Convertible Promissory Note dated April 6, 2011 with Pikka Asset Management Ltd

The failure of the Borrower to pay the principal and any accrued interest in full on or before the Due Date;

The filing of bankruptcy proceedings involving the Borrower as a debtor;

The application for the appointment of a receiver for the Borrower;

The making of a general assignment for the benefit of the Borrower's creditors;

The insolvency of the Borrower;

if during the Adjustment Period (as hereinafter defined) the Company shall:

issue to all or substantially all the holders of the Common Shares, by way of a stock dividend or otherwise, Common Shares or Convertible Securities; or

subdivide its outstanding Common Shares into a greater number of shares; or

combine or consolidate its outstanding Common Shares into a smaller number of shares,

(any of such events being herein called a “Common Share Reorganization”), the Conversion Price shall be adjusted effective immediately after the record date at which the holders of Common Shares are determined for the purposes of the Common Share Reorganization to a number which is the product of (1) the Conversion Price in effect on such record date and (2) a fraction:

the numerator of which is the number of Common Shares outstanding on such record date before giving effect to the Common Share Reorganization; and

the denominator of which is the number of Common Shares outstanding after giving effect to such Common Share Reorganization;

if during the Adjustment Period the Company shall issue or distribute to all or substantially all the holders of Common Shares, (i) shares of any class other than Common Shares, or (ii) rights, options or warrants (other than pursuant to a stock option plan or employee share purchase plan adopted by the shareholders of the Company at a general meeting of shareholders of the Company), or (iii) evidences of indebtedness, or (iv) any other assets (excluding cash dividends paid in the ordinary course) and such issuance or distribution does not constitute a Common Share Reorganization (any of such events being herein called a “Special Distribution”), the Conversion Price shall be adjusted effective immediately after the record date at which the holders of Common Shares are determined for purposes of the Special Distribution to a price which is the product of (1) the Conversion Price in effect on such record date and (2) a fraction:

the numerator of which shall be the difference between:

the product of (i) the number of Common Shares outstanding on such record date and (ii) the Current Market Price (as hereinafter defined) of the Common Shares on such date; and

the aggregate fair market value (as determined by the board of directors of the Company, whose determination shall be conclusive) of the shares, rights, options, warrants, evidences of indebtedness or other assets issued or distributed in the Special Distribution; and

the denominator of which shall be the product of (A) the number of Common Shares outstanding on such record date and (B) the Current Market Price of the Common Shares on such date.

Any Common Shares owned by or held for the account of the Company shall be deemed not to be outstanding for the purpose of any such computation. To the extent that such distribution of shares, rights, options, warrants, evidences of indebtedness or assets is not so made or to the extent that any rights, options or warrants so distributed are not exercised, the Conversion Price shall be readjusted to the Conversion Price which would then be in effect based upon such shares, rights, options, warrants, evidences of indebtedness or assets actually distributed or based upon the number of Common Shares or Convertible Securities actually delivered upon the exercise of such rights, options or warrants, as the case may be, but subject to any other adjustment required hereunder by reason of any event arising after such record date;

if during the Adjustment Period there is a reorganization of the Company not otherwise provided for in subsection 19(a) or a consolidation or merger or amalgamation of the Company with or into another body corporate including a transaction whereby all or substantially all of the Company’s undertaking and assets become the property of any other corporation (any such event being herein called a “Capital Reorganization”), the Holder, if he has not converted the entire Loan Amount prior to the effective date of such Capital Reorganization, shall be entitled to receive and shall accept, upon the exercise of such right of conversion at any time after the effective date of such Capital Reorganization, in lieu of the number of Common Shares to which he was theretofore entitled upon conversion of this Note, the aggregate number of shares or other securities or property of the Company, or such continuing, successor or purchasing corporation, as the case may be, under the Capital Reorganization that the Holder would have been entitled to receive as a result of such Capital Reorganization if, on the effective date thereof, he had been the holder of the number of Common Shares to which immediately before such transaction he was entitled upon conversion of this Note. No such Capital Reorganization shall be carried into effect unless all necessary steps shall have been taken so that the Holder shall thereafter be entitled to receive such number of shares or other securities or property of the Company, or of such continuing successor or purchasing corporation, as the case may be, under the Capital Reorganization, subject to adjustment thereafter in accordance with provisions the same, as nearly as may be possible, as those contained in this section 0 or section 20;

if the Company reclassifies or otherwise changes the outstanding Common Shares, the conversion right shall be adjusted effective immediately upon such reclassification becoming effective so that Holder shall be entitled to receive such Common Shares as he would have received had the principal amount of this Note been converted immediately prior to such effective date, subject to adjustment thereafter in accordance with provisions of this Note, as nearly as may be possible as those contained in this section 0 or section 20.

the adjustments and readjustments provided for in herein are cumulative and, subject to subsection 20(b), apply (without duplication) to successive issues, subdivisions, combinations, consolidations, distributions and any other events which require adjustment of the Conversion Price or the number or kind of shares or securities issuable hereunder;

no adjustment in the Conversion Price shall be required unless such adjustment would result in a change of at least 1% in the Conversion Price then in effect, provided however, that any adjustments which, except for the provisions of this subsection 20(b) would otherwise have been required to be made, shall be carried forward and taken into account in any subsequent adjustment;

no adjustment in the Conversion Price shall be made in respect of any event described in subsections 19(a)(i), 19(b) or 19(c) if the Holder is entitled to participate in such event on the same terms, mutatis mutandis, as if the Holder had converted the entire Loan Amount immediately prior to the effective date or record date of such event;

no adjustment in the Conversion Price shall be made pursuant to subsection 0 in respect of the issue of Common Shares pursuant to:

this Note; or

any stock option or purchase plan for officers, employees or directors of the Company outstanding or in existence as at the date hereof or any amendment to such plan;

and any such issue shall be deemed not to be a Common Share Reorganization or a Special Distribution.

if a dispute arises with respect to adjustments of the Conversion Price, such dispute shall be conclusively determined by the auditors of the Company or if they are unable or unwilling to act, by such firm of independent public accountants as may be selected by the board of directors of the Company and acceptable to the Holder and any such determination shall be binding upon the Company and the Holder;

if the Company sets a record date to determine the holders of Common Shares for the purpose of entitling them to receive any dividend or distribution or any subscription or purchase rights and shall thereafter legally abandon its plans to pay or deliver such dividend, distribution or subscription or purchase rights, then no adjustment in the Conversion Price shall be required by reason of the setting of such record date; and

notwithstanding the provisions of section 0 the maximum adjustment in the Conversion Price resulting from any adjustment described in section 19(a) shall be limited to an increase or decrease of the Conversion Price by 250% of the original Conversion Price.

“Adjustment Period” means the period from and including the date hereof to and including the last business day prior to the Due Date;

“business day” means any day which is not a Saturday, Sunday, or statutory holiday in the City of Vancouver;

“Convertible Security” means a security of the Company convertible into or exchangeable for or otherwise carrying the right to acquire Common Shares;

“Current Market Price” means, with reference to Common Shares, the average of the VWAPs for the 30 trading days immediately preceding the applicable date for determination of the Current Market Price;

“effective date” and “record date” shall mean the close of business on the relevant date;

VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Shares are then listed or quoted on the NYSE Amex Equities exchange, the daily volume weighted average price of the Common Shares for such date (or the nearest preceding date) as reported by Bloomberg L.P. (based on a trading day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time); (b) if the Common Shares are not then traded on NYSE Amex Equities Exchange, the volume weighted average price of the Common Shares for such date (or the nearest preceding date) on the OTC Bulletin Board; (c) if the Common Shares are not then quoted for trading on the OTC Bulletin Board and if prices for the Common Shares are then reported in the “Pink Sheets” published by Pink OTC Markets Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per Common Share so reported; or (d) in all other cases, the fair market value of a share of Common Shares as determined by an independent appraiser selected in good faith by the Holder and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.

default by the Borrower in the due payment of any amount payable under this Agreement or in the due and complete observance or performance of any other condition, covenant, or provision of this Agreement;

the occurrence of a material adverse change in the financial position of the Borrower or in the value of the security held by the Lender for the Loan;

any action by the Borrower that constitutes a denial of the Lender's rights set forth in this Agreement;

an order is made or a petition is filed for the bankruptcy of the Borrower;

the Borrower commits an act of bankruptcy or makes a general assignment for the benefit of its creditors or otherwise acknowledges its insolvency;

the appointment of a receiver, receiver-manager, or receiver and manager of any part of the properties or assets of the Borrower;

the enforceability of any execution, or any other process of any court against the Borrower, or the levy of a distress or analogous process upon the properties or assets or any part thereof of the Borrower;

default by the Borrower in the performance of any contractual obligation to the Lender under any other agreement or legal instrument, whether or not collateral or supplemental to this Agreement;

the holder of any mortgage, charge, or encumbrance on any of the properties or assets or any part thereof of the Borrower does anything to enforce or realize on such mortgage, charge, or encumbrance;

if, at any time during the term of this Agreement, the Borrower is subject to a change of control. For the purposes of this subparagraph, a "change of control" shall be deemed to occur if:

any person, or group of persons acting in concert, other than any current control person(s), hold greater than 20% of the issued and outstanding shares in the capital stock of the Borrower;

there is a 50% or greater change in the composition of the Borrower’s Board of Directors, effected by stockholders of the Borrower other than with the consent of the current control person(s); or

any representation or warranty made in writing to the Lender by the Borrower made in this Agreement or in any certificate or other instrument delivered or to be delivered by or on behalf of the Borrower to the Lender in contemplation of this Agreement is incorrect in any material respect on the date as of which such representation or warranty was made or purported to be made; or

trading in the shares of common stock of the Borrower is suspended for more than 30 days by a regulatory authority.

declare the then outstanding balance of the Loan, Interest, costs, and all money owing by the Borrower to be immediately due and payable and such funds and liabilities will forthwith become due and payable without presentment, demand, protest, or other notice of any kind to the Borrower, all of which are hereby expressly waived; and/or

as Lender’s sole recourse, take possession of the Shares designated as collateral for the principal amount of the Loan that is in default for its sole benefit; provided, that, in the event of a trading halt in the common stock of Borrower or upon the occurrence of an Event of Default under Section 8.1 (d), (e), (f) or (l), the Loan shall be full recourse, and the Lender shall have all remedies available under applicable laws to enforce payment of amounts due under this Agreement, including a first security interest in all of the assets of Borrower. Upon the occurrence of any Event of Default, the Lender shall be deemed to be the registered and beneficial owner of a 100% right, interest and title to the Shares free of all charges, liens and encumbrances, other than any resale or other restrictions imposed by law.

the undersigned holder at the time of conversion of the Note is not in the United States, is not a “U.S. person” as defined in Regulation S under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) and is not converting the Note on behalf of, or for the account or benefit of a U.S. person or a person in the United States and did not execute or deliver this Conversion Form in the United States;

the undersigned holder is resident in the United States or is a U.S. person who is a resident of the jurisdiction referred to in the address appearing above, and is a U.S. Accredited Investor and has completed the U.S. Accredited Investor Status Certificate in the form attached to this Conversion Form; or

if the undersigned holder is resident in the United States or is a U.S. Person, the undersigned holder has delivered to the Corporation and the Corporation’s transfer agent an opinion of counsel (which will not be sufficient unless it is in form and substance satisfactory to the Corporation) or such other evidence satisfactory to the Corporation to the effect that with respect to the securities to be delivered upon conversion of the Note, the issuance of such securities has been registered under the U.S. Securities Act and applicable state securities laws or an exemption from the registration requirements of the U.S. Securities Act and applicable state securities laws is available.

the undersigned has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the Common Shares, and the undersigned is able to bear the economic risk of loss of his or her entire investment;

the undersigned is: (i) acquiring the Common Shares for his or her own account or for the account of one or more U.S. Accredited Investors with respect to which the undersigned is exercising sole investment discretion, and not on behalf of any other person; (ii) is purchasing the Common Shares for investment purposes only and not with a view to resale, distribution or other disposition in violation of United States federal or state securities laws; and (iii) in the case of the acquisition by the undersigned of the Common Shares as agent or trustee for any other person or persons (each a “Beneficial Owner”), the undersigned holder has due and proper authority to act as agent or trustee for and on behalf of each such Beneficial Owner in connection with the transactions contemplated hereby; provided that: (x) if the undersigned holder, or any Beneficial Owner, is a corporation or a partnership, syndicate, trust or other form of unincorporated organization, the undersigned holder or each such Beneficial Owner was not incorporated or created solely, nor is it being used primarily to permit purchases without a prospectus or registration statement under applicable law; and (y) each Beneficial Owner, if any, is a U.S. Accredited Investor; and

the undersigned has not converted the Note as a result of any form of general solicitation or general advertising, including advertisements, articles, notices or other communications published in any newspaper, magazine or similar media or broadcast over radio, television or other form of telecommunications, or any seminar or meeting whose attendees have been invited by general solicitation or general advertising.

if the undersigned decides to offer, sell or otherwise transfer any of the Common Shares, the undersigned must not, and will not, offer, sell or otherwise transfer any of such securities directly or indirectly, unless:

(i) the sale is to the Corporation;

(ii) the sale is made outside the United States in a transaction meeting the requirements of Rule 904 of Regulation S under the U.S. Securities Act and in compliance with applicable local laws and regulations;

(iii) the sale is made pursuant to the exemption from the registration requirements under the U.S. Securities Act provided by Rule 144 thereunder and in accordance with any applicable state securities or “blue sky” laws; or

(iv) such securities are sold in a transaction that does not require registration under the U.S. Securities Act or any applicable state laws and regulations governing the offer and sale of securities, and it has prior to such sale furnished to the Corporation an opinion of counsel reasonably satisfactory to the Corporation;

the Common Shares are “restricted securities” under applicable federal securities laws and that the U.S. Securities Act and the rules of the United States Securities and Exchange Commission provide in substance that the undersigned may dispose of the securities only pursuant to an effective registration statement under the U.S. Securities Act or an exemption therefrom;

the Corporation has no obligation to register any of the Common Shares or to take action so as to permit sales pursuant to the U.S. Securities Act (including Rule 144 thereunder);

the Corporation may make a notation on its records or giving instructions to any transfer agent of the Corporation in order to implement the restrictions on transfer set forth and described in this Conversion Form;

upon the issuance thereof, and until such time as the same is no longer required under the applicable requirements of the U.S. Securities Act or applicable U.S. state laws and regulations, the certificates representing the Common Shares, and all securities issued in exchange therefor or in substitution thereof, will bear a legend in substantially the following form:

In connection with the conversion of a Note of PARK PLACE ENERGY INC. (the “Corporation”) by the holder, the holder hereby represents and warrants to the Corporation that the holder, and each beneficial owner (each a “Beneficial Owner”), if any, on whose behalf the holder is exercising such warrants, satisfies one or more of the following categories of Accredited Investor (please write “W/H” for the undersigned holder, and “B/O” for each beneficial owner, if any, on each line that applies):