EXHIBIT 10.1


                                                     January 25, 2005


Terra Nova Acquisition Corporation
2 Bloor Street West
Suite 3400
Toronto, Ontario, Canada M4W 3E2

EarlyBirdCapital, Inc.
275 Madison Avenue
Suite 1203
New York, New York 10016

         Re: Initial Public Offering

Gentlemen:

         The undersigned officer and director of Terra Nova Acquisition
Corporation ("Company"), in consideration of EarlyBirdCapital, Inc. ("EBC")
entering into a letter of intent ("Letter of Intent") to underwrite an initial
public offering of the securities of the Company ("IPO") and embarking on the
IPO process, hereby agrees as follows (certain capitalized terms used herein are
defined in paragraph 9 hereof):

         1. In the event that the Company fails to consummate a Business
Combination within 18 months from the effective date ("Effective Date") of the
registration statement relating to the IPO (or 24 months under the circumstances
described in the prospectus relating to the IPO), the undersigned will take all
reasonable actions within his power to cause the Company to liquidate as soon as
reasonably practicable. The undersigned hereby waives any and all right, title,
interest or claim of any kind in or to any distribution of the Trust Fund (as
defined in the Letter of Intent) as a result of such liquidation respect to the
undersigned's Insider Shares ("Claim") and hereby waives any Claim the
undersigned may have in the future as a result of, or arising out of, any
contracts or agreements with the Company and will not seek recourse against the
Trust Fund for any reason whatsoever. The undersigned agrees to indemnify and
hold harmless the Company against any and all loss, liability, claims, damage
and expense whatsoever (including, but not limited to, any and all legal or
other expenses reasonably incurred in investigating, preparing or defending
against any litigation, whether pending







Terra Nova Acquisition Corporation
EarlyBirdCapital, Inc.
January 25, 2005
Page 2


or threatened, or any claim whatsoever) which the Company may become subject as
a result of any claim by any vendor or other person who is owed money by the
Company for services rendered or products sold, or by any target business, but
only to the extent necessary to ensure that such loss, liability, claim, damage
or expense does not reduce the amount in the Trust Fund (as defined in the
Letter of Intent).

         2. In order to minimize potential conflicts of interest which may arise
from multiple affiliations, the undersigned agrees to present to the Company for
its consideration, prior to presentation to any other person or entity, any
suitable opportunity to acquire an operating business, until the earlier of the
consummation by the Company of a Business Combination, the liquidation of the
Company or until such time as the undersigned ceases to be an officer or
director of the Company, subject to any pre-existing fiduciary obligations the
undersigned might have.

         3. The undersigned acknowledges and agrees that the Company will not
consummate any Business Combination which involves a company which is affiliated
with any of the Insiders unless the Company obtains an opinion from an
independent investment banking firm reasonably acceptable to EBC that the
business combination is fair to the Company's stockholders from a financial
perspective.

         4. Neither the undersigned, any member of the family of the
undersigned, nor any Affiliate of the undersigned will be entitled to receive
and will not accept any compensation for services rendered to the Company prior
to the consummation of the Business Combination; provided that commencing on the
Effective Date, TerraNova Management Corp. ("Related Party"), shall be allowed
to charge the Company an allocable share of Related Party's overhead, up to
$7,500 per month, to compensate it for the Company's use of Related Party's
offices, utilities and personnel. Related Party and the undersigned shall also
be entitled to reimbursement from the Company for their out-of-pocket expenses
incurred in connection with seeking and consummating a Business Combination.

         5. Neither the undersigned, any member of the family of the
undersigned, or any Affiliate of the undersigned will be entitled to receive or
accept a finder's fee or any other compensation in the event the undersigned,
any member of the family of the undersigned or any Affiliate of the undersigned
originates a Business Combination.

         6. The undersigned agrees to be the Chairman of the Board, Chief
Executive Officer and a director of the Company until the earlier of the
consummation by the Company of a Business Combination or the liquidation of the
Company. The


Terra Nova Acquisition Corporation
EarlyBirdCapital, Inc.
January 25, 2005
Page 3


undersigned's biographical information furnished to the Company and EBC and
attached hereto as Exhibit A is true and accurate in all respects, does not omit
any material information with respect to the undersigned's background and
contains all of the information required to be disclosed pursuant to Section 401
of Regulation S-K, promulgated under the Securities Act of 1933. The
undersigned's Questionnaire furnished to the Company and EBC and annexed as
Exhibit B hereto is true and accurate in all respects. The undersigned
represents and warrants that:

    (a) he is not subject to or a respondent in any legal action for, any
injunction, cease-and-desist order or order or stipulation to desist or refrain
from any act or practice relating to the offering of securities in any
jurisdiction;

    (b) he has never been convicted of or pleaded guilty to any crime (i)
involving any fraud or (ii) relating to any financial transaction or handling of
funds of another person, or (iii) pertaining to any dealings in any securities
and he is not currently a defendant in any such criminal proceeding; and

    (c) he has never been suspended or expelled from membership in any
securities or commodities exchange or association or had a securities or
commodities license or registration denied, suspended or revoked.

         7. The undersigned has full right and power, without violating any
agreement by which he is bound, to enter into this letter agreement and to serve
as Chairman of the Board, Chief Executive Officer and a director of the Company.

         8. The undersigned authorizes any employer, financial institution, or
consumer credit reporting agency to release to EBC and its legal representatives
or agents (including any investigative search firm retained by EBC) any
information they may have about the undersigned's background and finances
("Information"). Neither EBC nor its agents shall be violating the undersigned's
right of privacy in any manner in requesting and obtaining the Information and
the undersigned hereby releases them from liability for any damage whatsoever in
that connection.

         9. As used herein, (i) a "Business Combination" shall mean an
acquisition by merger, capital stock exchange, asset or stock acquisition,
reorganization or otherwise, of an operating business selected by the Company;
(ii) "Insiders" shall mean all officers, directors and stockholders of the
Company immediately prior to the IPO; (iii) "Insider Shares" shall mean all of
the shares of Common Stock of the Company owned by an Insider prior to the IPO;
and (iv) "IPO Shares" shall mean the shares of Common Stock issued in the
Company's IPO.

Terra Nova Acquisition Corporation
EarlyBirdCapital, Inc.
January 25, 2005
Page 4


                                                     Vahan Kololian
                                                     --------------
                                                     Print Name of Insider


                                                     /s/ Vahan Kololian
                                                     ------------------
                                                     Signature




EXHIBIT A


         Vahan Kololian has been our chairman of the board and chief executive
officer since our inception. Mr. Kololian has been the president and chief
executive officer of Precinda Corporation, a private industrial holding company
based in Toronto, since its formation in March 2000. He has also been a partner
of TerraNova Partners L.P., a private investment firm and an affiliate of
Precinda Corporation, since September 2004 and president of TerraNova Management
Corp., the manager of TerraNova Partners L.P., since September 2004. In January
1991, Mr. Kololian co-founded Polar Capital Corporation, a Toronto and Calgary
based merchant banking firm, and served as its president until March 2000. He
also served as president of Polar Enterprise Partners Inc., a private fund
managed by Polar Capital Corporation, from its inception in June 1997 until
March 2000. From September 1988 to March 1990, he was a director and partner of
Gordon Capital Corporation, an investment bank. Mr. Kololian commenced his
career at Burns Fry Ltd., an investment bank now owned by Nesbitt Burns (which
is owned by the Bank of Montreal), where Mr. Kololian served in various
professional roles in the investment banking and mergers and acquisitions groups
from September 1981 to September 1988. Mr. Kololian is a member of The World
Presidents' Organization and a member of The Law Society of Upper Canada. He
holds a B.A. from the University of Western Ontario and an LL.B. from the
University of Ottawa.