EMPLOYMENT AGREEMENT



 





EXHIBIT 10.1



EMPLOYMENT AGREEMENT




     EMPLOYMENT AGREEMENT (this “Agreement”), dated effective as of
January 1, 2004, by and between Warren Resources, Inc., a New York corporation
(the “Company”), and Ellis G. Vickers (the “Employee”). This Agreement shall
supercede and replace the prior Employment Agreement dated September 1, 2001
between the Company and the Employee.



WITNESSETH:




     WHEREAS, the Company desires to employ the Employee upon the terms
and conditions set forth in this Agreement; and



     WHEREAS, the Employee desires to accept an offer of employment with
the Company upon the terms and conditions set forth herein;



     NOW, THEREFORE, in consideration of the premises and the respective
covenants and agreements of the parties herein contained, and intending to be
legally bound hereby, the parties hereto agree as follows:



     1. EMPLOYMENT. The Company hereby agrees to employ the Employee, and
the Employee hereby agrees to serve the Company, on the terms and conditions
hereinafter set forth in this Agreement.



     2. TERM. This Agreement, and the employment of the Employee by the
Company hereunder, will commence on the date hereof (the “Effective Date”) and
terminate on December 31, 2004 (the “Initial Term”), subject to termination as
set forth herein (the “Employment Period”). As used herein, the term “Employment
Year” shall mean each consecutive twelve (12) month period during the Employment
Period commencing on the Effective Date. Effective on the first anniversary of
the Effective Date, this Agreement shall be automatically extended indefinitely
until the Company or the Employee shall give ninety (90) days prior written
notice to the other party that it or he, as the case may be, in its or his sole
discretion, wishes to terminate this Agreement.



     3. POSITION AND DUTIES. Subject to the provisions of this Section 3,
during the Employment Period, the Employee shall serve as the Senior Vice
President and Associate General Counsel of the Company and Senior Vice President
and General Counsel of Warren E&P, Inc. The Employee shall faithfully perform
the duties and responsibilities normally associated with such positions, subject
to the oversight and direction of the Chief Executive Officer of the Company and
the Board of Directors of the Company.



 









 





     4. PLACE OF EMPLOYMENT. Generally, the Employee will fulfill all
duties and responsibilities to the Company as set forth herein from the office
of Warren Resources, Inc., located at 105 West 3rd Street, Suite 302, Roswell,
New Mexico 88201.



     5. BEST EFFORTS. The Employee shall devote his best efforts and all
of his business time exclusively to the performance of his duties and
responsibilities as set forth in this Agreement, which duties and
responsibilities shall be performed competently, carefully and faithfully.
Except as provided below, the Employee shall not, while an employee of the
Company and without the prior written consent of the Company, engage in any
other gainful occupation or activity which conflicts with or impinges upon the
full and faithful performance of the Employee’s duties, or otherwise violates
any other term or provision of this Agreement.



     6. THE EMPLOYEE’S COMPENSATION.



          (a) SALARY. During the Employment Period, for the services
described herein the Company shall pay to the Employee an annual base salary of
$218,905.00 (as adjusted pursuant to the terms hereof, the “Base Compensation”).
The Base Compensation shall be increased on each anniversary date of this
Agreement by any increases in the cost of living based on the changes in the
“Consumer Price Index” as published from time to time by the U.S. Department of
Commerce for the area of Roswell, New Mexico metropolitan area or Albuquerque,
New Mexico metropolitan area, whichever is applicable. The Base Compensation
will be paid to the Employee in accordance with the normal payroll practices of
the Company in effect from time to time, less all required withholdings for
benefits, federal, state and local taxes, if any. The amount of the Base
Compensation may, in the Company’s discretion, be increased by the Company on an
annual basis during the Employment Period. All increases to the Base
Compensation, if any, shall be based on the condition of the Company’s business
and results of operations and the Company’s evaluation of the Employee’s
individual performance for the relevant period. Any increases made to the Base
Compensation shall be in the discretion of the Company.



          (b) INCENTIVE BONUS COMPENSATION. In addition to the Base
Compensation to which the Employee is entitled under Section 6(a), the Employee
shall be eligible to be awarded incentive bonus compensation (the “Bonus
Compensation”) with respect to each calendar year or portion thereof during
which the Employee was employed by the Company hereunder equal to up to and
including 100% of the Employee’s Base Compensation. The criteria for determining
the amount of the Bonus Compensation shall be determined by mutual agreement
between the Employee and the Chief Executive Officer of the Company and shall by
approved by the Compensation Committee of the Board of Directors. Incentive
Bonus Compensation shall be paid within 90 days following the end of the
calendar year.



          (c) OPTIONS. Employee shall be entitled to participate in the
Company’s Equity Incentive Plan (the “Equity Incentive Plan”), and will be
awarded 20,000 options thereunder, exercisable at the price of $7.00 per share
of common stock for a period ending five years after the date of grant of the
option (the “Options”). The grant



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of such Options shall be documented with a formal award letter from the Company
to the Employee setting forth the terms and conditions of Employee’s Options.



     7. THE EMPLOYEE’S BENEFITS. As an employee of the Company, the
Employee shall be entitled to receive and enjoy the following benefits during
the Employment Period:



          (a) PARTICIPATION IN COMPANY BENEFIT PLANS. The Employee shall
be entitled to participate in and to receive benefits generally available to
senior executives under those certain employee benefit plans and arrangements
which may be offered by the Company from time to time during the Employment
Period, subject to and on a basis consistent with the terms, conditions and
overall administration of such plans and arrangements by the Company. The
Company shall provide full medical, hospitalization and dental insurance
coverage for the Employee.



          (b) VACATIONS. The Employee shall be entitled to four (4)
weeks of paid vacation per Employment Year, provided that any vacations are to
be taken at times mutually agreeable to the Company and the Employee. In
addition to the foregoing, the Employee shall be entitled to receive all paid
holidays given by the Company to its employees generally. If Employee has not
used his accrued but unused vacation days during an Employment Year, such days
may not be carried over to another and shall be deemed waived by the Employee.
Any accrued but unused vacation days in an Employment Year shall be reimbursed
in cash to Employee upon a termination of his employment Without Cause
hereunder.



          (c) BUSINESS EXPENSE REIMBURSEMENT. The Company shall promptly
reimburse or pay the Employee for all reasonable and necessary business expenses
paid or incurred by the Employee in performing his duties and responsibilities
hereunder; provided, that, the Employee shall have (i) submitted such reasonable
documentation as may be requested by the Company in accordance with the
reimbursement policies of the Company in effect from time to time and (ii)
obtained the prior approval of the Company for all charges in excess of $5,000.



          (d) LIFE INSURANCE. The Company shall provide term life
insurance in the amount of $500,000 on the life of Employee, with Employee’s
spouse, or other Employee designee, as the named beneficiary.



     8. TERMINATION OF EMPLOYMENT. The Employee’s employment with the
Company may be terminated as follows:



          (a) WITH CAUSE. The Employee’s employment with the Company may
be terminated by the Company at any time for “Cause.” As used herein, the term
“Cause” shall refer to the following: (i) theft, fraud, dishonesty, gross
negligence or willful malfeasance by the Employee in connection with the
performance of his duties hereunder (collectively, “Theft Events”); (ii) a
material breach or failure to fulfill and perform the Employee’s duties
hereunder, which breach or failure is not cured to the reasonable satisfaction
of the Company within forty-five (45) days after written demand



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from the Company (if such breach is at all curable during such time in the
reasonable determination of the Company; failing such determination, “Cause”
shall have occurred upon the occurrence of such breach or failure); (iii)
conviction of a felony or a crime involving moral turpitude; (iv) habitual
neglect of duties or misconduct in the performance of the Employee’s duties and
responsibilities hereunder following an initial notice of warning from the
Company with respect thereto; or (v) a repeated or ongoing failure to comply
with the reasonable directions and instructions of management of the Company in
connection with the performance of the Employee’s duties and responsibilities
hereunder following an initial notice of warning from the Company with respect
thereto. Upon termination for Cause, all rights of the Employee under this
Agreement shall immediately terminate and the Company shall have no further
obligations. A termination of the Employee’s employment with the Company by the
Employee upon his voluntary resignation or voluntary retirement shall be treated
as a termination for Cause hereunder. In connection therewith, the Employee
covenants and agrees not to voluntarily resign or voluntarily retire without
providing the Company with ninety (90) days’ prior written notice. Upon a
termination for Cause, Employee shall receive in full satisfaction of all
amounts due to him an amount equal to the remainder of Base Compensation through
date of termination. Notwithstanding any of the foregoing, in the event that the
Company has terminated Employee’s employment on account of a Theft Event, the
Company shall be entitled to withhold from any amounts otherwise due to Employee
under this Subsection 8(a) the amount of monetary damages incurred by the
Company from such Theft Event which shall be quantified and determined in
writing by the Company within 90 days after the date of termination. The
Employee agrees that his eligibility to receive any and all amounts described in
this Section 8(a) shall be subject to and contingent upon the Employee’s
execution of a full and complete general release in favor of the Company and its
affiliated persons and entities, satisfactory to the Company in its sole
discretion.



          (b) WITHOUT CAUSE. The Employee’s employment with the Company
may be terminated by the Company at any time without Cause, but in the event of
any such termination pursuant to this Section 8(b), the Company will pay, in
addition to any other amounts due hereunder, the Employee severance pay in an
amount equal to the greater of (i) the balance of all of Employee’s remaining
and unpaid Base Compensation due for the balance of the then existing term
hereunder, or (ii) 90 days of Base Compensation, payable upon execution and
delivery of the release described below, less all required withholdings and in
accordance with then current payroll practices of the Company and applicable law
or regulation. In addition, Employee shall receive any accrued but unpaid
vacation time for the current Employment Year. The Employee agrees that his
eligibility to receive any and all amounts described in this Section 8(b) shall
be subject to and contingent upon the Employee’s execution of a full and
complete general release in favor of the Company and its affiliated persons and
entities, satisfactory to the Company in its sole discretion.



          (c) TERMINATION FOR DEATH OR DISABILITY. The Employee’s
employment hereunder shall terminate immediately upon the Employee’s death or
Disability. For purposes of the preceding sentence, the term “Disability” shall
mean the Employee’s inability, by reason of physical or mental incapacity
(determined by a licensed physician reasonably acceptable to the Employee and
the Company), to perform the



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essential functions of his job, with or without a reasonable accommodation by
the Company, for an aggregate of ninety (90) days during any twelve (12) month
period, provided further that during any such continuous period, the Employee’s
Base Compensation payable under Section 6(a) shall be reduced by the amount, if
any, of payments to the Employee under any short-term or long-term disability
insurance policy, plan or program maintained by the Company. During any period
when the Employee implicitly or explicitly purports to be unable to perform his
duties hereunder by reason of physical or mental illness, incapacity or
disability, the Employee, at the request and expense of Company, shall submit to
one or more examinations by a physician of the Company’s choice. A termination
of the Employee’s employment with the Company due to any of the foregoing
provisions of this Section 8(c) shall be treated as a termination without Cause
hereunder.



          (d) TERMINATION BY EMPLOYEE FOR GOOD REASON. Employee shall
have the right to terminate this Agreement for “Good Reason”. The following
events affecting Employee shall constitute “Good Reason” within the meaning of
this Agreement: (i) if Employee, at any time during the Employment Period
(except during a period of Disability), has suffered a material change or
diminution in duties and responsibilities from those contemplated herein, or
(ii) if there is a Change of Control Event, as defined below.



     For purposes of this Employment Agreement, a “Change of Control”
shall mean the happening of any of the following:



          (i) the acquisition by any person or group deemed a person under
Sections 3(a)(9) and 13(d)(3) of the Securities Exchange Act of 1934 (the
“Exchange Act”) (other than the Company and its subsidiaries as determined
immediately prior to that date) of beneficial ownership, directly or indirectly
(with beneficial ownership determined as provided in Rule 13d-3, or any
successor rule, under the Exchange Act), of a majority of the total combined
voting power of all classes of stock of the Company having the right under
ordinary circumstances to vote at an election of the Board of Directors of the
Company, if such person or group deemed a person was not a beneficial owner of
at least five percent (5%) of such total combined voting power of the Company on
the date of this Agreement;



          (ii) the election to the Board of Directors of the Company of
members as a result of which a majority of the Board of Directors shall consist
of persons who are not members of the Board of Directors as of the Effective
Date, except in the event that such slate of Directors is proposed by the
management of the Company;



          (iii) the date of approval by the stockholders of the Company of
an agreement providing for the merger or consolidation of the Company with
another corporation or other entity where (x) stockholders of the Company
immediately prior to such merger or consolidation would not beneficially own
following such merger or consolidation shares entitling such stockholders to 50%
or more of all votes (without consolidation of the rights of any class of stock
to elect directors by a separate class vote) to which all stockholders of the
surviving corporation would be entitled in the election of directors, or (y)
where the members of the Board of Directors, immediately prior to such



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merger or consolidation, would not, immediately after such merger or
consolidation, constitute a majority of the board of directors of the surviving
corporation; or



          (iv) the sale of all or substantially all of the assets of the
Company.



               (e) STATUS UPON TERMINATION. The termination of this
Agreement, and the Employee’s employment hereunder, for any reason whatsoever
shall constitute the Employee’s effective termination and resignation from any
other positions or duties with the Company and all of its affiliates.



               (f) EFFECT OF TERMINATION.




               (i) In the event of a termination of the Employee’s
employment with the Company hereunder for any reason, in addition and
subject to the provisions of Sections 8(a), 8(b), 8(c) and 8(d), the
Employee shall be entitled to receive all Base Compensation and accrued
benefits owing through the date of termination in accordance with the
Company’s normal practices then in effect.




               (ii) In the event of a termination of the Employee’s
employment without Cause pursuant to Sections 8(b), 8(c) or 8(d) above,
the Company shall also pay the Employee severance compensation in
accordance with Section 8(b) above. Furthermore, if the Employee is
terminated without Cause, or the employment ceases under Section 8(c) or
8(d), all unvested options granted to the Employee pursuant to the Equity
Incentive Plan shall become fully vested and be kept in effect for 90 days
following the Employee’s termination of employment.




               (iii) In the event of a termination of the Employee’s
employment with the Company hereunder for Cause pursuant to Section 8(a)
above, all rights of the Employee under this Agreement shall immediately
terminate and the Company shall have no further obligations hereunder,
subject to Section 8(f)(i) above and this provision. Furthermore, if the
Employee is terminated for Cause, all unvested options granted to the
Employee pursuant to the Equity Inventive Plan shall terminate.



          9. NONCOMPETITION AND CONFIDENTIALITY.



               (a) NONCOMPETITION. During the Employment Period and, in the
case of a termination of the Employee’s employment for Cause, for a period of
six (6) months following the date of termination of employment, or, in the case
of a termination of the Employee’s employment without Cause, for a period of one
day following the date of termination of employment (the “Covered Period”), the
Employee agrees not to engage in any Competitive Activity within the States of
New York, California, New Mexico, Texas and Wyoming. As used herein, the term
“Competitive Activity” shall mean the following: (i) providing competitive
services, other than on behalf of the Company, to any Customer (as defined
below); (ii) serving as an officer, director, employee, consultant, advisor,
agent



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or representative of, or otherwise associating in any other capacity with, any
person, corporation, partnership, limited liability company, sole
proprietorship, association or other business enterprise, other than the
Company, engaged in the business of oil and gas exploration, drilling and
production or any other business in which the Company is engaged (each, a
“Competitive Enterprise”), or engaging individually in any Competitive
Enterprise; (iii) owning or acquiring, directly or indirectly, any interest in
any Competitive Enterprise (provided, however, the Employee shall be allowed to
passively own for investment purposes, directly or indirectly, no more than ten
percent (10%) of the issued and outstanding publicly traded securities of any
issuer engaged in a Competitive Enterprise); (iv) soliciting or inducing any
partner, stockholder, member, principal, director, officer, employee,
consultant, agent or other representative of the Company or one or more
affiliates to leave the employ or retention of the Company or such affiliate or
hiring away any of the foregoing persons; and/or (v) encouraging, requesting or
advising, explicitly or implicitly, any Customer or supplier of the Company or
one or more of its affiliates to withdraw, curtail or cancel its business
relationships with the Company or any affiliate thereof (unless expressly
requested to do so by the Company as part of the Employee’s employment services
provided hereunder).



     As used in this Section 9, the term “Customer” shall include any
person who is or was a customer of the Company or an affiliate thereof at any
time during the period commencing with the Employment Period through the end of
the Covered Period.



          (b) CONFIDENTIALITY. During the Employment Period and for a
period of three (3) years thereafter, the Employee shall not, except as may
otherwise be required by law, directly or indirectly disclose to any person or
entity, or use or cause to be used in any manner adverse to the interests of the
Company or any affiliate thereof, any Confidential Information (as defined below
in this Section 9(b)). The Employee agrees that, upon the termination of his
employment with the Company for any reason, all Confidential Information (other
than a copy of this Agreement and any other agreements that have been personally
executed by the Employee other than in his capacity as an officer of the
Company) and duplicates thereof in the possession or control of the Employee, in
any form or format, including, without limitation, written, visual, audio,
electronic or magnetic formats, shall forthwith be returned to the Company and
shall not be retained by the Employee or furnished or communicated to any third
party in any form whatsoever.



     As used in this Section 9(b), the term “Confidential Information”
shall mean the following: (i) information disclosed to the Employee or known by
the Employee as a consequence of the Employee’s relationship with the Company or
any Affiliate thereof, as defined below, not generally known in the Company’s
business, about the Company’s or an Affiliate’s employees, customers, directors,
officers, partners, shareholders, advertising methods, public relations methods,
business plans, operations, methods, processes and forecasts, vendors, finances,
trade marks, trade secrets, source code, patent applications, manuals, designs,
technical specifications and other intellectual property; (ii) information
disclosed to the Employee or known by the Employee as a consequence of the
Employee’s relationship with the Company or any Affiliate thereof, not generally
known in the businesses in which the customers of the Company or its affiliates
are or may be engaged, about the products, processes, operations, trade
information and services of any such



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customer; or (iii) information disclosed to the Employee by the Company or any
of its affiliate which is marked as “confidential” or, if communicated verbally,
is followed up by written correspondence designating such information as
“confidential.” Affiliate shall mean any person or entity that directly, or
indirectly, through one or more intermediaries, controls, or is controlled by,
or is under common control with, the Company.



          (c) SEVERABILITY. The invalidity or nonenforceability of any
provision of this Section 9 in any respect shall not affect the validity or
enforceability of the other provisions of this Section 9 in any other respect,
or of any other provision of this Agreement. In the event that any provision of
this Section 9 shall be held invalid or unenforceable by a court of competent
jurisdiction by reason of the geographic or business scope or the duration
thereof or for any other reason, such invalidity or unenforceability shall
attach only to the particular aspects of such provision found invalid or
unenforceable as applied and shall not affect or render invalid or unenforceable
any other provision of this Section 9 or the enforcement of such provision in
other circumstances, and this Section 9 shall be construed as if the geographic
or business scope or the duration of such provision or other basis on which such
provision has been challenged had been more narrowly drafted so as not to be
invalid or unenforceable.



     10. BUSINESS OPPORTUNITIES. During the Employment Period, the
Employee agrees to bring all business opportunities to the Company relating to
or otherwise associated with the business or businesses then conducted by the
Company or each affiliate thereof, or business or businesses proposed to be
conducted by the Company.



     11. RIGHTS TO WORK PRODUCT. The Employee agrees that all work
performed by the Employee pursuant hereto shall be the sole and exclusive
property of the Company, in whatever stage of development or completion. With
respect to any copyrightable works prepared in whole or in part by the Employee
pursuant to this Agreement, including compilations of lists or data, the
Employee agrees that all such works will be prepared as “work-for-hire” within
the meaning of the Copyright Act of 1976, as amended (the “Act”), of which the
Company shall be considered the “author” within the meaning of the Act. In the
event (and to the extent) that such works or any part or element thereof is
found as a matter of law not to be a “work-for-hire” within the meaning of the
Act, the Employee hereby assigns to the Company the sole and exclusive right,
title and interest in and to all such works, and all copies of any of them,
without further consideration, and agrees, to the extent reasonable under the
circumstances, to cooperate with the Company to register, and from time to time
to enforce, all patents, copyrights and other rights and protections relating to
such works in any and all countries. To that end, the Employee agrees to execute
and deliver all documents requested by the Company in connection therewith, and
the Employee hereby irrevocably designates and appoints the Company as the
Employee’s agent and attorney-in-fact to act for and on behalf of the Employee
and in the Employee’s stead to execute, register and file any such applications,
and to do all other lawfully permitted acts to further the registration,
protection and issuance of patents, copyrights or similar protections with the
same legal force and effect as if executed by the Employee. The Company shall
reimburse the Employee for all reasonable costs and expenses incurred by the
Employee pursuant to this Section 11.



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     12. NO DISPARAGING STATEMENTS. During the Term of employment and for
one (1) year after termination of this Agreement for any reason whatsoever, the
Employee and the Company agree to refrain from making any disparaging
statements, either orally or in writing, about the other party (and, on the part
of the Employee, about any affiliate of the Company, or any directors, officers,
shareholders, employees, agents or other representatives of the Company or any
affiliate thereof).



     13. SURVIVAL. The provisions of Sections 8(b), 8(c), 8(d), 8(f), 9,
11, 12, 14, 15, 16 and 17 hereof shall survive the termination of this Agreement
for the applicable time period necessary to fully effectuate the provisions of
such sections.



     14. COMPLIANCE WITH OTHER AGREEMENTS. The Employee and the Company
each hereby represent and warrant to the other that the execution and delivery
of this Agreement and the performance of such party’s obligations hereunder will
not, with or without the giving of notice and/or the passage of time, (i)
violate any judgment, writ, injunction or order of any court, arbitrator or
governmental agency applicable to such party, or (ii) conflict with, result in
the breach of any provision of or the termination of, or constitute a default
under, any agreement to which such party is a party or by which such party is or
may be bound. The parties agree to indemnify and hold harmless each other from
any liability, judgment or claim incurred, entered or made against such party
based on its reliance on the representations and warranties made in this Section
14, including all costs and expenses and attorney’s fees incurred or paid by
such party in connection with the foregoing.



     15. INJUNCTIVE RELIEF. The Employee acknowledges and agrees that the
Company and its affiliates are engaged in a highly competitive business and that
the protections of the Company and each such affiliate set forth in Sections 9,
10 and 11 of this Agreement are fair and reasonable and are of vital concern to
the Company and its affiliates. Further, the Employee acknowledges and agrees
that monetary damages for any violation of such Sections will not adequately
compensate the Company and its affiliates with respect to any such violation.
Therefore, in the event of a breach by the Employee of any of the terms and
provisions contained in Sections 9, 10 or 11 hereof, the Company shall be
entitled to institute legal proceedings to enforce the specific performance of
this Agreement by the Employee and to enjoin the Employee from any further
violations. The remedies available to the Company pursuant to this Section 15
may be exercised cumulatively by the Company in conjunction with all other
rights and remedies provided by law.



     16. ARBITRATION OF DISPUTES. If any dispute shall arise between the
Employee and the Company in connection with this Agreement, and such dispute
cannot be resolved amicably by the parties, the same shall be conclusively and
finally resolved by binding arbitration. Any party hereto may commence an
arbitration proceeding by providing written notice to the other party requesting
the arbitration of an unresolved dispute. Each such dispute, if any, shall be
submitted to an arbitrator acceptable to both parties. If either the Employee or
the Company refuses or neglects to agree to appoint an arbitrator within thirty
(30) days after receipt of written notice from the other party requesting the
other party to do so, the American Arbitration Association may appoint such



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arbitrator. The arbitrator shall be experienced in the subject matter of the
dispute. Except as otherwise specifically set forth herein, the arbitrators
shall conduct the arbitration in accordance with the Commercial Arbitration
Rules of the American Arbitration Association. The decision in writing of the
arbitrator, when filed with the parties hereto, shall be final and binding on
both parties. Judgment may be entered upon the final decision of the arbitrator
in any court having jurisdiction. Such arbitration shall take place in New York,
New York.



     Notwithstanding anything to the contrary contained in this Section
16, nothing shall prohibit the Company or Employee from pursuing all legal and
equitable remedies available to the Company or Employee in order to enforce the
provisions of Sections 9, 10 and 11 of this Agreement. To the extent that any
court action is permitted consistent with or to enforce this Agreement, the
parties hereby consent to the jurisdiction of the federal or state courts
sitting in any state where the Company maintains an office. Accordingly, with
respect to any such court action, all of the parties hereto (a) submit to the
personal jurisdiction of such courts, (b) consent to service of process and (c)
waive any other requirement (whether imposed by statute, rule of court, or
otherwise) with respect to personal jurisdiction or service of process.



     17. AMENDMENT; WAIVER; DISCHARGE. No provision of this Agreement may
be amended, waived or discharged unless such amendment, waiver or discharge is
agreed to in writing and signed by the Employee and a duly authorized
representative of the Company. No waiver by either party hereto at any time of
any breach by the other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time.



     18. VALIDITY. The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.



     19. NOTICES. All notices, demands and other communications provided
for in this Agreement shall be in writing and shall be delivered by hand or sent
via fax transmission (with written fax confirmation) or mailed postage prepaid
or by registered, certified or express mail or reputable overnight courier
service, charges prepaid, and shall be deemed given when so delivered, if
delivered by hand, or upon receipt of reasonably adequate fax confirmation, if
faxed, or, if mailed, five (5) business days after mailing (or one (1) business
day in the case of express mail or overnight courier service), addressed as
follows:



	 	 	 
	

	 	If to the Employee:
	 
	 	 
	

	 	Ellis G. Vickers
	

	 	P.O. Box 1952
	

	 	Roswell, NM 88202-1952







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	 	If to the Company:
	 
	 	 
	

	 	Warren Resources, Inc.
	

	 	489 Fifth Avenue
	

	 	32nd Floor
	

	 	New York, NY 10016
	

	 	Attention: Chief Executive Officer
	

	 	(Fax): (212) 697-9466
	

	 	(Tel.): (212) 697-9660







or to such other address or person as any party may have furnished to the other
in writing in accordance herewith, except that notices of change of address
shall be effective only upon receipt.



     20. HEADINGS. All headings contained in this Agreement are for
reference purposes only and shall not in any way effect the meaning or
interpretation of any provision or provisions of this Agreement.



     21. ENTIRE AGREEMENT. This Agreement sets forth the entire agreement
of the parties hereto in respect of the subject matter contained herein and
supersedes all prior agreements, promises, covenants, understandings,
arrangements, communications, representations or warranties, whether oral or
written, by any party or representative of any party hereto.



     22. ASSIGNMENT AND TRANSFER. The Employee’s rights and obligations
under this Agreement shall not be transferable by assignment or otherwise, and
any purported assignment, transfer or delegation thereof shall be void. This
Agreement shall inure to the benefit of, and be binding upon and enforceable by,
any purchaser of substantially all of the Company’s assets, any corporate
successor to the Company or any assignee thereof.



     23. COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.



     24. GOVERNING LAW. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of New
York without regard to its conflicts of law principles.



     IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date and year first above written.



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	 	WARREN RESOURCES, INC.

 	 
	 	By:  	/s/ Norman F. Swanton
 	 
	 	 	Name:  	Norman F. Swanton 	 
	 	 	Title:  	Chief Executive Officer 	 
	 



	 	 	 	 	 
	 	 	 
	 	                                          /s/ Ellis G. Vickers
 	 
	 	Ellis G. Vickers 	 
	 	 	 
	 




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