Document:

Unassociated Document

Exhibit
10.16

EXCHANGE AGREEMENT

This EXCHANGE AGREEMENT (the “Agreement”) made and entered effective as of June 16, 2011, by and between Mesa Energy Holdings, Inc., a Delaware corporation (the “Company”) and Whalehaven Capital Fund Ltd., a Bermuda Corporation (“Whalehaven”).

WITNESSETH:

WHEREAS, the Company issued Whalehaven a promissory note in a principal amount of $20,000 on December 8, 2010, which was due on June 8, 2011 (the “Initial Note”);

WHEREAS, on February 14, 2011, the Company and Whalehaven entered into an amendment to the Initial Note (the “Amendment”), whereby the principal amount of the Initial Note was increased by $30,000 to $50,000, of which $20,000 was funded to the Company on February 14, 2011 (the “Additional Note” and together with the Initial Note, the “Notes”) and the remaining $10,000 was intended to be funded to the Company at a later date (the “Remaining Payment”);

WHEREAS, the parties subsequently agreed to waive the Remaining Payment and have the Initial Note, as amended by the Additional Note, be $40,000 principal amount;

WHEREAS, the Notes accrue interest at the rate of 6% per annum, of which $621.37 of accrued interest on the Initial Note and $397.81 of accrued interest on the Additional Note is due and payable as of the date of this Agreement (together with the Notes, the “Debt”);

WHEREAS, the Company has requested that Whalehaven agree to restructure (the “Restructuring”) the Debt into two Convertible Notes, one for each Note (the “New Debt”) with such New Debt convertible into the Company’s shares of common stock at a conversion price of $0.125 per share, thereby eliminating the Debt;

WHEREAS, Whalehaven has agreed to the Restructuring and the New Debt;

WHEREAS, the board of directors of the Company deems it advisable and in the best interests of the Company to consummate the transactions contemplated by this Agreement upon the terms and conditions set forth herein;

NOW, THEREFORE, in consideration of the mutual promises, covenants and agreements set forth herein and in reliance upon the undertakings, representations, warranties and indemnities contained herein, the Company and Whalehaven hereby agree as follows:

 

  

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ARTICLE 1

EXCHANGE OF NOTES; CLOSING

Section 1.1       Restructuring.  Subject to the terms and conditions herein stated, Whalehaven agrees at the Closing that the Debt shall be restructured and, as so restructured, to exchange the Debt for the New Debt pursuant to Convertible Notes dated as of the date hereof (the “Convertible Notes”), as set forth on Schedule A hereto.  The parties agree that upon closing of the transactions contemplated by this Agreement, the Notes will no longer be outstanding.

Section 1.2       Closing.  The closing of the transactions contemplated by this Agreement (the “Closing”) shall take place simultaneously with the execution and delivery of this Agreement and the Convertible Notes.

Section 1.3        Deliveries at Closing.  At the closing, Whalehaven and the Company shall exchange executed copies of this Agreement and the Convertible Notes.

ARTICLE 2

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company represents and warrants to Whalehaven as of the date hereof as follows:

Section 2.1        Organization.  The Company is a corporation duly organized, validly existing and in good standing under the laws of the state of Delaware and has all requisite corporate power and authority to own its properties and carry on its business as now being conducted.

Section 2.2         Authority; Enforceability.  The Company has the requisite corporate power and authority to execute and deliver this Agreement and to carry out its obligations hereunder.  The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all necessary corporate action on the part of the Company and no other corporate proceedings on the part of the Company are necessary to authorize this Agreement or to consummate the transactions so contemplated.  This Agreement has been duly executed and delivered by the Company and constitutes a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as (a) enforceability may be limited by applicable bankruptcy, insolvency, fraudulent transfer, moratorium or similar laws from time to time in effect affecting creditors’ rights generally and (b) the availability of equitable remedies may be limited by equitable principles of general applicability.

Section 2.3        Third Party Consents.  No consent, authorization, order or approval of, or filing or registration with, any governmental authority or other person is required for the execution and delivery of this Agreement or the consummation by the Company of any of the transactions contemplated hereby.

 

  

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Section 2.4        No Other Representations or Warranties.  Except as set forth above in this Section 2, no other representations or warranties, express or implied, are made in this Agreement by the Company to Whalehaven.

ARTICLE 3

MISCELLANEOUS

Section 3.1        Survival of Representations, Warranties and Agreements. The representations, warranties, covenants and agreements in this Agreement or in any instrument delivered pursuant to this Agreement shall survive the Closing and shall not be limited or affected by any investigation by or on behalf of any party hereto.

Section 3.2.       Further Assurances.  Each of the Company and Whalehaven will use its, as the case may be, best reasonable efforts to take all action and to do all things necessary, proper or advisable on order to consummate and make effective the transactions contemplated by this Agreement.

Section 3.3        Entire Agreement; No Third Party Beneficiaries.  This Agreement (including the documents, exhibits and instruments referred to herein) (a) constitutes the entire agreement and supersedes all prior agreements, and understandings and communications, both written and oral, among the parties with respect to the subject matter hereof, and (b) is not intended to confer upon any person other than the parties hereto any rights or remedies hereunder.

Section 3.4        Governing Law.  This Agreement shall be governed and construed in accordance with the laws of the State of New York without regard to any applicable principles of conflicts of law.

Section 3.5       Counterparts.  This Agreement may be executed in multiple counterparts, each of which shall be deemed an original and all of which taken together shall constitute one and the same document.

Section 3.6        Amendment and Modification.  This Agreement may not be amended or modified except by an instrument in writing signed by each of the parties hereto.

Section 3.7        No Joint Venture.  Nothing contained herein shall make Whalehaven or the Company, partners or joint venturers or create any relationship or obligation between any of them except as expressly set forth herein.

Section 3.8        Independent Legal Advice.  All parties acknowledge and represent that:  (a) they have read this Agreement; (b) they clearly understand this Agreement and each of its terms; (c) they fully and unconditionally consent to the terms of this Agreement; (d) Sichenzia Ross Friedman Ference LLP represents the Company and Whalehaven on other matters but not on this matter, it has drafted this Agreement at the request of all parties, however all parties have had the benefit and advice of counsel of their own selection and that neither of them have relied upon the advice or counsel of Sichenzia Ross Friedman Ference LLP with respect to this Agreement; (e) they have executed this Agreement , freely, with knowledge, and without influence or duress; (f) they have not relied upon any other representations, either written or oral, express or implied, made to them by any person; and (g) the consideration received by them has been actual and adequate.

 

  

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Section 3.9        Construction.  Each party acknowledges that it or its own independent legal counsel participated in the preparation of this Agreement and, therefore, stipulates that the rule of construction that ambiguities are to be resolved against the drafting party shall not be applied in the interpretation of this Agreement to favor any party against the other.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed themselves or by their respective duly authorized officers as of June 16, 2011.

	 	 
MESA ENERGY HOLDINGS, INC.

	 
	 	 	 	 
	
 

	
By: 

	/s/ RANDY M. GRIFFIN	 
	 	 	Name: Randy M. Griffin	 
	 	 	Title: Chief Executive Officer	 

 

	 	WHALEHAVEN CAPITAL FUND LTD.	 
	 	 	 	 
	
 

	
By: 

	/s/ ERIC WEISBLUM	 
	 	 	Name: Eric Weisblum	 
	 	 	Title: Authorized Signatory	 

  

4

  

SCHEDULE A

	
Principal Amount of

 Promissory Note

	
Accrued Interest 

on Promissory 

Note

	
Date Funds Received 

for Rule 144 Tacking

 Purposes

	
New Convertible

 Note Number

	  	  	  	  
	
$20,000

	
$621.37

	
December 8, 2010

	
A-1

	
$20,000

	
$397.81

	
February 14, 2011

	
A-2SECOND AMENDMENT TO EMPLOYMENT SERVICES
AGREEMENT

 

 

THIS AMENDMENT TO
EMPLOYMENT SERVICES AGREEMENT (“Amendment”), dated as of the 1st day of October, 2012, is between
Mesa Energy Holdings, Inc. a Delaware corporation, (hereinafter referred to as the “Company”), and Rachel
L. Dillard, (“Executive”). Company and Executive are sometimes hereinafter collectively called the “Parties”
and individually called a “Party.”

 

WHEREAS, on
Septmeber 19, 2011, the Parties entered into an Employment Services Agreement (“Agreement”); and

 

WHEREAS, on
October 17, 2011, the Parties entered into an amendment to the Agreement (the “First Amendment”) to amend the
vesting dates of the restricted stock grant provided under Section 5(d) of the Agreement; and

 

WHEREAS, the
Parties wish to further amend certain provisions of the Agreement;

 

NOW, THEREFORE,
for and in consideration of the mutual covenants contained herein and for other good and valuable consideration, receipt and sufficiency
of which is hereby acknowledged, Company and Executive hereby agree as follows:

 

		1.	The last sentence of Section 2(d) is amended in its entirety to read as follows:

 

“The
parties acknowledge, however, that the Executive may be required to travel in connection with her duties hereunder and that, from
time to time, the Executive may need to work from her home.”

 

		2.	The “Base Salary,” as defined in Section 3 of the Agreement, shall be increased to
$125,000 per year.

 

		3.	The last sentence of Section 5(d) is amended in its entirety to read as follows:

 

“In
the event of a Change of Control (defined below) or Randy Griffin terminates his status (or is terminated) as an executive officer
of the Company, or Executive dies or suffers a Permanendt Disability (defined below), all of the unvested shares will immediately
become vested.”

 

		4.	The first paragraph in Section 6(e) of the Agreement, shall be amended in its entirety to read
as follows:

 

“Termination
for Good Reason. The Executive may terminate this Agreement at any time for Good Reason.
In the event of termination under this Section 6(e), the Company shall pay to the Executive severance
in an amount equal to the then applicable Base Salary for a period equal to three (3) months (the “Severance Period”),
subject to the Executive’s continued compliance with Sections 7 and 8 of this Agreement
for the applicable Severance Period following the Executive’s termination, and subject to the Company’s regular payroll
practices and required withholdings. The Executive shall continue to receive all Benefits during the Severance Period. The
Executive shall not have any further rights under this Agreement or otherwise to receive any other compensation or benefits after
such resignation. For the purposes of this Agreement, “Good Reason” shall mean any of the following (without
Executive’s express written consent):”

 

    	 

    	 

    

 

		5.	Section 7(a) of the Agreement is amended to read in its entirety as follows:

 

“(a)For
the duration of the Employment Period (the “Non-compete Period”), the Executive shall not, directly or indirectly,
except as specifically provided in the last sentence of Section 2(b), engage or invest in, own, manage, operate, finance, control
or participate in the ownership, management, operation, financing, or control of, be employed by, associated with, or in any manner
connected with, lend any credit to, or render services or advice to, any business, firm, corporation, partnership, association,
joint venture or other entity that engages or conducts any business the same as or substantially similar to the Business or any
other business engaged in or proposed to be engaged in or conducted by the Company and/or any of its Affiliates during the Employment
Period, or then included in the future strategic plan of the Company and/or any of its Affiliates, anywhere within the states in
which the Company or any of its Affiliates at that time is operating; provided, however, that the
Executive may own less than 5% in the aggregate of the outstanding shares of any class
of securities of any enterprise (but without otherwise participating in the activities of such enterprise) including those engaged
in the oil and gas business, other than any such enterprise with which the Company competes or is currently engaged in a joint
venture, if such securities are listed on any national or regional securities exchange or have been registered under Section 12(b)
or (g) of the Securities Exchange Act of 1934, as amended. Notwithstanding the foregoing, if the Executive shall present to the
Board any opportunity within the scope of the prohibited activities described above, and the Company shall not elect to pursue
such opportunity within a reasonable time, then the Executive shall be permitted to pursue such opportunity, subject to the requirements
of Section 2(b).”

 

		6.	The last sentence of Section 12 of the Agreement is hereby deleted in its entirety.

 

Except as specifically
amended as provided herein, the Agreement, as amended by the First Amendment, shall remain in full force and effect and is hereby
confirmed and ratified.

 

This Amendment shall
be governed and construed in accordance with the laws of the State of Texas, without giving effect to principles of conflicts or
choice of laws thereof.

 

[The next page is the signature page]

 

    	 

    	 

    

IN WITNESS
WHEREOF, this Amendment is executed, accepted and agreed to by the Parties effective as of the date first set forth above.

 

  

	Company	 	Executive
	 	 	 	 	 
	Mesa Energy Holdings, Inc.	 	 
	 	 	 	 	 
	By:	 	 	By:	 
	 	Randy M. Griffin, CEO	 	 	Rachel L. Dillard

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