REOSTAR ENERGY CORP - Exhibit 10.2






EXHIBIT 10.2





NONE OF THE SECURITIES TO WHICH THIS SUBSCRIPTION AGREEMENT RELATES HAVE BEEN
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO REGISTERED, NONE MAY
BE OFFERED OR SOLD, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES OR TO U.S. PERSONS
(AS DEFINED HEREIN) EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S UNDER
THE SECURITIES ACT, PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION
NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN EACH
CASE ONLY IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. IN ADDITION, HEDGING
TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE
WITH THE SECURITIES ACT.

 

  

PRIVATE PLACEMENT SUBSCRIPTION AGREEMENT 

   


	 	TO: 	 REOSTAR ENERGY CORPORATION. (OTCBB: REOS)

        (FORMERLY GOLDRANGE RESOURCES, INC) 

      5416 BIRCHMAN AVE 

      FORT WORTH, TEXAS 76107 
	 	 	 
	 	 	            Purchase
      of Shares and Warrants  








1. SUBSCRIPTION 



1.1 The undersigned (the "Subscriber") hereby irrevocably subscribes for and agrees
to purchase the securities (the "Securities") of ReoStar Energy Corporation.,
a Nevada corporation (or its successor entity) (the "Company"), consisting of
___________ shares of the Company's common stock (the "Shares") and a warrant
to purchase __________ shares of Company's common stock, in the form attached
hereto as Exhibit A (the "Warrants"), at a subscription price of $1.00 per unit,
for a total purchase price of $___________ (the "Subscription Proceeds"), which
is tendered herewith, on the basis of the representations and warranties and subject
to the terms and conditions set forth herein (such subscription and agreement
to purchase being the "Subscription"). The exercise price of the warrant is $1.50
per share. 



1.2 The Subscription may be rejected in whole or in part by the Company, in its
sole and absolute discretion for any cause or for no cause. Subject to the terms
hereof, the Subscription will be effective upon its acceptance by the Company.




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



1.4 The Subscriber acknowledges that the offering of Shares contemplated hereby
is part of a private placement by the Company of up to an aggregate subscription
level of $25,000,000 (the "Offering"). Notwithstanding the foregoing, the Company
reserves the right to increase the subscription level. 



2. PAYMENT 



2.1 The Subscription Proceeds must accompany this Subscription and shall be wired
directly to the Company's legal counsel in accordance with the wire instructions
attached hereto as Schedule A. The Subscriber authorizes the Company's legal counsel
to deliver the Subscription Proceeds to the Company on the Closing Date (as defined
below). 








  

 2.2 The Subscriber acknowledges and agrees that this Subscription
Agreement, the Subscription Proceeds and any other documents delivered in connection
herewith will be held by the Company's legal counsel on behalf of the Company.
In the event that this Subscription Agreement is not accepted by the Company for
whatever reason within 30 days of the delivery of an executed Subscription Agreement
by the Subscriber, this Subscription Agreement, the Subscription Proceeds and
any other documents delivered in connection herewith will be returned to the Subscriber
at the address of the Subscriber as set forth in this Subscription Agreement.




3. DOCUMENTS REQUIRED FROM SUBSCRIBER 



3.1 The Subscriber must complete, sign and return to the Company or its legal
counsel, as directed by the Company, two (2) executed copies of this Subscription
Agreement. In addition, the Subscriber must complete, sign and return to the Company
the Investor Suitability Questionnaire attached hereto as Exhibit B and the Non-Disclosure
Agreement attached hereto as Exhibit C. 



3.2 The Subscriber shall complete, sign and return to the Company as soon as possible,
on request by the Company, any documents, questionnaires, notices and undertakings
as the Company may require to comply with applicable securities laws or any regulatory
authorities. 



4. CLOSING 



4.1 Closing of the offering of the Securities (the "Closing") shall occur on or
before March 31st, 2007, or on such other date as may be determined by the Company
(the "Closing Date"), and may occur in multiple closings as the Company may determine.




5. REPRESENTATIONS AND WARRANTIES OF THE SUBSCRIBER 



5.1 The Subscriber hereby makes the following representations and warranties to
the Company: 




	 	(a) 	The Subscriber understands that the Shares,
      the Warrants, and the shares underlying the Warrants have not been registered
      under the Securities Act, or any state securities laws, in reliance upon
      exemptions from regulation for non-public offerings. The Subscriber understands
      that the Securities or any interest therein may not be, and agrees that
      the Securities or any interest therein will not be, resold or otherwise
      disposed of by the undersigned unless the Securities are subsequently registered
      under the Securities Act and under appropriate state securities laws or
      unless the Company receives an opinion of counsel satisfactory to it that
      an exemption from registration is available; 
	 	 	 
	 	(b) 	The Subscriber is acquiring the Shares, the
      Warrants, and the shares underlying the Warrants, for investment for its
      own account, not as a nominee or agent, and not with the view to, or for
      resale in connection with, any distribution thereof, and that such Investor
      has no present intention of selling, granting any participation in, or otherwise
      distributing the same. The Subscriber further represents that it does not
      have any contract, undertaking, agreement or arrangement with any person
      or entity to sell, transfer or grant participation to such person or entity
      or to any third person or entity with respect to any of the Shares, the
      Warrants, or the shares underlying the Warrants; 
	 	 	 
	 	(c) 	The Subscriber, or its purchaser representative,
      within the meaning of Regulation D, Rule 501(h), promulgated by the Securities
      and Exchange Commission (its "Purchaser Representative"), has substantial
      experience in evaluating and investing in private placement transactions
      of securities in companies similar to the Company and acknowledges that
      the Subscriber or its Purchaser Representative can protect its own interests.
      The Subscriber or its Purchaser Representative has such knowledge and experience
      in financial and business matters so that the Subscriber or its Purchaser
      


 










	 	 	Representative is capable of evaluating the
      merits and risks of its investment in the Company; 
	 	 	 
	 	(d)	The Subscriber understands and acknowledges
      that the Company has a limited financial and operating history and that
      an investment in the Company is highly speculative and involves substantial
      risks. The Subscriber can bear the economic risk of the Subscriber's investment
      and is able, without impairing the Subscriber's financial condition, to
      hold the Shares, the Warrants, and the shares underlying the Warrants for
      an indefinite period of time and to suffer a complete loss of such Investor's
      investment; 
	 	 	 
	 	(e)	The Subscriber has had an opportunity to ask
      questions of, and receive answers from, the officers of the Company concerning
      the Agreement, the exhibits and schedules attached hereto and thereto and
      the transactions contemplated by the Agreement, as well as the Company's
      business, management and financial affairs, which questions were answered
      to its satisfaction. The Subscriber believes that it has received all the
      information such Investor considers necessary or appropriate for deciding
      whether to purchase the Securities and the shares underlying the Warrants.
      The Subscriber understands that such discussions, as well as any information
      issued by the Company, were intended to describe certain aspects of the
      Company's business and prospects, but were not necessarily a thorough or
      exhaustive description. The Subscriber acknowledges that any business plans
      prepared by the Company have been, and continue to be, subject to change
      and that any projections included in such business plans or otherwise are
      necessarily speculative in nature, and it can be expected that some or all
      of the assumptions underlying the projections will not materialize or will
      vary significantly from actual results. The Subscriber also acknowledges
      that it is relying solely on its own counsel and not on any statements or
      representations of the Company or its agents for legal advice with respect
      to this investment; 
	 	 	 
	 	(f)	The Subscriber is an "accredited investor"
      within the meaning of Regulation D, Rule 501(a), promulgated by the Securities
      and Exchange Commission under the Securities Act and shall submit to the
      Company such further assurances of such status as may be reasonably requested
      by the Company; 
	 	 	 
	 	(g) 	The residency of the Subscriber (or, in the
      case of a partnership or corporation, such entity's principal place of business)
      is correctly set forth on the Subscriber's signature page to this Subscription
      Agreement; 
	 	 	 
	 	(h) 	The Subscriber has all requisite power and
      authority to execute and deliver the Agreement, to purchase the Securities
      hereunder and to carry out and perform its obligations under the terms of
      the Agreement. All action on the part of the Subscriber necessary for the
      authorization, execution, delivery and performance of the Agreement, and
      the performance of all of the Subscriber's obligations under the Agreement,
      has been taken or will be taken prior to the Closing; 
	 	 	 
	 	(i) 	The Agreement, when executed and delivered
      by the Subscriber, will constitute valid and legally binding obligations
      of the Subscriber, enforceable in accordance with their terms except: (i)
      to the extent that any indemnification provisions contained herein may be
      limited by applicable law and principles of public policy, (ii) as limited
      by applicable bankruptcy, insolvency, reorganization, moratorium and other
      laws of general application affecting enforcement of creditors' rights generally,
      and (iii) as limited by laws relating to the availability of specific performance,
      injunctive relief or other equitable remedies or by general principles of
      equity; 
	 	 	 
	 	(j) 	No consent, approval, authorization, order,
      filing, registration or qualification of or with any court, governmental
      authority or third person is required to be obtained by the
	 	 	 


 










	 	 	Subscriber in connection with the execution
      and delivery of the Agreement by the Subscriber or the performance of the
      Subscriber's obligations hereunder; 
	 	 	 
	 	(k) 	The Subscriber has reviewed with its own tax
      advisors the U.S. federal, state, local and foreign tax consequences of
      this investment and the transactions contemplated by the Agreement. With
      respect to such matters, the Subscriber relies solely on such advisors and
      not on any statements or representations of the Company or any of its agents,
      written or oral. The Subscriber understands that it (and not the Company)
      shall be responsible for its own tax liability that may arise as a result
      of this investment or the transactions contemplated by the Agreement; 
	 	 	 
	 	(l) 	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 
	 	 	 
	 	(m) 	The Subscriber has been informed of and understands
      the following:





	 	(i) 	There are substantial restrictions on the transferability
      of the Securities; 
	 	 	 
	 	(ii) 	No federal or state agency has made any finding
      or determination as to the fairness for public investment, nor any recommendation
      nor endorsement, of the Securities; 





	 	(n) 	None of the following information has ever
      been represented, guaranteed, or warranted to the Subscriber, expressly
      or by implication by any broker, the Company, or agent or employee of the
      foregoing, or by any other person: 





	 	(i) 	The approximate or exact length of time that
      the Subscriber will be required to remain a holder of the Securities; 
	 	 	 
	 	(ii) 	The amount of consideration, profit, or loss
      to be realized, if any, as a result of an investment in the Company; 
	 	 	 
	 	(iii) 	That the past performance or experience of
      the Company, its officers, directors, associates, agents, affiliates, or
      employees or any other person will in any way indicate or predict economic
      results in connection with the plan of operations of the Company or the
      return on the investment; 





	 	(o) 	The Subscriber has not distributed any information
      relating to this investment to anyone other than his purchaser representative,
      if any, and no other person except such personal representative and the
      Subscriber has used this information; 




5.2 Each Subscriber who is a Non-U.S. person (as defined herein) hereby represents
and warrants to the Company as follows: 




	 	(a) 	This Agreement is made by the Company with
      such Subscriber who is a Non-U.S. person in reliance upon such Non-U.S.
      person's representations, warranties and covenants made in this Section
      5.2; 
	 	 	 
	 	(b) 	Such Non-U.S. person has been advised and acknowledges
      that: 


 











	 	(i)	 the Shares, the Warrants, and the shares underlying
      the Warrants have not been registered under the Securities Act, the securities
      laws of any state of the United States or the securities laws of any other
      country; 
	 	 	 
	 	(ii)	 n issuing and selling the Shares, the Warrants,
      and the shares underlying the Warrants to such Non-U.S. person pursuant
      hereto, the Company is relying upon the "safe harbor" provided by Regulation
      S and/or on Section 4(2) under the Securities Act; 
	 	 	 
	 	(iii) 	it is a condition to the availability of the
      Regulation S "safe harbor" that the Shares, the Warrants, and the shares
      underlying the Warrants not be offered or sold in the United States or to
      a U.S. person until the expiration of a period of one year following the
      Closing Date; notwithstanding the foregoing, prior to the expiration of
      one year after the Closing (the "Restricted Period"), the Shares, the Warrants,
      and the shares underlying the Warrants may be offered and sold by the holder
      thereof only if such offer and sale is made in compliance with the terms
      of this Agreement and either: (A) if the offer or sale is within the United
      States or to or for the account of a U.S. person (as such terms are defined
      in Regulation S), the securities are offered and sold pursuant to an effective
      registration statement or pursuant to Rule 144 under the Securities Act
      or pursuant to an exemption from the registration requirements of the Securities
      Act; or (B) the offer and sale is outside the United States and to other
      than a U.S. person; 
	 	 	 
	 	(iv) 	As used herein, the term "United States" means
      and includes the United States of America, its territories and possessions,
      any State of the United States, and the District of Columbia, and the term
      "U.S. person" (as defined in Regulation S) means: 





	 	A. 	a natural person resident in the United States;
      
	 	 	 
	 	B. 	any partnership or corporation organized or
      incorporated under the laws of the United States; 
	 	 	 
	 	C. 	any estate of which any executor or administrator
      is a U.S. person; 
	 	 	 
	 	D. 	any trust of which any trustee is a U.S. person;
      
	 	 	 
	 	E. 	any agency or branch of a foreign entity located
      in the United States; 
	 	 	 
	 	F. 	any nondiscretionary account or similar account
      (other than an estate or trust) held by a dealer or other fiduciary for
      the benefit or account of a U.S. person; 
	 	 	 
	 	G. 	any discretionary account or similar account
      (other than an estate or trust) held by a dealer or other fiduciary organized,
      incorporated and (if an individual) resident in the United States; and 
	 	 	 
	 	H. 	a corporation or partnership organized under
      the laws of any foreign jurisdiction and formed by a U.S. person principally
      for the purpose of investing in securities not registered under the Securities
      Act, unless it is organized or incorporated, and owned, by accredited investors
      (as defined in Rule 501(a) under the Securities Act) who are not natural
      persons, estates or trusts. 


 










	 	 	As used herein, the term "Non-U.S. person"
      means any person who is not a U.S. person or is deemed not to be a U.S.
      person under Rule 902(k)(2) of the Securities Act. 




	 	(c) 	Such Non-U.S. person agrees that with respect
      to the Shares, the Warrants, and the shares underlying the Warrants until
      the expiration of the Restricted Period: 





	 	(i) 	such Non-U.S. person, its agents or its representatives
      have not and will not solicit offers to buy, offer for sale or sell any
      of the Shares, the Warrants, and the shares underlying the Warrants, or
      any beneficial interest therein in the United States or to or for the account
      of a U.S. person during the Restricted Period; notwithstanding the foregoing,
      prior to the expiration of the Restricted Period, the Shares, the Warrants,
      and the shares underlying the Warrants may be offered and sold by the holder
      thereof only if such offer and sale is made in compliance with the terms
      of this Agreement and either: (A) if the offer or sale is within the United
      States or to or for the account of a U.S. person (as such terms are defined
      in Regulation S), the securities are offered and sold pursuant to an effective
      registration statement or pursuant to Rule 144 under the Securities Act
      or pursuant to an exemption from the registration requirements of the Securities
      Act; or (B) the offer and sale is outside the United States and to other
      than a U.S. person; and 
	 	 	 
	 	(ii) 	such Non-U.S. person shall not engage in hedging
      transactions with regard to the Shares, the Warrants, and the shares underlying
      the Warrants unless in compliance with the Securities Act. 


 


	 	 	The foregoing restrictions are binding upon
      subsequent transferees of the Shares, the Warrants, and the shares underlying
      the Warrants, except for transferees pursuant to an effective registration
      statement. Such Non-U.S. person agrees that after the Restricted Period,
      the Shares, the Warrants, and the shares underlying the Warrant may be offered
      or sold within the United States or to or for the account of a U.S. person
      only pursuant to applicable securities laws. 
	 	 	 
	 	(d) 	Such Non-U.S. person has not engaged, nor is
      it aware that any party has engaged, and such Non-U.S. person will not engage
      or cause any third party to engage, in any directed selling efforts (as
      such term is defined in Regulation S) in the United States with respect
      to the Shares, the Warrants, and the shares underlying the Warrants. 
	 	 	 
	 	(e) 	Such Non-U.S. person: (i) is domiciled and
      has its principal place of business outside the United States; (ii) certifies
      it is not a U.S. person and is not acquiring the Shares, the Warrants, or
      the shares underlying the Warrants for the account or benefit of any U.S.
      person; and (iii) at the time of the Closing Date, the Non-U.S. person or
      persons acting on Non-U.S. person's behalf in connection therewith will
      be located outside the United States. 
	 	 	 
	 	(f) 	At the time of offering to such Non-U.S. person
      and communication of such Non-U.S. person's order to purchase the Shares,
      the Warrants, or the shares underlying the Warrants and at the time of such
      Non-U.S. Person's execution of this Agreement, the Non-U.S. person or persons
      acting on Non-U.S. person's behalf in connection therewith were located
      outside the United States. 
	 	 	 
	 	(g) 	Such Non-U.S. person is not a "distributor"
      (as defined in Regulation S) or a "dealer" (as defined in the Securities
      Act). 











	 	(h) 	Such Non-U.S. person acknowledges that the
      Company shall make a notation in its stock books regarding the restrictions
      on transfer set forth in this Section 5.2 and shall transfer such shares
      on the books of the Company only to the extent consistent therewith. 
	 	 	 
	 	(i) 	If the Subscriber is not a United States person,
      such Subscriber hereby represents that such Subscriber is satisfied as to
      the full observance of the laws of such Subscriber's jurisdiction in connection
      with any invitation to subscribe for the Shares, the Warrants, and the shares
      underlying the Warrants or any use of the Agreement, including (i) the legal
      requirements within such Subscriber's jurisdiction for the purchase of Shares,
      the Warrants, and the shares underlying the Warrants, (ii) any foreign exchange
      restrictions applicable to such purchase, (iii) any governmental or other
      consents that may need to be obtained and (iv) the income tax and other
      tax consequences, if any, that may be relevant to the purchase, holding,
      redemption, sale or transfer of such securities. Such Subscriber's subscription
      and payment for, and such Subscriber's continued beneficial ownership of,
      the Shares, the Warrants, and the shares underlying the Warrants will not
      violate any applicable securities or other laws of such Subscriber's jurisdiction.
      




6. REPRESENTATIONS AND WARRANTIES WILL BE RELIED UPON BY THE COMPANY 



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




7. REGISTRATION RIGHTS 



7.1 The Company shall file with the SEC not later than 90 days after the Closing
Date (the "Filing Date"), and thereafter use its best efforts to cause to be declared
effective by the SEC, a registration statement (the "Registration Statement")
(on Form S-1, Form SB-2 or such other form that it is eligible to use), within
120 days of the filing of the Registration Statement, in order to register the
Shares and the shares underlying the Warrants (the "Registrable Securities") for
resale and distribution under the Securities Act. The Company agrees to respond
to all SEC comments within 14 business days of receipt thereof by the Company.
The Company agrees to pay penalties equal to 1.0% of the investment amount for
the first 30 days and 1.5% of the investment amount price for every 30 days thereafter
if the registration is not filed by the Filing Deadline. The same penalties shall
apply if the registration is filed in a timely manner but the comments are not
responded to within the allotted time frame referenced above. The penalty may
be paid in cash or stock at the option of Company provided that the shares are
registered. If the Company elects to pay the penalty in shares, the shares will
be priced at Volume Weighted Average Price for the 20 trading days prior to the
payment date. 



7.2 If and whenever the Company is required by the provisions hereof to effect
the registration of any Registrable Securities under the Securities Act, the Company
will, as expeditiously as possible: 




	 	(a) 	prepare and file with the SEC such amendments
      and supplements to such Registration Statement and the prospectus used in
      connection therewith as may be necessary to keep such Registration Statement
      effective until such Registration Statement has been effective for a period
      of one (1) year, and comply with the provisions of the Securities Act with
      respect to the disposition of all of the Registrable Securities covered
      by such Registration 


 










	 	 	Statement in accordance with the Subscriber's
      intended method of disposition set forth in such Registration Statement
      for such period; 
	 	 	 
	 	(b) 	furnish to the Subscriber, at the Company's
      expense, such number of copies of the Registration Statement and the prospectus
      included therein (including each preliminary prospectus) as such persons
      reasonably may request in order to facilitate the public sale or their disposition
      of the securities covered by such Registration Statement; and 
	 	 	 
	 	(c) 	immediately notify the Subscribe when a prospectus
      relating thereto is required to be delivered under the Securities Act, of
      the happening of any event of which the Company has knowledge as a result
      of which the prospectus contained in such Registration Statement, as then
      in effect, includes an untrue statement of a material fact or omits to state
      a material fact required to be stated therein or necessary to make the statements
      therein not misleading in light of the circumstances then existing. 
	 	 	 
	 	 	 
	 	 	 




7.3 In connection with each Registration Statement described in this Section 7,
the Subscriber will furnish to the Company in writing such information and representation
letters with respect to itself and the proposed distribution by it as reasonably
shall be necessary in order to assure compliance with federal and applicable state
securities laws. 



8. LEGENDING AND REGISTRATION OF SUBJECT SHARES 



8.1 The Subscriber hereby acknowledges that a legend may be placed on the certificates
representing any of the Securities to the effect that the Securities represented
by such certificates are subject to a hold period and may not be traded until
the expiry of such hold period except as permitted by applicable securities legislation.




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 Subscription Agreement. 



9. COLLECTION OF PERSONAL INFORMATION 



9.1 The Subscriber acknowledges and consents to the fact that the Company is collecting
the Subscriber's personal information for the purpose of fulfilling this Subscription
Agreement and completing the Offering. The Subscriber's personal information (and,
if applicable, the personal information of those on whose behalf the Subscriber
is contracting hereunder) may be disclosed by the Company to (a) stock exchanges
or securities regulatory authorities, (b) the Company's registrar and transfer
agent, (c) regulatory authorities and (d) any of the other parties involved in
the Offering, including legal counsel, and may be included in record books in
connection with the Offering. By executing this Subscription Agreement, the Subscriber
is deemed to be consenting to the foregoing collection, use and disclosure of
the Subscriber's personal information (and, if applicable, the personal information
of those on whose behalf the Subscriber is contracting hereunder) and to the retention
of such personal information for as long as permitted or required by law or business
practice. Notwithstanding that the Subscriber may be purchasing Securities as
agent on behalf of an undisclosed principal, the Subscriber agrees to provide,
on request, particulars as to the identity of such undisclosed principal as may
be required by the Company in order to comply with the foregoing. 



10. COSTS 



10.1 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 purchase of the Securities shall be
borne by the Subscriber. 



11. GOVERNING LAW 










11.1 This Subscription Agreement is governed by the laws of the
State of California and the federal laws applicable therein. 



12. SURVIVAL 



12.1 This Subscription 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 purchase of the Securities by the Subscriber pursuant hereto. 



13. ASSIGNMENT 



13.1 This Subscription Agreement is not transferable or assignable. 



14. EXECUTION 



14.1 The Company shall be entitled to rely on delivery by facsimile machine of
an executed copy of this Subscription Agreement and acceptance by the Company
of such facsimile copy shall be equally effective to create a valid and binding
agreement between the Subscriber and the Company in accordance with the terms
hereof.



15. SEVERABILITY 



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



16. ENTIRE AGREEMENT 



16.1 Except as expressly provided in this Subscription Agreement and in the agreements,
instruments and other documents contemplated or provided for herein, this Subscription
Agreement contains the entire agreement between the parties with respect to the
sale 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. 



17. NOTICES 



17.1 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 it at the respective addresses set forth in this Subscription Agreement and
the signature pages hereto. 



18. COUNTERPARTS 



18.1 This Subscription 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. 



 












IN WITNESS WHEREOF the Subscriber has duly executed this Subscription Agreement
as of the date of acceptance by the Company.




	 	___________________________________

      (Name of Subscriber - Please type or print) 
	 	 
	 	___________________________________

      (Signature
      and, if applicable, Office) 
	 	 
	 	___________________________________

      (Address
      of Subscriber) 
	 	 
	 	___________________________________

      (City, State
      or Province, Postal Code of Subscriber)
	 	 
	 	___________________________________

      (Country
      of Subscriber) 
	 	 
	 	 




Please send original by courrier to: 



Greenberg Traurig, LLP 



Attention: Raymond A. Lee 



Center Tower, 



650 Town Center Drive, 



Suite 1700, 



Costa Mesa, CA 92626 



USA 



Tel: 714.708.6500 





With a fax copy to 



Fax: +1.714.708.6501 AND +44.207.681.17.52 








A C E P T A N C E 



The above-mentioned Subscription Agreement in respect of the Shares for purchase
and the issuance of Warrants to _______________________ is hereby accepted by
REOSTAR ENERGY CORPORATION (or its successor entity). 



Dated the ____ day of ___________________, 2007, at _________________________.




REOSTAR ENERGY CORPORATION 



By: _________________________



Name: Mark S. Zouvas 



Title: Chief Executive Officer 












SCHEDULE A 

  

  TRUST FUNDS (USD)

  

  

  INSTRUCTIONS FOR WIRING FUNDS TO GREENBERG TRAURIG, LLP 

  

  Wire Instructions 

  

  CitiBank Wire Transfer Instructions



Domestic 




	 	Citibank FSB 

      201 S. Biscayne Blvd., Suite 3100 

      Miami, Florida 33131 USA 
	 	 
	For credit to the account of: 	Greenberg Traurig 
	ABA routing number 	266086554 
	Account # 	3200175071 
	Reference: 	Client/Matter #36349.010100 
	 	ReoStar Energy Corporation Private Placement
      






International 




	  	Citibank FSB 

      201 S. Biscayne Blvd., Suite 3100 

      Miami, Florida 33131 USA 
	 	 
	For credit to the account of:  	Greenberg Traurig 
	International Swift code 	CITIUS33
	US ABA number 	266086554 
	Account 	# 3200175071
	Reference: 	Client/Matter #36349.010100 
	 	ReoStar Energy Corporation Private Placement