Exhibit 10.1
LOAN CONSOLIDATION
AGREEMENT
THIS LOAN CONSOLIDATION
AGREEMENT (this “
Agreement ”) is made and entered into as of, but not
necessarily on, the 1st day of October, 2009, by and between
Arkanova Acquisition Corporation , a Delaware corporation
(the “ Company ”), and Aton Select Funds
Limited (the “ Investor ”).
Background
A.
The Company is currently indebted to
the Investor in the principal amount of Ten Million Twelve Thousand
Five Hundred and No/100 United States Dollars (US $10,012,500.00)
under the following described promissory notes (collectively, the
“ Existing Notes ”):
(i)
Promissory Note from the Company to
Aton Select Fund Limited dated September 3, 2008, in the
original principal amount of Nine Million and No/100 United States
Dollars (US $9,000,000.00);
(ii)
Promissory Note from the Company to
Aton Select Fund Limited dated April 29, 2009, in the original
principal amount of Six Hundred Thousand and No/100 United States
Dollars (US $600,000); and
(iii)
Promissory Note from the Company to
Aton Select Fund Limited dated April 14, 2009, in the original
principal amount of Four Hundred Twelve Thousand Five Hundred and
No/100 United States Dollars (US $412,500).
B.
The Company has requested that the
Investor loan an additional One Million One Hundred Sixty-Eight
Thousand Seven Hundred Twenty-Nine and 17/100 United States Dollars
(US $1,168,729.17) (the “ Additional Loan Amount
”) and consolidate the outstanding principal balances under
the Existing Notes and the Additional Loan Amount into one new
promissory note in the principal amount of Twelve Million and
No/100 United States Dollars (US $12,000,000.00) (the “
New Note ”), and the Investor has agreed to such new
loan and consolidation of the Existing Notes on the following terms
and conditions.
Terms and
Conditions
In consideration of the mutual
promises made herein and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1.
New Loan Documents
. The Company and the Investor
shall enter into new loan documents in the substantially the form
of the Note Purchase Agreement, Secured Promissory Note, Pledge
Agreement and Guaranty Agreement attached hereto as Annexes
“A,” “B,” “C’” and
“D” attached hereto and incorporated herein reference
for all purposes (the “New Loan Documents”). The
New Loan Documents shall provide for the consolidation and
cancellation of the Existing Notes and the loan of the Additional
Loan Amount under a new Secured Promissory Note on the terms set
forth therein, which new Secured Promissory Note will be secured by
a pledge of all of the membership interests of the Company’s
wholly owned subsidiary, Provident Energy Associates of Montana,
LLC, a Montana limited liability
