Document:

Filed by Automated Filing Services Inc. (604) 609-0244 - Arkanova Energy Corporation - Exhibit 10.1

NONE OF THE SECURITIES TO WHICH THIS AGREEMENT RELATES HAVE
BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
"1933 ACT"), OR ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO REGISTERED, NONE
MAY BE OFFERED OR SOLD IN THE UNITED STATES OR TO U.S. PERSONS (AS DEFINED
HEREIN) EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT
TO, THE REGISTRATION REQUIREMENTS OF THE 1933 ACT AND IN EACH CASE ONLY IN
ACCORDANCE WITH APPLICABLE STATE AND/OR PROVINCIAL SECURITIES LAWS. 

AGREEMENT 

THIS AGREEMENT effective as of May 21, 2007. 

AMONG: 

ARKANOVA ENERGY CORPORATION

21 Waterway Avenue – Suite 300 
The Woodlands, Texas 77381 
(the
"Company") 

AND: 

ARKANOVA ACQUISITION CORP.

21 Waterway Avenue – Suite 300 
The Woodlands, Texas 77381

("Acquisition Corp.") 

AND: 

DAVID GRIFFIN 
604 Cherry St

Helena, AR 72342-3306 
(the "Subscriber") 

WHEREAS: 

A.         
 The Subscriber entered into a Oil and Gas Lease Acquisition and
Development Agreement dated July 24, 2006 (the "Development Agreement") with
Arkanova Energy, Inc. (the “Lessee”), a private Delaware company; 

B.           Pursuant
to the terms of the Development Agreement, the Subscriber agreed to deliver to
the Lessee leases (the “Leases”) of 100% of the mineral rights in 50,000 acres,
more or less, located in Phillips and Monroe Counties, Arkansas as more
particularly described in the Development Agreement, subject to a royalty
interest in favour of the lessors; 

2 

C.           As
at the date hereof, the Lessee has paid to the Subscriber, on account of the
lease bonus payments for the leasehold interests delivered by the Subscriber and
his affiliates and related parties, being David B. Griffin, his wife, Roxanna S.
Griffin, Griffin Family Investments Company Number One, and any other entities
in which David Griffin has at least a fifty percent ownership interest (the
“Related Parties”), a total of $8,498,205 (the "Paid to Date Amount"), the
receipt of which is hereby acknowledged by the Subscriber; 

D.           The
Paid to Date Amount has been allocated to the following leases, for a balance
due and owing of $1,372,873 (the "Lease Payment"), payable to the Subscriber and
the Related Parties upon delivery of evidence in form and substance reasonably
satisfactory to Lessee as more particularly described in the Development
Agreement: 

	Date of Lease 

	Name of Lessor 

	Acres Leased 

	Lease Bonus 
Amount (DG
      
Interest) 
	February 19, 2007 	D.B. Griffin et al. 	23,935.62 	$7,180,684.50 
	November 17, 2006 	Griffin/Howe et al. 	16,567.52 	$2,485,128 
	November 17, 2006 	Griffin/Solomon et al. 	1,368.44 	$205,266.00 
	  	  	  	$9,871,078.50 

E.          
On March 1, 2007, the Lessee merged with and into Acquisition Corp., with
Acquisition Corp. carrying on as the surviving corporation (the "Merger"); 

F.           By
operation of law, and as of the effective date of the Merger, all of the rights,
assets and liabilities of the Lessee, including the rights under the Development
Agreement, were deemed vested in Acquisition Corp.; and 

G.          
The parties hereto seek to enter into this Agreement whereby, following the
payment by Acquisition Corp. to the Subscriber of an additional sum of
$1,000,000 on account of monies due to the Subscriber and the Related Parties
for the leasehold interests (the "Additional Payment"), the Subscriber agrees to
accept, at the election of the Company, shares of common stock in the capital of
the Company (each, a "Share") at a price of $1.25 per Share in full and final
settlement of the Lease Payment and any further payments due from Acquisition
Corp. for the Leases (each, an "Additional Lease Payment"), provided that this
Agreement shall not apply to (i) the acquisition of mineral interests under the
Area on Mutual Interest clause in the Agreement and (ii) shall only apply to
mineral rights owned by Subscriber and the Related Parties as of 5:00 P.M.
Central Daylight time Monday, May 21, 2007. 

3 

THEREFORE, in consideration of the mutual covenants and
agreements herein contained and other good and valuable consideration (the
receipt and sufficiency of which are hereby acknowledged), the parties covenant
and agree as follows: 

Issuance of Shares

1.                     
 Shares 

1.1                    
Acquisition Corp. agrees to immediately notify the Company upon the payment of
the Additional Payment (the "Notice of Payment"). 

1.2                     Upon
receipt of the Notice of Payment by the Company, and upon the election by the
Company to pay the Lease Payment and any Additional Lease Payment in Shares:

	 	(a) 	
      the Company agrees to issue the Shares to the Subscriber
      on the basis of the representations and warranties and subject to the
      terms and conditions set forth herein;

	 	 	 
	 	(b) 	
      the Subscriber agrees to accept the Shares in full and
      final satisfaction of the Lease Payment and/or any Additional Lease
      Payment, as applicable; and

	 	 	 
	 	(c) 	
      the Subscriber agrees to complete, sign and return to the
      Company as soon as possible, on request by the Company, any documents,
      questionnaires, notices and undertakings as may be required by regulatory
      authorities, the OTC Bulletin Board, stock exchanges and applicable
      law.

2.                      
Closing 

2.1                    
The closing of each issuance of the Shares shall occur within fifteen (15)
business days of the election, by the Company, to pay the Lease Payment and/or
any Additional Lease Payment, as applicable, in Shares (the "Closing Date").

3.                      
Acknowledgements of Subscriber 

3.1                    
The Subscriber acknowledges and agrees that: 

	 	(a) 	
      the Shares when issued will not be registered under the
      Securities Act of 1933, as amended (the "1933 Act"), or under any state
      securities or "blue sky" laws of any state of the United States, and are
      being offered only in a transaction not involving any public offering
      within the meaning of the 1933 Act, and, unless so registered, may not be
      offered or sold in the United States or to U.S. Persons (as defined
      herein), except pursuant to an effective registration statement under the
      1933 Act, or pursuant to an exemption from, or in a transaction not
      subject to, the registration requirements of the 1933 Act, and in each
      case only in accordance with applicable state securities
  laws;

4 

	 	(b) 	
      the Company will refuse to register any transfer of the
      Shares not made in accordance with the provisions of Regulation S,
      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;

	 	 	 
	 	(c) 	
      by completing the Questionnaire, the Subscriber is
      representing and warranting that the Subscriber is an "accredited
      investor", as the term is defined in Regulation D promulgated under the
      1933 Act;

	 	 	 
	 	(d) 	
      the decision to execute this Agreement and accept the
      Shares agreed to be issued hereunder has not been based upon any oral or
      written representation as to fact or otherwise made by or on behalf of the
      Company and such decision is based solely upon a review of publicly
      available information regarding the Company available on the website of
      the United States Securities and Exchange Commission (the "SEC") available
      at www.sec.gov (the "Company
      Information");

	 	 	 
	 	(e) 	
      the Subscriber has had a reasonable opportunity to review
      the Company Information and to ask questions of and receive answers from
      the Company, and to obtain additional information, to the extent possessed
      or obtainable without unreasonable effort or expense, necessary to verify
      the accuracy of the information contained in the Company Information, or
      any other document provided to the Subscriber;

	 	 	 
	 	(f) 	
      the books and records of the Company were available upon
      reasonable notice for inspection, subject to certain confidentiality
      restrictions, by the Subscriber during reasonable business hours at its
      principal place of business and that all documents, records and books
      pertaining to the issuance of the Shares have been made available for
      inspection by the Subscriber

	 	 	 
	 	(g) 	
      the Company is entitled to rely on the representations
      and warranties and the statements and answers of the Subscriber contained
      in this Agreement and the Questionnaire and the Subscriber will hold
      harmless the Company from any loss or damage it may suffer as a result of
      the Subscriber's failure to correctly complete this Agreement and the
      Questionnaire;

	 	 	 
	 	(h) 	
      the Subscriber will indemnify and hold harmless the
      Company and, where applicable, its respective directors, officers,
      employees, agents, advisors and shareholders from and against any and all
      loss, liability, claim, damage and expense whatsoever (including, but not
      limited to, any and all fees, costs and expenses whatsoever reasonably
      incurred in investigating, preparing or defending against any claim,
      lawsuit, administrative proceeding or investigation whether commenced or
      threatened) arising out of or based upon any acknowledgment,
      representation or warranty of the Subscriber contained herein, the
      Questionnaire or in any other document furnished by the Subscriber to the
      Company in connection herewith, being untrue in any material respect or
      any breach or failure

5 

	 		
      by the Subscriber to comply with any covenant or
      agreement made by the Subscriber to the Company in connection
      therewith;

	 	 	 
	 	(i) 	
      the Subscriber has been advised to consult its own legal,
      tax and other advisors with respect to the merits and risks of an
      investment in the Shares and with respect to applicable resale
      restrictions and it is solely responsible (and the Company is in any way
      responsible) for compliance with applicable resale restrictions;

	 	 	 
	 	(j) 	
      the Shares are not listed on any stock exchange or
      automated dealer quotation system and no representation has been made to
      the Subscriber that any of the Shares will become listed on any stock
      exchange or automated dealer quotation system, except that currently
      certain market makers make market in the shares of the Company's common
      stock on the OTC Bulletin Board;

	 	 	 
	 	(k) 	
      neither the SEC nor any other securities commission or
      similar regulatory authority has reviewed or passed on the merits of the
      Shares;

	 	 	 
	 	(l) 	
      no documents in connection with the issuance of the
      Shares have been reviewed by the SEC or any state securities
      administrators; and

	 	 	 
	 	(m) 	
      there is no government or other insurance covering any of
      the Shares.

4.                      
Representations, Warranties and Covenants of the
Subscriber 

4.1                     The
Subscriber hereby represents and warrants to and covenants with the Company
(which representations, warranties and covenants shall survive the Closing Date)
that: 

	 	(a) 	
      the Subscriber is an "accredited investor" as that term
      is defined in Regulation D promulgated under the 1933 Act;

	 	 	 
	 	(b) 	
      the Subscriber has received and carefully read this
      Agreement;

	 	 	 
	 	(c) 	
      the Subscriber has the legal capacity and competence to
      enter into and execute this Agreement and to take all actions required
      pursuant hereto and, if the Subscriber is a corporation, it is duly
      incorporated and validly subsisting under the laws of its jurisdiction of
      incorporation and all necessary approvals by its directors, shareholders
      and others have been obtained to authorize execution and performance of
      this Agreement on behalf of the Subscriber;

	 	 	 
	 	(d) 	
      the Subscriber (i) has adequate net worth and means of
      providing for its current financial needs and possible personal
      contingencies, (ii) has no need for liquidity in this investment, and
      (iii) is able to bear the economic risks of an investment in the Shares
      for an indefinite period of time, and can afford the complete loss of such
      investment;

6 

	 	(e) 	
      all information contained in the Questionnaire is
      complete and accurate and may be relied upon by the Company, and the
      Subscriber will notify the Company immediately of any material change in
      any such information occurring prior to the Closing Date;

	 	 	 
	 	(f) 	
      the Subscriber has the requisite knowledge and experience
      in financial and business matters as to be capable of evaluating the
      merits and risks of the investment in the Shares and the Company, and the
      Subscriber is providing evidence of such knowledge and experience in these
      matters through the information requested in the Questionnaire;

	 	 	 
	 	(g) 	
      the Subscriber understands and agrees that the Company
      and others will rely upon the truth and accuracy of the acknowledgements,
      representations, warranties, covenants and agreements contained in this
      Agreement and the Questionnaire and agrees that if any of such
      acknowledgements, representations and agreements are no longer accurate or
      have been breached, the Subscriber shall promptly notify the
    Company;

	 	 	 
	 	(h) 	
      the Subscriber is aware that an investment in the Company
      is speculative and involves certain risks, including the possible loss of
      the investment;

	 	 	 
	 	(i) 	
      the entering into of this Agreement and the transactions
      contemplated hereby do not result in the violation of any of the terms and
      provisions of any law applicable to, or, if applicable, the constating
      documents of, the Subscriber, or of any agreement, written or oral, to
      which the Subscriber may be a party or by which the Subscriber is or may
      be bound;

	 	 	 
	 	(j) 	
      the Subscriber has duly executed and delivered this
      Agreement and it constitutes a valid and binding agreement of the
      Subscriber enforceable against the Subscriber;

	 	 	 
	 	(k) 	
      the Subscriber is purchasing the Shares for its own
      account for investment purposes only and not for the account of any other
      person and not for distribution, assignment or resale to others, and no
      other person has a direct or indirect beneficial interest is such Shares,
      and the Subscriber has not subdivided his interest in the Shares with any
      other person;

	 	 	 
	 	(l) 	
      the Subscriber is not an underwriter of, or dealer in,
      the shares of the Company's common stock, nor is the Subscriber
      participating, pursuant to a contractual agreement or otherwise, in the
      distribution of the Shares;

	 	 	 
	 	(m) 	
      the Subscriber has made an independent examination and
      investigation of an investment in the Shares and the Company and has
      either (i) depended on the advice of its legal and financial advisors or
      (ii) has elected not to seek such advice and has waived his right of
      obtaining advise from its legal and financial advisors) and agrees that
      the Company will not be responsible in anyway whatsoever for the
      Subscriber's decision to invest in the Shares and the
  Company;

7 

	 	(n) 	
      if the Subscriber is acquiring the Shares as a fiduciary
      or agent for one or more investor accounts, the Subscriber has sole
      investment discretion with respect to each such account, and the
      Subscriber has full power to make the foregoing acknowledgements,
      representations and agreements on behalf of such account;

	 	 	 	 
	 	(o) 	
      the Subscriber is not aware of any advertisement of any
      of the Shares and is not acquiring the Shares 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 or television, or any
      seminar or meeting whose attendees have been invited by general
      solicitation or general advertising; and

	 	 	 	 
	 	(p) 	
      no person has made to the Subscriber any written or oral
      representations:

	 	 	 	 
	 		(i) 	
      that any person will resell or repurchase any of the
      Shares,

	 	 	 	 
	 		(ii) 	
      that any person will refund the consideration of any of
      the Shares,

	 	 	 	 
	 		(iii) 	
      as to the future price or value of any of the Shares,
      or

	 	 	 	 
	 		(iv) 	
      that any of the Shares will be listed and posted for
      trading on any stock exchange or automated dealer quotation system or that
      application has been made to list and post any of the Shares of the
      Company on any stock exchange or automated dealer quotation system, except
      that currently certain market makers make market in the shares of the
      Company's common stock on the OTC Bulletin Board.

4.2                     In
this Agreement, the term "U.S. Person" shall have the meaning ascribed thereto
in Regulation S promulgated under the 1933 Act and for the purpose of the
Agreement includes any person in the United States. 

5.                      
Acknowledgement and Waiver 

5.1                    
The Subscriber has acknowledged that the decision to accept the Shares in full
and final satisfaction of the Lease Payment was solely made on the Company
Information. The Subscriber hereby waives, to the fullest extent permitted by
law, any rights of withdrawal, rescission or compensation for damages to which
the Subscriber might be entitled in connection with the distribution of any of
the Shares. 

6.                      
Representations and Warranties will be Relied Upon by the Company

6.1                     The
Subscriber acknowledges that the acknowledgements, representations and
warranties contained herein are made by it with the intention that they may be
relied upon by the Company and its legal counsel in determining the Subscriber's
eligibility to acquire the Shares under applicable securities legislation, or
(if applicable) the eligibility of others on whose behalf it is contracting
hereunder to acquire the Shares under applicable securities legislation. The

8 

Subscriber further agrees that by accepting delivery of the
certificates representing the Shares, it will be representing and warranting
that the acknowledgements representations and warranties contained herein are
true and correct as of the date hereof and will continue in full force and
effect notwithstanding any subsequent disposition by the Subscriber of such
Shares. 

7.                     
 Resale Restrictions 

7.1                    
The Subscriber acknowledges that any resale of the Shares will be subject to
resale restrictions contained in the securities legislation applicable to the
Subscriber or proposed transferee. The Subscriber acknowledges that the Shares
have not been registered under the 1933 Act or the securities laws of any state
of the United States. The Shares may not be offered or sold in the United States
unless registered in accordance with federal securities laws and all applicable
state securities laws or exemptions from such registration requirements are
available. 

8.                      
Legending and Registration of Subject Shares 

8.1                    
The Subscriber hereby acknowledges that upon the issuance thereof, and until
such time as the same is no longer required under the applicable securities laws
and regulations, the certificates representing any of the Shares will bear a
legend in substantially the following form: 

  
    
      
        NONE OF THE SECURITIES REPRESENTED HEREBY HAVE BEEN
          REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED
          (THE "1933 ACT"), OR ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO
          REGISTERED, NONE MAY BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
          REGISTRATION STATEMENT UNDER THE 1933 ACT OR PURSUANT TO AN EXEMPTION
          FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS
          OF THE 1933 ACT AND IN EACH CASE ONLY IN ACCORDANCE WITH APPLICABLE
          STATE SECURITIES LAWS. 

      

    

  

8.2                     The
Subscriber hereby acknowledges and agrees to the Company making a notation on
its records or giving instructions to the registrar and transfer agent of the
Company in order to implement the restrictions on transfer set forth and
described in this Agreement. 

9.                     
 Costs 

9.1                     The
Subscriber acknowledges and agrees that all costs and expenses incurred by the
Subscriber (including any fees and disbursements of any special counsel retained
by the Subscriber) relating to the issuance of the Shares shall be borne by the
Subscriber. 

9 

10.                     Governing
Law 

10.1                    This
Agreement is governed by the laws of the State of Texas and the federal laws of
the United States applicable thereto. The Subscriber, in its personal or
corporate capacity and, if applicable, on behalf of each beneficial purchaser
for whom it is acting, irrevocably attorns to the exclusive jurisdiction of the
Courts of the State of Texas. 

11.                    
Survival 

11.1                    This
Agreement, including without limitation the representations, warranties and
covenants contained herein, shall survive and continue in full force and effect
and be binding upon the parties hereto notwithstanding the completion of the
issuance of the Shares by the Subscriber pursuant hereto. 

12.                     Assignment

12.1                   
This Agreement is not transferable or assignable. 

13.                     Severability

13.1                    The
invalidity or unenforceability of any particular provision of this Agreement
shall not affect or limit the validity or enforceability of the remaining
provisions of this Agreement. 

14.                    
Entire Agreement 

14.1                   
Except as expressly provided in this Agreement and in the agreements,
instruments and other documents contemplated or provided for herein, this
Agreement contains the entire agreement between the parties with respect to the
issuance of the Shares and there are no other terms, conditions, representations
or warranties, whether expressed, implied, oral or written, by statute or common
law, by the Company or by anyone else. 

15.                    
Notices 

15.1                    All
notices and other communications hereunder shall be in writing and shall be
deemed to have been duly given if mailed or transmitted by any standard form of
telecommunication. Notices to the Subscriber and the Company shall be directed
to the address on the first page of this Agreement. 

16.                     Counterparts
and Electronic Means 

16.1                   
This Agreement may be executed in any number of counterparts, each of which,
when so executed and delivered, shall constitute an original and all of which
together shall constitute one instrument. Delivery of an executed copy of this
Agreement by electronic facsimile transmission or other means of electronic
communication capable of producing a printed copy will be deemed to be execution
and delivery of this Agreement as of the date hereinafter set forth. 

10 

17.                     Delivery
and Registration Information 

17.1                    Unless
otherwise notified in writing by the Subscriber, the certificates representing
the Shares shall be registered and delivered to the Subscriber as stated on the
face page of this Agreement. 

18.                     Currency

18.1                    Unless
otherwise provided, all dollar amounts referred to in this Agreement are in
lawful money of the United States of America. 

18.                    
Further Acts 

18.1                    The
Subscriber covenants and agrees to and in favour of the Company and Acquisition
Corp. to promptly do all such further acts and things as may be necessary to
give effect to the intention of this Agreement and the Development Agreement,
and further agrees that in the event that the Leases are owned by any affiliates
of the Subscriber rather than by the Subscriber directly, the Subscriber shall
cause such affiliates to accept the issuance of the Shares on account of the
Lease Payment and provide the Company with a certificate or certificates from
such affiliates making the representations, warranties, agreements, covenants
and acknowledgements provided herein in favour of the Company and Acquisition
Corp. 

 

IN WITNESS WHEREOF the parties hereto have duly executed
this Agreement as of the date set forth on page one of this Agreement. 

 

ARKANOVA ENERGY CORPORATION 

 

Per:   /s/ Arkanova Energy Corporation

            Authorized Signatory

 

ARKANOVA ACQUISITION CORP. 

 

Per:    /s/ Arkanova Acquisition Corp.

             Authorized Signatory

11 

	WITNESSED BY: 	) 	  
	  	) 	  
	  	) 	  
	Name 	) 	  
	  	) 	  
	Address 	) 	/s/
      David Griffin 
	  	) 	DAVID GRIFFIN 
	  	) 	  
	  	) 	  
	Occupation 	) 	  

SCHEDULE A 

U.S. ACCREDITED INVESTOR QUESTIONNAIRE 

All capitalized terms herein, unless otherwise defined, have
the meanings ascribed thereto in the Agreement. 

This Questionnaire is for use by the Subscriber that has
indicated an interest in acquiring the Shares of ARKANOVA ENERGY
CORPORATION (the "Company"). The purpose of this Questionnaire is to assure
the Company that the Subscriber will meet the standards imposed by the 1933 Act
and the appropriate exemptions of applicable state securities laws. The Company
will rely on the information contained in this Questionnaire for the purposes of
such determination. This Questionnaire is not an offer of the Shares or any
other securities of the Company in any state other than those specifically
authorized by the Company. 

The Subscriber covenants, represents and warrants to the
Company that it satisfies one or more of the categories of "Accredited
Investors", as defined by Regulation D promulgated under the 1933 Act, as
indicated below: (Please initial in the space provide those categories, if any,
of an "Accredited Investor" which the Subscriber satisfies.) 

	_______	Category 1 	
      An organization described in Section 501(c)(3) of the
      United States Internal Revenue Code, a corporation, a Massachusetts or
      similar business trust or partnership, not formed for the specific purpose
      of acquiring the Shares, with total assets in excess of US $5,000,000.
    

	 	  	
       

	_______	Category 2 	
      A natural person whose individual net worth, or joint net
      worth with that person's spouse, on the date of purchase exceeds US
      $1,000,000. 

	 	  	
       

	_______	Category 3 	
      A natural person who had an individual income in excess
      of US $200,000 in each of the two most recent years or joint income with
      that person's spouse in excess of US $300,000 in each of those years and
      has a reasonable expectation of reaching the same income level in the
      current year. 

	 	  	
       

	_______	Category 4 	
      A "bank" as defined under Section (3)(a)(2) of the 1933
      Act or savings and loan association or other institution as defined in
      Section 3(a)(5)(A) of the 1933 Act acting in its individual or fiduciary
      capacity; a broker dealer registered pursuant to Section 15 of the
      Securities Exchange Act of 1934 (United States); an insurance
      company as defined in Section 2(13) of the 1933 Act; an investment company
      registered under the Investment Company Act of 1940 (United
      States) or a business development company as defined in Section 2(a)(48)
      of such Act; a Small Business Investment Company licensed by the U.S.
      Small Business Administration under Section 301(c) or (d) of the Small
      Business Investment Act of 1958 (United States); a plan with total
      assets in excess of $5,000,000 established and maintained by a state, a
      political subdivision thereof, or an agency or instrumentality of a state
      or a political subdivision thereof, for the benefit

- 2 - 

			
      of its employees; an employee benefit plan within the
      meaning of the Employee Retirement Income Security Act of 1974
      (United States) whose investment decisions are made by a plan
      fiduciary, as defined in Section 3(21) of such Act, which is either a
      bank, savings and loan association, insurance company or registered
      investment adviser, or if the employee benefit plan has total assets in
      excess of $5,000,000, or, if a self- directed plan, whose investment
      decisions are made solely by persons that are accredited investors.
  

	 	  	
       

	_______	Category 5 	
      A private business development company as defined in
      Section 202(a)(22) of the Investment Advisers Act of 1940 (United
      States). 

	 	  	
       

	_______	Category 6 	
      A director or executive officer of the Company.

	 	  	
       

	_______	Category 7 	
      A trust with total assets in excess of $5,000,000, not
      formed for the specific purpose of acquiring the Shares, whose purchase is
      directed by a sophisticated person as described in Rule 506(b)(2)(ii)
      under the 1933 Act. 

	 	  	
       

	_______	Category 8 	
      An entity in which all of the equity owners satisfy the
      requirements of one or more of the foregoing categories.

Note that prospective Subscribers claiming to satisfy one of
the above categories of Accredited Investor may be required to supply the
Company with a balance sheet, prior years' federal income tax returns or other
appropriate documentation to verify and substantiate the Subscriber's status as
an Accredited Investor. 

If the Subscriber is an entity which initialled Category 8 in
  reliance upon the Accredited Investor categories above, state the name, address,
  total personal income from all sources for the previous calendar year, and the
  net worth (exclusive of home, home furnishings and personal automobiles) for
  each equity owner of the said entity:

The Subscriber hereby certifies that the information contained
in this Questionnaire is complete and accurate and the Subscriber will notify
the Company promptly of any change in any such information. If this
Questionnaire is being completed on behalf of a corporation, partnership, trust
or estate, the person executing on behalf of the Subscriber represents that it
has the authority to execute and deliver this Questionnaire on behalf of such
entity. 

- 3 - 

IN WITNESS WHEREOF, the undersigned has executed this
Questionnaire as of the ___ day of _______________, 200 . 

	If a Corporation, Partnership or Other Entity: 		If an Individual: 
	  	 	  
	 	 	 
	Print of Type Name of Entity 	 	Signature 
	 	 	 
	 	 	 
	Signature of Authorized Signatory 	 	Print or Type Name 
	 	 	 
	 	 	 
	Type of Entity 		Social Security/Tax I.D. No. (if applicable)Filed by Automated Filing Services Inc. (604) 609-0244 - Arkanova Energy Corporation - Exhibit 10.2

NONE OF THE SECURITIES TO WHICH THIS AGREEMENT RELATES HAVE
BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
"1933 ACT"), OR ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO REGISTERED, NONE
MAY BE OFFERED OR SOLD IN THE UNITED STATES OR TO U.S. PERSONS (AS DEFINED
HEREIN) EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT
TO, THE REGISTRATION REQUIREMENTS OF THE 1933 ACT AND IN EACH CASE ONLY IN
ACCORDANCE WITH APPLICABLE STATE AND/OR PROVINCIAL SECURITIES LAWS. 

AGREEMENT 

THIS AGREEMENT effective as of May 21, 2007. 

AMONG: 

ARKANOVA ENERGY CORPORATION

21 Waterway Avenue – Suite 300 
The Woodlands, Texas 77381 
(the
"Company") 

AND: 

ARKANOVA ACQUISITION CORP.

21 Waterway Avenue – Suite 300 
The Woodlands, Texas 77381

("Acquisition Corp.") 

AND: 

DAVID GRIFFIN 
604 Cherry St

Helena, AR 72342-3306 
(the "Subscriber") 

WHEREAS: 

A.          
The Subscriber entered into an Option Agreement dated July 24, 2006 (the "Option
Agreement") with Arkanova Energy, Inc. (the “Optionee”), a private Delaware
company; 

B.          
Pursuant to the terms of the Option Agreement, the Subscriber granted an option
(the "Option") to the Optionee to acquire an oil and gas lease (the "Lease") of
the Subscriber's mineral interests underlying an aggregate area of 14,172.61 net
mineral acres in Desha County, Arkansas (the "Lands"); 

2 

C.          
To exercise the Option, the Optionee is required to pay a cash fee of $275 per
net mineral acre for total consideration of $3,897,467.75 (the "Option Payment")
on or before the later of (i) July 24, 2007 and (ii) the date which is arrived
at by adding (A) the number of days between January 24, 2007 and the date on
which the Subscriber furnishes the Optionee evidence reasonably satisfactory to
Optionee and its legal counsel as to Subscriber’s ownership of all of the
minerals underlying the Lands to (B) July 24, 2007, which sum is in addition to
a cash fee of $25 already paid by the Optionee upon entry into the Option
Agreement; 

D.          
On March 1, 2007, the Optionee merged with and into Acquisition Corp., with
Acquisition Corp. carrying on as the surviving corporation (the "Merger"); 

E.          
By operation of law, and as of the effective date of the Merger, all of the
rights, assets and liabilities of the Optionee, including the rights under the
Option Agreement, were deemed vested in Acquisition Corp.; and 

F.          
The parties hereto seek to enter into this Agreement whereby, upon notification
of the exercise of the Option by Acquisition Corp., and upon the election of the
Company to pay the Option Payment in stock as provided herein, the Company has
agreed to issue to the Subscriber, and the Subscriber has agreed to accept from
the Company, 3,117,974 shares of common stock (the "Shares") at a price of $1.25
per Share in full and final settlement of the Option Payment. 

THEREFORE, in consideration of the mutual covenants and
agreements herein contained and other good and valuable consideration (the
receipt and sufficiency of which are hereby acknowledged), the parties covenant
and agree as follows: 

Issuance of Shares

1.                      
Shares 

1.1                    
Acquisition Corp. agrees to immediately notify the Company upon the exercise of
the Option (the "Notice of Exercise"). 

1.2                    
Upon receipt of the Notice of Exercise by the Company, and upon the election by
the Company to pay the Option Payment in Shares: 

	 	(a) 	
      the Company agrees to issue the Shares to the Subscriber
      on the basis of the representations and warranties and subject to the
      terms and conditions set forth herein;

	 	 	 
	 	(b) 	
      the Subscriber agrees to accept the Shares in full and
      final satisfaction of the Option Payment; and

	 	 	 
	 	(c) 	
      the Subscriber agrees to complete, sign and return to the
      Company as soon as possible, on request by the Company, any documents,
      questionnaires, notices and undertakings as may be required by regulatory
      authorities, the OTC Bulletin Board, stock exchanges and applicable
      law.

3 

2.                      
Closing 

2.1                    
Closing of the issuance of the Shares shall occur within fifteen (15) business
days of the receipt of the Notice of Exercise by the Company and the election,
by the Company, to pay the Option Payment in Shares (the "Closing Date"). 

3.                      
Acknowledgements of Subscriber 

3.1                    
The Subscriber acknowledges and agrees that: 

	 	(a) 	
      the Shares when issued will not be registered under the
      Securities Act of 1933, as amended (the "1933 Act"), or under any state
      securities or "blue sky" laws of any state of the United States, and are
      being offered only in a transaction not involving any public offering
      within the meaning of the 1933 Act, and, unless so registered, may not be
      offered or sold in the United States or to U.S. Persons (as defined
      herein), except pursuant to an effective registration statement under the
      1933 Act, or pursuant to an exemption from, or in a transaction not
      subject to, the registration requirements of the 1933 Act, and in each
      case only in accordance with applicable state securities laws;

	 	 	 
	 	(b) 	
      the Company will refuse to register any transfer of the
      Shares not made in accordance with the provisions of Regulation S,
      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;

	 	 	 
	 	(c) 	
      by completing the Questionnaire, the Subscriber is
      representing and warranting that the Subscriber is an "accredited
      investor", as the term is defined in Regulation D promulgated under the
      1933 Act;

	 	 	 
	 	(d) 	
      the decision to execute this Agreement and accept the
      Shares agreed to be issued hereunder has not been based upon any oral or
      written representation as to fact or otherwise made by or on behalf of the
      Company and such decision is based solely upon a review of publicly
      available information regarding the Company available on the website of
      the United States Securities and Exchange Commission (the "SEC") available
      at www.sec.gov (the "Company
      Information");

	 	 	 
	 	(e) 	
      the Subscriber has had a reasonable opportunity to review
      the Company Information and to ask questions of and receive answers from
      the Company, and to obtain additional information, to the extent possessed
      or obtainable without unreasonable effort or expense, necessary to verify
      the accuracy of the information contained in the Company Information, or
      any other document provided to the Subscriber;

	 	 	 
	 	(f) 	
      the books and records of the Company were available upon
      reasonable notice for inspection, subject to certain confidentiality
      restrictions, by the Subscriber during

4 

	 		
      reasonable business hours at its principal place of
      business and that all documents, records and books pertaining to the
      issuance of the Shares have been made available for inspection by the
      Subscriber;

	 	 	 
	 	(g) 	
      the Company is entitled to rely on the representations
      and warranties and the statements and answers of the Subscriber contained
      in this Agreement and the Questionnaire and the Subscriber will hold
      harmless the Company from any loss or damage it may suffer as a result of
      the Subscriber's failure to correctly complete this Agreement and the
      Questionnaire;

	 	 	 
	 	(h) 	
      the Subscriber will indemnify and hold harmless the
      Company and, where applicable, its respective directors, officers,
      employees, agents, advisors and shareholders from and against any and all
      loss, liability, claim, damage and expense whatsoever (including, but not
      limited to, any and all fees, costs and expenses whatsoever reasonably
      incurred in investigating, preparing or defending against any claim,
      lawsuit, administrative proceeding or investigation whether commenced or
      threatened) arising out of or based upon any acknowledgment,
      representation or warranty of the Subscriber contained herein, the
      Questionnaire or in any other document furnished by the Subscriber to the
      Company in connection herewith, being untrue in any material respect or
      any breach or failure by the Subscriber to comply with any covenant or
      agreement made by the Subscriber to the Company in connection
      therewith;

	 	 	 
	 	(i) 	
      the Subscriber has been advised to consult its own legal,
      tax and other advisors with respect to the merits and risks of an
      investment in the Shares and with respect to applicable resale
      restrictions and it is solely responsible (and the Company is in any way
      responsible) for compliance with applicable resale restrictions;

	 	 	 
	 	(j) 	
      the Shares are not listed on any stock exchange or
      automated dealer quotation system and no representation has been made to
      the Subscriber that any of the Shares will become listed on any stock
      exchange or automated dealer quotation system, except that currently
      certain market makers make market in the shares of the Company's common
      stock on the OTC Bulletin Board;

	 	 	 
	 	(k) 	
      neither the SEC nor any other securities commission or
      similar regulatory authority has reviewed or passed on the merits of the
      Shares;

	 	 	 
	 	(l) 	
      no documents in connection with the issuance of the
      Shares have been reviewed by the SEC or any state securities
      administrators; and

	 	 	 
	 	(m) 	
      there is no government or other insurance covering any of
      the Shares.

5 

4.                      
Representations, Warranties and Covenants of the
Subscriber 

4.1                    
The Subscriber hereby represents and warrants to and covenants with the Company
(which representations, warranties and covenants shall survive the Closing Date)
that: 

	 	(a) 	
      the Subscriber is an "accredited investor" as that term
      is defined in Regulation D promulgated under the 1933 Act;

	 	 	 
	 	(b) 	
      the Subscriber has received and carefully read this
      Agreement;

	 	 	 
	 	(c) 	
      the Subscriber has the legal capacity and competence to
      enter into and execute this Agreement and to take all actions required
      pursuant hereto and, if the Subscriber is a corporation, it is duly
      incorporated and validly subsisting under the laws of its jurisdiction of
      incorporation and all necessary approvals by its directors, shareholders
      and others have been obtained to authorize execution and performance of
      this Agreement on behalf of the Subscriber;

	 	 	 
	 	(d) 	
      the Subscriber (i) has adequate net worth and means of
      providing for its current financial needs and possible personal
      contingencies, (ii) has no need for liquidity in this investment, and
      (iii) is able to bear the economic risks of an investment in the Shares
      for an indefinite period of time, and can afford the complete loss of such
      investment;

	 	 	 
	 	(e) 	
      all information contained in the Questionnaire is
      complete and accurate and may be relied upon by the Company, and the
      Subscriber will notify the Company immediately of any material change in
      any such information occurring prior to the Closing Date;

	 	 	 
	 	(f) 	
      the Subscriber has the requisite knowledge and experience
      in financial and business matters as to be capable of evaluating the
      merits and risks of the investment in the Shares and the Company, and the
      Subscriber is providing evidence of such knowledge and experience in these
      matters through the information requested in the Questionnaire;

	 	 	 
	 	(g) 	
      the Subscriber understands and agrees that the Company
      and others will rely upon the truth and accuracy of the acknowledgements,
      representations, warranties, covenants and agreements contained in this
      Agreement and the Questionnaire and agrees that if any of such
      acknowledgements, representations and agreements are no longer accurate or
      have been breached, the Subscriber shall promptly notify the
    Company;

	 	 	 
	 	(h) 	
      the Subscriber is aware that an investment in the Company
      is speculative and involves certain risks, including the possible loss of
      the investment;

	 	 	 
	 	(i) 	
      the entering into of this Agreement and the transactions
      contemplated hereby do not result in the violation of any of the terms and
      provisions of any law applicable

6 

	 		
      to, or, if applicable, the constating documents of, the
      Subscriber, or of any agreement, written or oral, to which the Subscriber
      may be a party or by which the Subscriber is or may be bound;

	 	 	 	 
	 	(j) 	
      the Subscriber has duly executed and delivered this
      Agreement and it constitutes a valid and binding agreement of the
      Subscriber enforceable against the Subscriber;

	 	 	 	 
	 	(k) 	
      the Subscriber is purchasing the Shares for its own
      account for investment purposes only and not for the account of any other
      person and not for distribution, assignment or resale to others, and no
      other person has a direct or indirect beneficial interest is such Shares,
      and the Subscriber has not subdivided his interest in the Shares with any
      other person;

	 	 	 	 
	 	(l) 	
      the Subscriber is not an underwriter of, or dealer in,
      the shares of the Company's common stock, nor is the Subscriber
      participating, pursuant to a contractual agreement or otherwise, in the
      distribution of the Shares;

	 	 	 	 
	 	(m) 	
      the Subscriber has made an independent examination and
      investigation of an investment in the Shares and the Company and has
      either (i) depended on the advice of its legal and financial advisors or
      (ii) has elected not to seek such advice and has waived his right of
      obtaining advise from its legal and financial advisors) and agrees that
      the Company will not be responsible in anyway whatsoever for the
      Subscriber's decision to invest in the Shares and the Company;

	 	 	 	 
	 	(n) 	
      if the Subscriber is acquiring the Shares as a fiduciary
      or agent for one or more investor accounts, the Subscriber has sole
      investment discretion with respect to each such account, and the
      Subscriber has full power to make the foregoing acknowledgements,
      representations and agreements on behalf of such account;

	 	 	 	 
	 	(o) 	
      the Subscriber is not aware of any advertisement of any
      of the Shares and is not acquiring the Shares 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 or television, or any
      seminar or meeting whose attendees have been invited by general
      solicitation or general advertising; and

	 	 	 	 
	 	(p) 	
      no person has made to the Subscriber any written or oral
      representations:

	 	 	 	 
	 		(i) 	
      that any person will resell or repurchase any of the
      Shares,

	 	 	 	 
	 		(ii) 	
      that any person will refund the consideration of any of
      the Shares,

	 	 	 	 
	 		(iii) 	
      as to the future price or value of any of the Shares,
      or

	 	 	 	 
	 		(iv) 	
      that any of the Shares will be listed and posted for
      trading on any stock exchange or automated dealer quotation system or that
      application has

7 

been made to list and post any of the Shares of the Company on
any stock exchange or automated dealer quotation system, except that currently
certain market makers make market in the shares of the Company's common stock on
the OTC Bulletin Board. 

4.2                    
In this Agreement, the term "U.S. Person" shall have the meaning ascribed
thereto in Regulation S promulgated under the 1933 Act and for the purpose of
the Agreement includes any person in the United States. 

5.                     
 Acknowledgement and Waiver 

5.1                    
The Subscriber has acknowledged that the decision to accept the Shares in full
and final satisfaction of the Option Payment was solely made on the Company
Information. The Subscriber hereby waives, to the fullest extent permitted by
law, any rights of withdrawal, rescission or compensation for damages to which
the Subscriber might be entitled in connection with the distribution of any of
the Shares. 

6.                      
Representations and Warranties will be Relied Upon by the Company

6.1                    
The Subscriber acknowledges that the acknowledgements, representations and
warranties contained herein are made by it with the intention that they may be
relied upon by the Company and its legal counsel in determining the Subscriber's
eligibility to acquire the Shares under applicable securities legislation, or
(if applicable) the eligibility of others on whose behalf it is contracting
hereunder to acquire the Shares under applicable securities legislation. The
Subscriber further agrees that by accepting delivery of the certificates
representing the Shares, it will be representing and warranting that the
acknowledgements representations and warranties contained herein are true and
correct as of the date hereof and will continue in full force and effect
notwithstanding any subsequent disposition by the Subscriber of such Shares.

7.                      
Resale Restrictions 

7.1                    
The Subscriber acknowledges that any resale of the Shares will be subject to
resale restrictions contained in the securities legislation applicable to the
Subscriber or proposed transferee. The Subscriber acknowledges that the Shares
have not been registered under the 1933 Act or the securities laws of any state
of the United States. The Shares may not be offered or sold in the United States
unless registered in accordance with federal securities laws and all applicable
state securities laws or exemptions from such registration requirements are
available. 

8.                      
Legending and Registration of Subject Shares 

8.1                    
The Subscriber hereby acknowledges that upon the issuance thereof, and until
such time as the same is no longer required under the applicable securities laws
and regulations, the certificates representing any of the Shares will bear a
legend in substantially the following form: 

8 

  
    
      
        NONE OF THE SECURITIES REPRESENTED HEREBY HAVE BEEN
          REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED
          (THE "1933 ACT"), OR ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO
          REGISTERED, NONE MAY BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
          REGISTRATION STATEMENT UNDER THE 1933 ACT OR PURSUANT TO AN EXEMPTION
          FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS
          OF THE 1933 ACT AND IN EACH CASE ONLY IN ACCORDANCE WITH APPLICABLE
          STATE SECURITIES LAWS. 

      

    

  

8.2                    
The Subscriber hereby acknowledges and agrees to the Company making a notation
on its records or giving instructions to the registrar and transfer agent of the
Company in order to implement the restrictions on transfer set forth and
described in this Agreement. 

9.                     
 Costs 

9.1                    
The Subscriber acknowledges and agrees that all costs and expenses incurred by
the Subscriber (including any fees and disbursements of any special counsel
retained by the Subscriber) relating to the issuance of the Shares shall be
borne by the Subscriber. 

10.                    
Governing Law 

10.1                   
This Agreement is governed by the laws of the State of Texas and the federal
laws of the United States applicable thereto. The Subscriber, in its personal or
corporate capacity and, if applicable, on behalf of each beneficial purchaser
for whom it is acting, irrevocably attorns to the exclusive jurisdiction of the
Courts of the State of Texas. 

11.                    
Survival 

11.1                    This
Agreement, including without limitation the representations, warranties and
covenants contained herein, shall survive and continue in full force and effect
and be binding upon the parties hereto notwithstanding the completion of the
issuance of the Shares by the Subscriber pursuant hereto. 

12.                    
Assignment 

12.1                   
This Agreement is not transferable or assignable. 

13.                    
Severability 

13.1                    The
invalidity or unenforceability of any particular provision of this Agreement
shall not affect or limit the validity or enforceability of the remaining
provisions of this Agreement. 

9 

14.                    
Entire Agreement 

14.1                    Except
as expressly provided in this Agreement and in the agreements, instruments and
other documents contemplated or provided for herein, this Agreement contains the
entire agreement between the parties with respect to the issuance of the Shares
and there are no other terms, conditions, representations or warranties, whether
expressed, implied, oral or written, by statute or common law, by the Company or
by anyone else. 

15.                    
Notices 

15.1                    All
notices and other communications hereunder shall be in writing and shall be
deemed to have been duly given if mailed or transmitted by any standard form of
telecommunication. Notices to the Subscriber and the Company shall be directed
to the address on the first page of this Agreement. 

16.                    
Counterparts and Electronic Means 

16.1                    This
Agreement may be executed in any number of counterparts, each of which, when so
executed and delivered, shall constitute an original and all of which together
shall constitute one instrument. Delivery of an executed copy of this Agreement
by electronic facsimile transmission or other means of electronic communication
capable of producing a printed copy will be deemed to be execution and delivery
of this Agreement as of the date hereinafter set forth. 

17.                    
Delivery and Registration Information 

17.1                   
Unless otherwise notified in writing by the Subscriber, the certificates
representing the Shares shall be registered and delivered to the Subscriber as
stated on the face page of this Agreement. 

18.                    
Currency 

18.1                   
Unless otherwise provided, all dollar amounts referred to in this Agreement are
in lawful money of the United States of America. 

18.                    
Further Acts 

18.1                    The
Subscriber covenants and agrees to and in favour of the Company and Acquisition
Corp. to promptly do all such further acts and things as may be necessary to
give effect to the intention of this Agreement and the Option Agreement, and
further agrees that in the event that the Lands are owned by any affiliates of
the Subscriber rather than by the Subscriber directly, the Subscriber shall
cause such affiliates to accept the issuance of the Shares on account of the
Option Payment and provide the Company with a certificate or certificates from
such affiliates making the representations, warranties, agreements, covenants
and acknowledgements provided herein in favour of the Company and Acquisition
Corp. 

10 

IN WITNESS WHEREOF the parties hereto have duly executed
this Agreement as of the date set forth on page one of this Agreement. 

  ARKANOVA ENERGY CORPORATION 

  Per:   /s/ Arkanova Energy Corporation

            Authorized Signatory

  

ARKANOVA ACQUISITION CORP. 

  Per:    /s/ Arkanova Acquisition Corp.

            Authorized Signatory

	WITNESSED BY: 	) 	  
	  	) 	  
	  	) 	  
	Name 	) 	  
	  	) 	  
	Address 	) 	/s/
      David Griffin  
	  	) 	DAVID GRIFFIN 
	  	) 	  
	  	) 	  
	Occupation 	) 	  

SCHEDULE A 

U.S. ACCREDITED INVESTOR QUESTIONNAIRE 

All capitalized terms herein, unless otherwise defined, have
the meanings ascribed thereto in the Agreement. 

This Questionnaire is for use by the Subscriber that has
indicated an interest in acquiring the Shares of ARKANOVA ENERGY
CORPORATION (the "Company"). The purpose of this Questionnaire is to assure
the Company that the Subscriber will meet the standards imposed by the 1933 Act
and the appropriate exemptions of applicable state securities laws. The Company
will rely on the information contained in this Questionnaire for the purposes of
such determination. This Questionnaire is not an offer of the Shares or any
other securities of the Company in any state other than those specifically
authorized by the Company. 

The Subscriber covenants, represents and warrants to the
Company that it satisfies one or more of the categories of "Accredited
Investors", as defined by Regulation D promulgated under the 1933 Act, as
indicated below: (Please initial in the space provide those categories, if any,
of an "Accredited Investor" which the Subscriber satisfies.) 

	_______	Category 1 	
      An organization described in Section 501(c)(3) of the
      United States Internal Revenue Code, a corporation, a Massachusetts or
      similar business trust or partnership, not formed for the specific purpose
      of acquiring the Shares, with total assets in excess of US $5,000,000.
    

	 	  	
       

	_______	Category 2 	
      A natural person whose individual net worth, or joint net
      worth with that person's spouse, on the date of purchase exceeds US
      $1,000,000. 

	 	  	
       

	_______	Category 3 	
      A natural person who had an individual income in excess
      of US $200,000 in each of the two most recent years or joint income with
      that person's spouse in excess of US $300,000 in each of those years and
      has a reasonable expectation of reaching the same income level in the
      current year. 

	 	  	
       

	_______	Category 4 	
      A "bank" as defined under Section (3)(a)(2) of the 1933
      Act or savings and loan association or other institution as defined in
      Section 3(a)(5)(A) of the 1933 Act acting in its individual or fiduciary
      capacity; a broker dealer registered pursuant to Section 15 of the
      Securities Exchange Act of 1934 (United States); an insurance
      company as defined in Section 2(13) of the 1933 Act; an investment company
      registered under the Investment Company Act of 1940 (United
      States) or a business development company as defined in Section 2(a)(48)
      of such Act; a Small Business Investment Company licensed by the U.S.
      Small Business Administration under Section 301(c) or (d) of the Small
      Business Investment Act of 1958 (United States); a plan with total
      assets in excess of $5,000,000 established and maintained by a state, a
      political subdivision thereof, or an agency or instrumentality of a state
      or a political subdivision thereof, for the benefit

- 2 - 

			
      of its employees; an employee benefit plan within the
      meaning of the Employee Retirement Income Security Act of 1974
      (United States) whose investment decisions are made by a plan
      fiduciary, as defined in Section 3(21) of such Act, which is either a
      bank, savings and loan association, insurance company or registered
      investment adviser, or if the employee benefit plan has total assets in
      excess of $5,000,000, or, if a self- directed plan, whose investment
      decisions are made solely by persons that are accredited investors.
  

	 	  	
       

	_______	Category 5 	
      A private business development company as defined in
      Section 202(a)(22) of the Investment Advisers Act of 1940 (United
      States). 

	 	  	
       

	_______	Category 6 	
      A director or executive officer of the Company.

	 	  	
       

	_______	Category 7 	
      A trust with total assets in excess of $5,000,000, not
      formed for the specific purpose of acquiring the Shares, whose purchase is
      directed by a sophisticated person as described in Rule 506(b)(2)(ii)
      under the 1933 Act. 

	 	  	
       

	_______	Category 8 	
      An entity in which all of the equity owners satisfy the
      requirements of one or more of the foregoing categories.

Note that prospective Subscribers claiming to satisfy one of
the above categories of Accredited Investor may be required to supply the
Company with a balance sheet, prior years' federal income tax returns or other
appropriate documentation to verify and substantiate the Subscriber's status as
an Accredited Investor. 

If the Subscriber is an entity which initialled Category 8 in
reliance upon the Accredited Investor categories above, state the name, address,
total personal income from all sources for the previous calendar year, and the
net worth (exclusive of home, home furnishings and personal automobiles) for
each equity owner of the said entity:

The Subscriber hereby certifies that the information contained
in this Questionnaire is complete and accurate and the Subscriber will notify
the Company promptly of any change in any such information. If this
Questionnaire is being completed on behalf of a corporation, partnership, trust
or estate, the person executing on behalf of the Subscriber represents that it
has the authority to execute and deliver this Questionnaire on behalf of such
entity. 

- 3 - 

IN WITNESS WHEREOF, the undersigned has executed this
Questionnaire as of the ___ day of _______________, 200 . 

	If a Corporation, Partnership or Other Entity: 		If an Individual: 
	  	 	  
	 	 	 
	Print of Type Name of Entity 	 	Signature 
	 	 	 
	 	 	 
	Signature of Authorized Signatory 	 	Print or Type Name 
	 	 	 
	 	 	 
	Type of Entity 		Social Security/Tax I.D. No. (if applicable)

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