Document:

Discount Factoring Agr

    Exhibit
      10.5

    

    
      	 	 	
              800
                South Figueroa Street, Suite 730

              Los
                Angeles, CA 90017

              Tel.:
                (213) 347-0101 Fax: (213) 347-0202

              www.merchantfactors.com

            

    

    
      

      

    

    

    

    June
      8,
      2006

    

    Guru
      Denim Inc.

    1525
      Rio
      Vista Avenue

    Los
      Angeles, CA 90023

    ATTN:
      Mr.
      Charles Lesser

    

    Gentlemen:

    

    Reference
      is made to the Discount Factoring Agreement of 12/2/2004, as amended. The
      contract is further amended as follows:

    

    
      	 	
              Effective
                July 1, 2006:

            	 	 
	 	
              Factoring
                Commission

            	 	
              From
                .65 to .60%

            
	 	 	 	 
	 	
              EXTENSION

            	 	
              To
                12/2/2007

            

    

    

    

    All
      other
      terms and conditions of the above Discount Factoring Agreement remain
      unchanged.

    

    Please
      indicate your acceptance by signing in the space provided, and returning the
      original to me.

    

    The
      copy
      is for your file.

    

    

    
      	 	 	
              Very
                truly yours,

            
	 	 	 
	 	 	 
	 	 	
              /s/
                Donald Nunnari
                
                

              

              DONALD
                NUNNARI

            
	 	 	
              
                Senior
                  Vice President

              

            
	 	 	
               

            
	 	 	 
	
              READ
                AND AGREED:

            	 	 
	
              GURU
                DENIM INC.

            	 	 
	 	 	 
	
              /s/
                Jeffrey Lubell
                
                

              

              JEFFREY
                LUBELL

            	 	 
	
              PresidentExhibit 10.5

                                                                Saskatchewan
------------------------------------------------------------------------------

[logo]  Saskatchewan                         PETROLEUM AND NATURAL GAS LEASE
        Industry and
        Resources

Withdrawn from:  13-Jun-2006 Sale  PCL 186
                                                              PN58019
This Agreement, effective   13-Jun-2006

BETWEEN:

HER MAJESTY THE QUEEN in Right of the Province of Saskatchewan, as represented
by the Minister of Industry and Resources, (the "Lessor"),

                                       -and-

SCOTT LAND & LEASE LTD.                 100.0000%

(the "Lessee")

GRANT
-----

1    The Lessor grants and leases to the Lessee the right to explore for,
     work, recover, remove, and dispose of, the petroleum and natural
     gas (the "Petroleum") within the meaning of The Petroleum and Natural Gas
     Regulations, 1969 (the "regulations"), insofar as the  Petroleum is the
     property of the Lessor and the Lessor has the right to grant the same,
     that may be found within, upon or under the following lands (the "leased
     area"):

LOCATION   SEC   TWP  RGE   MER

PETROLEUM & NATURAL GAS FROM THE SURFACE TO THE TOP PRECAMBRIAN

    NW      2     5    25    2

Total Hectares      64.75          Total Acres:    160.00      (more or less)

TERM
----

2    The term of this Lease shall be for a period ending five years from the
     first day of April 2007, provided that this Lease will be continued at
     the expiration of this term if the requirements for continuance in the
     regulations have been satisfied by the Lessee.

                           LESSEE COPY

<PAGE>

ACT AND REGULATIONS INCORPORATED
--------------------------------

3    The provisions of The Crown Minerals Act (the "Act") and the regulations
     under that Act are deemed to be incorporated into and form part of the
     terms of this Lease.

4    Where there is any conflict between the requirements of this Lease and
     the Act or the regulations, the Act and the regulations shall govern.

ROYALTY
-------

5    In respect to all Petroleum produced, saved or recovered from the leased
     area, there is hereby excepted and reserved to the Lessor the royalty
     upon Petroleum that is prescribed by the Act and the regulations, which
     royalty shall be paid or delivered by the Lessee to the Lessor in the
     manner and time that is so prescribed.

OPERATIONS
----------

6    The Lessee shall not unduly interfere with other petroleum and natural
     gas operations or other mining operations in the leased area, or in any
     manner cause undue public or private damage, inconvenience or nuisance.

POOLING
-------

7(1) The Lessee is authorized to pool the leased area or part thereof with
     other mineral lands to complete a drainage unit.

7(2) In the even of such pooling:

     (a)  the Lessee shall promptly enter into an Addendum Agreement with the
     Lessor, in a form prescribed by the Lessor, which Addendum Agreement
     shall describe the areas to be pooled and the ratio mentioned in clause
     7(2)(b); and

     (b)  The quantity of production from the mineral lands in the pooled
     drainage unit to be allocated to the leased area, and the royalties
     excepted and reserved in this lease based on that allocation, shall be
     calculated and paid on the basis of the ratio that the surface area of
     the leased  area included in the pooled drainage unit bears to the total
     surface area of the mineral lands in the pooled drainage unit.

7(3) Drilling operations on, or production of Petroleum from, any mineral
     lands in the pooled drainage unit shall have the same effect in
     continuing this Lease in force and effect as if such operations or
     production were upon or from the leased area included in the pooled
     drainage unit.

CANCELLATION
------------

8    Without restricting the generality of these terms, this Lease may be
     cancelled by the Minister if there has been a breach by the Lessee of any
     of the provisions of the Lease or any of the provisions of The Crown
     Minerals Act or the regulations relating to the Lease.

TERMINATION - LESSOR'S RIGHTS
-----------------------------

9(1) On the termination of this Lease by cancellation, surrender, or
     expiration, the Lessee shall comply with all directions or orders of the
     Lessor or any other official of the Province of Saskatchewan respecting
     the preservation, clean up, and restoration of the leased area and
     facilities in the leased area with respect to operations conducted by or
     on behalf of the Lessee.

9(2) Any costs incurred by the Lessor as a result of the Lessee's failure to
     comply with any direction or order mentioned in clause 9(1), which
     failure shall be communicated to the Lessee, shall be a debt due by the
     Lessee to the Lessor and may be recovered by the Lessor as provided for
     by law.

INDEMNITY
---------

10   The Lessee shall keep harmless and indemnify the Lessor, its Ministers,
     officials, agents and employees, past, present and future, from and
     against all actions, suits, claims and demands arising out of or in
     connection with the operations carried on by the Lessee, its employees,
     agents,  licensees and contractors, pursuant to this Lease.

ENUREMENT
---------

11   The Lease shall enure to the benefit of and shall be binding upon the
     parties to this Lease and their respective heirs, executors,
     administrators, successors and assigns.

IN WITNESS WHEREOF the Lessor and the Lessee have executed this Lease.

SIGNED, SEALED AND DELIVERED

                        /s/Ed Dancsok
                        --------------------------------------------
                        Lessor
                        Director of Geology & Petroleum Lands Branch

                        /s/ Gregg Scott
                        --------------------------------------------
                        Lessee - Gregg Scott
                                 President

<PAGE>

                      TRANSFER OF AGREEMENT

BETWEEN:

Scott Land & Lease Ltd., a body corporate having an office at the City of
Calgary, in the Province of ALBERTA (hereinafter called "the Transferor")

-and-

Lions Petroleum, Inc., a body corporate having an office in the City of
Calgary, in the Province of ALBERTA (As To A 100% Interest) (hereinafter
called "the Transferee")

The Transferor, being the holder of 100% Interest in Saskatchewan Petroleum
and Natural Gas Lease PN58019 dated June 12, 2006, in consideration of the sum
of One ($1.00) Dollar, and other valuable consideration, payment of which is
hereby acknowledged by the Transferor, hereby transfers unto the Transferee
100% interest in the said Saskatchewan Petroleum and Natural Gas Lease.

AND the Transferee hereby accepts this transfer.

AND the Post Office address of the Transferee is:

                       Lions Petroleum Inc
                   1150, 789 West Pender Street
                   Vancouver, British Columbia
                             V6C 1H2

DATED this 24th day of July, 2006.

Scott Land & Lease Ltd.           Lions Petroleum Inc.

/s/ Gregg Scott                   /s/ Gordon Wiltse
------------------------------    -----------------------------
Gregg Scott  President            Gordon Wiltse, CFO & Director
(As To A 100% Interest)           (As To A 100% Interest)
Transferor                        Transferee

<PAGE>

SCHEDULE FOR FORM OF SASKATCHEWAN PETROLEUM AND NATURAL GAS LEASE
                      AND TRANSFER AGREEMENT

Sale      Lease               Location                 Hectares/Acres
-----------------------------------------------------------------------------
PCL 187   PN58020   LOCATION   SEC  TWP  RGE  MER    Total Hectares 64.75
                      NW       27   5    25   2     Total Acres:  160.00
--------  -------- ----------- ---- ---- ---- ------ ------------------------
PCL 188   PN58021   LOCATION   SEC  TWP  RGE  MER    Total Hectares 258.59
                       NE       33   5    25   2     Total Acres: 639.00
                       NW       33   5    25   2
                       S/2      33   5    25   2
--------  -------- ----------- ---- ---- ---- ------ ------------------------
PCL 189   PN58022   LOCATION   SEC  TWP  RGE  MER    Total Hectares  32.37
                       01       35   5    25   2     Total Acres:    80.00
                       02       35   5    25   2
--------  -------- ----------- ---- ---- ---- ------ ------------------------
PCL 190   PN58023   LOCATION   SEC  TWP  RGE  MER    Total Hectares  32.37
                       03       35   5    25   2     Total Acres:    80.00
                       04       35   5    25   2
             HERITAGE SENSITIVE
--------  -------- ----------- ---- ---- ---- ------ ------------------------

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