Arkanova Energy Corporation: Exhibit 10.42 - Filed by newsfilecorp.com





THIS AGREEMENT RELATES TO AN OFFERING OF SECURITIES IN AN
OFFSHORE TRANSACTION TO PERSONS WHO ARE NOT U.S. PERSONS (AS DEFINED IN
REGULATION S UNDER THE 1933 ACT) PURSUANT TO REGULATION S UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”). NONE OF THE
SECURITIES TO WHICH THIS AGREEMENT RELATES HAVE BEEN REGISTERED UNDER THE 1933
ACT, OR ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO REGISTERED, NONE MAY BE
OFFERED OR SOLD, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES OR TO U.S. PERSONS
(AS DEFINED HEREIN EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S
UNDER THE 1933 ACT, PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
1933 ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE 1933 ACT AND IN EACH CASE ONLY
IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS. IN ADDITION, HEDGING
TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS IN ACCORDANCE
WITH THE 1933 ACT.

AMENDED & RESTATED GUARANTY AGREEMENT

     THIS AMENDED & RESTATED
GUARANTY AGREEMENT (this “Guaranty”) is made and entered into as of,
but not necessarily on, the 6th day of February, 2013, and between Arkanova
Energy Corporation. a Nevada corporation (“Guarantor”) and Aton
Select Funds Limited (the “Investor”)

Background

     A. On even date herewith Arkanova
Acquisition Corporation, a Nevada corporation and a wholly-owned subsidiary of
Guarantor, Arkanova Acquisition Corp. (“Maker”), and the Investor
(“Payee”), consummated the sale by Maker and the purchase by Payee of
certain secured indebtedness of Maker (the “Indebtedness”), and to
evidence the obligation of Maker to pay the Indebtedness Maker executed and
delivered to Payee that certain amended & restated secured promissory note
(the “Note”) evidencing Maker’s obligation to pay to Payee the principal
and interest set forth therein; and

     B. As a material inducement to
Payee purchase the Indebtedness and accept the Note as evidence of Maker’s
obligation to pay for same, Guarantor, being the sole shareholder of Maker, has
agreed to guarantee the payment of the indebtedness evidenced by the Note and
the performance of the obligations of Maker under the Note pursuant to the terms
and conditions set forth herein;

Terms and Conditions

     In consideration of the mutual
benefits to be derived from the covenants and agreements herein contained and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, hereby agree as follows:

     1. Guarantee of Maker’s
Obligations. Guarantor, as primary obligor and not merely as surety and
intending to be legally bound hereby, hereby absolutely, irrevocably,
unequivocally and unconditionally, guarantees to Payee the due, prompt and
faithful performance of, compliance with and execution of all of the terms,
provisions, conditions, covenants, warranties, obligations and agreements of
Maker contained in, described in or pursuant to the Note and this Guaranty,
including the prompt and full payment of all indebtedness of Maker to Payee
arising pursuant to the Note and all renewals and extensions thereof, now
existing or hereafter arising pursuant to the Note (the “Guaranteed
Obligations”). In the event of default by Maker in payment or performance of
the indebtedness evidenced by the Note, or any part thereof, when such
indebtedness or other obligations become due, whether by maturity, prepayment or
by acceleration, Guarantor shall, on demand and without further notice of
dishonor, pay the amount due thereon to Payee. In the event of such payment is
made by Guarantor, then Guarantor shall be subrogated to the rights then held by
Payee with respect to the Guaranteed Obligations to the extent to which the
Guaranteed Obligations were discharged by Guarantor. Upon payment by Guarantor
of any sums to Payee hereunder, all rights of Guarantor against Maker arising as
a result therefrom by way of right of subrogation or otherwise, shall in all
respects be subordinate and junior in right of payment to the prior indefeasible
payment in full of all the obligations of Maker to Payee under the Note. This
Guaranty shall be irrevocable by Guarantor until all of the Guaranteed
Obligations have been finally, completely and indefeasibly paid in full and
completely performed.




     2. Nondischargeability of
Guaranty. Guarantor hereby agrees that Guarantor’s obligations under the
terms of this Guaranty shall not be released, diminished, impaired, modified,
affected or limited in any manner whatsoever by the occurrence of any reason or
event, including without limitation, one or more of the following events: (a)
the taking or accepting of any other security for any or all of the Guaranteed
Obligations; (b) any indulgence, compromise, settlement or release which may be
extended by Payee to Maker, Guarantor or any one or more other parties liable in
whole or in part for the Guaranteed Obligations for such consideration as Payee
may deem proper; (c) the lack of corporate power of Maker, the insolvency or
bankruptcy of Maker, or any party at any time liable for the payment of any or
all of the Guaranteed Obligations, whether now existing or hereafter occurring;
(d) any renewal, extension, and/or rearrangement of the payment of any or all of
the Guaranteed Obligations with or without notice to or consent of Guarantor;
(e) any neglect, delay, omissions, failure, or refusal of Payee to take or
prosecute any action for the collection of any of the Guaranteed Obligations or
to foreclose or take or prosecute any action in connection with any instrument
or agreement evidencing or securing all or any part of the Guaranteed
Obligations; (f) the enforceability of all or any part of the Guaranteed
Obligations against Maker by reason of the fact that the Guaranteed Obligations
exceed the amount permitted by law, the act of creating the Guaranteed
Obligations, or any part thereof, is ultra vires, or the officers creating same
acted in excess of their authority; (g) any payment by Maker to Payee is held to
constitute a preference under the bankruptcy laws or if for any other reason
Payee is required to refund such payment or pay the amount thereof to someone
else; or (h) any impairment, modification, change, release or limitation of the
liability of Maker or Guarantor, or of any remedy for the enforcement thereof,
resulting from the operation of any present or future provision of the Federal
Bankruptcy Code or any similar law or statute of the United States or the State
of Texas.

     3. No Setoff. The
obligations, guaranties, covenants, agreements and duties of Guarantor under
this Guaranty are primary obligations of Guarantor and shall not be subject to
any counterclaim, setoff, deduction, diminution, abatement, recoupment,
suspension, deferment, reduction or defense based upon any claim that Maker,
Guarantor or any other person or entity may have against Payee. The obligations
of Guarantor set forth herein constitute recourse obligations of Guarantor
enforceable against Guarantor to the full extent of Guarantor’s assets and
properties.

     4. Continuation of
Guaranty. Guarantor covenants that this Guaranty will not be discharged
except by complete performance of the Guaranteed Obligations contained in this
Guaranty. This Guaranty shall not be affected by, and shall remain in full force
and effect notwithstanding, any bankruptcy, insolvency, liquidation, or
reorganization of Maker or Guarantor.

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     5. Reliance on Guaranty.
Guarantor recognizes that Payee is relying upon this Guaranty and the
undertakings of Guarantor hereunder in purchasing the Indebtedness and accepting
the Note in connection therewith, and Guarantor further recognizes that the
execution and delivery of this Guaranty is a material inducement to Payee in
purchasing the Indebtedness and accepting the Note as evidence of Maker’s
obligation to pay for same in accordance with the terms of the Note.

     6. Payments under
Guaranty. All amounts to be payable under this Guaranty shall be payable at
the address of Payee set forth in the Note or at such other address as Payee may
from time to time designate in writing.

     7. Representations of
Guarantor. Guarantor hereby represents, warrants and covenants to Payee as
follows:

     (a)
Authorization. Guarantor has all requisite corporate power and authority
to execute, deliver and perform this Guaranty. The Guaranty constitutes the
valid and binding obligation of Guarantor, enforceable against Guarantor in
accordance with its terms, except as enforcement may be limited by bankruptcy,
insolvency, moratorium, reorganization or other laws or equitable principles
relating to or affecting creditors' rights generally.

     (b)
Benefit to Guarantor. Guarantor has derived, or expects to derive,
financial and other advantage and benefit, directly or indirectly, from the
consummation of the transactions contemplated by the Note and the making of this
Guaranty.

     8. Waiver. Guarantor
hereby waives notice to Guarantor of the acceptance of this Guaranty, and of any
default on the part of Maker of Maker’s obligations under the Note to Payee, and
all other notices in connection herewith or in connection with the liabilities,
obligations and duties guaranteed hereby. Guarantor further waives diligence,
presentment and suit on part of Payee in the enforcement of any liability,
obligation or duty guaranteed by Guarantor hereunder.

     9. Enforcement of
Guaranty. Guarantor agrees that Payee shall not be first required to enforce
against Maker or any other person any liability, obligation or duty guaranteed
hereby before seeking enforcement thereof against Guarantor. Suit may be brought
and maintained against Guarantor by Payee to enforce any liability, obligation
or duty guaranteed hereby without joinder of Maker or any other party or without
Payee first exhausting Payee’s remedies against Maker or without Payee first
exhausting Payee’s rights against any security which shall ever have been given
to Payee to secure the payment or performance of the Guaranteed Obligations.

     10. Payment of Expenses and
Attorneys’ Fees. Guarantor agrees to pay, on demand, and to save Payee
harmless against liability for, any and all costs and expenses (including
reasonable fees and disbursements of counsel) incurred or expended by Payee in
connection with the enforcement of or preservation of any rights under this
Guaranty. 

     11. Governing Law. THIS
GUARANTY IS MADE, ENTERED INTO AND PERFORMABLE IN HARRIS COUNTY, TEXAS, AND ALL
PAYMENTS ARE DUE AND PAYABLE IN TRAVIS COUNTY, TEXAS. CONSEQUENTLY, THIS
GUARANTY SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE
STATE OF TEXAS WITHOUT REGARD TO ITS CONFLICTS OF LAW RULES AND ANY LITIGATION
OR OTHER PROCEEDING AS BETWEEN GUARANTOR AND PAYEE THAT MAY BE BROUGHT, OR ARISE
OUT OF, IN CONNECTION WITH OR BY REASON OF THIS GUARANTY SHALL BE BROUGHT IN THE
APPLICABLE FEDERAL OR STATE COURT IN AND FOR HARRIS COUNTY, TEXAS WHICH COURTS SHALL BE THE EXCLUSIVE COURTS OF
JURISDICTION AND VENUE.

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     12. Termination of
Guaranty. This Guaranty shall terminate and be of no further force or effect
upon the payment of the Guaranteed Obligations in full.

     13. Reformation and
Severability. If any provision of this Guaranty is held to be illegal,
invalid or unenforceable under present or future laws effective during the term
hereof (i) in lieu of such illegal, invalid or unenforceable provision, there
shall be added automatically as a part of this Guaranty a provision as similar
in terms to such illegal, invalid or unenforceable provision as may be possible
and be legal, valid and enforceable, and (ii) the legality, validity and
enforceability of the remaining provisions hereof shall not in any way be
affected or impaired thereby.

     14. Successors and
Assigns. This Guaranty shall be binding upon Guarantor and its heirs,
personal representatives, successors and permitted assigns. Guarantor may not
assign or transfer any of Guarantor’s rights or obligations hereunder without
the prior written consent of Payee. In the event of an assignment by Payee of
its rights or interest in the Guaranteed Obligations including the Note, or any
part thereof, the rights and benefits hereunder, to the extent applicable to the
indebtedness so assigned shall automatically pass with a transfer or assignment
of the Note or any interest therein to any holder thereof.

     15. Entire Agreement. This
Guaranty embodies the final, entire agreement of Guarantor with respect to the
subject matter hereof and supersedes any and all prior or contemporaneous
agreements, representations and understandings, whether written or oral,
relating to this Guaranty.

     16. Effect on Prior
Guaranty. This Guaranty replaces that certain amended and restated Guaranty
issued by Guarantor to Investor entered into as of July 1, 2012, which the
parties hereby agree is cancelled and of no further force or effect.

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Guarantor Signature

     To evidence the binding effect of
the foregoing terms, Guarantor has executed and delivered this Guaranty as of,
but not necessarily on, the date first above written.

ARKANOVA ENERGY CORPORATION

	By: 	“Pierre Mulacek” 	 
	 	Pierre Mulacek, President 	 


ACCEPTED:

ATON SELECT FUNDS LIMITED

	By: 	“David Dawes” 	 
	 	David Dawes 	 
	 	Director 	 


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