Document:

NO
SHORT SELLING AGREEMENT

    

    August
31, 2009

    

    Mesa
Energy Holdings, Inc.

    4321 7th
Avenue

    Los
Angeles, CA  90008

    Attn:  Beverly
Frederick

    

    Ladies
and Gentlemen:

    

    Reference
is made to the Agreement and Plan of Merger and Reorganization (the “Merger
Agreement”) by and among Mesa Energy Holdings, Inc., a Delaware corporation (the
“Company”), Mesa Energy, Inc., a Nevada corporation (“Mesa”), and Mesa Energy
Acquisition Corp., a Nevada corporation and a wholly owned subsidiary of the
Company.  In connection with consummation of the Merger (as defined in
the Merger Agreement), Mesa stockholders shall receive shares of common stock,
par value $0.0001 per share (“Common Stock”), of the Company in consideration
for shares of Mesa held by them at the effective time of the
Merger.  In consideration of the Company and Mesa entering into the
Merger Agreement, the undersigned hereby agrees as follows:

    

    1.           The
undersigned hereby covenants and agrees not to, directly or indirectly, effect
or agree to effect any short sale (as defined in Rule 200 under Regulation SHO
of the Exchange Act of 1934, as amended (the “Exchange Act”)), whether or not
against the box, establish any “put equivalent position” (as defined in Rule
16a-1(h) under the Exchange Act) with respect to the Common Stock, borrow or
pre-borrow any shares of Common Stock, or grant any other right (including,
without limitation, any put or call option) with respect to the Common Stock or
with respect to any security that includes, relates to or derives any
significant part of its value from the Common Stock or otherwise seek to hedge
its position in the Common Stock for a period commencing on the Closing Date (as
defined in the Merger Agreement) and ending on the 24-month anniversary of the
Closing Date (the “No-Short Period”).

     

    2.           This
Agreement shall be governed by and construed in accordance with the laws of the
State of New York, without giving effect to principles of conflicts or
choice of laws thereof.

    

    3.           This
Agreement will become a binding agreement among the undersigned as of the
Closing Date.  In the event that no closing occurs under the Merger
Agreement, this Agreement shall be null and void.  This Agreement (and
the agreements reflected herein) may be terminated by the mutual agreement of
the Company and the undersigned and, if not sooner terminated, will terminate
upon the expiration date of the No-Short Period.  This Agreement may
be duly executed by facsimile and in any number of counterparts, each of which
shall be deemed an original, and all of which together shall be deemed to
constitute one and the same instrument.  Signature pages from separate
identical counterparts may be combined with the same effect as if the parties
signing such signature page had signed the same counterpart.  This
Agreement may be modified or waived only by a separate writing signed by each of
the parties hereto expressly so modifying or waiving such
agreement.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    

    Very
truly yours,

    

    _______________________________

    Print
Name:

    

    Address:
_____________________________________________

    ____________________________________________________

    Number of
shares of Common Stock owned: ________________

    Certificate
Numbers: ___________________________________

    

    [Company
signature on the following page]

    
      
         

      

      
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    Accepted
and Agreed to:

    

    Mesa
Energy Holdings, Inc.

    

    
      
        	
                By:

              	 
      	 
      
	
                Name:
      Beverly Frederick

              
	
                Title:
      PresidentIR
SHARES ESCROW AGREEMENT

     

    This
Escrow Agreement (this “Agreement”) is entered into as of August 31, 2009, by
and between Mesa Energy Holdings, Inc., a Delaware corporation (the “Company”),
and Gottbetter & Partners, LLP (the “Escrow Agent”).

     

    WHEREAS,
pursuant to an Agreement and Plan of Merger and Reorganization (the “Merger
Agreement”) by and among the Company, a wholly-owned subsidiary of the Company
(“Acquisition Corp.”) and Mesa Energy, Inc., a Nevada corporation (“Mesa”),
Acquisition Corp. will merge with and into MESA (the “Merger”), with MESA being
the surviving corporation in the Merger;

     

    WHEREAS,
the Company has agreed to issue 1,000,000 shares (the “IR Escrow Shares”) of its
common stock, par value $0.0001 per share (“Common Stock”), to consultants
providing investor relations services to the Company, of which 70,000 shares
have been issued prior to the date hereof; and

     

    WHEREAS,
the parties hereto desire to establish an escrow account to provide for the
safekeeping of the IR Escrow Shares until such time as the IR Escrow Shares are
released by the Escrow Agent in accordance with the terms and conditions of this
Agreement.

     

    All
capitalized terms used but not defined herein shall have the meanings ascribed
thereto in the Merger Agreement.

     

    NOW,
THEREFORE, the parties hereto hereby agree as follows:

     

    1.           Escrow and
Consultants.

     

    (a)           Escrow of
Shares.  At the Closing of the Merger, the Company shall
deposit with the Escrow Agent certificate(s) representing an aggregate of
930,000 shares of Common Stock issued in the name of the Escrow Agent or its
nominee.  The IR Escrow Shares shall be held in trust and shall not be
subject to any lien, attachment, trustee process or any other judicial process
of any creditor of any party hereto.  The Escrow Agent agrees to hold
the IR Escrow Shares in an escrow account (the “Escrow Account”), subject to the
terms and conditions of this Agreement.

     

    (b)           IR
Consultants.  The Company agrees that the IR Escrow Shares
shall be held in escrow by the Escrow Agent pursuant to this Agreement for its
benefit as set forth herein and that the IR Escrow Shares shall be released to
consultants retained by the Company to provide public and investor relations
services to the Company.

     

    (c)           Dividend,
Etc.  Any securities distributed in respect of or in exchange
for any of the IR Escrow Shares, whether by way of stock dividends, stock splits
or otherwise, shall be issued in the name of the Escrow Agent or its nominee and
shall be delivered to the Escrow Agent, who shall hold such securities in the
Escrow Account.  Such securities shall be considered IR Escrow Shares
for purposes hereof.  Any cash dividends or property (other than
securities) distributed in respect of the IR Escrow Shares shall promptly be
distributed by the Escrow Agent to the Company.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    (d)           Voting of
Shares.  The Company shall have the right, in its sole
discretion, to direct the Escrow Agent in writing as to the exercise of any
voting rights pertaining to the IR Escrow Shares in the Escrow Account, and the
Escrow Agent shall comply with any such written instructions.  In the
absence of such instructions, the Escrow Agent shall not vote any of the IR
Escrow Shares.

     

    2.           Distribution of IR Escrow
Shares.  Subject to the provisions of Section 4 herein, the
Escrow Agent shall release the IR Escrow Shares as follows:

     

    (a)           The
Escrow Agent shall distribute the IR Escrow Shares only in accordance with
written instructions, substantially in the form of Exhibit A hereto (the
“Instructions”), delivered to the Escrow Agent that is executed by the Company
and that instructs the Escrow Agent as to the distribution of some or all of the
IR Escrow Shares.

     

    (b)           Notwithstanding
the above, upon receipt by the Escrow Agent of a final and non-appealable
judgment, order, decree or award of a court of competent jurisdiction (a “Court
Order”), the Escrow Agent shall deliver the IR Escrow Shares in accordance with
the Court Order.  Any Court Order shall be accompanied by an opinion
of counsel for the party presenting the Court Order to the Escrow Agent (which
opinion shall be satisfactory to the Escrow Agent) to the effect that the court
issuing the Court Order has competent jurisdiction and that the Court Order is
final and non-appealable.

     

    (c)           The
Company acknowledges that the only terms and conditions upon which the IR Escrow
Shares are to be released are set forth in this Agreement.  The
Company reaffirms its agreement to abide by the terms and conditions of this
Agreement with respect to the release of the IR Escrow Shares.  Any
dispute with respect to the release of the IR Escrow Shares shall be resolved
pursuant to Section 4 herein or by agreement between the parties.

     

    3.           Duties and Responsibilities
of Escrow Agent.  The Escrow Agent’s duties and
responsibilities shall be subject to the following terms and
conditions:

     

    (a)           The
Company acknowledges and agrees that the Escrow Agent (i) shall not be
responsible for or bound by, and shall not be required to inquire into whether
the Company is entitled to receipt of the IR Escrow Shares pursuant to any other
agreement or otherwise; (ii) shall be obligated only for the performance of such
duties as are specifically assumed by the Escrow Agent pursuant to this
Agreement; (iii) may rely on and shall be protected in acting or refraining from
acting upon any written notice, instruction, instrument, statement, request or
document furnished to it hereunder and believed by the Escrow Agent in good
faith to be genuine and to have been signed or presented by the proper person or
party, without being required to determine the authenticity or correctness of
any fact stated therein or the propriety or validity or the service thereof;
(iv) may assume that any person believed by the Escrow Agent in good faith to be
authorized to give notice or make any statement or execute any document in
connection with the provisions hereof is so authorized; (v) shall not be under
any duty to give the property held by Escrow Agent hereunder any greater degree
of care than the Escrow Agent gives its own similar property, but in no event
less than a reasonable amount of care; and (vi) may consult with counsel
satisfactory to the Escrow Agent, the opinion of such counsel to be full and
complete authorization and protection in respect of any action taken, suffered
or omitted by the Escrow Agent hereunder in good faith and in accordance with
the opinion of such counsel.

    
      
         

      

      
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    (b)           The
Company acknowledges that the Escrow Agent is acting solely as a stakeholder at
its request and that the Escrow Agent shall not be liable for any action taken
by Escrow Agent in good faith and believed by the Escrow Agent to be authorized
or within the rights or powers conferred upon the Escrow Agent by this
Agreement.  The Company agrees to indemnify and hold harmless the
Escrow Agent and any of the Escrow Agent’s partners, employees, agents and
representatives for any action taken or omitted to be taken by the Escrow Agent
or any of them hereunder, including the fees of outside counsel and other costs
and expenses of defending itself against any claim or liability under this
Agreement, except in the case of gross negligence or willful misconduct on the
part of the Escrow Agent committed in its capacity as Escrow Agent under this
Agreement.  The Escrow Agent shall owe a duty only to the Company
under this Agreement and to no other person.

     

    (c)           The
Company agrees to reimburse the Escrow Agent for outside counsel fees, to the
extent authorized hereunder and incurred in connection with the performance of
its duties and responsibilities hereunder.

     

    (d)           The
Escrow Agent may at any time resign as Escrow Agent hereunder by giving thirty
days prior written notice of resignation to the Company.  Prior to the
effective date of the resignation as specified in such notice, the Company will
issue to the Escrow Agent an instruction authorizing delivery of the IR Escrow
Shares to a substitute escrow agent selected by the Company.  If no
successor escrow agent is named by the Company, the Escrow Agent may apply to a
court of competent jurisdiction in the State of New York for appointment of a
successor escrow agent, and to deposit the IR Escrow Shares with the clerk of
any such court.

     

    (e)           The
Escrow Agent does not have and will not have any interest in the IR Escrow
Shares, but is serving only as escrow agent in connection therewith, having only
possession thereof.

     

    (f)           This
Agreement sets forth exclusively the duties of the Escrow Agent with respect to
any and all matters pertinent thereto and no implied duties or obligations shall
be read into this Agreement.

     

    (g)           The
provisions of this Agreement shall survive the resignation of the Escrow Agent
or the termination of this Agreement.

     

    4.           Dispute
Resolution.  Resolution of disputes arising under this
Agreement shall be subject to the following terms and conditions:

     

    (a)           If
any dispute shall arise with respect to the delivery, ownership, right of
possession or disposition of the IR Escrow Shares, or if the Escrow Agent shall
in good faith be uncertain as to its duties or rights hereunder, the Escrow
Agent shall be authorized, without liability to anyone, to (i) refrain from
taking any action other than to continue to hold the IR Escrow Shares pending
receipt of Instructions from the Company, or (ii) deposit the IR Escrow Shares
with any court of competent jurisdiction in the State of New York, in which
event the Escrow Agent shall give written notice thereof to the Company and
shall thereupon be relieved and discharged from all further obligations pursuant
to this Agreement.  The Escrow Agent may, but shall be under no duty
to, institute or defend any legal proceedings which relate to the IR Escrow
Shares.  The Escrow Agent shall have the right to retain counsel if it
becomes involved in any disagreement, dispute or litigation on account of this
Agreement or otherwise determines that it is necessary to consult
counsel.

    
      
         

      

      
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    (b)           The
Escrow Agent is hereby expressly authorized to comply with and obey any Court
Order.  In case the Escrow Agent obeys or complies with a Court Order,
the Escrow Agent shall not be liable to the Company or to any other person,
firm, corporation or entity by reason of such compliance.

     

    5.           Termination of
Escrow.  The escrow account established hereby shall terminate
upon the delivery by the Escrow Agent of all of the IR Escrow Shares in
accordance with this Agreement.

     

    6.           Notices.  All
notices, instructions and other communications given hereunder or in connection
herewith shall be in writing.  Any such notice, instruction or
communication shall be sent either (i) by registered or certified mail,
return receipt requested, postage prepaid, or (ii) via a reputable
nationwide overnight courier service, in each case to the address set forth
below.  Any such notice, instruction or communication shall be deemed
to have been delivered five business days after it is sent by registered or
certified mail, return receipt requested, postage prepaid, or one business day
after it is sent via a reputable nationwide overnight courier
service.

     

    If to the
Company (before the Merger):

    

    Mesa
Energy Holdings, Inc.

    4321 7th
Avenue

    Los
Angeles, CA  90008

    Attention:  Beverly
Frederick

    

    If to the
Company (after the Merger):

    

    Mesa
Energy Holdings, Inc.

    5220
Spring Valley Road

    Suite
525

    Dallas,
TX  75254

    Attention:  Randy
M. Griffin

    Facsimile:  (972)
490-9161

    

    If to the
Escrow Agent:

    

    Gottbetter
& Partners, LLP

    488
Madison Avenue, 12th
Floor

    New York,
NY  10022

    Attn:  Adam
S. Gottbetter, Esq.

    Facsimile:  (212)
400-6901

    
      
         

      

      
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    Any party
may give any notice, instruction or communication in connection with this
Agreement using any other means (including personal delivery, telecopy or
ordinary mail), but no such notice, instruction or communication shall be deemed
to have been delivered unless and until it is actually received by the party to
whom it was sent.  Any party may change the address to which notices,
instructions or communications are to be delivered by giving the other parties
to this Agreement notice thereof in the manner set forth in this
Section 6.

     

    7.           General.

     

    (a)           Governing Law;
Assigns.  This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York without regard to
conflict-of-law principles and shall be binding upon, and inure to the benefit
of, the parties hereto and their respective successors and assigns.

     

    (b)           Counterparts.  This
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.

     

    (c)           Entire
Agreement.  This Agreement constitutes the entire understanding
and agreement of the parties with respect to the subject matter of this
Agreement and supersedes all prior agreements or understandings, written or
oral, between the parties with respect to the subject matter
hereof.

     

    (d)           Waivers.  No
waiver by any party hereto of any condition or of any breach of any provision of
this Agreement shall be effective unless in writing.  No waiver by any
party of any such condition or breach, in any one instance, shall be deemed to
be a further or continuing waiver of any such condition or breach or a waiver of
any other condition or breach of any other provision contained
herein.

     

    (e)           Amendment.  This
Agreement may be amended only with the written consent of the Company and the
Escrow Agent.

     

    (f)           Consent to Jurisdiction and
Service.  The parties hereby absolutely and irrevocably consent
and submit to the jurisdiction of the courts in the State of New York and of any
federal court located in the State of New York in connection with any actions or
proceedings brought against any party hereto by the Escrow Agent arising out of
or relating to this Agreement.  In any such action or proceeding, the
parties hereby absolutely and irrevocably waive personal service of any summons,
complaint, declaration or other process and hereby absolutely and irrevocably
agree that the service thereof may be made by certified or registered
first-class mail directed to such party, at their respective addresses in
accordance with Section 6 hereof.

     

    (g)           Acknowledge and Waiver of
Conflict.  The parties hereby acknowledge that the Escrow Agent
has represented the Company in connection with the Merger.  The
Company hereby waives any conflict of interest arising by virtue of the Escrow
Agent’s representation of the Company, and hereby agrees to acknowledge and
approve the taking of any action by the Escrow Agent reasonably necessary to
protect and preserve its rights under this Agreement.

    
      
         

      

      
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    IN
WITNESS WHEREOF, the parties have duly executed this IR Shares Escrow Agreement
as of the day and year first above written.

     

    
      	 
      	
              MESA
      ENERGY HOLDINGS, INC.

            
	 
      	 
      
	 
      	
              By:

            	
              /s/ Beverly Frederick

            
	 
      	
              Name:
      Beverly Frederick

            
	 
      	
              Title:
      President

            
	 
      	 
      
	 
      	
              GOTTBETTER
      & PARTNERS, LLP

            
	 
      	 
      
	 
      	
              By:

            	
              /s/ Adam S. Gottbetter

            
	 
      	
              Name:
      Adam S. Gottbetter

            
	 
      	
              Title:
      Partner

            

    

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    EXHIBIT
A

     

    Form of
Instructions

    

    Mr. Adam
S. Gottbetter

    Gottbetter
& Partners, LLP

    488
Madison Ave., 12th Floor

    New York,
NY  10022

    Phone:  212-400-6900

    Facsimile:  212-400-6901

    

    Re:       Mesa
Energy Holdings, Inc.

    

    Dear Mr.
Gottbetter:

    

    With
respect to the IR Shares Escrow Agreement by and between Mesa Energy Holdings,
Inc. and Gottbetter & Partners, LLP, as escrow agent, we hereby authorize
the release of the IR Escrow Shares to the following public and investor
relations firms:

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        	
                                                Name of Firm

                                              	 	
                                                Number of Shares

                                              
	 
      	 	 
      
	 
      	 	 
      
	 	 	 
	 	 	 
	 	 	 
	 	 	 

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    

    
      
        	 
      	
                MESA
      ENERGY HOLDINGS, INC.

              
	 
      	 
      
	 
      	
                By:

              	 
      
	 
      	
                Name:

              
	 
      	
                Title:

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