SUBSIDIARY GUARANTY

1.           Identification.

This Guaranty (the “Guaranty”), dated as of __________, 2009, is entered into by
Mesa Energy, Inc., a Nevada corporation, Mesa Energy Operating, LLC, a Texas
limited liability company (each a “Guarantor” and collectively, “Guarantors”),
for the benefit of ____________________ (“Lender”).

2.           Recitals.

2.1           Each Guarantor is a direct subsidiary of Mesa Energy Holdings,
Inc., a Delaware corporation (“Parent”).  The Lender has made and/or is making a
loan to Parent (the “Loan”).  Guarantor has and will obtain substantial benefit
from the proceeds of the Loan.

2.2           The Loan is and will be evidenced by a certain secured promissory
Note issued by Parent  on or about the date of this Guaranty (“Note”) in the
principal amount of $__________ pursuant to a subscription agreement dated at or
about the date hereof (“Subscription Agreement”).   The Note was or will be
executed by Parent as “Borrower” or “Debtor” for the benefit of Lender as the
“Holder” or “Lender” thereof.

2.3           In consideration of the Loan and for other good and valuable
consideration, and as security for the performance by Parent of its obligations
under the Note and as security for the repayment of the Loan and all other sums
due from Parent to Lender arising under the Note, Transaction Documents (as
defined in the Subscription Agreement) and any other agreement to which the
Lender and Parent are parties (collectively, the “Obligations”), Guarantor, for
good and valuable consideration, receipt of which is acknowledged, has agreed to
enter into this Guaranty.

3.           Guaranty.

3.1           Guaranty.  Guarantor hereby unconditionally and irrevocably
guarantees, jointly and severally with any other Guarantor, the punctual
payment, performance and observance when due, whether at stated maturity, by
acceleration or otherwise, of all of the Obligations now or hereafter existing,
whether for principal, interest (including, without limitation, all interest
that accrues after the commencement of any insolvency, bankruptcy or
reorganization of Parent, whether or not constituting an allowed claim in such
proceeding), fees, commissions, expense reimbursements, liquidated damages,
indemnifications or otherwise (such obligations, to the extent not paid by
Parent being the parts of and components of the “Obligations”), and agrees to
pay any and all reasonable costs, fees and expenses (including reasonable
counsel fees and expenses) incurred by Lender in enforcing any rights under the
guaranty set forth herein.  Without limiting the generality of the foregoing,
Guarantor’s liability shall extend to all amounts that constitute part of the
Obligations and would be owed by Parent to Lender, but for the fact that they
are unenforceable or not allowable due to the existence of an insolvency,
bankruptcy or reorganization involving Parent.
 
3.2           Guaranty Absolute.  Guarantor guarantees that the Obligations will
be paid strictly in accordance with the terms of the Note, regardless of any
law, regulation or order now or hereafter in effect in any jurisdiction
affecting any of such terms or the rights of Lender with respect thereto.  The
obligations of Guarantor under this Guaranty are independent of the Obligations,
and a separate action or actions may be brought and prosecuted against Guarantor
to enforce such obligations, irrespective of whether any action is brought
against Parent or any other Guarantor or whether Parent or any other Guarantor
is joined in any such action or actions.  The liability of Guarantor under this
Guaranty constitutes a primary obligation, and not a contract of surety, and to
the extent permitted by law, shall be irrevocable, absolute and unconditional
irrespective of, and Guarantor hereby irrevocably waives any defenses it may now
or hereafter have in any way relating to, any or all of the following:
 
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(a)  any lack of validity of the Note or any agreement or instrument relating
thereto;
 
(b)  any change in the time, manner or place of payment of, or in any other term
of, all or any of the Obligations, or any other amendment or waiver of or any
consent to departure from the Note, including, without limitation, any increase
in the Obligations resulting from the extension of additional credit to Parent
or otherwise;
 
(c)  any taking, exchange, release, subordination or non-perfection of any
Collateral, or any taking, release or amendment or waiver of or consent to
departure from any other guaranty, for all or any of the Obligations;
 
(d)  any change, restructuring or termination of the corporate, limited
liability company or partnership structure or existence of Parent; or
 
(e)  any other circumstance (including, without limitation, any statute of
limitations) or any existence of or reliance on any representation by Lender
that might otherwise constitute a defense available to, or a discharge of,
Parent or any other guarantor or surety.

This Guaranty shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Obligations is rescinded or must
otherwise be returned by Lender, the Lender or any other entity upon the
insolvency, bankruptcy or reorganization of the Parent or otherwise (and whether
as a result of any demand, settlement, litigation or otherwise), all as though
such payment had not been made.

3.3           Waiver.  Guarantor hereby waives promptness, diligence, notice of
acceptance and any other notice with respect to any of the Obligations and this
Guaranty and any requirement that Lender exhaust any right or take any action
against any Borrower or any other person or entity or any Collateral.  Guarantor
acknowledges that it will receive direct and indirect benefits from the
financing arrangements contemplated herein and that the waiver set forth in this
Section 3.3 is knowingly made in contemplation of such benefits.  Guarantor
hereby waives any right to revoke this Guaranty, and acknowledges that this
Guaranty is continuing in nature and applies to all Obligations, whether
existing now or in the future.

3.4       Continuing Guaranty; Assignments.  This Guaranty is a continuing
guaranty and shall (a) remain in full force and effect until the later of the
indefeasible cash payment in full of the Obligations and all other amounts
payable under this Guaranty, the Subscription Agreement, Transaction Documents
and the Note, (b) be binding upon Guarantor, its successors and assigns and (c)
inure to the benefit of and be enforceable by the Lender and its successors,
pledgees, transferees and assigns.  Without limiting the generality of the
foregoing clause (c), Lender may pledge, assign or otherwise transfer all or any
portion of its rights and obligations under this Guaranty (including, without
limitation, all or any portion of its Note owing to it) to any other Person, and
such other Person shall thereupon become vested with all the benefits in respect
thereof granted Lender herein or otherwise.
 
3.5          Subrogation.  Guarantor will not exercise any rights that it may
now or hereafter acquire against Lender or other Guarantor (if any) that arise
from the existence, payment, performance or enforcement of such Guarantor’s
obligations under this Guaranty, including, without limitation, any right of
subrogation, reimbursement, exoneration, contribution or indemnification,
whether or not such claim, remedy or right arises in equity or under contract,
statute or common law, including, without limitation, the right to take or
receive from Lender or other Guarantor (if any), directly or indirectly, in cash
or other property or by set-off or in any other manner, payment or security
solely on account of such claim, remedy or right, unless and until all of the
Obligations and all other amounts payable under this Guaranty shall have been
indefeasibly paid in full.
 
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3.6     Maximum Obligations. Notwithstanding any provision herein contained to
the contrary, Guarantor’s liability with respect to the Obligations shall be
limited to an amount not to exceed, as of any date of determination, the amount
that could be claimed by Lender from Guarantor without rendering such claim
voidable or avoidable under Section 548 of the Bankruptcy Code or under any
applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent Conveyance
Act or similar statute or common law.
 
4.           Miscellaneous.
 
4.1           Expenses.  Guarantor shall pay to the Lender, on demand, the
amount of any and all reasonable expenses, including, without limitation,
attorneys’ fees, legal expenses and brokers’ fees, which the Lender may incur in
connection with exercise or enforcement of any the rights, remedies or powers of
the Lender hereunder or with respect to any or all of the Obligations.

4.2           Waivers, Amendment and Remedies.  No course of dealing by the
Lender and no failure by the Lender to exercise, or delay by the Lender in
exercising, any right, remedy or power hereunder shall operate as a waiver
thereof, and no single or partial exercise thereof shall preclude any other or
further exercise thereof or the exercise of any other right, remedy or power of
the Lender.  No amendment, modification or waiver of any provision of this
Guaranty and no consent to any departure by Guarantor therefrom, shall, in any
event, be effective unless contained in a writing signed by the Majority in
Interest (as such term is defined in the Subscription Agreement) or the Lender
against whom such amendment, modification or waiver is sought, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given.  The rights, remedies and powers of the
Lender, not only hereunder, but also under any instruments and agreements
evidencing or securing the Obligations and under applicable law are cumulative,
and may be exercised by the Lender from time to time in such order as the Lender
may elect.

4.3           Notices.  All notices or other communications given or made
hereunder shall be given in the same manner as set forth in Section 13a of the
Subscription Agreement to the party to receive the same at its address set forth
below or to such other address as either party shall hereafter give to the other
by notice duly made under this Section:

 
To Guarantor, to:
Mesa Energy Holdings, Inc.

5220 Spring Valley Road, Suite 525
Dallas, TX 75254
Attn: Randy M. Griffin, CEO
Fax: (760) ___________
 
With a copy by facsimile

 
only to:
Gottbetter & Partners, LLP

488 Madison Avenue, 12th Floor
New York, NY 10022
Attn: Adam S. Gottbetter, Esq.
Fax: (212) 400-6901

To Lender:                                                      
 
If to Guarantor or Lender,
with a copy by telecopier only to:

Grushko & Mittman, P.C.
551 Fifth Avenue, Suite 1601
New York, New York 10176
Fax: (212) 697-3575
 
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Any party may change its address by written notice in accordance with this
paragraph.

4.4           Term; Binding Effect.  This Guaranty shall (a) remain in full
force and effect until payment and satisfaction in full of all of the
Obligations; (b) be binding upon Guarantor and its successors and permitted
assigns; and (c) inure to the benefit of the Lender and its respective
successors and assigns.  Upon the payment in full of the Obligations, (i) this
Guaranty shall terminate and (ii) the Lender will, upon Guarantor’s request and
at Guarantor’s expense, execute and deliver to Guarantor such documents as
Guarantor shall reasonably request to evidence such termination, all without any
representation, warranty or recourse whatsoever.

4.5           Captions.  The captions of Paragraphs, Articles and Sections in
this Guaranty have been included for convenience of reference only, and shall
not define or limit the provisions hereof and have no legal or other
significance whatsoever.

4.6           Governing Law; Venue; Severability.  This Guaranty shall be
governed by and construed in accordance with the laws of the State of New York
without regard to principles of conflicts or choice of law.  Any legal action or
proceeding against Guarantor with respect to this Guaranty must be brought only
in the courts of the State of New York or of the United States for the Southern
District of New York, and, by execution and delivery of this Guaranty, Guarantor
hereby irrevocably accepts for itself and in respect of its property, generally
and unconditionally, the jurisdiction of the aforesaid courts.  Guarantor hereby
irrevocably waives any objection which they may now or hereafter have to the
laying of venue of any of the aforesaid actions or proceedings arising out of or
in connection with this Guaranty brought in the aforesaid courts and hereby
further irrevocably waives and agrees not to plead or claim in any such court
that any such action or proceeding brought in any such court has been brought in
an inconvenient forum.  If any provision of this Guaranty, or the application
thereof to any person or circumstance, is held invalid, such invalidity shall
not affect any other provisions which can be given effect without the invalid
provision or application, and to this end the provisions hereof shall be
severable and the remaining, valid provisions shall remain of full force and
effect.  This Guaranty shall be deemed an unconditional obligation of Guarantor
for the payment of money and, without limitation to any other remedies of
Lender, may be enforced against Guarantor by summary proceeding pursuant to New
York Civil Procedure Law and Rules Section 3213 or any similar rule or statute
in the jurisdiction where enforcement is sought.  For purposes of such rule or
statute, any other document or agreement to which Lender and Guarantor are
parties or which Guarantor delivered to Lender, which may be convenient or
necessary to determine Lender’s rights hereunder or Guarantor’s obligations to
Lender are deemed a part of this Guaranty, whether or not such other document or
agreement was delivered together herewith or was executed apart from this
Guaranty.  Each party hereby irrevocably waives personal service of process and
consents to process being served in any suit, action or proceeding in connection
with this Agreement or any other Transaction Document by mailing a copy thereof
via registered or certified mail or overnight delivery (with evidence of
delivery) to such party at the address in effect for notices to it under this
Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof.  Nothing contained herein shall be deemed
to limit in any way any right to serve process in any other manner permitted by
law.  Guarantor irrevocably appoints Parent its true and lawful agent for
service of process upon whom all processes of law and notices may be served and
given in the manner described above; and such service and notice shall be deemed
valid personal service and notice upon each such Guarantor with the same force
and validity as if served upon such Guarantor.
 
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4.7           Satisfaction of Obligations.  For all purposes of this Guaranty,
the payment in full of the Obligations shall be conclusively deemed to have
occurred when the Obligations have been indefeasibly paid.

4.8           Execution.   This Agreement may be executed by facsimile signature
and delivered by electronic transmission.
 
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IN WITNESS WHEREOF, the undersigned have executed and delivered this Guaranty,
as of the date first written above.
 
“GUARANTOR”
 
“GUARANTOR”
MESA ENERGY, INC.
 
MESA ENERGY OPERATING, LLC
a Nevada corporation
 
a Texas limited liability company
           
By:
   
 
By:
   
     
Its:
   
 
Its:
   
           
APPROVED:
   
“PARENT”
   
MESA ENERGY HOLDINGS, INC.
   
A Delaware corporation
               
By:
   
         
Its:
   
   

 
This Guaranty Agreement may be signed by facsimile signature and
delivered by confirmed facsimile transmission.

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