an exercise price per share equal
      to
      $5.00 (the exercise price in effect being herein called the “Warrant Price”),
      312,500 shares (“Warrant Shares”) of the Company’s Common Stock, par value
      $0.00001 per share (“Common Stock”). The number of Warrant Shares purchasable
      upon exercise of this Warrant and the Warrant Price shall be subject to
      adjustment from time to time as described herein.

    

    Section
      1. Registration.
      The
      Company shall maintain books for the transfer and registration of the Warrant.
      Upon the initial issuance of this Warrant, the Company shall issue and register
      the Warrant in the name of the Warrantholder.

    

    Section
      2. Transfers.
      As
      provided herein, this Warrant may be transferred only pursuant to a registration
      statement filed under the Securities Act of 1933, as amended (the “Securities
      Act”), or an exemption from such registration. Subject to such restrictions, the
      Company shall transfer this Warrant from time to time upon the books to be
      maintained by the Company for that purpose, upon surrender thereof for transfer
      properly endorsed or accompanied by appropriate instructions for transfer and
      such other documents as may be reasonably required by the Company, including,
      if
      required by the Company, an opinion of its counsel to the effect that such
      transfer is exempt from the registration requirements of the Securities Act,
      to
      establish that such transfer is being made in accordance with the terms hereof,
      and a new Warrant shall be issued to the transferee and the surrendered Warrant
      shall be canceled by the Company.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    Section
      3. Exercise
      of Warrant.
      Subject
      to the provisions hereof, the Warrantholder may exercise this Warrant in whole
      or in part at any time prior to its expiration upon surrender of the Warrant,
      together with delivery of the duly executed Warrant exercise form attached
      hereto as Appendix A (the “Exercise Agreement”) and payment by cash, certified
      check or wire transfer of funds (or,
      in
      certain circumstances, by cash-less exercise as provided below) for
      the
      aggregate Warrant Price for that number of Warrant Shares then being purchased,
      to the Company during normal business hours on any business day at the Company’s
      principal executive offices (or such other office or agency of the Company
      as it
      may designate by notice to the Warrantholder). The Warrant Shares so purchased
      shall be deemed to be issued to the Warrantholder or the Warrantholder’s
      designee, as the record owner of such shares, as of the close of business on
      the
      date on which this Warrant shall have been surrendered (or evidence of loss,
      theft or destruction thereof and security or indemnity satisfactory to the
      Company), the Warrant Price shall have been paid and the completed Exercise
      Agreement shall have been delivered. Certificates for the Warrant Shares so
      purchased, representing the aggregate number of shares specified in the Exercise
      Agreement, shall be delivered to the Warrantholder within a reasonable time,
      not
      exceeding three (3) business days, after this Warrant shall have been so
      exercised. The certificates so delivered shall be in such denominations as
      may
      be requested by the Warrantholder and shall be registered in the name of the
      Warrantholder or such other name as shall be designated by the Warrantholder.
      If
      this Warrant shall have been exercised only in part, then, unless this Warrant
      has expired, the Company shall, at its expense, at the time of delivery of
      such
      certificates, deliver to the Warrantholder a new Warrant representing the number
      of shares with respect to which this Warrant shall not then have been exercised.
      As used herein, “business day” means a day, other than a Saturday or Sunday, on
      which banks in New York City are open for the general transaction of business.
      Each exercise hereof shall constitute the re-affirmation by the Warrantholder
      that the representations and warranties contained in Section 5 of the Purchase
      Agreement (as defined below) are true and correct in all material respects
      with
      respect to the Warrantholder as of the time of such exercise.

    

    Section
      4. Compliance
      with the Securities Act of 1933.
      Except
      as provided in the Purchase Agreement (as defined below), the Company may cause
      the legend set forth on the first page of this Warrant to be set forth on each
      Warrant or similar legend on any security issued or issuable upon exercise
      of
      this Warrant, unless counsel for the Company is of the opinion as to any such
      security that such legend is unnecessary.

    

    Section
      5. Payment
      of Taxes.
      The
      Company will pay any documentary stamp taxes attributable to the initial
      issuance of Warrant Shares issuable upon the exercise of the Warrant; provided,
      however, that the Company shall not be required to pay any tax or taxes which
      may be payable in respect of any transfer involved in the issuance or delivery
      of any certificates for Warrant Shares in a name other than that of the
      Warrantholder in respect of which such shares are issued, and in such case,
      the
      Company shall not be required to issue or deliver any certificate for Warrant
      Shares or any Warrant until the person requesting the same has paid to the
      Company the amount of such tax or has established to the Company’s reasonable
      satisfaction that such tax has been paid. The Warrantholder shall be responsible
      for income taxes due under federal, state or other law, if any such tax is
      due.

     

    
      
         

      

      
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    Section
      6. Mutilated
      or Missing Warrants.
      In case
      this Warrant shall be mutilated, lost, stolen, or destroyed, the Company shall
      issue in exchange and substitution of and upon cancellation of the mutilated
      Warrant, or in lieu of and substitution for the Warrant lost, stolen or
      destroyed, a new Warrant of like tenor and for the purchase of a like number
      of
      Warrant Shares, but only upon receipt of evidence reasonably satisfactory to
      the
      Company of such loss, theft or destruction of the Warrant, and with respect
      to a
      lost, stolen or destroyed Warrant, reasonable indemnity or bond with respect
      thereto, if requested by the Company.

    

    Section
      7. Reservation
      of Common Stock.
      The
      Company hereby represents and warrants that there have been reserved, and the
      Company shall at all applicable times keep reserved until issued (if necessary)
      as contemplated by this Section 7, out of the authorized and unissued shares
      of
      Common Stock, sufficient shares to provide for the exercise of the rights of
      purchase represented by this Warrant. The Company agrees that all Warrant Shares
      issued upon due exercise of the Warrant shall be, at the time of delivery of
      the
      certificates for such Warrant Shares, duly authorized, validly issued, fully
      paid and non-assessable shares of Common Stock of the Company.

    

    Section
      8. Adjustments.
      Subject
      and pursuant to the provisions of this Section 8, unless waived in a particular
      case by the Warrantholder, the Warrant Price and number of Warrant Shares
      subject to this Warrant shall be subject to adjustment from time to time as
      set
      forth hereinafter.

    

    (a) If
      the
      Company shall, at any time or from time to time while this Warrant is
      outstanding, pay a dividend or make a distribution on its Common Stock in shares
      of Common Stock, subdivide its outstanding shares of Common Stock into a greater
      number of shares or combine its outstanding shares of Common Stock into a
      smaller number of shares or issue by reclassification of its outstanding shares
      of Common Stock any shares of its capital stock (including any such
      reclassification in connection with a consolidation or merger in which the
      Company is the continuing corporation), then the number of Warrant Shares
      purchasable upon exercise of the Warrant and the Warrant Price in effect
      immediately prior to the date upon which such change shall become effective,
      shall be adjusted by the Company so that the Warrantholder thereafter exercising
      the Warrant shall be entitled to receive the number of shares of Common Stock
      or
      other capital stock which the Warrantholder would have received if the Warrant
      had been exercised immediately prior to such event upon payment of a Warrant
      Price that has been adjusted to reflect a fair allocation of the economics
      of
      such event to the Warrantholder. Such adjustments shall be made successively
      whenever any event listed above shall occur.

    

    (b) If
      any
      capital reorganization, reclassification of the capital stock of the Company,
      consolidation or merger of the Company with another corporation in which the
      Company is not the survivor, or sale, transfer or other disposition of all
      or
      substantially all of the Company’s assets to another corporation shall be
      effected, then, as a condition of such reorganization, reclassification,
      consolidation, merger, sale, transfer or other disposition, lawful and adequate
      provision shall be made whereby each Warrantholder shall thereafter have the
      right to purchase and receive upon the basis and upon the terms and conditions
      herein specified and in lieu of the Warrant Shares immediately theretofore
      issuable upon exercise of the Warrant, such shares of stock, securities or
      assets as would have been issuable or payable with respect to or in exchange
      for
      a number of Warrant Shares equal to the number of Warrant Shares immediately
      theretofore issuable upon exercise of the Warrant, had such reorganization,
      reclassification, consolidation, merger, sale, transfer or other disposition
      not
      taken place, and in any such case appropriate provision shall be made with
      respect to the rights and interests of each Warrantholder to the end that the
      provisions hereof (including, without limitation, provision for adjustment
      of
      the Warrant Price) shall thereafter be applicable, as nearly equivalent as
      may
      be practicable in relation to any shares of stock, securities or assets
      thereafter deliverable upon the exercise hereof. The Company shall not effect
      any such consolidation, merger, sale, transfer or other disposition unless
      prior
      to or simultaneously with the consummation thereof the successor corporation
      (if
      other than the Company) resulting from such consolidation or merger, or the
      corporation purchasing or otherwise acquiring such assets or other appropriate
      corporation or entity shall assume the obligation to deliver to the
      Warrantholder, at the last address of the Warrantholder appearing on the books
      of the Company, such shares of stock, securities or assets as, in accordance
      with the foregoing provisions, the Warrantholder may be entitled to purchase,
      and the other obligations under this Warrant. The provisions of this paragraph
      (b) shall similarly apply to successive reorganizations, reclassifications,
      consolidations, mergers, sales, transfers or other dispositions.

     

    
      
         

      

      
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    (c) In
      case
      the Company shall fix a payment date for the making of a distribution to all
      holders of Common Stock (including any such distribution made in connection
      with
      a consolidation or merger in which the Company is the continuing corporation)
      of
      evidences of indebtedness or assets (other than cash dividends or cash
      distributions payable out of consolidated earnings or earned surplus or
      dividends or distributions referred to in Section 8(a)), or subscription rights
      or warrants, the Warrant Price to be in effect after such payment date shall
      be
      determined by multiplying the Warrant Price in effect immediately prior to
      such
      payment date by a fraction, the numerator of which shall be the total number
      of
      shares of Common Stock outstanding multiplied by the Market Price (as defined
      below) per share of Common Stock immediately prior to such payment date, less
      the fair market value (as determined by the Company’s Board of Directors in good
      faith) of said assets or evidences of indebtedness so distributed, or of such
      subscription rights or warrants, and the denominator of which shall be the
      total
      number of shares of Common Stock outstanding multiplied by such Market Price
      per
      share of Common Stock immediately prior to such payment date. “Market Price” as
      of a particular date (the “Valuation Date”) shall mean the following: (a) if the
      Common Stock is then listed on a national stock exchange, the closing sale
      price
      of one share of Common Stock on such exchange on the last trading day prior
      to
      the Valuation Date; (b) if the Common Stock is then quoted on The Nasdaq Stock
      Market, Inc. (“Nasdaq”), the National Association of Securities Dealers, Inc.
      OTC Bulletin Board (the “Bulletin Board”) or such similar exchange or
      association, the closing sale price of one share of Common Stock on Nasdaq,
      the
      Bulletin Board or such other exchange or association on the last trading day
      prior to the Valuation Date or, if no such closing sale price is available,
      the
      average of the high bid and the low asked price quoted thereon on the last
      trading day prior to the Valuation Date; or (c) if the Common Stock is not
      then
      listed on a national stock exchange or quoted on Nasdaq, the Bulletin Board
      or
      such other exchange or association, the fair market value of one share of Common
      Stock as of the Valuation Date, shall be determined in good faith by the Board
      of Directors of the Company and the Warrantholder. If the Common Stock is not
      then listed on a national securities exchange, the Bulletin Board or such other
      exchange or association, the Board of Directors of the Company shall respond
      promptly, in writing, to an inquiry by the Warrantholder prior to the exercise
      hereunder as to the fair market value of a share of Common Stock as determined
      by the Board of Directors of the Company. In the event that the Board of
      Directors of the Company and the Warrantholder are unable to agree upon the
      fair
      market value in respect of subpart (c) hereof, the Company and the Warrantholder
      shall jointly select an appraiser, who is experienced in such matters. The
      decision of such appraiser shall be final and conclusive, and the cost of such
      appraiser shall be borne equally by the Company and the Warrantholder. Such
      adjustment shall be made successively whenever such a payment date is
      fixed.

     

    
      
         

      

      
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    (d) An
      adjustment to the Warrant Price shall become effective immediately after the
      payment date in the case of each dividend or distribution and immediately after
      the effective date of each other event which requires an
      adjustment.

    

    (e) In
      the
      event that, as a result of an adjustment made pursuant to this Section 8, the
      Warrantholder shall become entitled to receive any shares of capital stock
      of
      the Company other than shares of Common Stock, the number of such other shares
      so receivable upon exercise of this Warrant shall be subject thereafter to
      adjustment from time to time in a manner and on terms as nearly equivalent
      as
      practicable to the provisions with respect to the Warrant Shares contained
      in
      this Warrant.

     

    Section
      9. Fractional
      Interest.
      The
      Company shall not be required to issue fractions of Warrant Shares upon the
      exercise of this Warrant. If any fractional share of Common Stock would, except
      for the provisions of the first sentence of this Section 9, be deliverable
      upon
      such exercise, the Company, in lieu of delivering such fractional share, shall
      pay to the exercising Warrantholder an amount in cash equal to the Market Price
      of such fractional share of Common Stock on the date of exercise.

    

    Section
      10. Extension
      of Expiration Date.
      If the
      Company fails to cause any Registration Statement covering Registrable
      Securities (unless otherwise defined herein, capitalized terms are as defined
      in
      the Registration Rights Agreement relating to the Warrant Shares (the
“Registration Rights Agreement”)) to be declared effective prior to the
      applicable dates set forth therein, or if any of the events specified in Section
      2(c)(ii) of the Registration Rights Agreement occurs, and the Blackout Period
      (whether alone, or in combination with any other Blackout Period) continues
      for
      more than 60 days in any 12 month period, or for more than a total of 90 days,
      then the Expiration Date of this Warrant shall be extended one day for each
      day
      beyond the 60-day or 90-day limits, as the case may be, that the Blackout Period
      continues.

    

    Section
      11. Benefits.
      Nothing
      in this Warrant shall be construed to give any person, firm or corporation
      (other than the Company and the Warrantholder) any legal or equitable right,
      remedy or claim, it being agreed that this Warrant shall be for the sole and
      exclusive benefit of the Company and the Warrantholder.

    

    Section
      12. Notices
      to Warrantholder.
      Upon
      the happening of any event requiring an adjustment of the Warrant Price, the
      Company shall promptly give written notice thereof to the Warrantholder at
      the
      address appearing in the records of the Company, stating the adjusted Warrant
      Price and the adjusted number of Warrant Shares resulting from such event and
      setting forth in reasonable detail the method of calculation and the facts
      upon
      which such calculation is based. Failure to give such notice to the
      Warrantholder or any defect therein shall not affect the legality or validity
      of
      the subject adjustment.

     

    
      
         

      

      
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    Section
      13. Identity
      of Transfer Agent.
      The
      Transfer Agent for the Common Stock is Pacific Stock Transfer Company. Upon
      the
      appointment of any subsequent transfer agent for the Common Stock or other
      shares of the Company’s capital stock issuable upon the exercise of the rights
      of purchase represented by the Warrant, the Company will mail to the
      Warrantholder a statement setting forth the name and address of such transfer
      agent.

    

    Section
      14. Notices.
      Unless
      otherwise provided, any notice required or permitted under this Warrant shall
      be
      given in writing and shall be deemed effectively given as hereinafter described
      (i) if given by personal delivery, then such notice shall be deemed given upon
      such delivery, (ii) if given by telex or facsimile, then such notice shall
      be
      deemed given upon receipt of confirmation of complete transmittal, (iii) if
      given by mail, then such notice shall be deemed given upon the earlier of (A)
      receipt of such notice by the recipient or (B) three days after such notice
      is
      deposited in first class mail, postage prepaid, and (iv) if given by an
      internationally recognized overnight air courier, then such notice shall be
      deemed given one business day after delivery to such carrier. All notices shall
      be addressed as follows: if to the Warrantholder, at its address as set forth
      in
      the Company’s books and records and, if to the Company, at the address as
      follows, or at such other address as the Warrantholder or the Company may
      designate by ten days’ advance written notice to the other:

    

    If
      to the
      Company:

    

    Mr.
      Mark
      Gustafson

    Triangle
      Petroleum Corporation

    Suite
      1110, 521-3rd Avenue SW

    Calgary,
      Alberta T2P
      3T3 

    Fax: (403)
      269-3537

    

    With
      a
      copy to:

    

    Sichenzia
      Ross Friedman Ference LLP

    1065
      Avenue of the Americas

    New
      York,
      New York 10010 

    Attention:
      Thomas A. Rose, Esq.

    Fax:
      (212) 930-9725

    

    

    Section
      15. Registration
      Rights.
      The
      initial Warrantholder is entitled to the benefit of certain registration rights
      with respect to the shares of Common Stock issuable upon the exercise of this
      Warrant as provided in the Registration Rights Agreement, and any subsequent
      Warrantholder may be entitled to such rights.

     

    
      
         

      

      
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    Section
      16. Successors.
      All the
      covenants and provisions hereof by or for the benefit of the Warrantholder
      shall
      bind and inure to the benefit of its respective successors and assigns
      hereunder. 

    

    Section
      17. Governing
      Law; Consent to Jurisdiction; Waiver of Jury Trial.
      This
      Warrant shall be governed by, and construed in accordance with, the internal
      laws of the State of Nevada, without reference to the choice of law provisions
      thereof. The Company and, by accepting this Warrant, the Warrantholder, each
      irrevocably submits to the exclusive jurisdiction of the courts of the State
      of
      Nevada located in Nevada and the United States District Court situated therein
      for the purpose of any suit, action, proceeding or judgment relating to or
      arising out of this Warrant and the transactions contemplated hereby. Service
      of
      process in connection with any such suit, action or proceeding may be served
      on
      each party hereto anywhere in the world by the same methods as are specified
      for
      the giving of notices under this Warrant. The Company and, by accepting this
      Warrant, the Warrantholder, each irrevocably consents to the jurisdiction of
      any
      such court in any such suit, action or proceeding and to the laying of venue
      in
      such court. The Company and, by accepting this Warrant, the Warrantholder,
      each
      irrevocably waives any objection to the laying of venue of any such suit, action
      or proceeding brought in such courts and irrevocably waives any claim that
      any
      such suit, action or proceeding brought in any such court has been brought
      in an
      inconvenient forum. EACH
      OF THE COMPANY AND, BY ITS ACCEPTANCE HEREOF, THE WARRANTHOLDER HEREBY WAIVES
      ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS
      WARRANT AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS
      WAIVER.

     

    Section
      19. Limitations
      on Exercise.

    

    (a) Notwithstanding
      anything to the contrary contained herein, the number of Warrant Shares that
      may
      be acquired by the Warrantholder upon any exercise of this Warrant (or otherwise
      in respect hereof) shall be limited to the extent necessary to insure that,
      following such exercise (or other issuance), the total number of shares of
      Common Stock then beneficially owned by such Warrantholder and its Affiliates
      (as such term is defined in the Purchase Agreement) and any other Persons (as
      such term is defined in the Purchase Agreement) whose beneficial ownership
      of
      Common Stock would be aggregated with the Warrantholder's for purposes of
      Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange
      Act”), does not exceed 4.99% of the total number of issued and outstanding
      shares of Common Stock (including for such purpose the shares of Common Stock
      issuable upon such exercise). For such purposes, beneficial ownership shall
      be
      determined in accordance with Section 13(d) of the Exchange Act and the rules
      and regulations promulgated thereunder. This provision shall not restrict the
      number of shares of Common Stock which a Warrantholder may receive or
      beneficially own in order to determine the amount of securities or other
      consideration that such Holder may receive in the event of a transaction
      contemplated by Section 8 of this Warrant. By written notice to the Company,
      the
      Warrantholder may waive the provisions of this Section 19(a), but any such
      waiver will not be effective until the 61st day after delivery of such notice,
      nor will any such waiver effect any other Warrantholder.

     

    
      
         

      

      
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    Section
      19. No
      Rights as Stockholder.
      Prior
      to the exercise of this Warrant, the Warrantholder shall not have or exercise
      any rights as a stockholder of the Company by virtue of its ownership of this
      Warrant.

    

    Section
      20. Amendment;
      Waiver.
      This
      Warrant is one of a series of Warrants of like tenor issued by the Company
      pursuant to the Purchase Agreement (collectively, the “Company
      Warrants”).
      Any
      term of this Warrant may be amended or waived (including the adjustment
      provisions included in Section 8 of this Warrant) upon the written consent
      of
      the Company and the holders of Company Warrants representing at least 50% of
      the
      number of shares of Common Stock then subject to all outstanding Company
      Warrants (the “Majority
      Holders”);
      provided,
      that
      (x) any such amendment or waiver must apply to all Company Warrants; and (y)
      the
      number of Warrant Shares subject to this Warrant, the Warrant Price and the
      Expiration Date may not be amended, and the right to exercise this Warrant
      may
      not be altered or waived, without the written consent of the Warrantholder.
      Notwithstanding the provisions of the preceding sentence, any Warrantholder
      shall have the right to waive for itself only any adjustment in the Warrant
      Price pursuant to Section 8 hereof.

    

    Section
      21. Section
      Headings.
      The
      section headings in this Warrant are for the convenience of the Company and
      the
      Warrantholder and in no way alter, modify, amend, limit or restrict the
      provisions hereof.

     

    
      
         

      

      
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    IN
      WITNESS WHEREOF, the Company has caused this Warrant to be duly executed, as
      of
      the 23rd day of January, 2006.

     

    
      	 	 	 
	 	TRIANGLE
              PETROLEUM
              CORPORATION
	 	 
	 	 
	 	By: /s/
              MARK GUSTAFSON
	 	Name:  Mark
              Gustafson
	 	
              Title:
                 President

            

     

    
      
         

      

      
        9THE SECURITIES REPRESENTED HEREBY HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT") OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR TRANSFERRED
EXCEPT PURSUANT TO A REGISTRATION UNDER THE SECURITIES ACT OR AN EXEMPTION
THEREFROM.

                                  SUBORDINATED
                                 PROMISSORY NOTE

$250,000                                                     DATE: March 3, 2006

      FOR VALUE RECEIVED, the undersigned, NATURAL GAS SYSTEMS, INC., a Nevada
corporation ("Borrower"), HEREBY PROMISES TO PAY to LAIRD Q. CAGAN (the
"Payee"), in lawful money of the United States of America in immediately
available funds, the principal sum of TWO HUNDRED AND FIFTY THOUSAND DOLLARS
($250,000), or such lesser amount as may then be outstanding hereunder, together
with any accrued by unpaid interest thereon, on MARCH 3, 2007, (the "Maturity
Date"). No interest shall be payable on the unpaid principal under this
Subordinated Promissory Note ("Subordinated Note") prior to the Maturity Date,
except in the event of acceleration hereunder. This Subordinated Note shall
accrue interest at a rate of 10% per annum. All computations of interest under
this Subordinated Note shall be made on the basis of a 365 day year and the
actual number of days elapsed.

      Subject to the subordinate provisions herein, the Maturity Date of this
Subordinated Note shall be accelerated and all amounts of unpaid principal and
interest shall be immediately payable upon the closing of the sale of equity or
convertible equity in by the Company in excess of $2,000,000. Notwithstanding
the foregoing, however, no amounts of interest or principal under this
Subordinated Note shall be due and payable unless and until the Borrower is able
to meet the "Distribution Conditions," necessary for the payment of subordinated
debt, as detailed in Section 6.10 of the Prospect Loan Agreement.

      Payee, by acceptance of this Subordinated Note, agrees that the
indebtedness evidenced by this Subordinated Note, and any renewals or extensions
thereof, shall at all times and in all respects be subordinate and junior in
right of payment to that certain Loan Agreement executed by Borrower in favor of
Prospect Energy Corporation, a Maryland corporation in the aggregate principal
amount of $5,000,000, plus accrued but unpaid interest, dated February 2, 2005,
and as amended January 31, 2006 (the "Prospect Loan Agreement"), together with
any extensions, modifications, renewals, amendments thereof. The indebtedness
described in the preceding sentence is hereinafter sometimes referred to as
"Senior Indebtedness".

      Prior to the date on which all Senior Indebtedness is repaid ("Senior
Indebtedness Repayment Date"), if an Event of Default (as defined in the
Prospect Loan Agreement) is then existing and continuing on any of the Senior
Indebtedness, or if an Event of Default would be immediately caused by payment
of any principal or interest hereunder, no payment either of principal or
interest (notwithstanding the expressed Maturity Date or any time for the
payment of principal of or interest on this Subordinated Note) shall be made on
this Subordinated Note, and the Payee or any legal holder of this Subordinated
Note will take no steps, whether by suit or otherwise, to compel or enforce the
collection of this Subordinated Note, nor will the Payee or legal holder use
this Subordinated Note by way of counterclaim, setoff, recoupment or otherwise
so as to diminish, discharge or otherwise satisfy in whole or in part any
indebtedness or liability of the holder to the Borrower under this Subordinated
Promissory Note, whether now existing or hereafter arising and howsoever
evidenced.

<PAGE>

      In the event of any insolvency or bankruptcy proceedings, and any
receivership, liquidation, reorganization, arrangement or other similar
proceedings in connection therewith, relative to the Borrower or to its
creditors, as such, or to its property, and in the event of any proceedings, for
voluntary liquidation, dissolution or other winding-up of the Borrower, whether
or not involving insolvency or bankruptcy, then the holder of Senior
Indebtedness shall be entitled to receive payment in full of all principal,
premium and interest on all Senior Indebtedness before the Payee is entitled to
receive any payment on account of principal, premium or interest upon this
Subordinated Note.

      No present or future holder of Senior Indebtedness shall be prejudiced in
his right to enforce subordination of this Subordinated Note by any act or
failure to act on the part of the Borrower. The subordination provisions of this
Subordinated Note are solely for the purpose of defining the relative rights of
the holders of Senior Indebtedness on the one hand, and the Payee or other legal
holder of this Subordinated Note on the other hand, and nothing herein shall
impair as between the Borrower and the Payee or other legal holder of this
Subordinated Note the obligation of the Borrower, which is unconditional and
absolute, to pay to the holder hereof the principal, premium, if any, and
interest thereon in accordance with its terms, nor shall anything herein prevent
the Payee or other legal holder of this Subordinated Note from exercising all
remedies otherwise permitted by applicable law or hereunder upon default
hereunder, subject to the rights, if any, under this Subordinated Note of holder
of Senior Indebtedness to receive cash, property or securities otherwise payable
or deliverable to the Payee or other legal holder of this Subordinated Note.

      The Payee and each and every other legal holder of this Subordinated Note
by acceptance hereof shall undertake and agree for the benefit of the holder of
Senior Indebtedness to execute, verify, deliver and file any (a) proofs of
claim, consents, assignments or other instruments which the holder of Senior
Indebtedness may at any time require in order to prove and realize upon any
rights or claims pertaining to this Subordinated Note and to effectuate the full
benefit of the subordination contained herein; and upon failure of the Payee or
other legal holder of this Subordinated Note so to do such holder of Senior
Indebtedness shall be deemed to be irrevocably appointed the agent and
attorney-in-fact of the Payee or other legal holder of this Subordinated Note to
execute, verify, deliver and file any such proofs of claim, consents,
assignments or other instruments and (b) any and all subordination agreements
and other indicia of subordination.

      Subject to the subordination provisions herein, the Borrower shall have
the right to prepay, without premium or penalty, at any time after (a) the
Senior Indebtedness Repayment Date, or (b) Borrower is able to meet the
"Distribution Conditions" necessary for the payment of subordinated debt, as
detailed in Section 6.10 of the Prospect Loan Agreement, any part of all of the
indebtedness evidenced hereby, upon two (2) business days' prior notice in
writing to Payee specifying the amount and date of such prepayment. Any
prepayment shall include interest accrued to the date of such prepayment.

      All payments hereunder shall be paid to Payee at c/o CMCP, 10600 N. De
Anza Blvd., Suite 250, Cupertino, CA 95014, or at such other place or places as
the Payee may from time to time designate in writing.

      At the election of the Payee or legal holder hereof and without notice,
the indebtedness remaining unpaid hereon shall become at once due and payable at
the place of payment aforesaid in case of default ("Default") as follows: (i) in
the payment, when due and payable (after giving effect to the express
subordination provisions hereof), of any required payment of principal or

<PAGE>

interest hereunder or under the Prospect Loan Agreement, or any portion thereof,
after ten days' written notice and opportunity to cure or (ii) any insolvency,
filing of a petition in bankruptcy, or assignment for the benefit of creditors
of Borrower. In the event of a Default, the Payee or legal holder hereof shall
be entitled to (a) interest on all overdue payments at 10% per annum and (b)
reasonable costs of collection, including reasonable attorneys' fees.

      All remedies afforded by law shall be cumulative, and all shall be
available to Payee at all times until this Subordinated Note has been paid and
performed in full. No delay or omission of Payee to exercise any right or power
under this Subordinated Note shall impair such right or power to be construed to
be a waiver of any Default or acquiescence therein, and any single or partial
exercise of any such right or power shall not preclude any other or further
exercise thereof or the exercise of any other right or power, and no waiver
whatsoever shall be valid unless in writing signed by Payee and then only to the
extent in such writing specifically set forth.

      The terms and provisions of this Subordinated Note shall inure to the
benefit of any assignee, transferee or holder or holders of this Subordinated
Note, and in the event of such transfer or assignment, each of all of the
rights, powers, privileges and benefits herein conferred upon Payee shall
automatically be vested in such transferee, as assignee of holder or holders.

      The terms and provisions of this Subordinated Note shall be binding upon
the Borrower and its successors, assigns and transferees but any such assignment
or transfer shall not relieve Borrower of its obligations hereunder.

      The Borrower hereby waives presentment, demand, notice of nonpayment and
protest and all other demands or notices in connection with the acceptance,
performance or enforcement of this Subordinated Note.

      The invalidity or unenforceability of any of the provisions hereof shall
not affect the validity or enforceability of the remainder hereof.

      This Subordinated Note shall be construed and enforced in accordance with
the laws of the State of California.

      IN WITNESS WHEREOF, the parties have duly executed this Subordinated Note
on the date first above written.

PAYEE                                           BORROWER

LAIRD Q. CAGAN                                  NATURAL GAS SYSTEMS, INC.

By:                                             By:
    ----------------------------                    ----------------------------
                                                By: Robert S. Herlin, President
                                                    and CEO

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