REOSTAR ENERGY CORP - Exhibit 9.01






PURCHASE AND SALE AGREEMENT 

  

  

  Between 

  

  REOSTAR ENERGY CORP

  

  (Purchaser) 

  

  And 

  

  UNITED TEXAS PETROLEUM, INC 

  

  (Seller) 

  

  With respect to the 

  

  

  MONTAGUE, COOKE, AND WISE COUNTY PROPERTIES 

  

  

  

  

  

  

  

  

  Dated as of December 4, 2007











PURCHASE AND SALE AGREEMENT 



                     PURCHASE
AND SALE AGREEMENT, dated as of December 4, 2007 (the "Agreement"), by and among
ReoStar Energy Corp., a Nevada corporation ("REOS", or "Purchaser"), and United
Texas Petroleum, Inc., a Texas corporation, ("UTP", or "Seller"). REOS and UTP
are referred to herein each as a "Party" and collectively as the "Parties". 




W I T N E
  S S E T H : 





                     WHEREAS,
Seller is the owner of working interests in certain oil and gas wells and leases
located in Montague, Cooke, and Wise Counties, Texas, as set forth on Schedule
A attached hereto ("UTP Properties"). 



                     WHEREAS,
Seller desires to sell to Purchaser, and Purchaser desires to purchase from Seller,
the UTP Properties on the terms, subject to the conditions, and for the consideration
described herein. 



                     NOW,
THEREFORE, in consideration of the mutual promises made herein and of the mutual
benefits to be derived here from the Parties hereto agree as follows: 





ARTICLE 1            SALE
AND PURCHASE OF THE UTP PROPERTIES 



                     SECTION
1.01. Sale and Purchase of the UTP Properties. 



                     Subject
to the terms and conditions contained herein and in reliance upon the representations
and warranties contained herein, at the Closing provided for in Section 1.02 hereof,
Seller will sell to Purchaser the UTP Properties, and Purchaser will purchase
the UTP Properties, for the Consideration hereinafter defined in Article 2 and
any subsequent purchase as defined in Article 3.. 



                     SECTION
1.02. Effective Date. 



                     The
Effective Date of this Agreement shall be August 1, 2007. 



                     SECTION
1.03. Closing. 



                     Closing
of the purchase and sale of the UTP Properties ("Closing") will take place at
the offices of the Purchaser, or such other place as may be mutually acceptable,
simultaneously with the execution of this Agreement. 



                     SECTION
1.04. Delivery of the UTP Properties and Consideration. 



                     At
Closing, Seller shall deliver to Purchaser, against delivery of the Consideration
as provided in Article 2 hereof and subsequent deliveries of interests defined
in Article 3 hereof, good and marketable title to the UTP Properties free and
clear of any liens, charges, encumbrances, 






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imperfections of title, security interest, options or rights or
claims of others with respect thereto (collectively, "Encumbrances"), by delivering
to Purchaser assignments of interest for the UTP Properties. UTP shall not retain
any interest in the properties conveyed under the terms and conditions of this
Agreement. 





ARTICLE 2            CONSIDERATION




                     As
consideration for the sale of the UTP Properties (the "Consideration"), Purchaser
shall pay to Seller at Closing US$914,446.19 (nine hundred fourteen thousand,
four hundred forty-six dollars) via wire transfer to an account designated by
Seller in accordance with wire transfer instructions to provided by Seller. The
outstanding liabilities associated with these interests, also shown in Schedule
A hereto, will be forgiven by the operator of said interests, Rife Energy Operating,
an affiliate of the Purchaser. 





ARTICLE 3            UNTRANSFERED
INTERESTS AND OUTSTANDING LIABILITIES 



                     SECTION
3.01 Interest in Default Under JOA. 



                     Upon
the completion of the terms and conditions of this Agreement, the Seller will
still retain working interests in certain oil and gas wells and leases located
in Montague, Cooke, and Wise Counties, Texas, as set forth on Schedule B attached
hereto ("UTP Properties - Retained"). With respect to these working interests
and leases, should any of the interests identified in schedule B become in default
the Seller will make reasonable and ongoing efforts to transfer these interests
to the Purchaser under JOA Default Provisions. At no time will any subsequent
transfer or purchase of working interests, as detailed in Schedule B hereto, possess
a net revenue interest less than seventy-five percent (75%). 



                     SECTION
3.02 Interest to be Transferred Outside of Agreement. 



                     It
is also understood that a certain percentage of Working Interest investors under
UTP will transfer from UTP to Rife Energy Operating, Inc. with existing NRI. Furthermore,
any current or future liabilities either in the form of Joint Interest Billings
or AFE cash calls will need to have been satisfied prior to the transfer of said
interests. The current liabilities associated with these interests are also detailed
in Schedule B hereto. All existing ORRI will continue to be the property of UTP.






ARTICLE 4            REPRESENTATIONS
AND WARRANTIES OF SELLER TO PURCHASER 



                     Seller
hereby represents and warrant to Purchaser as of the Initial Closing Date as follows:




                     SECTION
4.01 Organization, Qualification and Corporate Power of UTP. 



                     UTP
is a company duly incorporated, validly existing and in good standing under the
laws of 






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Texas and is duly licensed or qualified to transact business as
a corporation, and is in good standing, in each jurisdiction in which the nature
of its business or the ownership of its properties makes such licensing or qualification
necessary and where the failure be so licensed or qualified would have a material
adverse effect on the business, operations, assets, financial condition, value
or prospects of UTP (a "Material Adverse Effect"). UTP has the corporate power
and authority to own, lease, or sell its properties and to carry on its business
as currently conducted. 



                     SECTION
4.02 Authorization of Agreement; No Conflicts. 



                     The
execution and delivery by Seller of this Agreement and the performance by Seller
of their obligations hereunder have been duly authorized by all requisite action
on the part of Seller and will not violate any provision of law, any order of
any court or other agency of government, the organizational document or by-laws
of Seller, or any provision of any indenture, agreement or other instrument to
which it is a party or by which it or any of its properties is bound or conflict
with, result in a breach of or constitute (with due notice or lapse of time or
both) a default under any such indenture, agreement or other instrument, or result
in the creation or imposition of any lien, charge or encumbrance of any nature
whatsoever upon any of the properties or assets of Seller. 



                     SECTION
4.03 Validity. 



                     This
Agreement and each other agreement entered into in connection herewith to which
Seller is a party have been duly executed and delivered by Seller and constitute
the legal, valid and binding obligation of Seller, enforceable in accordance with
their respective terms, except as the same may be limited by bankruptcy, insolvency,
reorganization or other laws affecting the enforcement of creditors' rights generally
now or hereafter in effect and subject to the application of equitable principles
and the availability of equitable remedies. 



                     SECTION
4.04 Consents and Approvals. 



                     No
registration or filing with, or consent or approval of, or other action by, any
Federal, state or other governmental agency or instrumentality or any other person
or entity is or will be necessary on the part of Seller for the valid execution,
delivery and performance by Seller of this Agreement and each other agreement
entered into in connection herewith to which Seller are a party. 



                     SECTION
4.05 Litigation & Indemnification. 



                     There
is no action, suit, investigation or proceeding pending, or to the knowledge of
Seller, threatened against or affecting UTP with regard to the UTP Properties
before any court or by or before any governmental body or arbitration board or
tribunal. The Seller agrees to hold the Purchaser harmless against any and all
actions, litigation, claims or any other type of potential encumbrance that have
occurred or may have occurred from the gross negligence of the seller prior to
the effective date of the Agreement. The Seller further agrees to indemnify the
Purchaser for any action, litigation, claim brought against the Purchaser arising
from Seller's gross negligence occurring prior to the effective date of this Agreement




                     SECTIONS
4.06 No Brokers. 



                     Seller
has not retained any broker or finder in connection with the transactions contemplated





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herein so as to give rise to any valid claim against Seller or
Purchaser for any brokerage or finder's commission, fee or similar compensation.




                     SECTION
4.07 Accuracy of Information. 



                     None
of the representations and warranties of Seller contained herein or in any Schedule
hereto contains any untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements herein and therein not misleading
in light of the circumstances in which made. 





ARTICLE 5            REPRESENTATIONS
AND WARRANTIES OF PURCHASER 



                     Purchaser
hereby represents and warrants to the Seller as of the date hereof and as of the
Closing Date as follows: 



                     SECTION
5.01 Organizations, Qualification and Corporate Power. 



                     Purchaser
is a corporation duly organized, validly existing and in good standing under the
laws of Nevada, and is duly licensed or qualified to transact business as a limited
liability company and, is in good standing, in each jurisdiction in which the
nature of its business or the ownership of its properties makes such licensing
or qualification necessary and where the failure to be so licensed or qualified
would have a material adverse effect on the business, operations, assets, results
of operation, financial condition, value or prospects of Purchaser. Purchaser
has the power and authority to own or lease its properties and to carry on its
business as currently conducted and to execute, deliver and perform this Agreement.




                     SECTION
5.02 Authorization of Agreement; No Conflicts. 



                     The
execution and delivery by Purchaser of this Agreement and the performance by Purchaser
of its obligations hereunder have been duly authorized by all requisite corporate
action on the part of Purchaser and will not violate any provision of law, any
order of any court or other agency of government, the organizational document
or by-laws of Purchaser, or any provision of any indenture, agreement or other
instrument to which it is a party or by which it or any of its properties is bound
or conflict with, result in a breach of or constitute (with due notice or lapse
of time or both) a default under any such indenture, agreement or other instrument,
or result in the creation or imposition of any lien, charge or encumbrance of
any nature whatsoever upon any of the properties of assets of Purchaser. 



                     SECTION
5.03 Validity. 



                     This
Agreement and each other agreement entered into in connection herewith to which
Purchaser is a party have been duly executed and delivered by Purchaser and constitute
the legal, valid and binding obligation of Purchaser, enforceable in accordance
with their respective terms, except as the same may be limited by bankruptcy,
insolvency, reorganization or other laws affecting the enforcement of creditors'
rights generally now or hereafter in effect and subject to the application of
equitable principles and the availability of equitable remedies. 




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                     SECTION
5.04 Consents and Approvals. 



                     No
registration or filing with, or consent or approval of, or other action by, any
Federal, state or other governmental agency or instrumentality or any other person
or entity is or will be necessary on the part of Purchaser for the valid execution,
delivery and performance by Purchaser of this Agreement and each other agreement
entered into in connection herewith to which Purchaser is a party. 



                     SECTION
5.05 Investment Representations. 



                     Purchaser
is acquiring the UTP Properties being purchased by it hereunder for the purpose
of investment. Purchaser has, with respect to its investment: (i) had an opportunity
to ask all questions of, and receive satisfactory answers from, Seller and the
officers of UTP, (ii) received and reviewed all information, including without
limitation relevant documents, contracts and other instruments, in the each case
deemed necessary or desirable by Purchaser, and (iii) as a result of the foregoing,
has satisfactorily performed its due diligence with respect to the UTP Properties
and such investment; provided the foregoing does not in any way relieve UTP of
its representations and warranties set forth in this Agreement and shall not limit
Purchaser's ability to rely thereon. 



                     SECTION
5.06 Litigation. 



                     There
is no action, suit, investigation or proceeding pending, or to the knowledge of
Purchaser, threatened against or affecting Purchaser before any court or by or
before any governmental body or arbitration board or tribunal which questions
the validity of this Agreement or which questions the validity of or seeks to
rescind or prevent the taking of action taken or to be taken in connection herewith
or the consummation of the transactions contemplated hereby. 



                     SECTIONS
5.07 No Brokers. 



                     Purchaser
has not retained any broker or finder in connection with the transactions contemplated
herein so as to give rise to any valid claim against Seller for any brokerage
or finder's commission, fee or similar compensation. 





ARTICLE 6            COVENANTS
OF SELLER 



                     At
Purchaser's request and without further consideration, Seller will execute and
deliver to Purchaser such other documents and take such other action as Purchaser
may reasonably request in order to consummate more effectively the transactions
contemplated hereby and to vest in Purchaser good and marketable title to the
UTP Properties. 





ARTICLE 7            COVENANTS
OF PURCHASER 



                     At
Seller' request, and without further consideration, Purchaser will execute and
deliver to Seller and take such other action as Seller may reasonably request
in order to consummate more effectively the transactions contemplated hereby.





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ARTICLE 8            FEES
AND EXPENSES 



                     Except
as otherwise provided herein, each of the Parties to this Agreement shall assume,
bear, and pay its own expenses in connection with the preparation, execution,
delivery and performance hereof.. 





ARTICLE 9            SURVIVAL
OF REPRESENTATIONS AND WARRANTIES 



                     The
representations and warranties set forth in Articles 3, 4 and 5 shall survive
the Closing hereunder and shall expire on the third anniversary of the Closing
Date. 





ARTICLE 10          MISCELLANEOUS




                     SECTION
10.01 Assignment; Successors. 



                     This
Agreement may be assigned by REOS to an affiliated company or designee in its
sole discretion and without the consent of UTP. 



                     SECTION
10.02 Amendments, Modification and Waivers. 



                     Neither
this Agreement nor any term hereof may be changed, waived, discharged or terminated
orally, but only by written consent signed by Purchaser and by Seller. 



                     SECTION
10.03 Notices. 



                     Any
notice, payment, demand or communication required or permitted to be given by
an provision of this Agreement will be in writing and will be deemed to have been
given when delivered personally or by facsimile to the party designated to receive
such notice, or on the date following the date sent by overnight courier, or on
the third (3rd) business day after the same is sent by certified mail, postage
and charges prepaid, directed to the following address or to such other or additional
addresses as any party might designate by written notice to the other party: 




	 	To Purchaser: 	ReoStar Energy Corp. 

      3880 Hulen St. 

      Fort Worth, TX 76107 

      Tel: 817-989-7367 

      Fax: 817-989-7368 

      Attn: Joe Bill Bennett 
	 	 	 







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	 	To Seller: 	United Texas Petroleum, Inc 

      13649 Montfort Dr. 

      Suite 200 

      Dallas, TX 75240 

      Tel: 972-732-6510 

      Fax: 972-732-6151 

      Attn: Gary Stapleton 






                     SECTION
10.04 Interpretations and Severance. 



                     Whenever
possible, each provision of this Agreement shall be interpreted in such manner
as to be effective and valid under applicable law but if any provision of this
Agreement is held to be prohibited by or invalid under applicable law, such provision
shall be ineffective only to the extent of such prohibition or invalidity without
invalidating the remainder of such provision or the remaining provisions of this
Agreement, unless the prohibited or invalid provision is a material provision
the omission of which would result in the frustration of the parties' economic
objectives. 



                     SECTION
10.05 Headings and Captions. 



                     The
headings and captions herein are for convenience only and cannot be used to construe
the text of the sectioned paragraphs in which they appear. References herein to
this Agreement include references to the exhibits and the schedules referred to
herein. 



                     SECTION
10.06 No Third-Party Reliance. 



                     No
third party is entitled to rely on any of the representations, warranties and
agreements of Purchaser and the Seller contained in this Agreement. Seller and
Purchaser assume no liability to any third party because of any reliance on the
representations, warranties and agreements of Seller and Purchaser contained in
this Agreement. 



                     SECTION
10.07 Supersedes Prior Agreements. 



                     This
Agreement supersedes any and all prior agreements or understandings, written or
oral, of Seller or Purchaser relating to the acquisition of the UTP Properties
by Purchaser and incorporates the entire understanding of the parties with respect
to the subject matter hereof. 



                     SECTION
10.08 Governing Law. 



                     This
Agreement shall be governed by, construed, interpreted and enforced in accordance
with the laws of the State of Texas without regard to its conflicts of law rules.




                     SECTION
10.09 Counterparts. 



                     Two
or more duplicate originals of the written instruments containing this Agreement
may be signed by the parties, each of which shall be an original but all of which
together shall constitute one and the same agreement, and all signatures need
not appear on any one counterpart. 



                     SECTION
10.10 Continuation of Joint Operating Agreement. 




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                     The
Joint Operating Agreement between Rife Energy Operating and UTP will remain in
effect for all properties referenced in Article 1 and Article 3 of this Purchase
and Sale Agreement. 





                     IN
WITNESS WHEREOF, the Parties hereto have duly executed this Agreement as of the
date first written above. 




	 	SELLER: 

      

      United Texas Petroleum, Inc. 

      A Texas corporation 

      

      

      By:  /s/ W. Gary Stapleton             

      Name: W. Gary Stapleton

      Title: President
	 	 
	 	 
	 	PURCHASER: 

      

      ReoStar Energy Corp. 

      A Corporation 

      

      

      By:  /s/ Joe Bill Bennett                  
      

      Name: Joe Bill Bennett 

      Title: Chief Operating Officer 
	 	 


 




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