**Exhibit4.1**

 

**CONTRIBUTIONAGREEMENT**

 

This **CONTRIBUTION AGREEMENT** (this “Agreement”) dated as of                    , 200  , by and between Warren Resources,Inc., a Delaware corporation (“Warren”), and [name of LLC], a Delaware limitedliability company (the “Company”) (Warren and the Company individually a“Party,” and collectively the “Parties”).

 

**W I T NE S S E T H**

 

**WHEREAS,** the Company was organized to bethe successor to [insert name of the limited partnership], a Delaware limitedpartnership (the “Partnership”); and

 

**WHEREAS**, the Company’s Amended and RestatedLimited Liability Agreement, dated                    , 200   (the “LLC Agreement”), provides fortwo classes of membership interests, one class being “Standard MembershipInterests” to be held by “Standard Members,” and the second class being“Preferred Membership Interests” to be held by “Preferred Members” (as thoseterms are defined in the LLC Agreement); and

 

**WHEREAS,**pursuant to a conversion under thelaws of the State of Delaware, Warren (the general partner of the Partnership)exchanged its general partnership interest in the Partnership for a StandardMembership Interest, thereby making a capital contribution to the Company andbecoming a Standard Member of the Company, and each limited partner of thePartnership exchanged its limited partnership interest in the Partnership foreither a Standard Membership Interest or a Preferred Membership Interest,thereby making a capital contribution to the Company and becoming a StandardMember of the Company or a Preferred Member of the Company, as the case may be;and

 

**WHEREAS,**pursuant to this Agreement, Warrenshall issue to the Company           shares of WarrenSeries A 8% Cumulative Convertible Preferred Stock (the “Preferred Stock”) asan additional capital contribution (the “Warren Additional CapitalContribution”) in exchange for an additional Standard Membership Interest inthe Company (the “Warren Additional Standard Membership Interest”);

 

**NOW, THEREFORE,** in consideration of thepremises and the mutual agreements herein and for other good and valuableconsideration, the receipt and adequacy of which are hereby acknowledged, theParties, intending to be legally bound by the terms hereof applicable to eachof them, hereby agree as follows:

 

**ARTICLE I**

 

**The Issuances by Warrenand the Company**

** **

SECTION 1.01. The Warren Additional CapitalContribution. Warren shall make the Warren Additional Capital Contributionby issuing to the Company the Preferred Stock, which Preferred Stock shall havea stated value of $12 per share, and a total value of$              ,and which total value shall be equal to the fair market value of all of thePreferred Membership Interests held by the Preferred Members.

 

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SECTION 1.02. The Warren Additional MembershipInterest. In exchange for the Warren Additional Capital Contribution, theCompany shall issue to Warren the Warren Additional Standard MembershipInterest.

 

SECTION 1.03.  Termsof the Preferred Stock. The Preferred Stock shall have the rights, preferences,terms and conditions in accordance with the Certificate of Designation attachedhereto as Exhibit A and made a part hereof.

 

**ARTICLEII**

 

**The Closing**

 

SECTION 2.01. The Closing. The closinghereunder (the “Closing”) shall take place at the offices of Warren, 489 FifthAvenue, New York, NY 10017.

 

SECTION 2.02. Transactions To Be Effected at theClosing. At the Closing, Warren shall deliver to the Company a certificatefor the Preferred Stock registered in the name of the Company, and the Companyshall deliver to Warren a certificate for the Warren Additional StandardMembership Interest registered in the name of Warren.

 

**ARTICLEIII**

 

**Representations and Warranties ofWarren**

 

Warren hereby represents and warrants to the Companyas of the date of this Agreement, as follows:

 

SECTION 3.01 Experience. Warren is experiencedin evaluating companies such as the Company, is able to fend for itself intransactions such as the one contemplated by this Agreement, has such knowledgeand experience in financial and business matters that it is capable ofevaluating the merits and risks of its prospective investment in the WarrenAdditional Standard Membership Interest, and has the ability to bear theeconomic risks of such investment.

 

SECTION 3.02 Nature of Investment. Warren isacquiring the Warren Additional Standard Membership Interest for investment forits own account and not with the view to, or for resale in connection with, anydistribution thereof. Warren understands that the Warren Additional StandardMembership Interest has not been registered under the Securities Act of 1933,as amended (the “Securities Act”), or any state securities law, by reason of aspecific exemption from the registration provisions of the Securities Act andthe state securities laws, respectively, which depends upon, among otherthings, the bona fide nature of the investment intent as expressed herein.Warren further represents that it does not have any contract, undertaking,agreement or arrangement with any person to sell, transfer or grantparticipation to any third person with respect to any part of the WarrenAdditional Standard Membership Interest. Warren understands and acknowledgesthat the offering of the Warren Additional Standard Membership Interestpursuant to this Agreement will not be registered under the Securities Act orunder the state securities laws on the ground that the sale provided for inthis Agreement and the issuance of securities hereunder is exempt from theregistration requirements of the Securities Act and any applicable statesecurities laws.

 

SECTION 3.03. Rule 144. Warren acknowledgesthat the Warren Additional Standard Membership Interest must be heldindefinitely unless subsequently registered under the Securities

 

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Act and any applicable state securities laws or an exemption from suchregistration is available and the transfer thereof is otherwise permitted underthe LLC Agreement. Warren is aware of the provisions of Rule 144 promulgatedunder the Securities Act that permit limited resale of shares purchased in aprivate placement subject to the satisfaction of certain conditions. Warrencovenants that, in the absence of an effective registration statement coveringthe Warren Additional Standard Membership Interest, Warren will sell, transfer,distribute or otherwise dispose of the Warren Additional Standard MembershipInterest only in a manner consistent with its representations and covenants setforth in this Section 3 and those set forth in the LLC Agreement. In connectiontherewith, Warren acknowledges that the Company will make a notation on itsbooks regarding the restrictions on transfer set forth in this Section 3 andwill transfer Warren Additional Standard Membership Interest on the books of Companyonly to the extent not inconsistent therewith.

 

SECTION 3.04. No Public Market. Warrenunderstands that no public market now exists for the Warren Additional StandardMembership Interest, and that there may never be a public market for the WarrenAdditional Standard Membership Interest.

 

SECTION 3.05. Accredited Investor. Warren is an“accredited investor” as defined in Rule 501 of Regulation D as promulgated bythe Securities and Exchange Commission under the Securities Act and shallsubmit to the Company such further assurances of such status as may bereasonably requested by the Company.

 

**ARTICLE IV**

 

**Representations and Warranties of theCompany**

 

The Company hereby represents and warrants to Warrenas of the date of this Agreement, as follows:

 

SECTION 4.01. Experience. The Company isexperienced in evaluating companies such as Warren, is able to fend for itselfin transactions such as the one contemplated by this Agreement, has suchknowledge and experience in financial and business matters that it is capableof evaluating the merits and risks of its prospective investment in thePreferred Stock, and has the ability to bear the economic risks of suchinvestment.

 

SECTION 4.02. Nature of Investment. The Companyis obtaining the Preferred Stock investment for its own account and not withthe view to, or for resale in connection with, any distribution thereof. TheCompany understands that the Preferred Stock has not been registered under theSecurities Act or any state securities law, by reason of a specific exemptionfrom the registration provisions of the Securities Act and the state securitieslaws, respectively, which depends upon, among other things, the bona fidenature of the investment intent as expressed herein. The Company furtherrepresents that it does not have any contract, undertaking, agreement orarrangement with any person to sell, transfer or grant participation to anythird person with respect to any part of the Preferred Stock. The Companyunderstands and acknowledges that the offering of the Preferred Stock pursuantto this Agreement will not be registered under the Securities Act or under thestate securities laws on the ground that the sale provided for in thisAgreement and the issuance of securities hereunder is exempt from the registrationrequirements of the Securities Act and any applicable state securities laws.

 

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SECTION 4.03. Investment Purposes.  The Company acknowledges its understandingthat the issuance of the Preferred Stock is intended to be exempt fromregistration under the Securities Act, and the rules and regulations in effectthereunder.  In furtherance thereof, theCompany has no intention of engaging in a public distribution of any of thePreferred Stock. The Company understands that no public market now exists forthe Preferred Stock, and that there may never be a public market for thePreferred Stock.

 

SECTION 4.04. Accredited Investor. The Companywas not formed for the specific purpose of making this investment in Warren andis an “accredited investor” as defined in Rule 501 of Regulation D aspromulgated by the Securities and Exchange Commission under the Securities Actand shall submit to Warren such further assurances of such status as may bereasonably requested by Warren.

 

SECTION 4.05. Restrictive Legend.  Each certificate representing the PreferredStock (and any common stock issuable upon conversion of the Preferred Stock)shall bear a legend substantially in the following form:

 

THE SECURITIES EVIDENCEDHEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED(THE “ACT”), OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD,TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION,UNLESS THE TRANSFEROR DELIVERS TO THE COMPANY AN OPINION OF COUNSELSATISFACTORY TO THE COMPANY, TO THE EFFECT THAT THE PROPOSED SALE, TRANSFER OROTHER DISPOSITION MAY BE EFFECTED WITHOUT REGISTRATION UNDER THE ACT ANDUNDER APPLICABLE STATE SECURITIES OR “BLUE SKY” LAWS.

 

ARTICLE V

 

**Covenants**

 

SECTION 5.01. Reasonable Best Efforts. EachParty shall, and shall cause its affiliates to, use its reasonable best efforts(at its own expense) to obtain, and to cooperate in obtaining, all consentsfrom third persons necessary or appropriate to permit the Warren AdditionalCapital Contribution to be completed.

 

SECTION 5.02.  Post-ClosingCooperation. The Parties shall cooperate with each other, and shall causetheir respective officers, employees, agents, auditors and representatives tocooperate with each other after the Closing, and each Party shall reimburse theother Party for reasonable out-of-pocket costs and expenses incurred inassisting such other Party pursuant to this Article V.

 

SECTION 5.03. Further Assurances. From time totime, as and when requested by any party,

 

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each Party shall execute and deliver, or cause to be executed anddelivered, all such documents and instruments and shall take, or cause to betaken, all such further or other actions (subject to Section 5.01 hereof), assuch other Party may reasonably deem necessary or desirable to consummate thetransactions contemplated by this Agreement, including, in the case of Warren,executing and delivering to the Company such assignments, deeds, bills of sale,consents and other instruments as the Company or its counsel may reasonablyrequest as necessary or desirable for such purpose.

 

**ARTICLEVI**

 

**General Provisions**

 

SECTION 6.01. Assignment. This Agreement andthe rights and obligations hereunder shall not be assignable or transferable byWarren or the Company without the prior written consent of the other Party;provided, however, that Warren may assign this Agreement and its rights andobligations hereunder to any entity controlling, controlled by or under commoncontrol with, Warren, or to any entity that acquires Warren by purchase ofstock or by merger or otherwise, or by acquiring all or substantially all ofWarren’s assets, provided that any such assignee succeeds to all of the rightsand is subject to all of the obligations of Warren under this Agreement. Anyattempted assignment in violation of this Section 6.01 shall be null and voidab initio.

 

SECTION 6.02. No Third-Party Beneficiaries.This Agreement is for the sole benefit of the Parties and their permittedassigns and nothing herein expressed or implied shall give or be construed togive to any person, other than the Parties and such assigns, any legal orequitable rights hereunder.

 

SECTION 6.03. Interpretation; Exhibits andSchedules; Certain Definitions. The headings contained in this Agreementand in any Exhibit or Schedule hereto are for reference purposes only and shallnot affect in any way the meaning or interpretation of this Agreement. AnyExhibits and Schedules annexed hereto or referred to herein are herebyincorporated in and made a part of this Agreement as if set forth in fullherein. Any capitalized terms used in any Exhibit or Schedule, but nototherwise defined therein, shall have the meaning as defined in this Agreement.When a reference is made in this Agreement to a Section, Exhibit or Schedule,such reference shall be to a Section of, or an Exhibit or Schedule to, thisAgreement unless otherwise indicated.

 

SECTION 6.04. Counterparts. This Agreement may beexecuted in one or more counterparts, all of which shall be considered one andthe same agreement, and shall become effective when one or more suchcounterparts have been signed by each Party and delivered to each of the otherParty.

 

SECTION 6.05. Entire Agreement. This Agreementand the LLC Agreement contain the entire agreement and understanding betweenthe Parties with respect to the subject matter hereof and supersede all prioragreements and understandings relating to such subject matter. Neither Partyshall be liable or bound to any other party in any manner by anyrepresentations, warranties or covenants relating to such subject matter exceptas specifically set forth herein or in the LLC Agreement.

 

SECTION 6.06. Severability. If any provision ofthis Agreement (or any portion thereof) or the application of any suchprovision (or any portion thereof) to any person or circumstance shall be heldinvalid, illegal or unenforceable in any respect by a court of competentjurisdiction, such invalidity, illegality or unenforceability shall not affectany other provision hereof (or the remaining portion thereof) or theapplication of such provision to any other persons or circumstances.

 

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SECTION 6.07. Amendments and Waivers. ThisAgreement may not be amended except by an instrument in writing signed onbehalf of each Party. By an instrument in writing, either Party may waivecompliance by the other Party with any term or provision of this Agreement thatsuch other Party was or is obligated to comply with or perform.

 

SECTION 6.08. Consent to Jurisdiction. EachParty irrevocably submits to the exclusive jurisdiction of the Supreme Court ofthe State of New York, New York County, and the United States District Courtfor the Southern District of New York, for the purposes of any suit, action orother proceeding arising out of this Agreement, or any transaction contemplatedhereby or thereby. Each Party may commence any such action, suit or proceedingonly in either in the United States District Court for the Southern District ofNew York or if such suit, action or other proceeding may not be brought in suchcourt for jurisdictional reasons, in the Supreme Court of the State of NewYork, New York County. Service of any process, summons, notice or document byU.S. registered mail to such Party’s respective address set forth Section 6.09hereof shall be effective service of process for any action, suit or proceedingin New York with respect to any matters to which it has submitted tojurisdiction in this Section 6.08. Each Party irrevocably and unconditionallywaives any objection to the laying of venue of any action, suit or proceedingarising out of this Agreement, or the transactions contemplated hereby andthereby in the Supreme Court of the State of New York, New York County, or theUnited States District Court for the Southern District of New York, and furtherirrevocably and unconditionally waives the right to plead or claim, in any suchcourt, that any such action, suit or proceeding brought in any such court hasbeen brought in an inconvenient forum.

 

SECTION 6.09. Addresses. The address of Warrenis 489 Fifth Avenue, 32nd Floor, New York, NY 10017, and the addressof the Company is Suite 23, 801 East 4th, Gillette, Wyoming 82716.

 

SECTION 6.10. Governing Law. This Agreementshall be governed by and construed in accordance with the internal laws of theState of New York applicable to agreements made and to be performed entirelywithin such State, without regard to the conflicts of law principles of suchState.

 

IN WITNESS WHEREOF, Warren and the Company have dulyexecuted this Agreement as of the date first written above.

 
|   | **[Name of the LLC]**        |
|--------|------------------------------|
|   | By: Warren Resources,  Inc., |
|   | its  Managing Member         |
|   |                         |
|   |                         |
|   | By:                          |   |   |
|   | Name:                        |  Norman F. Swanton |
|   | Title:                       | Chairman & Chief  Executive Officer |
|   |                         |
|   | **WARREN RESOURCES, INC.**   |
|   |                         |
|   |                         |
|   | By:                          |   |   |
|   | Name:                        | Norman F. Swanton |
|   | Title:                       |   Chairman & Chief Executive Officer |
|        |                              |  |  |  |  |  |  |

 

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