Document:

Filed by Automated Filing Services Inc. (604) 609-0244 - Park Place Energy Inc. - Exhibit 10.7

	BOUNTY DEVELOPMENTS LTD.
      	1250, 340 – 12 Ave. S.W. 
	  	Calgary, AB 
	  	T2R 1L5 
	  	Tel (403) 264-4994 
	  	Fax (403) 266-6031 
	  	pclark@bountydev.com
      

September 22, 2006 

	Damascus Energy Inc. 	Park Place Energy Inc. 
	22 Barclay Walk S.W., 	1220-666 Burrard St. 
	Calgary, Alberta T2P 4V9 	Vancouver, B.C. V6C 2X8 
	  	  
	Attention: Michael Vandale 	Attention: David Stadnyk

	RE: 	Seismic Option Agreement
    
	  	West Half of Section 13,
      Township 87, Range 7 W6M 
	  	Worsley Area, Alberta
  
	  	Bounty file: AM-209-003
  
	 	 

Bounty Developments Ltd. (“Bounty”) is the holder of an
undivided 100% Working Interest in the Title Documents covering the Farmout
Lands described in Schedule “A” and has agreed to option its interests in the
Farmout Lands to Damascus (“Damascus”) and Park Place Energy Inc. (“Park Place”)
on the following terms and conditions. 

	1. 	
      DEFINITIONS

	 	 	 
		
      Each capitalized term used in this Head Agreement will
      have the meaning given to it in the Farmout & Royalty Procedure, and,
      in addition:

	 	 	
       

		(a) 	
      “Contract Depth” means a depth of -1600 metres subsea or
      15 metres into the Precambrian, whichever first occurs;

	 	 	
       

		(b) 	
      “Farmee” means Damascus as to a 50% interest and Park
      Place as to a 50% interest;

	 	 	
       

		(c) 	
      “Farmor” means Bounty;

	 	 	
       

	 	(d)	
      “Title Documents” mean the title documents described as
      “Title Documents” in Schedule “A” and all renewals, extensions,
      continuations or documents of titles issued in substitution therefrom.
    

 

	 	(e) 	
      “Mutual Interest Lands” means Sections 1, 2, 11, 12, E13,
      14, S23 and S24 in 87-7 W6, and Sections 6, 7, and 18 in 87-6
  W6.

	2. 	
      SCHEDULES

	 	 	 
		
      The following Schedules are attached hereto and made part
      of this Agreement:

	 	 	 
		(a) 	
      Schedule “A”, which describes the Title Documents, the
      Farmout Lands and the Encumbrances;

	 	 	 
		(b) 	
      Schedule “B”, which is the election sheet for the 1997
      CAPL Farmout & Royalty Procedure (the “Farmout and Royalty Procedure”)
      which, along with the elections, is incorporated by reference as fully as
      if it were attached hereto;

	 	 	 
		(c) 	
      Schedule “C”, which specifies the types of drilling
      information to be supplied by the Farmee to the Farmor pursuant to the
      Farmout & Royalty Procedure;

	 	 	 
		(d) 	
      Schedule”D”, which is the election sheet for the 1990
      CAPL Operating Procedure (the “Operating Procedure”) and the 1996 PASC
      Accounting Procedure (the “Accounting Procedure”) which, along with the
      elections, are incorporated by reference as fully as if they were attached
      hereto;

	 	 	 
		(e) 	
      Schedule “E”, which is a copy of the Gross Overriding
      Royalty Agreements with Berry Consultants Inc.;

	 	 	 
		(f) 	
      Schedule “F”, which is a copy of the Gross Overriding
      Royalty Agreements with Tlell Developments
Inc.

	3. 	
      SEISMIC PROGRAM

	a) 	
      The parties hereby confirm that, pursuant to a prior
      agreement but as part of the Farmee’s consideration under this Agreement,
      that on or before November 1, 2006, Farmee, at its sole cost and risk,
      commenced (and has now completed) shooting a minimum 10 square kilometres
      three dimensional seismic program over the Farmout Lands which shall be
      sufficient to fully evaluate the Farmout Lands (the “Seismic Program”).
      which shall be reasonable under the circumstances.

	 	 
	b) 	
      From the Seismic Program, Farmee shall provide Farmor, at
      no cost and as soon as available, with a copy of: all field data including
      survey information; processed data, including stacked data; interpreted
      data; and a copy of shot point base maps and bin overlay maps. Farmor
      shall hold such data confidential and for its sole use and
  benefit.

	 	 
	c) 	
      Farmee shall retain 100% of the trading rights and sole
      ownership of the Seismic Program.

2

4.        ELECTION
TO DRILL 

Providing that Farmee has fulfilled its obligations and is not
in default under clause 3 of this Agreement, on or before November 1, 2006,
Farmee shall have the right to elect as follows: 

	a) 	
      to drill the Test Well on the Farmout Lands pursuant to
      clause 5 hereof; or

	 	 
	b) 	
      terminate this agreement and therefore relinquish any
      right to earn an interest in the Farmout Lands.

5.       
TEST WELL 

	a) 	
      As between the parties comprising Farmee, all operations
      with respect to the Test Well shall be subject to the provisions of the
      Operating Procedure as amended by the Head Agreement. Damascus shall be
      appointed initial Operator.

	 	 	 	 
		
      If the Farmee elects to drill the Test Well pursuant to
      clause 4, it shall spud the Test Well at a mutually agreeable location on
      the Farmout Lands within 90 days of making such election and shall then
      diligently and continuously drill the Test Well to Contract Depth at its
      sole cost. In the event surface access to the drill site cannot be
      reasonably obtained by the required date because of surface conditions,
      weather conditions, rig availability or regulatory approval, Farmee shall,
      before the required date, advise Farmor in writing, of the reasons why
      access cannot be obtained. Farmor shall, thereupon, grant an extension to
      the commencement date which shall be reasonable under the circumstances.
      If production of petroleum substances in paying quantities is indicated,
      Farmee shall equip the Test Well and thereafter use its best efforts to
      produce and dispose of the said substances.

	 	 	 	 
		b) 	
      Farmee shall be solely responsible for the costs to
      drill, complete, evaluate, equip and tie in or abandon the Test
    Well.

	 	 	 	 
		c) 	
      Subject to Article 3.00 of the Farmout & Royalty
      Procedure, the Farmee will earn the following interests in the Farmout
      Lands after complying with the provisions of this clause:

	 	 	 	 
			(i) 	
      a 100% Working Interest in the Farmout Lands, subject to
      the Farmee’s Overriding Royalty reserved in Article 5.00 of the Farmout
      and Royalty Procedure which overriding royalty shall be convertible to a
      45% Working Interest after Payout.

	 	 	 	 
		d) 	
      50% of the cost of the Seismic Program shall be added to
      the Payout account for the Test Well.

3

	6. 	
      OPERATING PROCEDURE

	 	 	 
		
      The Operating Procedure and Accounting Procedure shall
      govern joint operations on the Farmout Lands earned under this
      agreement.

	 	 	 
	7. 	
      AREA OF MUTUAL INTEREST

	 	 	 
		a) 	
      Article 8.00 of the Farmout and Royalty Procedure will be
      in effect from the Effective Date until July 31, 2007. Subject to Article
      8.00, the Parties will have the right to participate in an acquisition of
      Mutual Interest Lands in the following percentages:

	 	 	 
			
      Farmor-50%

	 	 	 
			
      Farmee-50%.

		
      The Encumbrances will apply to the Mutual Interest Lands
      and shall be paid by the Parties in proportion to their participating
      interest.

	 	 
	8. 	
      AMENDMENT TO THE LIMITATIONS ACT

	 	 
		
      The two year period for seeking a remedial order under
      section 3(1)(a) of the Limitations Act, s.a. 1996 c. L-15.1, as
      amended, for any claim (as defined in that Act) arising in
      connection with this Agreement is extended to:

	 	a. 	
      for claims disclosed by an audit, two years after the
      time this agreement permitted that audit to be performed ; or

	 	 	 
	 	b. 	
      for all other claims, four
years.

	9. 	
      ADDRESSES FOR NOTICES

	 	 
		
      The parties’ Addresses for notices are:

	 	 
		
      Bounty Developments Ltd.

		
      1250, 340 – 12th Avenue S.W. 
Calgary, AB
      T2R 1L5

	 	 
		
      Attention: Jon P. Clark

	 	 
		
      Damascus Energy Inc.

		
      22 Barclay Walk S.W., 
Calgary, Alberta T2P
  4V9

	 	 
		
      Attention: Michael Vandale

	 	 
		
      Park Place Energy Inc.

		
      1220-666 Burrard St.

4

		
      Vancouver, BC. V6C 2X8

	 	 
		
      Attention: David Stadnyk

	 	 
	10. 	
      MISCELLANEOUS

	 	a) 	
      Each of the parties represents and warrants that it now
      has or is entitled to have good right, full power and absolute authority
      to enter into this Agreement.

	 	 	 
	 	b) 	
      In the event of a conflict between any term or condition
      of this Head Agreement and any Schedule attached hereto, the term or
      condition of this Head Agreement shall prevail.

	 	 	 
	 	c) 	
      Any reference in this Head Agreement to “hereunder”,
      “herein” and “hereof” refer to the provision of this Head Agreement and
      unless otherwise stated, any reference to a clause, subclause, or Schedule
      refers to the clauses, subclauses or Schedule of this Head
    Agreement.

	 	 	 
	 	d) 	
      The following clauses of the 1990 CAPL Operating
      Procedure are incorporated into and apply mutatis mutandis to this Head
      Agreement:

	 	102 	HEADINGS 
	 	103(b) 	REFERENCES 
	 	2101 	PARTIES TO SUPPLY 
	 	2301 	WAIVER OF PARTITION OF SALE

	 	2601 	LIMITATION ON RIGHT OF
      ACQUISITION 
	 	2801 	SUPERSEDES PREVIOUS AGREEMENTS
  
	 	2802 	TIME OF ESSENCE 
	 	2803 	BINDS SUCCESSORS AND ASSIGNS
  
	 	2804 	LAWS OF JURISDICTION TO APPLY
  

11.       
COUNTERPART EXECUTION 

This Agreement may be executed in counterpart. All of those
executed counterpart pages when taken together will constitute the Agreement.

If this reflects your understanding of the terms and conditions
agreed upon respecting this Agreement, please sign and return one counterpart
execution page to complete our copy of this Agreement. 

Yours very truly, 

BOUNTY DEVELOPMENTS LTD. 

/s/ Jon P. Clark 

Jon P. Clark 
Exploration Manager 

5

Agreed to this 5 day of Oct., 2006 

 

DAMASCUS ENERGY INC. 

Per: /s/ Michael Vandale 

PARK PLACE ENERGY INC. 

Per: /s/ David Stadnyk 

6

Schedule “A” Attached to
an                      
Agreement dated effective the 29th 
day of May, 2006 between Bounty
Developments Ltd., Damascus Energy Inc. and 
Park Place Energy Inc. 

	Farmout Lands 	Title Documents 	Encumbrances 
	  	  	  
	Twp. 87, Rge. 7 W6 M: 	Alberta Crown PNG Lease 	Crown Royalty 
	West Half of Section 13 	No.0506020313 	  
	PNG 	  	1% Gross 
	  	  	Overriding Royalty 
	  	  	to Berry 
	  	  	Consultants Inc. 
	  	  	  
	  	  	1% Gross 
	  	  	Overriding Royalty 
	  	  	to Tlell 
	  	  	Developments Inc. 

7

Schedule “B” Attached to an Agreement dated effective the
29th day of 
May, 2006 between Bounty Developments Ltd., Damascus Energy Inc.
and 
Park Place Energy Inc. 

1997 CAPL FARMOUT & ROYALTY PROCEDURE ELECTIONS AND
AMENDMENTS 

	Subclause 1.01 (f) 	- 	Effective
      Date                   
       -                      
      May 29, 2006 
	  		 
	Subclause 1.01 (t) 	- 	Payout
      -                   
      Alternate                    
      *A 
	  	  	(if Article 6.00 applies)
  

*50% of the cost of the Seismic Program shall be added to the
Payout account for the Test Well. 

	Subclause 1.01
      (bb)               
      - 	Delete the following from the definition:

	 	 
		“which area will be determined as of the
      drilling rig release date of that Earning Well” 
	 	 
	Clause 1.02 - 	Incorporation of Provisions from 1990 CAPL
      Operating Procedure 
	 	(i) Insurance (311) Alternate B 
	 	 
	Article 4.00 (Option Wells) 	will_____ /will not X apply. 
	 	 
	Article 5.00 (Overriding Royalty) 	                   
      will X /will not _______apply. 

Subclause 5.01A, Quantification of Overriding Royalty
(if applicable). 

	 	(i) 	
      Crude oil (a) - Alternate 2 
If Alternate 1 applies,
      _n/a__ % 
If Alternate 2 applies, 1/23.8365, min 5%, max
    15%

	 	 	 
	 	(ii) 	
      Other (b) - Alternate 1 
If Alternate 1
      applies, 15 % 
If Alternate 2 applies, n/a % in (i) and
      n/a % in (ii)

Subclause 5.04B, Permitted Deductions (if applicable).
Alternate 1 only

Article 6.00 (Conversion of Overriding Royalty) will X
/will not_____apply. 
Conversion to 45% of Working Interest in Subclause
6.04A

Article 8.00 (Area of Mutual Interest) will X apply.

Article 11.02 (Reimbursement of Land Maintenance Costs)

will _____/will not __X__ apply. If applies, reimbursement of
$___n/a______ 

8

Schedule “C” Attached to an Agreement dated effective the
29th day of 
May, 2006 between Bounty Developments Ltd., Damascus Energy Inc.
and 
Park Place Energy Inc. 

BOUNTY DEVELOPMENTS LTD. 
WELL REQUIREMENT SHEET 

	PRIOR TO SPUD 	COPIES 	 	AFTER DRILLING 	COPIES 
	  	  	 	  	  
	Survey Plat 	1 		Digital Logs (Sonic log – LAS
      Format) 	1 
	  	  	 	Field Prints Logs 	1 
	Appl. for Licence 	1 	 	Final Prints Logs 	1 
	Well Licence 	1 	 	Final Analyses 	1 
	AFE or Well Cost Est. 	1 	 	Core 	1 
	Prognosis 	1 	 	DST’s 	1 
	  	  	 	Oil, Gas or Water 	1 

	DURING DRILLING 	  	 	DRILLING REPORT 	  
	  	  	 	  	  
	Daily drilling report 	1 	 	Casing details 	1 
	Geologic report 	1 	 	Cored intervals & recoveries 	1 
	  	  	 	Comp/Abandon data 	1 
	  	  	 	Formation tops 	1 
	  	  	 	Sample/core desc. 	1 

	NOTICES 	  	 	COMPLETION REPORT 	  
	  	  	 	  	  
	24 hr comp/abandon 	1 	 	Daily 	1 
	Notice of intention to: 	  	 	Production tests 	1 
	           
             Core 	1 	 	Production data 	1 
	               
         Test 	1 	 	New well reports 	1 
	  	  	 	Samples: Access to Operator’s
      set 	  

SPECIAL REQUIREMENTS BEFORE
ABANDONMENT:                  
See DST Charts 

Mail to Bounty at address for service 

TELEPHONE: 

	Daily drilling, geological and completion reports to: 	Fax: 	266-6031 
	Weekend or night reports to Jon Clark 	Home ph: 	243-5214 
	  	e-mail: 	  
	  	jonclark@bountydev.com

9

Schedule “D” Attached
  to an Agreement dated effective the 29th day of 

  May, 2006 between Bounty Developments Ltd., Damascus Energy Inc. and 

  Park Place Energy Inc. 

CAPL OPERATING PROCEDURE - 1990

	Clause 311 	Insurance Election: A 
	Clause 604 	Marketing Fee: deleted 
	Clause 903 	Casing Point Election: A 
	Clause 1007 	Penalty for Independent Operations: 
	  	1. Development Wells: 300% 
	  	2. Exploratory Wells: 500% 
	Clause 1010 	Exceptions to Clause 1007: (iv) 180 days 
	Clause 2401 	Disposition of Interests: A 
	Clause 2404 	Recognition Upon Assignment: 
	  	CAPL Assignment Procedure to take precedence
  

	Clause 302. Overhead Rates: 	(a) 		Exploration Project: n/a percent OR
  
	  	  	1. 	5% ; $50,000. 
	  	  	2. 	3% ; $100,000. 
	  	  	3. 	1% 
	  	(b) 		Drilling of a Well: n/a percent OR

	  	  	1. 	3%; $ 50,000. 
	  	  	2. 	2%; $l00,000. 
	  	  	3. 	1% 
	  	(c) 		Initial Construction Project: n/a
      percent OR 
	  	  	1. 	3%; $ 50,000. 
	  	  	2. 	2%; $100,000. 
	  	  	3. 	1% 
	  	(d) 		Construction Project: n/a percent OR
  
	  	  	1. 	5% of the first $ 50,000. 
	  	  	2. 	3% of the next $100,000. 
	  	  	3. 	1% 
	  	(e) 		Operation and Maintenance: 
	  	  	1. 	n/a ; 
	  	  	2. 	$250. per Producing well per month; or 
	  	  	3. 	n/a 
	  		 	 
	  	  	  	Subclause 302(e)(2) and 302(e)(3) hereof shall not
    
	Clause 406. Dispositions 		 	$10,000.00 

10

Schedule “E” Attached to an Agreement dated effective the
29th day of 
May, 2006 between Bounty Developments Ltd., Damascus Energy Inc.
and 
Park Place Energy Inc. 

OVERRIDING ROYALTY AGREEMENT 

THIS AGREEMENT made as of the 1st day of January,
2006 

BETWEEN: 

  
    
      
        BERRY CONSULTANTS INC. a body corporate, having
          an office at the City of Calgary in the Province of Alberta (hereinafter
          referred to as the "Royalty Owner") 

      

    

  

OF THE FIRST PART 

- and - 

  
    
      
        BOUNTY DEVELOPMENTS LTD., a body corporate,
          having an office at the City of Calgary in the Province of Alberta (hereinafter
          referred to as the "Grantor") 

      

    

  

OF THE SECOND PART 

          WHEREAS
the Grantor holds an interest in the Royalty Lands and Leases as hereinafter
defined; and WHEREAS, in consideration of good and valuable consideration
received, the Grantor has agreed to grant and to pay to the Royalty Owner an
Overriding Royalty effective as of the date hereof, the terms and conditions of
which are provided for in this agreement. 

          NOW
THEREFORE this Agreement witnesseth that in consideration of the mutual
covenants and agreements set forth and contained herein, the parties agree as
follows: 

1.      DEFINITIONS 

In this Agreement, including this clause, unless the context
otherwise requires: 

	(a) 	
      "Condensate" means a mixture of mainly pentanes and
      heavier hydrocarbons that may be contaminated with sulphur compounds, that
      is recovered or is recoverable at a Well from an underground reservoir and
      that may be gaseous in its virgin reservoir state but is liquid at the
      condition under which its volume is measured or
  estimated;

11

	(b) 	
      "Crude Oil" means a mixture mainly of pentanes and
      heavier hydrocarbons that may be contaminated with sulphur compounds, that
      is recovered or is recoverable at a Well from an underground reservoir and
      that is liquid at the conditions under which its volume is measured or
      estimated, and includes all other hydrocarbon mixtures so recovered or
      recoverable except natural gas or Condensate;

	(c) 	
      "Current Market Value" means the price at which Petroleum
      Substances are sold by the Grantor calculated at the Royalty Determination
      Point, which price is not unreasonable having regard to market conditions
      applicable to similar production in arm's length transactions at the time
      of such disposition including, without restricting the generality of the
      foregoing, such factors as the volumes available, the kind and quality of
      Petroleum Substances to be sold, the effective date of the sale, the term
      of the sale agreement, the point of sale of the Petroleum Substances and
      the type of transportation service available for the delivery of the
      Petroleum Substances to be sold;

	 	 
	(d) 	
      "Leases" means the respective documents of title and any
      extension or renewal of such documents pursuant to which the Grantor holds
      an interest in the Royalty Lands;

	 	 
	(e) 	
      "Overriding Royalty" means the overriding royalty granted
      pursuant to Clause 2 hereof;

	 	 
	(f) 	
      "Petroleum Substances" means Crude Oil, Condensate,
      natural gas and related hydrocarbons and all other substances produced in
      association therewith but only to the extent that the same are granted by
      the Leases;

	 	 
	(g) 	
      "Raw Gas" has the meaning prescribed by the
      Regulations;

	 	 
	(h) 	
      "Regulations" means all statutes, laws, rules, orders,
      regulations or directives in effect from time to time and made by any
      governmental authority having jurisdiction over the Royalty Lands and the
      operations to be conducted thereon;

	 	 
	(i) 	
      "Royalty Determination Point" means the first point of
      measurement downstream from the wellhead after the initial treatment of
      the produced substances for the separation and removal of basic sediment
      and water from the Petroleum Substances;

	 	 
	(j) 	
      "Royalty Lands" means the specified undivided working
      interest(s) in the lands set forth in Schedule "A";

	 	 
	(k) 	
      "Spacing Unit" means the area allocated to a Well (or the
      area which would be allocated to a well, but for a plan of unitization)
      pursuant to the Regulations for the purpose of producing Petroleum
      Substances; and

	 	 
	(l) 	
      "Well" means any well on the Royalty Lands or on lands
      pooled with the Royalty Lands.

12

2.      GRANT OF OVERRIDING
ROYALTY 

Grantor hereby grants to the Royalty Owner an interest in
respect of the Petroleum Substances within, upon or under the Royalty Lands
equal to one (1%) percent of the gross monthly production produced from the
Royalty Lands. 

3.      QUANTIFICATION OF
OVERRIDING ROYALTY 

If Royalty Owner does not take possession of and separately
dispose of its share of Petroleum Substances, the Overriding Royalty shall be
quantified and paid on the gross proceeds of the sale of such Petroleum
Substances without any deductions, except the following, namely: 

	(a) 	
      with respect to Crude Oil and Condensate, a proportionate
      share of the actual costs of transportation from the Royalty Determination
      Point to market connection;

	 	 
	(b) 	
      with respect to Petroleum Substances other than Crude Oil
      and Condensate, a proportionate share of the cost of transportation,
      gathering and processing, providing that such costs are no greater than
      those allowed from time to time by the Crown in the right of the Province
      of Alberta in calculating its royalty.

4.      OVERRIDING ROYALTY
TAKEN IN KIND 

	(a) 	
      The Royalty Owner shall have the right to take in kind
      the Royalty Owner's share of Petroleum Substances. Such right may be
      exercised separately with respect to Condensate, Crude Oil, Raw Gas, and
      any other individual Petroleum Substance. In the case of Crude Oil and
      Condensate, such right when exercised shall be done on a minimum of thirty
      (30) days notice to the Grantor. In the case of all other Petroleum
      Substances such right when exercised shall be done on a minimum of six (6)
      months notice to the Grantor. If the Royalty Owner, however, signifies in
      writing its consent to the sale of any of the Royalty Owner's share of
      Petroleum Substances under a contract made by the Grantor providing for a
      minimum term in excess of the said respective notice periods, the Royalty
      Owner's right to take in kind any Petroleum Substances subject to such
      contract shall be suspended during the term of such contract. The Royalty
      Owner may cease to take in kind any Petroleum Substances upon giving the
      Grantor the same minimum notice as provided above for the Royalty Owner to
      take such Petroleum Substances in kind as aforesaid. The right to take in
      kind or to cease to take in kind may be exercised from time to time
      subject only to the foregoing provisions of this Subclause.

	 	 
	(b) 	
      When the Royalty Owner is taking in kind the Royalty
      Owner's share of any Petroleum Substances, the Grantor shall at no cost to
      the Royalty Owner remove basic sediment and water therefrom in accordance
      with good oilfield practice, and:

13

	 	(i)	
      in respect to Crude Oil and Condensate: the Grantor shall
      deliver the Royalty Owner's share to the Royalty Owner, or its nominee, at
      the tank outlets, or comparable delivery point, in accordance with usual
      and customary pipeline and shipping practice, free and clear of all
      charges whatsoever except to the extent that the Royalty Determination
      Point is an earlier point in which case the costs of moving product from
      the Royalty Determination Point to the delivery point will be deductible
      by the Grantor from the Overriding Royalty. The Royalty Owner shall have
      the right to use free of charge a share of the Grantor's lease tankage and
      storage facilities to store a maximum of ten (10) days accumulation of the
      Royalty Owner's share of Crude Oil and Condensate; and

	 	 	 
	 	(ii) 	
      in respect to Raw Gas: the Grantor shall deliver the
      Royalty Owner's share to the Royalty Owner, or its nominee, at the Royalty
      Determination Point of the relevant well, provided that to the extent the
      Royalty Owner so requests on reasonable notice to the Grantor and the
      Grantor can reasonably comply with such request, the Grantor shall gather,
      compress, transport, treat and process such share of Raw Gas along with
      the Grantor's share of Raw Gas from the applicable well or wells and
      deliver to the Royalty Owner at their relevant plant outlet, the Royalty
      Owner's Overriding Royalty share of marketable gas and other Petroleum
      Substances obtained from such share of Raw Gas, in which event, the
      Royalty Owner shall be responsible for:

	 	A. 	
      its proportionate share of the costs of gathering,
      compressing, transporting, treating and processing such Raw Gas where the
      Grantor or an Affiliate thereof does not own such facilities; or

	 	 	 
	 	B. 	
      where the Grantor or an Affiliate thereof owns such
      facilities, such fee as may be agreed upon by the Grantor and the Royalty
      Owner for the use of such facilities to make marketable the Royalty
      Owner's Overriding Royalty share of Raw Gas.

5.      CONDUCT OF
OPERATIONS 

	(a) 	
      Grantor shall be entitled to use a proportionate share of
      the Royalty Owner's share of Petroleum Substances as may be reasonably
      necessary for its drilling and production operations with respect to the
      Royalty Lands, excluding Petroleum Substances used for tertiary recovery
      operations. Grantor shall not be liable to Royalty Owner for Petroleum
      Substances which are unavoidably lost. Petroleum Substances so used or
      lost shall be excluded when quantifying the Overriding
  Royalty.

14

	(b) 	
      The Grantor shall have the right to commingle Petroleum
      Substances produced from the Royalty Lands with Petroleum Substances
      produced from other lands, provided reasonable methods are used to
      determine the proper measurement of production of Petroleum Substances
      from the Royalty Lands.

	 	 
	(c) 	
      Nothing contained in this Agreement shall be a deemed or
      implied covenant by the Grantor to develop the Royalty Lands.

	 	 
	(d) 	
      The Grantor shall carry on (or cause to be carried on)
      all operations on the Royalty Lands diligently and in a good and
      workmanlike manner consistent with good oilfield
  practice.

6.      MAINTENANCE OF LEASES

Grantor shall comply with all the covenants and conditions
contained in the Leases insofar as they relate to the Royalty Lands and shall do
all things necessary to maintain the Leases in full force and effect during the
term of this Agreement including, without limitation, timely payment of all
rentals, all renewal and extension fees, all taxes, all payments in lieu of
actual production and royalties due or becoming due in respect of the Royalty
Lands and the Leases. 

7.      POOLING 

The Grantor shall have the authority to pool the Petroleum
Substances in a zone underlying all or a portion of the Royalty Lands to the
extent required to form a Spacing Unit in such zone, but only if such pooling
allocates to that portion of the Royalty Lands included in the Spacing Unit that
proportion of the total production of Petroleum Substances from the Spacing Unit
which the surface area of that portion of the Royalty Lands placed in the
Spacing Unit bears to the total surface area of the Spacing Unit. The Grantor
shall thereafter give written notice to the Royalty Owner describing the extent
to which the Royalty Lands are being pooled and describing the Spacing Unit with
respect to which they are so pooled. 

8.      UNITIZATION 

The Grantor shall not include the Royalty Lands or any part or
parts thereof in a Unit Agreement or a Unit Operating Agreement for the unitized
development and/or operation thereof with other lands without the consent of the
Royalty Owner, which shall not be unreasonably withheld. Upon any such
unitization, the Overriding Royalty shall be quantified on the basis of the
production allocated to each Spacing Unit on the Royalty Lands under the plan of
unitization and not upon the basis of actual production from the Royalty Lands.
Further, each Spacing Unit for which production is allocated shall be deemed to
have on Well thereon, regardless of the actual number of Wells. 

15

9.      BOOKS AND RECORDS

	(a) 	
      The Grantor shall keep true and current books, records
      and accounts showing the quantity of Petroleum Substances produced from or
      allocated to the Royalty Lands and the sales and disposition made thereof
      from time to time. The books, records, vouchers and accounts maintained by
      the Grantor shall be open to inspection at all reasonable times during
      business hours by any officer, agent or employee appointed or authorized
      by the Royalty Owner, in writing, to examine the same. All information
      obtained by the Royalty Owner pursuant to this clause shall be treated as
      confidential and shall not be disclosed to third persons without the prior
      written consent of the Grantor.

	 	 
	(b) 	
      By the last day of each month, beginning with the first
      month following the month in which production of Petroleum Substances from
      the Royalty Lands is obtained after the date hereof, Grantor shall submit
      to Royalty Owner a statement showing the quantity and kind of Petroleum
      Substances produced, deemed to be produced or allocated to, saved and sold
      from or used off the Royalty Lands in the immediately preceding calendar
      month, together with a quantification of Royalty Owner's share of
      Petroleum Substances for such immediately preceding calendar month. When
      Royalty Owner does not take and separately dispose of its share of
      Petroleum Substances, the said statement shall also include the sale price
      for such Petroleum Substances and the gross proceeds received therefrom,
      accompanied by a cheque payable to Royalty Owner for its share of such
      proceeds. A copy of Grantor's governmental production statement for the
      month for which the Overriding Royalty is quantified as aforesaid and
      also, with respect to Crown Leases, a copy of the government royalty
      statement with respect to the Leases, shall accompany each royalty
      statement to Royalty Owner. Any information contained in such governmental
      production statement or royalty statement need not be repeated in the
      statement to Royalty Owner.

	 	 
	(c) 	
      Royalty Owner, upon notice to Grantor, shall have the
      right to audit Grantor's accounts and records for any given calendar year,
      insofar as they relate to any matter or item relating to this Agreement
      bearing on the Overriding Royalty, within the twenty-four (24) month
      period following the end of that calendar year. any payment made or
      statement rendered by Grantor hereunder which is not disputed by Royalty
      Owner on or before the last day of the twenty-sixth (26th) month following
      the end of the calendar year shall be deemed to be
  correct.

10.      ASSIGNMENT BY GRANTOR

The Grantor may assign any legal or equitable interest in this
Agreement, the Royalty Lands, the Leases or any portion or portions thereof and
in the event of such assignment, the Grantor shall continue to be bound by all
of the conditions and provisions of this Agreement as if there had been no
assignment until such 16

time as the Royalty Owner shall have been served with a written
undertaking by the assignee (or assignees) directly enforceable by the Royalty
Owner, to perform and be bound thereafter by all of the terms and provisions of
this Agreement to the same extent and degree with respect to the interest which
has been assigned to it, as it would have been if such assignee (or assignees)
had been a party to this Agreement instead of the Grantor. 

11.      ASSIGNMENT BY ROYALTY
OWNER 

The Royalty Owner may at any time assign its interest in the
Overriding Royalty upon notice thereof to the Grantor, provided that if at any
time the Overriding Royalty should become owned by more than one party, the
Grantor shall have the right to require the assignees of the Overriding Royalty
to appoint in writing an agent to represent all of the assignees of the
Overriding Royalty and to receive all statements and payments (if any) of the
Overriding Royalty. If the assignees of the Overriding Royalty fail to appoint
an agent hereunder within thirty (30) days of any request to do so by Grantor,
Grantor may withhold the Overriding Royalty until such time as an agent is
appointed. 

12.      ROYALTY OWNER'S LIEN

	(a) 	
      The Royalty Owner shall be entitled to and shall have a
      first and paramount lien upon the Grantor's share of all Petroleum
      Substances from time to time produced from the Royalty Lands to secure the
      payment of the Overriding Royalty. Such lien shall not operate to release
      the Grantor from personal liability for monies due to the Royalty Owner.
      Such lien shall not attach to the Grantor's share of Petroleum Substances
      sold or otherwise disposed of from the Royalty Lands, but immediately upon
      default occurring in payment by the Grantor of monies payable to the
      Royalty Owner such lien shall operate as an assignment to the Royalty
      Owner of the consideration thereafter payable to the Royalty Owner for the
      Petroleum Substances sold, up to the amount owed to the Royalty Owner and
      not so paid by the Grantor.

	 	 
	(b) 	
      Service of a copy of this agreement upon any purchaser of
      Petroleum Substances together with written notice from the Royalty Owner
      shall constitute written authorization on the part of the Grantor for such
      purchaser to pay the Royalty Owner the proceeds from any sale or sales of
      the Grantor's share of Petroleum Substances up to the amount owed to the
      Royalty Owner by the Grantor, and such purchaser is authorized to rely
      solely upon the statement of the Royalty Owner as to the amount owed to
      the Royalty Owner by the Grantor.

13.      NOTICES 

	(a) 	
      Whether or not so stipulated herein, delivery of all
      notices and communications (hereinafter called "notices") required or
      permitted hereunder shall be in writing. Notices may be
  given:

17

	 	(i) 	
      personally, by delivering the notice to the party on whom
      it is to be served at that Party's address for service, which notice shall
      be deemed received by the addressee when actually delivered as aforesaid
      if such delivery is during normal business hours provided that if a notice
      is not delivered during the addressee's normal business hours, such notice
      shall be deemed to have been received by such party at the commencement of
      the next ensuing business day following the date of delivery; or

	 	 	 
	 	(ii) 	
      by facsimile (or by any other like method by which a
      written or recorded message may be sent) directed to the party on whom it
      is to be served at that party's address for service, which notice shall be
      deemed received by the respective addressees thereof: (i) when actually
      received by it, if received within normal business hours; or (ii) at the
      commencement of the next ensuing business day following transmission
      thereof, if such notice is not received during such normal business hours;
      or

	 	 	 
	 	(iii) 	
      by mailing them first class mail (air mail if to or from
      a location outside Canada) double registered post, postage prepaid,
      directed to the party on whom it is to be served, at that party's address
      for service, which notice shall be deemed to be received by the addressee
      at noon, local time, on the earlier of the actual date of receipt or the
      fourth (4th) day (excluding Saturdays, Sundays and statutory holidays)
      following the mailing thereof; provided that, if postal service is
      interrupted or operating with unusual or imminent delay, notice shall not
      be served by such means during such interruption or period of
  delay.

	(b) 	
      Where, in this Agreement, a time period is established
      within which a party must respond, elect or otherwise communicate with
      respect to a notice so received the time shall commence to run when the
      notice is deemed to be received as hereinbefore provided. Any time period
      which expires on a Saturday, Sunday or statutory holiday shall be extended
      to expire on the next normal business day.

	 	 
	(c) 	
      The address of each of the respective parties hereto
      shall be as follows:

Bounty Developments Ltd. 
1250, 340
- 12 Avenue S.W. 
Calgary, Alberta 
T2R 1L5 

Berry Consultants Inc. 
1250, 340 –
12th Avenue S.W. 
Calgary, Alberta 
T2R 1L5 

18

	(d) 	
      Any party may change its address for service by notice to
      the other parties.

14.      TERM 

This Agreement shall remain in force and effect so long as the
Grantor or any successor in interest retains an interest in the Royalty Lands.

15.      GENERAL 

	 	(a) 	
      The parties will from time to time and at all times
      hereafter, without further consideration, do such further acts and deliver
      all such further assurances, deeds and documents as shall reasonably be
      required in order to fully perform and carry out the terms of this
      Agreement.

	 	 	 
	 	(b) 	
      This Agreement constitutes the entire agreement between
      the parties with respect to the subject matter of this Agreement and
      supersedes all prior contracts, agreements and understandings between the
      parties in this regard. No modification or alteration of this Agreement
      shall be binding unless executed in writing by these parties. There are no
      representations, warranties, collateral agreements or conditions affecting
      this transaction other than as are expressed or referred to herein in
      writing.

	 	 	 
	 	(c) 	
      The terms and conditions of this Agreement shall be
      binding upon and shall enure to the benefit of the parties hereto and
      their respective successors and assigns.

	 	 	 
	 	(d) 	
      Time is of the essence of this Agreement.

	 	 	 
	 	(e) 	
      The headings contained in this Agreement are intended for
      convenience of reference only and shall form no part of this
    Agreement.

	 	 	 
	 	(f) 	
      The words herein contained which impart the singular
      number or the masculine gender shall be read and construed as applying to
      the plural and each and every corporate, male or female party thereto and
      to its and their heirs, executors, administrators, successors and assigns,
      as the case or context requires.

	 	 	 
	 	(g) 	
      This Agreement shall be governed by and interpreted in
      accordance with the laws of the Province of Alberta. The parties hereby
      irrevocably attorn to the jurisdiction of the Courts of the Province of
      Alberta for the determination of all matters arising hereunder.

	 	 	 
	 	(h) 	
      The Schedules attached to this Agreement are incorporated
      by reference as fully as though contained in the body
  hereof.

19

Wherever any term or condition,
expressed or implied, of such Schedules conflicts or is at variance with any
terms or conditions of this Agreement, such term or condition of this Agreement
shall prevail. 

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

	
      BOUNTY DEVELOPMENTS LTD. 

       

      __________________________________________________
	
      BERRY CONSULTANTS INC. 

       

      __________________________________________________

20

Schedule “A” 
Attached to and Forming Part of Gross
Overriding 
Royalty Agreement dated January 1, 2006 
between Bounty
Developments Ltd. and Berry Consultants Inc. 

 

	LEASES 	ROYALTY LANDS 	INTEREST 
	Alberta Crown PNG Lease 	Twp. 87, Rge. 7 W6 M: West 	  
	No.0506020313 	Half of Section 13 PNG 	100%, subject to 
	  	  	Crown Lessor 
	  	  	Royalty 

21

Schedule “F” Attached to an Agreement dated effective the
29th day of 
May, 2006 between Bounty Developments Ltd., Damascus Energy Inc.
and 
Park Place Energy Inc. 

OVERRIDING ROYALTY AGREEMENT 

THIS AGREEMENT made as of the 1st day of January,
2006 

BETWEEN: 

  
    
      
        TLELL DEVELOPMENTS INC. a body corporate, having
          an office at the City of Calgary in the Province of Alberta (hereinafter
          referred to as the "Royalty Owner") 

      

    

  

OF THE FIRST PART 

- and - 

  
    
      
        BOUNTY DEVELOPMENTS LTD., a body corporate,
          having an office at the City of Calgary in the Province of Alberta (hereinafter
          referred to as the "Grantor") 

      

    

  

OF THE SECOND PART 

          WHEREAS
the Grantor holds an interest in the Royalty Lands and Leases as hereinafter
defined; and WHEREAS, in consideration of good and valuable consideration
received, the Grantor has agreed to grant and to pay to the Royalty Owner an
Overriding Royalty effective as of the date hereof, the terms and conditions of
which are provided for in this agreement. 

          NOW
THEREFORE this Agreement witnesseth that in consideration of the mutual
covenants and agreements set forth and contained herein, the parties agree as
follows: 

1.      DEFINITIONS 

In this Agreement, including this clause, unless the context
otherwise requires: 

	(a) 	
      "Condensate" means a mixture of mainly pentanes and
      heavier hydrocarbons that may be contaminated with sulphur compounds, that
      is recovered or is recoverable at a Well from an underground reservoir
      and

22

		
      that may be gaseous in its virgin reservoir state but is
      liquid at the condition under which its volume is measured or
      estimated;

	 	 
	(b) 	
      "Crude Oil" means a mixture mainly of pentanes and
      heavier hydrocarbons that may be contaminated with sulphur compounds, that
      is recovered or is recoverable at a Well from an underground reservoir and
      that is liquid at the conditions under which its volume is measured or
      estimated, and includes all other hydrocarbon mixtures so recovered or
      recoverable except natural gas or Condensate;

	 	 
	(c) 	
      "Current Market Value" means the price at which Petroleum
      Substances are sold by the Grantor calculated at the Royalty Determination
      Point, which price is not unreasonable having regard to market conditions
      applicable to similar production in arm's length transactions at the time
      of such disposition including, without restricting the generality of the
      foregoing, such factors as the volumes available, the kind and quality of
      Petroleum Substances to be sold, the effective date of the sale, the term
      of the sale agreement, the point of sale of the Petroleum Substances and
      the type of transportation service available for the delivery of the
      Petroleum Substances to be sold;

	 	 
	(d) 	
      "Leases" means the respective documents of title and any
      extension or renewal of such documents pursuant to which the Grantor holds
      an interest in the Royalty Lands;

	 	 
	(e) 	
      "Overriding Royalty" means the overriding royalty granted
      pursuant to Clause 2 hereof;

	 	 
	(f) 	
      "Petroleum Substances" means Crude Oil, Condensate,
      natural gas and related hydrocarbons and all other substances produced in
      association therewith but only to the extent that the same are granted by
      the Leases;

	 	 
	(g) 	
      "Raw Gas" has the meaning prescribed by the
      Regulations;

	 	 
	(h) 	
      "Regulations" means all statutes, laws, rules, orders,
      regulations or directives in effect from time to time and made by any
      governmental authority having jurisdiction over the Royalty Lands and the
      operations to be conducted thereon;

	 	 
	(i) 	
      "Royalty Determination Point" means the first point of
      measurement downstream from the wellhead after the initial treatment of
      the produced substances for the separation and removal of basic sediment
      and water from the Petroleum Substances;

	 	 
	(j) 	
      "Royalty Lands" means the specified undivided working
      interest(s) in the lands set forth in Schedule "A";

	 	 
	(k) 	
      "Spacing Unit" means the area allocated to a Well (or the
      area which would be allocated to a well, but for a plan of unitization)
      pursuant to the Regulations for the purpose of producing Petroleum
      Substances; and

23

	(l) 	
      "Well" means any well on the Royalty Lands or on lands
      pooled with the Royalty Lands.

2.      GRANT OF OVERRIDING
ROYALTY 

Grantor hereby grants to the Royalty Owner an interest in
respect of the Petroleum Substances within, upon or under the Royalty Lands
equal to one (1%) percent of the gross monthly production produced from the
Royalty Lands. 

3.      QUANTIFICATION OF
OVERRIDING ROYALTY 

If Royalty Owner does not take possession of and separately
dispose of its share of Petroleum Substances, the Overriding Royalty shall be
quantified and paid on the gross proceeds of the sale of such Petroleum
Substances without any deductions, except the following, namely: 

	(a) 	
      with respect to Crude Oil and Condensate, a proportionate
      share of the actual costs of transportation from the Royalty Determination
      Point to market connection;

	 	 
	(b) 	
      with respect to Petroleum Substances other than Crude Oil
      and Condensate, a proportionate share of the cost of transportation,
      gathering and processing, providing that such costs are no greater than
      those allowed from time to time by the Crown in the right of the Province
      of Alberta in calculating its royalty.

4.      OVERRIDING ROYALTY
TAKEN IN KIND 

	(a) 	
      The Royalty Owner shall have the right to take in kind
      the Royalty Owner's share of Petroleum Substances. Such right may be
      exercised separately with respect to Condensate, Crude Oil, Raw Gas, and
      any other individual Petroleum Substance. In the case of Crude Oil and
      Condensate, such right when exercised shall be done on a minimum of thirty
      (30) days notice to the Grantor. In the case of all other Petroleum
      Substances such right when exercised shall be done on a minimum of six (6)
      months notice to the Grantor. If the Royalty Owner, however, signifies in
      writing its consent to the sale of any of the Royalty Owner's share of
      Petroleum Substances under a contract made by the Grantor providing for a
      minimum term in excess of the said respective notice periods, the Royalty
      Owner's right to take in kind any Petroleum Substances subject to such
      contract shall be suspended during the term of such contract. The Royalty
      Owner may cease to take in kind any Petroleum Substances upon giving the
      Grantor the same minimum notice as provided above for the Royalty Owner to
      take such Petroleum Substances in kind as aforesaid. The right to take in
      kind or to cease to take in kind may be exercised from time to time
      subject only to the foregoing provisions of this Subclause.

	 	 
	(b) 	
      When the Royalty Owner is taking in kind the Royalty
      Owner's share of any Petroleum Substances, the Grantor shall at no cost to
      the Royalty

24

Owner remove basic sediment and water
therefrom in accordance with good oilfield practice, and: 

	 	(i)	
      in respect to Crude Oil and Condensate: the Grantor shall
      deliver the Royalty Owner's share to the Royalty Owner, or its nominee, at
      the tank outlets, or comparable delivery point, in accordance with usual
      and customary pipeline and shipping practice, free and clear of all
      charges whatsoever except to the extent that the Royalty Determination
      Point is an earlier point in which case the costs of moving product from
      the Royalty Determination Point to the delivery point will be deductible
      by the Grantor from the Overriding Royalty. The Royalty Owner shall have
      the right to use free of charge a share of the Grantor's lease tankage and
      storage facilities to store a maximum of ten (10) days accumulation of the
      Royalty Owner's share of Crude Oil and Condensate; and

	 	 	 
	 	(ii) 	
      in respect to Raw Gas: the Grantor shall deliver the
      Royalty Owner's share to the Royalty Owner, or its nominee, at the Royalty
      Determination Point of the relevant well, provided that to the extent the
      Royalty Owner so requests on reasonable notice to the Grantor and the
      Grantor can reasonably comply with such request, the Grantor shall gather,
      compress, transport, treat and process such share of Raw Gas along with
      the Grantor's share of Raw Gas from the applicable well or wells and
      deliver to the Royalty Owner at their relevant plant outlet, the Royalty
      Owner's Overriding Royalty share of marketable gas and other Petroleum
      Substances obtained from such share of Raw Gas, in which event, the
      Royalty Owner shall be responsible for:

	 	A. 	
      its proportionate share of the costs of gathering,
      compressing, transporting, treating and processing such Raw Gas where the
      Grantor or an Affiliate thereof does not own such facilities; or

	 	 	 
	 	B. 	
      where the Grantor or an Affiliate thereof owns such
      facilities, such fee as may be agreed upon by the Grantor and the Royalty
      Owner for the use of such facilities to make marketable the Royalty
      Owner's Overriding Royalty share of Raw Gas.

5.      CONDUCT OF
OPERATIONS 

	(a) 	
      Grantor shall be entitled to use a proportionate share of
      the Royalty Owner's share of Petroleum Substances as may be reasonably
      necessary for its drilling and production operations with respect to the
      Royalty Lands, excluding Petroleum Substances used for tertiary recovery
      operations. Grantor shall not be liable to Royalty Owner for Petroleum
      Substances which are unavoidably lost. Petroleum Substances so used or
      lost shall be excluded when quantifying the Overriding
  Royalty.

25

	(b) 	
      The Grantor shall have the right to commingle Petroleum
      Substances produced from the Royalty Lands with Petroleum Substances
      produced from other lands, provided reasonable methods are used to
      determine the proper measurement of production of Petroleum Substances
      from the Royalty Lands.

	 	 
	(c) 	
      Nothing contained in this Agreement shall be a deemed or
      implied covenant by the Grantor to develop the Royalty Lands.

	 	 
	(d) 	
      The Grantor shall carry on (or cause to be carried on)
      all operations on the Royalty Lands diligently and in a good and
      workmanlike manner consistent with good oilfield
  practice.

6.      MAINTENANCE OF
LEASES 

Grantor shall comply with all the covenants and conditions
contained in the Leases insofar as they relate to the Royalty Lands and shall do
all things necessary to maintain the Leases in full force and effect during the
term of this Agreement including, without limitation, timely payment of all
rentals, all renewal and extension fees, all taxes, all payments in lieu of
actual production and royalties due or becoming due in respect of the Royalty
Lands and the Leases. 

7.      POOLING 

The Grantor shall have the authority to pool the Petroleum
Substances in a zone underlying all or a portion of the Royalty Lands to the
extent required to form a Spacing Unit in such zone, but only if such pooling
allocates to that portion of the Royalty Lands included in the Spacing Unit that
proportion of the total production of Petroleum Substances from the Spacing Unit
which the surface area of that portion of the Royalty Lands placed in the
Spacing Unit bears to the total surface area of the Spacing Unit. The Grantor
shall thereafter give written notice to the Royalty Owner describing the extent
to which the Royalty Lands are being pooled and describing the Spacing Unit with
respect to which they are so pooled. 

8.      UNITIZATION 

The Grantor shall not include the Royalty Lands or any part or
parts thereof in a Unit Agreement or a Unit Operating Agreement for the unitized
development and/or operation thereof with other lands without the consent of the
Royalty Owner, which shall not be unreasonably withheld. Upon any such
unitization, the Overriding Royalty shall be quantified on the basis of the
production allocated to each Spacing Unit on the Royalty Lands under the plan of
unitization and not upon the basis of actual production from the Royalty Lands.
Further, each Spacing Unit for which production is allocated shall be deemed to
have on Well thereon, regardless of the actual number of Wells. 

9.      BOOKS AND RECORDS

26

	(a) 	
      The Grantor shall keep true and current books, records
      and accounts showing the quantity of Petroleum Substances produced from or
      allocated to the Royalty Lands and the sales and disposition made thereof
      from time to time. The books, records, vouchers and accounts maintained by
      the Grantor shall be open to inspection at all reasonable times during
      business hours by any officer, agent or employee appointed or authorized
      by the Royalty Owner, in writing, to examine the same. All information
      obtained by the Royalty Owner pursuant to this clause shall be treated as
      confidential and shall not be disclosed to third persons without the prior
      written consent of the Grantor.

	 	 
	(b) 	
      By the last day of each month, beginning with the first
      month following the month in which production of Petroleum Substances from
      the Royalty Lands is obtained after the date hereof, Grantor shall submit
      to Royalty Owner a statement showing the quantity and kind of Petroleum
      Substances produced, deemed to be produced or allocated to, saved and sold
      from or used off the Royalty Lands in the immediately preceding calendar
      month, together with a quantification of Royalty Owner's share of
      Petroleum Substances for such immediately preceding calendar month. When
      Royalty Owner does not take and separately dispose of its share of
      Petroleum Substances, the said statement shall also include the sale price
      for such Petroleum Substances and the gross proceeds received therefrom,
      accompanied by a cheque payable to Royalty Owner for its share of such
      proceeds. A copy of Grantor's governmental production statement for the
      month for which the Overriding Royalty is quantified as aforesaid and
      also, with respect to Crown Leases, a copy of the government royalty
      statement with respect to the Leases, shall accompany each royalty
      statement to Royalty Owner. Any information contained in such governmental
      production statement or royalty statement need not be repeated in the
      statement to Royalty Owner.

	 	 
	(c) 	
      Royalty Owner, upon notice to Grantor, shall have the
      right to audit Grantor's accounts and records for any given calendar year,
      insofar as they relate to any matter or item relating to this Agreement
      bearing on the Overriding Royalty, within the twenty-four (24) month
      period following the end of that calendar year. any payment made or
      statement rendered by Grantor hereunder which is not disputed by Royalty
      Owner on or before the last day of the twenty-sixth (26th) month following
      the end of the calendar year shall be deemed to be
  correct.

10.      ASSIGNMENT BY GRANTOR

The Grantor may assign any legal or equitable interest in this
Agreement, the Royalty Lands, the Leases or any portion or portions thereof and
in the event of such assignment, the Grantor shall continue to be bound by all
of the conditions and provisions of this Agreement as if there had been no
assignment until such time as the Royalty Owner shall have been served with a
written undertaking by 

27

the assignee (or assignees) directly enforceable by the Royalty
Owner, to perform and be bound thereafter by all of the terms and provisions of
this Agreement to the same extent and degree with respect to the interest which
has been assigned to it, as it would have been if such assignee (or assignees)
had been a party to this Agreement instead of the Grantor. 

11.      ASSIGNMENT BY ROYALTY
OWNER 

The Royalty Owner may at any time assign its interest in the
Overriding Royalty upon notice thereof to the Grantor, provided that if at any
time the Overriding Royalty should become owned by more than one party, the
Grantor shall have the right to require the assignees of the Overriding Royalty
to appoint in writing an agent to represent all of the assignees of the
Overriding Royalty and to receive all statements and payments (if any) of the
Overriding Royalty. If the assignees of the Overriding Royalty fail to appoint
an agent hereunder within thirty (30) days of any request to do so by Grantor,
Grantor may withhold the Overriding Royalty until such time as an agent is
appointed. 

12.      ROYALTY OWNER'S LIEN

	(a) 	
      The Royalty Owner shall be entitled to and shall have a
      first and paramount lien upon the Grantor's share of all Petroleum
      Substances from time to time produced from the Royalty Lands to secure the
      payment of the Overriding Royalty. Such lien shall not operate to release
      the Grantor from personal liability for monies due to the Royalty Owner.
      Such lien shall not attach to the Grantor's share of Petroleum Substances
      sold or otherwise disposed of from the Royalty Lands, but immediately upon
      default occurring in payment by the Grantor of monies payable to the
      Royalty Owner such lien shall operate as an assignment to the Royalty
      Owner of the consideration thereafter payable to the Royalty Owner for the
      Petroleum Substances sold, up to the amount owed to the Royalty Owner and
      not so paid by the Grantor.

	 	 
	(b) 	
      Service of a copy of this agreement upon any purchaser of
      Petroleum Substances together with written notice from the Royalty Owner
      shall constitute written authorization on the part of the Grantor for such
      purchaser to pay the Royalty Owner the proceeds from any sale or sales of
      the Grantor's share of Petroleum Substances up to the amount owed to the
      Royalty Owner by the Grantor, and such purchaser is authorized to rely
      solely upon the statement of the Royalty Owner as to the amount owed to
      the Royalty Owner by the Grantor.

13.      NOTICES 

	 	(a) 	
      Whether or not so stipulated herein, delivery of all
      notices and communications (hereinafter called "notices") required or
      permitted hereunder shall be in writing. Notices may be
  given:

28

	 	(i) 	
      personally, by delivering the notice to the party on whom
      it is to be served at that Party's address for service, which notice shall
      be deemed received by the addressee when actually delivered as aforesaid
      if such delivery is during normal business hours provided that if a notice
      is not delivered during the addressee's normal business hours, such notice
      shall be deemed to have been received by such party at the commencement of
      the next ensuing business day following the date of delivery; or

	 	 	 
	 	(ii) 	
      by facsimile (or by any other like method by which a
      written or recorded message may be sent) directed to the party on whom it
      is to be served at that party's address for service, which notice shall be
      deemed received by the respective addressees thereof: (i) when actually
      received by it, if received within normal business hours; or (ii) at the
      commencement of the next ensuing business day following transmission
      thereof, if such notice is not received during such normal business hours;
      or

	 	 	 
	 	(iii) 	
      by mailing them first class mail (air mail if to or from
      a location outside Canada) double registered post, postage prepaid,
      directed to the party on whom it is to be served, at that party's address
      for service, which notice shall be deemed to be received by the addressee
      at noon, local time, on the earlier of the actual date of receipt or the
      fourth (4th) day (excluding Saturdays, Sundays and statutory holidays)
      following the mailing thereof; provided that, if postal service is
      interrupted or operating with unusual or imminent delay, notice shall not
      be served by such means during such interruption or period of
  delay.

	 	(b) 	
      Where, in this Agreement, a time period is established
      within which a party must respond, elect or otherwise communicate with
      respect to a notice so received the time shall commence to run when the
      notice is deemed to be received as hereinbefore provided. Any time period
      which expires on a Saturday, Sunday or statutory holiday shall be extended
      to expire on the next normal business day.

	 	 	 
	 	(c) 	
      The address of each of the respective parties hereto
      shall be as follows:

Bounty Developments Ltd.
 1250, 340
- 12 Avenue S.W. 
Calgary, Alberta 
T2R 1L5 

Berry Consultants Inc. 
1250, 340 –
12th Avenue S.W. 
Calgary, Alberta 
T2R 1L5 

29

	 	(d) 	
      Any party may change its address for service by notice to
      the other parties.

14.      TERM 

This Agreement shall remain in force and effect so long as the
Grantor or any successor in interest retains an interest in the Royalty Lands.

15.      GENERAL 

	 	(a) 	
      The parties will from time to time and at all times
      hereafter, without further consideration, do such further acts and deliver
      all such further assurances, deeds and documents as shall reasonably be
      required in order to fully perform and carry out the terms of this
      Agreement.

	 	 	 
	 	(b) 	
      This Agreement constitutes the entire agreement between
      the parties with respect to the subject matter of this Agreement and
      supersedes all prior contracts, agreements and understandings between the
      parties in this regard. No modification or alteration of this Agreement
      shall be binding unless executed in writing by these parties. There are no
      representations, warranties, collateral agreements or conditions affecting
      this transaction other than as are expressed or referred to herein in
      writing.

	 	 	 
	 	(c) 	
      The terms and conditions of this Agreement shall be
      binding upon and shall enure to the benefit of the parties hereto and
      their respective successors and assigns.

	 	 	 
	 	(d) 	
      Time is of the essence of this Agreement.

	 	 	 
	 	(e) 	
      The headings contained in this Agreement are intended for
      convenience of reference only and shall form no part of this
    Agreement.

	 	 	 
	 	(f) 	
      The words herein contained which impart the singular
      number or the masculine gender shall be read and construed as applying to
      the plural and each and every corporate, male or female party thereto and
      to its and their heirs, executors, administrators, successors and assigns,
      as the case or context requires.

	 	 	 
	 	(g) 	
      This Agreement shall be governed by and interpreted in
      accordance with the laws of the Province of Alberta. The parties hereby
      irrevocably attorn to the jurisdiction of the Courts of the Province of
      Alberta for the determination of all matters arising hereunder.

	 	 	 
	 	(h) 	
      The Schedules attached to this Agreement are incorporated
      by reference as fully as though contained in the body
  hereof.

30

Wherever any term or condition,
expressed or implied, of such Schedules conflicts or is at variance with any
terms or conditions of this Agreement, such term or condition of this Agreement
shall prevail. 

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

	
      BOUNTY DEVELOPMENTS LTD. 

       

      ______________________________________________
	
      TLELL DEVELOPMENTS INC. 

       

      ______________________________________________

31

Schedule "A" 
Attached to and Forming Part of Gross
Overriding 
Royalty Agreement dated January 1, 2006 
between Bounty
Developments Ltd. and Tlell Developments Inc. 

 

	LEASES 	ROYALTY LANDS 	INTEREST 
	Alberta Crown PNG Lease 	Twp. 87, Rge. 7 W6 M: West 	  
	No.0506020313 	Half of Section 13 PNG 	100%, subject to 
	  	  	Crown Lessor 
	  	  	Royalty 

32

33<PAGE>

                                                                  Exhibit 10.1

                                                                CONFORMED COPY

C L I F F O R D                                            CLIFFORD CHANCE LLP
C H A N C E [LOGO]

              SYNDICATION AND AMENDMENT AND RESTATEMENT AGREEMENT

                               Dated 23 May 2007

                                      for

                             FLEXSYS HOLDING B.V.
                                  the Company

                                  arranged by
                                 KBC BANK NV.

                                      AND

                       CITIGROUP GLOBAL MARKETS LIMITED

                                     WITH

                                 KBC BANK N.V.
                                acting as Agent

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

                  RELATING TO A SECURED FACILITIES AGREEMENT
                              DATED 27 APRIL 2007

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

<PAGE>
<PAGE>

                                                                CONFORMED COPY

<TABLE>
                                               CONTENTS

<CAPTION>
CLAUSE                                                                                            PAGE

<C>                                                                                           <C>
1.        Definitions And Interpretation.............................................................3

2.        Conditions Precedent.......................................................................4

3.        Representations............................................................................4

4.        Transfer By Novation.......................................................................4

5.        Restatement................................................................................7

6.        Security Documents.........................................................................8

7.        Guarantee..................................................................................8

8.        Designated Entities........................................................................9

9.        Fees, Costs And Expenses...................................................................9

10.       Consents And Waivers.......................................................................9

11.       Indemnity.................................................................................10

12.       Miscellaneous.............................................................................10

13.       Governing Law.............................................................................10

Schedule 1           The Parties...............................................................deleted

Part I The Obligors............................................................................deleted

Part Ii The Existing Lenders...................................................................deleted

Part Iii The New Lenders.......................................................................deleted

Schedule 2           The Lenders...............................................................deleted

Schedule 3           Conditions Precedent And Conditions Subsequent............................deleted

Part I Conditions Precedent....................................................................deleted

Part II Conditions Subsequent..................................................................deleted

Schedule 4           Restated Agreement...............................................See Exhibit 10.2
</TABLE>

                                      -2-

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                                                                CONFORMED COPY

THIS AGREEMENT is dated 23 May 2007 and made between:

(1)     FLEXSYS HOLDING B.V. a private company with limited liability
        incorporated under the laws of The Netherlands having its seat in
        Deventer, The Netherlands and its registered office at Zutphenseweg
        51010, 7418 AJ Deventer, The Netherlands and registered with the
        Chamber of Commerce under number 3802104 (the "COMPANY");

(2)     THE SUBSIDIARIES of the Company listed in Part I of Schedule 1 as
        borrowers (together with the Company, the "BORROWERS");

(3)     THE ENTITIES of the Company listed in Part I of Schedule 1 as
        guarantors (together with the Company, the "GUARANTORS");

(4)     KBC BANK N.V. and CITIGROUP GLOBAL MARKETS LIMITED as mandated lead
        arrangers (whether acting individually or together the "ARRANGER");

(5)     THE FINANCIAL INSTITUTIONS listed in Part II of Schedule 1 as existing
        lenders (the "EXISTING LENDERS");

(6)     THE FINANCIAL INSTITUTIONS listed in Part III of Schedule 1 as new
        lenders (the "NEW LENDERS");

(7)     KBC BANK N.V. as agent of the other Finance Parties (the "AGENT"); and

(8)     KBC BANK N.V. as security agent and/or as security trustee for the
        Secured Parties (the "SECURITY TRUSTEE").

IT IS AGREED as follows:

1.      DEFINITIONS AND INTERPRETATION

1.1     DEFINITIONS
        In this Agreement:

        "EFFECTIVE DATE" means the date specified by the Agent on not less
        than 3 Business Days' notice as the day on which the New Lenders must
        fund their respective participation in each Loan and the Existing
        Lenders must novate their respective Commitments to the New Lenders in
        accordance with Schedule 2 (The Lenders).

        "ORIGINAL FACILITY AGREEMENT" means the USD 200,000,000 Multicurrency
        Term and Revolving Facilities Agreement dated 27 April 2007 between
        the Company, the Original Borrowers, the Original Guarantors, the
        Agent, the Arranger and the Existing Lenders.

        "RESTATED AGREEMENT" means the Original Facility Agreement, as amended
        by this Agreement, the terms of which are set out in Schedule 4
        (Restated Agreement).

1.2     INCORPORATION OF DEFINED TERMS
        (a)     Unless a contrary indication appears, a term defined in any
                other Finance Document has the same meaning in this Agreement.

        (b)     The principles of construction set out in the Original
                Facility Agreement shall have effect as if set out in this
                Agreement.

                                      -3-

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                                                                CONFORMED COPY

1.3     CLAUSES
        In this Agreement any reference to a "Clause" or a "Schedule" is,
        unless the context otherwise requires, a reference to a Clause or a
        Schedule to this Agreement.

1.4     THIRD PARTY RIGHTS
        A person who is not a party to this Agreement has no right under the
        Contracts (Rights of Third Parties) Act 1999 to enforce or to enjoy
        the benefit of any term of this Agreement.

1.5     DESIGNATION
        In accordance with the Original Facility Agreement, each of the
        Company and the Agent designates this Agreement as a Finance Document.

2.      CONDITIONS PRECEDENT

        The provisions of Clause 4 (Transfer by Novation) and Clause 5
        (Restatement) shall be effective only if, not later than three
        Business Days before the Effective Date, the Agent has received all
        the documents and other evidence listed in Schedule 3 (Conditions
        Precedent) in form and substance satisfactory to the Agent. The Agent
        shall notify the Company, the Existing Lenders and the New Lenders
        promptly upon being so satisfied.

3.      REPRESENTATIONS

        The Repeating Representations are deemed to be made by each Obligor
        (by reference to the facts and circumstances then existing) on:

        (a)     the date of this Agreement; and

        (b)     the Effective Date.

4.      TRANSFER BY NOVATION

4.1     TRANSFER BY NOVATION
        On the Effective Date (whether or not a Default is continuing) each
        Existing Lender shall transfer by novation all or part of its
        Commitment, rights and obligations under the Finance Documents to a
        New Lender, so that:

        (a)     each New Lender will become a Lender under the Restated
                Agreement with a Facility A Commitment and Facility B
                Commitment as set out in the relevant columns opposite its
                name in Schedule 2 (The Lenders);

        (b)     each Existing Lender's Facility A Commitment and Facility B
                Commitment shall be reduced to the respective amount set out
                in the relevant columns opposite its name in Schedule 2 (The
                Lenders);

        (c)     each New Lender will become a Lender under the Restated
                Agreement with a participation in each Loan as notified to it
                by the Agent pursuant to paragraphs (a) and (d) of Clause 4.6
                (Lenders' participations); and

        (d)     each Existing Lender's participation in each Loan shall be as
                notified to it by the Agent pursuant to paragraphs (a) and (d)
                of Clause 4.6 (Lenders' participations).

                                      -4-

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                                                                CONFORMED COPY

4.2     PROCEDURE FOR TRANSFER BY NOVATION
        The transfer by novation set out in Clause 4.1 (Transfer by Novation)
        shall take effect on the Effective Date so that:

        (a)     to the extent that in Clause 4.1 (Transfer by Novation) each
                Existing Lender seeks to transfer by novation its rights and
                obligations under the Finance Documents each of the Obligors
                and each Existing Lender shall be released from further
                obligations towards one another under the Finance Documents
                and their respective rights against one another under the
                Finance Documents shall be cancelled (being the "DISCHARGED
                RIGHTS AND OBLIGATIONS");

        (b)     each of the Obligors and each New Lender shall assume
                obligations towards one another and/or acquire rights against
                one another which differ from the Discharged Rights and
                Obligations only insofar as that Obligor and the relevant New
                Lender have assumed and/or acquired the same in place of that
                Obligor and that Existing Lender;

        (c)     the Agent, the Arranger, each New Lender and other Lenders
                shall acquire the same rights and assume the same obligations
                between themselves as they would have acquired and assumed had
                the New Lender been an Existing Lender with the rights and/or
                obligations acquired or assumed by it as a result of the
                transfer and to that extent the Agent, the Arranger and the
                relevant Existing Lender shall each be released from further
                obligations to each other under the Finance Documents; and

        (d)     each New Lender shall become a Party as a "Lender"; and

        (e)     the Issuing Bank and each New Lender shall acquire the same
                rights and assume the same obligations between themselves as
                they would have acquired and assumed had the New Lender been
                an Original Lender with the rights and/or obligations acquired
                or assumed by it as a result of the transfer by novation and
                to that extent the Issuing Bank and the relevant Existing
                Lender shall each be released from further obligations to each
                other under the Finance Documents.

4.3     AMOUNTS DUE ON OR BEFORE THE EFFECTIVE DATE
        Any amounts payable to the Existing Lenders by the Obligors pursuant
        to any Finance Document on or before the Effective Date (including,
        without limitation, all interest, fees and commission payable on the
        Effective Date) in respect of any period ending on or prior to the
        Effective Date shall be for the account of the Existing Lenders and
        none of the New Lenders shall have any interest in, or any rights in
        respect of, any such amount.

4.4     LIMITATION OF RESPONSIBILITY OF EXISTING LENDERS
        (a)     Each New Lender confirms to each Existing Lender and the other
                Finance Parties that it:

                (i)     has received a copy of the Original Facility Agreement
                        together with such other information as it has
                        required in connection with this transaction;

                                      -5-

<PAGE>
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                                                                CONFORMED COPY

                (ii)    has made (and shall continue to make) its own
                        independent investigation and assessment of the
                        financial condition and affairs of each Obligor and
                        its related entities in connection with its
                        participation in this Agreement and the Restated
                        Agreement and has not relied exclusively on any
                        information provided to it by any Existing Lender in
                        connection with any Finance Document; and

                (iii)   will continue to make its own independent appraisal of
                        the creditworthiness of each Obligor and its related
                        entities whilst any amount is or may be outstanding
                        under the Finance Documents or any Commitment is in
                        force.

        (b)     Unless expressly agreed to the contrary, the Existing Lenders
                make no representation or warranty and assume no
                responsibility to the New Lenders for:

                (i)     the legality, validity, effectiveness, adequacy or
                        enforceability of the Finance Documents or any other
                        documents;

                (ii)    the financial condition of any Obligor;

                (iii)   the performance and observance by any Obligor of its
                        obligations under the Finance Documents or any other
                        documents; or

                (iv)    the accuracy of any statements (whether written or
                        oral) made in or in connection with the Finance
                        Documents or any other document, and any
                        representations or warranties implied by law are
                        excluded.

        (c)     Nothing in any Finance Document obliges any Existing Lender
                to:

                (i)     accept a re-transfer from any New Lender of any of the
                        rights and obligations transferred by novation under
                        this Agreement; or

                (ii)    support any losses directly or indirectly incurred by
                        a New Lender by reason of the non-performance by any
                        Obligor of its obligations under the Finance Documents
                        or otherwise.

4.5     ADMINISTRATIVE DETAILS
        Each New Lender confirms that it has delivered to the Agent its
        Facility Office details and address, fax number and attention details
        for the purposes of Clause 35 (Notices) of the Restated Agreement.

4.6     LENDERS' PARTICIPATIONS
        (a)     The Agent shall notify each Existing Lender and each New
                Lender of the Base Currency Amount, the amount and currency of
                each Loan requested, pursuant to a Utilisation Request, to be
                made on the Effective Date and the amount of its participation
                in that new Loan not later than 3.00p.m. three Business Days
                before the Effective Date.

        (b)     The amount of each Existing Lender's and each New Lender's
                participation in each new Loan referred to in paragraph (a) of
                this Clause 4.6 (Lenders'

                                      -6-

<PAGE>
<PAGE>

                                                                CONFORMED COPY

                participations) will be equal to the proportion borne by its
                Available Commitment to the Available Facility immediately
                prior to the making of the Loan.

        (c)     Each Existing Lender and each New Lender shall make its
                participation in each Loan referred to in paragraph (a) of
                this Clause 4.6 (Lenders' participations) available by the
                Effective Date through its Facility Office.

        (d)     The Agent shall notify each Existing Lender and each New
                Lender of the Base Currency Amount (if applicable), the amount
                and currency of each Facility A Loan which was made before the
                Effective Date and which is to continue to be outstanding on
                the Effective Date and the amount and currency of its
                participation in that Facility A Loan by 3.00pm three Business
                Days before the Effective Date.

        (e)     The amount of each Existing Lender's and each New Lender's
                participation in each Facility A Loan referred to in paragraph
                (d) of this Clause 4.6 (Lenders' participations) will be equal
                to the proportion borne by its Facility A Commitment to the
                Total Facility A Commitments on the Effective Date.

        (f)     Each New Lender shall make its participation in each Facility
                A Loan referred to in paragraph (d) of this Clause 4.6
                (Lenders' participations) available by the Effective Date
                through its Facility Office for distribution by the Agent to
                the Existing Lenders in order to ensure that the
                participations of the Existing Lenders in each such Facility A
                Loan are equal to the amounts notified to them by the Agent
                under paragraph (e) of this Clause 4.6 (Lenders'
                participations).

        (g)
                (i)     Each Existing Lender and each New Lender required to
                        make a payment under this Agreement shall make the
                        same available to the Agent for value on the due date
                        at the time and in such funds specified by the Agent
                        as being customary at the time for settlement of
                        transactions in the relevant currency in the place of
                        payment.

                (ii)    Payment shall be made to such account in the principal
                        financial centre of the country of that currency (or,
                        in relation to euro, in a principal financial centre
                        in a Participating Member State or London) with such
                        bank as the Agent specifies.

5.      RESTATEMENT

5.1     RESTATEMENT OF THE ORIGINAL FACILITY AGREEMENT
        With effect from the Effective Date the Original Facility Agreement
        shall be amended and restated so that it shall be read and construed
        for all purposes as set out in Schedule 4 (Restated Agreement).

5.2     CONTINUING OBLIGATIONS
        The provisions of the Original Facility Agreement and the other
        Finance Documents shall, save as amended by this Agreement, continue
        in full force and effect.

                                      -7-

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                                                                CONFORMED COPY

6.      SECURITY DOCUMENTS

6.1     With effect from the Effective Date the benefit of each Security
        Document shall be maintained in favour of the New Lenders, without
        prejudice to paragraph (a) of Clause 26.4 (Limitation of
        responsibility of Existing Lenders) of the Original Facility
        Agreement.

6.2     Without prejudice to the wording of the Secured Liabilities in the
        Security Documents and thus insofar as necessary, both the Existing
        Lenders and the New Lenders expressly reserve the rights, powers,
        privileges and actions that they enjoy under any Security Documents
        governed by French and Belgian law in favour of the New Lenders, in
        accordance with the provisions of article 1278 et seq. of the French
        and Belgian Code civil.

6.3     With respect to the Security Documents governed by Italian law, any
        transfer made under the Original Facility Agreement by way of English
        law novation shall be construed under Italian law as a successione a
        titolo particolare and shall not entail under Italian law a novazione
        of (or have an effectto novativo on) the Original Facility Agreement.

6.4     Each New Lender hereby confirms that it has received a copy of each of
        the Security Documents which are governed by German law and are
        pledges, is aware of their contents and hereby expressly consents to
        the declarations of the Security Trustee made on behalf of each New
        Lender as future pledge in such Security Documents.

6.5     With regards to the Security Documents governed by Brazilian law:
        (a)     Flexsys Industria e Comercio Ltda. and the other Parties
                hereto expressly acknowledge and agree that, in light of
                Brazilian law, this Agreement shall not be deemed as a
                novation (novacao) of their obligations or rights under the
                Original Facility Agreement; and

        (b)     Flexsys Industria e Comercio Ltda. expressly acknowledges and
                agrees that the Security granted under the Security Documents
                governed by Brazilian law shall remain in full force and
                effect.

7.      GUARANTEE

        Each Obligor acknowledges the proposed amendments to the Original
        Facility Agreement and confirms for the benefit of the Finance Parties
        that the guarantee constituted by Clause 20 (Guarantee and Indemnity)
        of the Original Facility Agreement and the Transaction Security that
        it has granted in connection with the Original Facility Agreement
        shall (subject to the limitations set out in Clause 20 (Guarantee and
        Indemnity) of the Original Facility Agreement or in the relevant
        Security Documents) remain in full force and effect notwithstanding
        any increase in the Commitments and the designation of any new
        document as a Finance Document or any additions, amendments, novation,
        substitution, or supplements of or to the Finance Documents in
        relation to any Obligor and that the guarantee constituted by Clause
        20 (Guarantee and Indemnity) of the Original Facility Agreement and
        all restrictions agreed to thereunder and in that respect extends to
        any new obligations assumed by any Obligor under any amended or new
        Finance Documents and continue to secure the obligations of the
        Obligors under the

                                      -8-

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                                                                CONFORMED COPY

        Finance Documents, including in relation to the increased Total
        Commitments made available thereunder.

8.      DESIGNATED ENTITIES

        Where a Lender (each a "DESIGNATING LENDER") has designated in the
        signature pages to this Agreement an Affiliate of itself (each a
        "DESIGNATED ENTITY") as its Facility Office for the purposes of
        participating in or making Loans to a particular Borrower, the Parties
        unconditionally and irrevocably agree that such Designated Entity
        shall:

        (a)     not have any Commitment (which shall remain with the
                Designating Lender);

        (b)     be entitled to all rights and benefits (other than voting
                rights which shall remain with the Designating Lender) under
                this Agreement relating to its participation in any Loan to
                such a Borrower; and

        (c)     have the corresponding duties of a Lender in relation to such
                Loans, and shall be a party to this Agreement for that
                purpose.

        Such Designating Lender shall procure, subject to the terms of this
        Agreement, that the Designated Entity participates in a Loan to such a
        Borrower in place of the Designating Lender and the Parties shall be
        entitled to treat such Designated Entity as a Lender accordingly.

9.      FEES, COSTS AND EXPENSES

9.1     TRANSACTION EXPENSES
        The Company shall promptly on demand pay the Agent, the Arranger and
        the Security Trustee the amount of all costs and expenses (including
        legal fees) reasonably incurred by any of them in connection with the
        negotiation, preparation, printing and execution of this Agreement and
        any other documents referred to in this Agreement.

9.2     ENFORCEMENT COSTS
        The Company shall, within three Business Days of demand, pay to each
        Finance Party the amount of all costs and expenses (including legal
        fees) incurred by that Finance Party in connection with the
        enforcement of, or the preservation of any rights under, this
        Agreement.

9.3     STAMP TAXES
        The Company shall pay and, within three Business Days of demand,
        indemnify each Finance Party against any cost, loss or liability that
        Finance Party incurs in relation to all stamp duty, registration and
        other similar Taxes payable in respect of this Agreement.

10.     CONSENTS AND WAIVERS

10.1    CONSENT AND WAIVER
        The Company, each other Obligor, the Arranger, the Existing Lenders
        and the Agent each:

        (a)     consent to the New Lenders becoming Lenders; and

                                      -9-

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                                                                CONFORMED COPY

        (b)     waive the requirements of Clause 26 (Changes to the Lenders)
                of the Original Facility Agreement for the purposes of this
                Agreement and for the transfer by novation effected pursuant
                to this Agreement.

10.2    FURTHER ASSURANCE
        Each Obligor shall, at the request of the Agent and at its own
        expense, do all such acts and things necessary or desirable to give
        effect to the amendments effected or to be effected pursuant to this
        Agreement.

10.3    AGENT'S WAIVER
        The Agent waives the requirement for the payment of the fee referred
        to in Clause 26.3 (Assignment or transfer fee) of the Original
        Facility Agreement in respect of the transfers by novation effected
        pursuant to this Agreement.

11.     INDEMNITY

11.1    INDEMNITY FOR NEW LENDERS
        If, as a result of the operation of Clause 2 (Conditions Precedent),
        the transfer by novation contemplated by Clause 4 (Transfer by
        Novation) is not effective on the Effective Date, the Company shall,
        within three Business Days of demand, indemnify each New Lender
        against any cost, loss or liability incurred by that New Lender as a
        result of funding or making arrangements to fund the portion of any
        Loan which would otherwise have been transferred to such New Lender in
        accordance with Clause 4 (Transfer by Novation).

12.     MISCELLANEOUS

12.1    INCORPORATION OF TERMS
        The provisions of Clause 35 (Notices), Clause 37 (Partial invalidity),
        Clause 38 (Remedies and waivers), Clause 41 (USA Patriot Act), Clause
        43 (Enforcement) and Clause 44 (Waiver of Jury Trial) of the Original
        Facility Agreement shall be incorporated into this Agreement as if set
        out in full in this Agreement and as if references in those clauses to
        "this Agreement" or "the Finance Documents" are references to this
        Agreement and as if references in those clauses to "Party" and
        "Lender" include the New Lenders.

12.2    COUNTERPARTS
        This Agreement may be executed in any number of counterparts, and this
        has the same effect as if the signatures on the counterparts were on a
        single copy of this Agreement.

13.     GOVERNING LAW

        This Agreement is governed by English law.

THIS AGREEMENT HAS BEEN ENTERED INTO ON THE DATE STATED AT THE BEGINNING OF
THIS AGREEMENT.

                                      -10-

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                                                                CONFORMED COPY

                                  SIGNATURES

THE COMPANY

FLEXSYS HOLDING B.V.

By:           /s/ Wolter Kymmell
              ------------------
              WOLTER KYMMELL

Address:      51010 Zutphenseweg
              NL-7418 AJ Deventer
              The Netherlands
Fax:          +32 2 714 33 95

THE BORROWERS

FLEXSYS HOLDING B.V.

By:           /s/ Wolter Kymmell
              ------------------
              WOLTER KYMMELL

Address:      51010 Zutphenseweg
              NL-7418 AJ Deventer
              The Netherlands
Fax:          +32 2 714 33 95

FLEXSYS VERWALTUNGS- UND BETEILIGUNGS GMBH

By:           /s/ Wolter Kymmell               /s/ Hans-Jurgen Wnuck
              ------------------               ---------------------
              WOLTER KYMMELL                   HANS-JURGEN WNUCK

Address:      Grosse Drakenburgerstrasse 93-97, Postfach 1440
              D-31582 Neinburg/Weser
              Germany
Fax:          +32 2 714 33 95

FLEXSYS AMERICA L.P.

By:           Flexsys America Co., its General Partner

              By:    /s/ Wolter Kymmell
                     ------------------
              Name:  WOLTER KYMMELL
              Title: OFFICER

Address:      260 Springside Drive, P.O. Box 5444, Akron
              OH 44334-0444
              United States of America
Fax:          +32 2 714 33 95

                                      -11-

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FLEXSYS CO-ORDINATION CENTRE N.V.

By:           /s/ Wolter Kymmell
              ------------------
              WOLTER KYMMELL

Address:      Woluwe Gardens, Woluwedal 24/3
              1932 Sint-Stevens-Woluwe/Zaventem
              Belgium
Fax:          +32 2 714 33 95

FLEXSYS N.V.

By:           /s/ Wolter Kymmell
              ------------------
              WOLTER KYMMELL

Address:      Woluwe Gardens, Woluwedal 24/3
              1932 Sint-Stevens-Woluwe/Zaventem
              Belgium
Fax:          +32 2 714 33 95

FLEXSYS RUBBER CHEMICALS LTD

By:           /s/ Wolter Kymmell
              ------------------
              WOLTER KYMMELL

Address:      Ruabon Works, Cefn Mawr, Wrexham
              Clwyd LL14 3SL, North Wales
              United Kingdom
Fax:          +32 2 714 33 95

THE GUARANTORS

FLEXSYS HOLDING B.V.

By:           /s/ Wolter Kymmell
              ------------------
              WOLTER KYMMELL

Address:      51010 Zutphenseweg
              NL-7418 AJ Deventer
              The Netherlands
Fax:          +32 2 714 33 95

                                      -12-

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FLEXSYS K.K.

By:           /s/ Wolter Kymmell
              ------------------
              WOLTER KYMMELL

Address:      15-3, Uchi Kanda 3-chome
              Chiyoda-ku Tokyo
              Japan
Fax:          +32 2 714 33 95

FLEXSYS VERWALTUNGS- UND BETEILIGUNGS GMBH

By:           /s/ Wolter Kymmell               Hans-Jurgen Wnuck
              ------------------               -----------------
              WOLTER KYMMELL                   HANS-JURGEN WNUCK

Address:      Grosse Drakenburgerstrasse 93-97, Postfach 1440
              D-31582 Neinburg/Weser
              Germany
Fax:          +32 2 714 33 95

FLEXSYS AMERICA L.P.

By:           Flexsys America Co., its General Partner

              By:    /s/ Wolter Kymmell
                     ------------------
              Name:  WOLTER KYMMELL
              Title: OFFICER

Address:      260 Springside Drive, P.O. Box 5444, Akron
              OH 44334-0444
              United States of America
Fax:          +32 2 714 33 95

FLEXSYS CO-ORDINATION CENTRE N.V.

By:           /s/ Wolter Kymmell
              ------------------
              WOLTER KYMMELL

Address:      Woluwe Gardens, Woluwedal 24/3
              1932 Sint-Stevens-Woluwe/Zaventem
              Belgium
Fax:          +32 2 714 33 95

                                     -13-

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FLEXSYS N.V.

By:           /s/ Wolter Kymmell
              ------------------
              WOLTER KYMMELL

Address:      Woluwe Gardens, Woluwedal 24/3
              1932 Sint-Stevens-Woluwe/Zaventem
              Belgium
Fax:          +32 2 714 33 95

FLEXSYS RUBBER CHEMICALS LTD

By:           /s/ Wolter Kymmell
              ------------------
              WOLTER KYMMELL

Address:      Ruabon Works, Cefn Mawr, Wrexham
              Clwyd LL14 3SL, North Wales
              United Kingdom
Fax:          +32 2 714 33 95

FLEXSYS INDUSTRIA E COMERCIO LTDA

By:           /s/ Hiroaki Kawabata       /s/ Sergio Caratori Paes de Andrade
              --------------------       -----------------------------------
              HIROAKI KAWABATA           SERGIO CARATORI PAES DE ANDRADE

Address:      Avendida Atlantica No. 831
              CEP 09060-001, Santo Andre, SP
              Brazil
Fax:          +32 2 714 33 95

FLEXSYS VERKAUF GMBH

By:           /s/ Wolter Kymmell               Hans-Jurgen Wnuck
              ------------------               -----------------
              WOLTER KYMMELL                   HANS-JURGEN WNUCK

Address:      Grosse Drakenburgerstrasse 93-97, Postfach 1440
              D-31582 Neinburg/Weser
              Germany
Fax:          +32 2 714 33 95

FLEXSYS CHEMICALS (M) SDN. BHD.

By:           /s/ Wolter Kymmell
              ------------------
              WOLTER KYMMELL

Address:      No. 312, 3rd Floor, Block C, Kelana Square, 17,
              Jalan SS 7/26
              Petaling Jaya, 47301 Selangor
              Malaysia
Fax:          +32 2 714 33 95

                                     -14-

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THE AGENT

KBC BANK N.V.

By:           /s/ Peter de Wandeler
              ----------------------
              PETER DE WANDELER

Address:      BRUHAV12/IBR
              Havenlaan 12
              B-1080
              Brussels
Fax:          +32 2429 4920
Attention:    Dirk De Bleser/Peter De Wandeler

THE ARRANGERS

KBC BANK N.V.

By:           /s/ Ivan Vertenten               /s/ Adriaan Leoff
              ------------------               -----------------
              IVAN VERTENTEN                   ADRIAAN LOEFF

Address:      BRUHAV12/IBR
              Havenlaan 12
              B-1080
              Brussels
Fax:          +32 2429 4920
Attention:    Dirk De Bleser/Peter De Wandeler

CITIGROUP GLOBAL MARKETS LIMITED

By:           /s/ Paul Gibbs
              --------------
              PAUL GIBBS

Address:      Citigroup Centre
              Canary Wharf
              London E14 5LB
              United Kingdom
Fax:          +44 (0)207 986 8278
Attention:    Paul Gibbs

                                     -15-

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THE SECURITY TRUSTEE

KBC BANK N.V.

By:           /s/ Peter de Wandeler
              ---------------------
              PETER DE WANDELER

Address:      BRUHAV12/IBR
              Havenlaan 12
              B-1080
              Brussels
              Fax: +32 2429 4920
Attention:    Dirk De Bleser/Peter De Wandeler

THE EXISTING LENDERS

KBC BANK N.V.

By:           /s/ Ivan Vertenten               /s/ Adriaan Leoff
              ------------------               -----------------
              IVAN VERTENTEN                   ADRIAAN LOEFF

Address:      BRUHAV12/IBR
              Havenlaan 12
              B-1080
              Brussels
Fax:          +32 2429 4920
Attention:    Dirk De Bleser/Peter De Wandeler

CITIBANK, N.A.

By:           /s/ Paul Gibbs
              --------------
              PAUL GIBBS

Address:      399 Park Avenue
              New York
              NY 10022
              United States of America
Fax:          +44 (0)207 986 8278
Attention:    Jim Simpson

                                     -16-

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CITIBANK, N.A., LONDON BRANCH

By:           /s/ Paul Gibbs
              --------------
              PAUL GIBBS

Address:      Citigroup Centre
              Canary Wharf
              London E14 5LB
              United Kingdom
Fax:          +44 (0)207 986 8278
Attention:    Paul Gibbs

THE NEW LENDERS

ABN AMRO BANK N.V., BRUSSELS

By:           /s/ Bert Bielen                  /s/ Wim Goossers
              ---------------                  ----------------
              BERT BIELEN                      WIM GOOSSERS

Address:      Kanselarijstraat 17a
              B-1000 Brussels
              Belgium
Fax:          +32 2546 0402
Attention:    Eddy Jacobs

BANCA MONTE PASCHI BELGIO S.A.

By:           /s/ Luigi Macciola               /s/ Alessandro Lami
              ------------------               -------------------
              LUIGI MACCHIOLA                  ALESSANDRO LAMI

Address:      Rue Joseph II 24
              1000 Brussels
              Belgium
Fax:          +32 2 220 7332/+32 2 218 8391
Attention:    Laura Fiabane/Wendy Craps

BANQUE LBLUX S.A.

By:           /s/ H. Peter Radermacher         /s/ Kerstin Franzen
              ------------------------         -------------------
              H. PETER RADERMACHER             KERSTIN FRANZEN

Address:      3 rue Jean Monnet
              L-2180 Luxembourg
              Luxembourg
Fax:          +35 2 42434 3399
Attention:    Gregory Reich/Siegfried Behlert

                                     -17-

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BNP PARIBAS S.A.
BELGIUM BRANCH

By:           /s/ Hugo Baetens                 /s/ Didier Mahout
              ----------------                 -----------------
              HUGO BAETENS                     DIDIER MAHOUT

Address:      Avenue Louise 489
              1050 Brussels
              Belgium
Fax:          +32 2518 0920
Attention:    Laurent Falla/Raymond Pietercil and Annick De Cock

COMMERZBANK INTERNATIONAL S.A. LUXEMBOURG

By:           /s/ Kenneth Anderson             /s/ Stephan Wurm
              --------------------             ----------------
              KENNETH ANDERSON                 STEPHAN WURM

Address:      25, rue Edward Steichen
              L-2540 Luxembourg
              Luxembourg
Fax:          +32 2743 1911/+35 2477 911 2386
Attention:    Alain Seconde/Ulrike Meinlschmidt

DEUTSCHE BANK A.G. NEW YORK BRANCH

By:           /s/ Evelyn Thierry               /s/ Susan Lefevre
              ------------------               -----------------
              EVELYN THIERRY                   SUSAN LEFEVRE

Address:      60 Wall Street MSNYC 60-0208
              New York, NY 10005
              The United States of America
Fax:          +1 212 797 5690
Attention:    Evelyn Thierry/Michael J. Mozer

DEXIA BANK BELGIUM N.V./ S.A.

By:           /s/ Audrey Reveillon             /s/ Piet Cordonnier
              --------------------             -------------------
              AUDREY REVEILLON                 PIET CORDONNIER

Address:      Pachecolaan 44
              1000 Brussels
              Belgium
Fax:          +32 2 285 1375
Attention:    Audrey Reveillon/Piet Cordonnier

                                     -18-

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FIFTH THIRD BANK

By:           /s/ Matthew J. Kuchta
              ---------------------
              MATTHEW J. KUCHTA

Address:      600 Superior Avenue East
              Cleveland OH 44114
              The United States of America
Fax:          +1 216 2745 145
Attention:    Matthew Kuchta

FORTIS BANK S.A./N.V.

By:           /s/ Hans de Langhe               /s/ Herman Sonck
              ------------------               ----------------
              HANS DE LANGHE                   HERMAN SONCK

Address:      Montagne du Parc 3 - 1MH1C
              1000 Brussels
              Belgium
Fax:          +32 2565 0927
Attention:    Edith de Flines

FORTIS BANK (NEDERLAND) N.V.

AS FACILITY OFFICE OF FORTIS BANK S.A./N.V FOR THE PURPOSE OF PARTICIPATING IN
A LOAN TO FLEXSYS RUBBER CHEMICALS LTD AND/OR FLEXSYS AMERICA L.P. PURSUANT TO
CLAUSE 2.3 OF THE RESTATED AGREEMENT.

By:           /s/ H. Visser                    /s/ R. Klaasman
              -------------                    ---------------
              H. VISSER                        R. KLAASMAN

Address:      Coolsingel 93
              3012 AE Rotterdam
              The Netherlands
Fax:          +31 10 401 5615
Attention:    Hans Visser

ING BELGIUM S.A./N.V.

By:           /s/ Jacques Mamere
              ------------------
              JACQUES MAMERE

Address:      24 Avenue Marnix
              1000 Brussels
              Belgium
Fax:          +32 2718 0368/+32 2547 2665
Attention:    Carolien D'Hauwers/Jacques Mamere and Laurant Christiaens

                                     -19-

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MIZUHO CORPORATE BANK NEDERLAND N.V.

By:           /s/ A. Ujita                     /s/ H. Takahashi
              ------------                     ----------------
               A. UJITA                        H. TAKAHASHI

Address:      Apollolaan 171
              1077 AS Amsterdam
              The Netherlands
Fax:          +31 20 5734 376
Attention:    Rogier Jansen

-----------------------------------------------------------------------------
Witnesses:-

1. /s/ M. Blacnaflor                      2. /s/ D. Taswin
--------------------                      ----------------

Name: M. BLANCAFLOR                       Name: D. TASWIN

ID: N/A                                   ID: N/A

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

Documentary duty of EUR 0.15 per original paid by bank transfer from Clifford
Chance on 12 January 2007. Droit d'ecriture de 0,15 euro par original paye par
transfert bancaire de Clifford Chance le 12 janvier 2007. Recht op geschriften
van 0,15 euro per origineel betaald per overschrijving door Clifford Chance op
12 januari 2007.

                                     -20-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00127-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00127-of-00352.parquet"}]]