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EXHIBIT 3.3 WARREN RESOURCES, INC. ARTICLES SUPPLEMENTARY SERIES A INSTITUTIONAL 8% CUMULATIVE
CONVERTIBLE PREFERRED STOCK ($.0001 PAR VALUE) Pursuant to Section 2-105 of the Maryland General Corporation Law The undersigned President and Chief Executive Officer of Warren Resources,
Inc., a Maryland corporation (the Corporation), certifies to the State
Department of Assessments and Taxation of Maryland that pursuant to authority
granted to and vested in the Board of Directors of the Corporation by the
provisions of its Articles of Incorporation and the provisions of Section 2-105
of the Maryland General Corporation Law, the Board of Directors has duly adopted
the following resolutions creating the Series A Institutional 8% Cumulative
Convertible Preferred Stock ($.0001 par value), which resolution remains in full
force and effect: RESOLVED, that, pursuant to authority expressly granted to and vested in
the Board by the Articles of Incorporation and the provisions of Section 2-105
of the General Corporation Law of the State of Maryland, a series of Preferred
Stock, to consist of 2,100,000 shares of the authorized and unissued shares of
Preferred Stock, par value $.0001 per share, be, and the same hereby is,
established, and the issuance of the shares thereunder authorized, such series
to have the powers, preferences, rights, qualifications, limitations,
restrictions and designation, as follows: 1. DESIGNATION AND NUMBER. The designation of the series of Preferred
Stock authorized by this resolution shall be Series A Institutional 8%
Cumulative Convertible Preferred Stock (the Convertible Preferred Stock) and
the number of shares constituting the series shall be 2,100,000, to be issued as
whole shares only, and not in fractional shares. 2. DIVIDENDS. Holders of shares of the Convertible Preferred Stock shall
be entitled to receive, when and as declared by the Board out of assets of the
Corporation legally available for payment, an annual cash dividend equal to 8%
of the per share Liquidation Preference, (as such term is defined in Section 3),
or $.96 per share, payable quarter-annually in arrears on January 15, April 15,
July 15 and October 15 (each, a Dividend Payment Date) commencing January 15,
2004. Dividends on the shares of the Convertible Preferred Stock shall be
cumulative and shall accrue, without interest, from the first day of the
applicable quarterly period, except for the initial quarterly dividend after
issuance, which shall accrue from the date of issuance, and shall be payable to
holders of record as they appear on the stock books of the Corporation on the
date fixed by the Board for determining the holders entitled thereto and to
other distributions by the Corporation (the Record Date), which shall be not
more than 60 days nor less than 10 days preceding the related payment date. No
dividends shall be declared or paid or set apart for payment on any Parity
Preferred Stock (defined in Section 8(b)), unless dividends shall also be, or
have been, declared and paid, or set apart for payment, on the outstanding
shares of the




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Convertible Preferred Stock for all applicable Dividend Payment Dates ending on
or before the dividend payment date of the Parity Preferred Stock, ratably in
proportion to the respective amount of dividends (i) accumulated and unpaid or
payable on the Parity Preferred Stock, on the one hand, and (ii) accumulated and
unpaid or payable through the Dividend Payment Date of the Convertible Preferred
Stock next preceding such Dividend Payment Date, on the other hand. Except as set forth above, unless full cumulative dividends on the
outstanding shares of the Convertible Preferred Stock have been paid, no
dividends or other distributions, other than in the Corporations common stock,
$.0001 par value per share (the Common Stock) shall be paid, or declared and
set aside for payment, or made, with respect to Junior Stock (defined in Section
3), and no Junior Stock shall be redeemed, purchased or otherwise acquired by
the Corporation for any consideration, and no payment shall be made to, or
monies set aside for, a sinking fund for, the redemption of any shares of Junior
Stock; provided, however, that any monies theretofore deposited in any sinking
fund for Preferred Stock in compliance with the provisions of the sinking fund
may thereafter be applied to the purchase or redemption of such Preferred Stock
in accordance with the terms of the sinking fund, notwithstanding that such
Preferred Stock is Junior Stock and that, at the time of such application, full
cumulative dividends on the shares of the Convertible Preferred Stock
outstanding on the last Dividend Payment Date had not been paid, or declared and
set apart for payment; and, further provided, that any Junior Stock or Parity
Preferred Stock may be converted into or exchanged for stock of the Corporation
ranking junior to the Convertible Preferred Stock with respect to dividends and
distributions. The amount of dividends payable for the initial dividend period
or any period shorter than a full dividend period shall be computed on the basis
of a 360-day year of twelve 30-day months. 3. LIQUIDATION. The shares of the Convertible Preferred Stock shall rank
prior to the shares of Common Stock and any other class of stock of the
Corporation ranking junior to the Convertible Preferred Stock with respect to
payment of dividends and upon liquidation (the Common Stock and other classes
junior to the Convertible Preferred Stock, the Junior Stock). In the event of
any liquidation, dissolution or winding up of the Corporation, whether voluntary
or involuntary, the holders of shares of the Convertible Preferred Stock shall
be entitled to receive out of the assets of the Corporation available for
distribution to its stockholders, whether from capital, surplus or earnings,
before any distribution is made to holders of shares of Junior Stock,
liquidating distributions in an amount equal to $12.00 per share (the
Liquidation Preference), plus all dividends accrued and accumulated but unpaid
thereon to the date of final distribution; however, the holders of shares of the
Convertible Preferred Stock, upon liquidation, dissolution or winding up, shall
not be entitled to receive the Liquidation Preference, plus all applicable
dividends, until the liquidation preference of all shares of the Corporations
capital stock ranking prior to shares of the Convertible Preferred Stock shall
have been paid in full (or a sum set aside sufficient to provide for such
payment). If, upon any liquidation, dissolution or winding up of the
Corporation, the amounts payable with respect to the shares of the Convertible
Preferred Stock and any Parity Preferred Stock are insufficient for payment to
be made in full, the holders of shares of the Convertible Preferred Stock and
the Parity Preferred Stock shall share ratably in any such distribution of
assets in proportion to the full respective preferential amounts to which they
are entitled. After receipt of the full amount of the Liquidation Preference,
plus all applicable dividends, the holders of shares of the Convertible
Preferred Stock 2




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shall not be entitled to any further participation in any distribution of assets
by the Corporation. For the purposes hereof, neither a consolidation, nor a
merger of the Corporation with another corporation, nor a sale or transfer of
all or part of the Corporations assets for cash or securities shall be
considered a liquidation, dissolution or winding up of the Corporation. 4. VOTING RIGHTS. The holders of shares of the Convertible Preferred Stock
shall have no voting rights whatsoever, except for any voting rights to which
they may be entitled under the laws of the State of Maryland, and except as
follows: (a) As long as any shares of the Convertible Preferred Stock remain
outstanding, the consent of the holders of at least two-thirds of the shares of
the Convertible Preferred Stock outstanding at the time and all other classes or
series of Preferred Stock upon which like voting rights have been conferred and
are exercisable (voting together as a class) given in person or by proxy, either
in writing or at a meeting called for the purpose, shall be necessary to permit,
effect or validate any one or more of the following: (ii) the issuance or
increase of the authorized amount of any class or series of shares ranking prior
(see Section 8(a)) to the shares of the Convertible Preferred Stock; or (ii) any
amendment, alteration or repeal, whether by merger, consolidation or otherwise,
of any of the provisions of the Articles of Incorporation or of the resolutions
contained in these Articles Supplementary that would materially adversely affect
any power, preference, or special right of the shares of the Convertible
Preferred Stock or of the holders thereof; provided, however, that any increase
in the amount of authorized Common Stock or authorized Preferred Stock or any
increase or decrease in the number of shares of any series of Preferred Stock or
the creation and issuance of other series of Common Stock or Preferred Stock
which, in each case, constitute Parity Preferred Stock or Junior Stock, shall be
deemed not to materially adversely affect such powers, preferences or special
rights. (b) Holders of shares of the Convertible Preferred Stock entitled to
voting rights under the laws of the State of Maryland and as provided in these
Articles Supplementary shall have one vote for each share held. (c) The foregoing voting provisions shall not apply if all outstanding
shares of the Convertible Preferred Stock shall have been redeemed or called for
redemption and sufficient funds deposited in trust to effect such redemption at
or prior to the time of the action requiring the vote. 5. REDEMPTION AND REPURCHASE. (a) HOLDERS RIGHT TO REDEMPTION. Commencing seven (7) years after the
date of issuance, holders of shares of the Convertible Preferred Stock may
require the Corporation to redeem their shares at a redemption price equal to
the Liquidation Preference, plus accrued and unpaid dividends, if any (the
Redemption Price). Upon receipt of a notice to redeem, the Corporation, at its
option, shall either (i) pay the holder cash in an amount equal to the
Redemption Price, to the extent it has funds legally available for redemption,
or (ii) issue to the holder shares of its Common Stock in an amount equal to
125% of the Redemption Price (which includes accrued but unpaid dividends),
based on the average of the Closing Prices (defined in Section 10) of the
Corporations Common Stock, as reported by the Nasdaq National or Small 3




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Cap Market of The Nasdaq Stock Market or any national securities exchange or
electronic OTC listing service on which the shares of the Corporations Common
Stock are then traded, for the thirty (30) Trading Days (defined in Section 10)
immediately preceding the date of receipt of the holders written redemption
election. If the Corporations Common Stock is not so traded or has no trading
volume, the Board shall determine the Fair Market Value (defined in Section 10)
of the Common Stock, whose determination shall be conclusive and described in a
resolution of the Board. (b) CORPORATIONS OPTIONAL REDEMPTION. In the event the Closing Price of a
share of the Corporations Common Stock, as reported by the Nasdaq National or
Small Cap Market of The Nasdaq Stock Market, or any national securities exchange
or electronic OTC listing service on which the shares of Common Stock are then
traded, exceeds 133% of the Redemption Price (which includes accrued but unpaid
dividends), then in effect for ten (10) Trading Days during any 30-day period,
the shares of the Convertible Preferred Stock shall be redeemable at the option
of the Corporation upon notice at any time and from time to time, in whole or in
part. Upon such occurrence, also at its option, the Corporation may either (i)
redeem the shares, in whole or in part, for cash at the Redemption Price, or
(ii) issue to the holders such number of shares of Common Stock at the then
applicable Conversion Rate as shall equal in value 125% of the per share
Redemption Price (which includes accrued but unpaid dividends) based on the
average of the Closing Prices (defined in Section 9) of the Corporations Common
Stock, as reported by the Nasdaq National or Small Cap Market of The Nasdaq
Stock Market or any national securities exchange or electronic OTC listing
service on which the shares of the Corporations Common Stock are then traded,
for the thirty (30) Trading Days immediately preceding the date fixed for
redemption (the Redemption Date). If fewer than all of the outstanding shares
are to be redeemed, the shares to be redeemed shall be determined and allocated
pro rata among the holders based on the number of shares held, as nearly as
practicable, or by lot, or by such other method as the Board of Directors may
determine to be fair and appropriate. Notice of redemption shall be given by mail to each record holder of
shares of the Convertible Preferred Stock to be redeemed at the address of such
holder in the stock register of the Corporation, not less than 10 nor more than
30 days prior to the Redemption Date. If a notice of redemption has been given,
unless the Corporation defaults in making payment of the Redemption Price, from
and after the Redemption Date, dividends on the shares of the Convertible
Preferred Stock called for redemption shall cease to accrue, the shares shall no
longer be deemed to be outstanding, and all rights of the holders thereof as
stockholders of the Corporation, including conversion rights (except the right
to receive the Redemption Price), shall cease. Subject to applicable escheat
laws, any moneys set aside by the Corporation for the redemption and unclaimed
at the end of two years from the Redemption Date shall revert to the general
funds of the Corporation, after which reversion the holders of the shares called
for redemption shall look only to the general funds of the Corporation for
payment of the Redemption Price. Any interest accrued on funds so deposited
shall be paid to the Corporation from time to time. (c) CORPORATIONS OPTIONAL REPURCHASE. In the event of a Change of Control
(as defined in Section 10), the Corporation shall have the option to repurchase
the outstanding shares of the Convertible Preferred Stock upon notice, at any
time and from time to time, in whole or in 4




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part, at a repurchase price per share equal to the greater of (x) 125% of the
per share Liquidation Value, plus all accrued and unpaid dividends, and (y) the
consideration per share a holder of shares of the Convertible Preferred Stock
would have received had the holder voluntarily converted such shares into Common
Stock immediately prior to or upon the Change of Control, payable in the same
combination of cash and/or securities as received by the Corporation and/or its
shareholders immediately prior to or upon the Change of Control. (d) GENERAL. If fewer than all of the outstanding shares are to be
redeemed or repurchased, the shares to be redeemed or repurchased shall be
determined and allocated pro rata among the holders based on the number of
shares held, as nearly as practicable, or by lot, or by such other method as the
Board of Directors may determine to be fair and appropriate. Notice of
redemption or repurchase shall be given by mail to each record holder of shares
of the Convertible Preferred Stock to be redeemed or repurchased at the address
of such holder in the stock register of the Corporation, not less than 10 nor
more than 30 days prior to the Redemption Date or the date fixed for repurchase.
If a notice of redemption or repurchase /has been given, unless the Corporation
defaults in making payment of the Redemption Price or the repurchase
consideration, from and after the Redemption Date or the date fixed for
repurchase, as the case may be, dividends on the shares of the Convertible
Preferred Stock called for redemption or repurchase shall cease to accrue, the
shares shall no longer be deemed to be outstanding, and all rights of the
holders thereof as stockholders of the Corporation, including conversion rights
(except the right to receive the Redemption Price or the repurchase
consideration, as the case may be), shall cease. Subject to applicable escheat
laws, any moneys set aside by the Corporation for the redemption and/or the
repurchase and unclaimed at the end of two years from the Redemption Date or the
date fixed for repurchase shall revert to the general funds of the Corporation,
after which reversion the holders of the shares called for redemption or
repurchase shall look only to the general funds of the Corporation for payment
of the Redemption Price or the repurchase consideration. Any interest accrued on
funds so deposited shall be paid to the Corporation from time to time. 6. AUTHORIZATION AND ISSUANCE OF OTHER SECURITIES. No consent of the
holders of the Convertible Preferred Stock shall be required for (i) the
creation of any indebtedness of any kind by the Corporation, (ii) the creation,
or increase or decrease in the amount, of any class or series of stock of the
Corporation not ranking prior as to dividends or upon liquidation to the
Convertible Preferred Stock, or (iii) any increase or decrease in the amount of
the authorized shares of Common Stock or any increase, decrease or change in the
par value thereof, or in any similar terms thereof. 7. AMENDMENT OF RESOLUTION. The Board reserves the right by subsequent
amendment of this resolution, from time to time, to increase or decrease the
number of shares which constitute the Convertible Preferred Stock (but not below
the number of shares then outstanding) and to otherwise amend this resolution
within the limitations provided by law, by this resolution and by the Articles
of Incorporation. 8. RANKING. For the purposes of this resolution, any shares of any class
or classes of the Corporation shall be deemed to rank: 5




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(a) prior to shares of the Convertible Preferred Stock, either as to
dividends or upon liquidation, dissolution or winding up, or both, if the
holders of shares of such class or classes shall be entitled by the terms
thereof to the receipt of dividends or of amounts distributable upon
liquidation, dissolution or winding up, as the case may be, in preference or
priority to the holders of shares of the Convertible Preferred Stock. (b) on a parity with shares of the Convertible Preferred Stock, either as
to dividends or upon liquidation, dissolution or winding up, or both, whether or
not the dividend rates, dividend payment dates or redemption price or
liquidation price per share thereof are different from those of the shares of
the Convertible Preferred Stock, if the holders of shares of such class or
classes shall be entitled, by the terms thereof, to the receipt of dividends or
of amounts distributable upon liquidation, dissolution or winding up, as the
case may be, in proportion to their respective dividend rates or liquidation
prices, without preference or priority of one over the other as between the
holders of such shares and the holders of shares of the Convertible Preferred
Stock (the term Parity Preferred Stock being used to refer to any class or
shares on a parity with shares of the Convertible Preferred Stock, either as to
dividends or upon liquidation, dissolution or winding up, or both, as the
context may require). The Corporations Series A 8% Cumulative Convertible
Preferred Stock, if and when issued, shall rank on a parity with respect to
dividends and upon liquidation, dissolution or winding up with the Convertible
Preferred Stock and shall be deemed Parity Preferred Stock; and (c) junior to shares of the Convertible Preferred Stock, either as to
dividends or upon liquidation, dissolution or winding up, or both, consisting of
the Common Stock and other classes where the holders of the Convertible
Preferred Stock are entitled to the receipt of dividends or of amounts
distributable upon liquidation, dissolution or winding up, as the case may be,
in preference or priority to the holders of shares of such class or classes (the
Common Stock and other classes junior to the Convertible Preferred Stock, the
Junior Stock). 5. CONVERSION. (a) CONVERSION RATE. The holders of shares of the Convertible Preferred
Stock shall have the right to convert their shares into shares of Common Stock
at the following rate of conversion (the Conversion Rate, being the number of
shares of Common Stock issuable upon conversion of one share of Convertible
Preferred Stock), subject to adjustment as herein provided: (i) commencing one year from the date of issuance and until December
31, 2004, one share of Common Stock for each one share of Convertible
Preferred Stock; (ii) from January 1, 2005 and until July 1, 2006, 0.75 shares of
Common Stock for each one share of Convertible Preferred Stock; and (iii) from July 1, 2006 and thereafter, 0.50 shares of Common Stock
for each one share of Convertible Preferred Stock. 6




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(b) ACCRUED AND UNPAID DIVIDENDS. Upon conversion, holders of shares of
the Convertible Preferred Stock shall not be entitled to receive payment of the
accrued, cumulative and unpaid dividends with respect to the shares being
converted, but shall be entitled to dividend payments on the Dividend Payment
Date with respect to shares held of record at the close of business on the
Record Date for determining the stockholders entitled to such dividend,
notwithstanding their subsequent conversion of such shares; provided, however,
that in the event the shares are surrendered for conversion during the period
between the close of business on a Record Date and the opening of business on
the corresponding Dividend Payment Date, such converting holders, though
continuing to be entitled to receive the dividend, must pay to the Corporation
an amount equal to the dividend payable on the shares so surrendered at the time
of surrender; and further provided, that if the shares are surrendered for
conversion on the corresponding Dividend Payment Date, or thereafter, the
dividend is not required to be repaid. (c) CONVERSION PROCEDURE. (i) Conversion of the shares of the Convertible Preferred Stock
shall be effected by the surrender to the Transfer Agent (defined in
Section 10) of the certificate or certificates for the shares to be
converted, accompanied by a written notice stating that the holder elects
to convert all or a specified whole number of shares in accordance with
the provisions hereof, together with payment of any amount due under
Section 9(b). If more than one stock certificate for shares of the
Convertible Preferred Stock is surrendered for conversion at one time by
the same holder, the number of full shares of Common Stock issuable upon
conversion thereof shall be computed on the basis of the aggregate number
of shares represented by all the certificates so surrendered. In the event
the notice shall specify a name or names other than that of the converting
holder, the notice shall be accompanied by documents reflecting compliance
with the securities laws And, if applicable, payment of all transfer taxes
payable upon issuance of the shares of Common Stock in such name or names.
Other than such taxes, the Corporation shall pay any and all issue and
other taxes (excluding taxes based on income) that may be payable with
respect to the issue and/or delivery of shares of Common Stock on
conversion of shares of the Convertible Preferred Stock. As promptly as
practicable after receipt by the Transfer Agent of the certificate or
certificates for the shares being converted, the notice relating thereto,
the requisite documents reflecting compliance with the securities laws
And, if applicable, payment of all transfer taxes required to be paid
hereunder by the converting holder (or the demonstration to the
satisfaction of the Corporation that such taxes have been paid) and any
payment to the Corporation required by Section 9(b), the Corporation shall
deliver or cause to be delivered (x) certificates representing the number of validly issued,
fully paid and nonassessable whole shares of Common Stock to which
the converting holder shall be entitled, determined by multiplying
the Conversion Rate, as adjusted, in effect at the close of business
on the date the certificate or certificates evidencing the shares of
the Convertible Preferred Stock being converted were surrendered to
and received by the Transfer Agent, by the number of shares of the
Convertible Preferred Stock being converted, 7




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(y) cash in lieu of a fractional share of Common Stock,
determined in accordance with Section 9(e) below, and (z) in the event of a partial conversion (less than the full
number of shares of the Convertible Preferred Stock evidenced by the
surrendered certificate or certificates is being converted), a new
certificate or certificates, of like tenor, for the number of shares
evidenced by the surrendered certificate or certificates, less the
number of shares being converted. (ii) A conversion shall be deemed effective immediately prior to the
close of business on the date the certificate or certificates representing
the shares of the Convertible Preferred Stock being converted, accompanied
by any required documents and payments, were surrendered to and received
by the Transfer Agent. Upon conversion, the rights of the converting
holder with respect to the shares being converted shall terminate, except
for the right to have the shares of Common Stock issuable upon conversion
(or such other consideration as is provided herein) delivered, and the
party entitled to receive the shares of Common Stock so issuable shall be
treated for all purposes as having become the record holder of the shares
at such time. In the event the shares are surrendered for conversion on a
day the Corporations transfer books for its Common Stock are closed, upon
the reopening of such books the surrender shall be deemed to have occurred
immediately prior to the close of business as of the date the
certificate(s) for the shares surrendered were received by the Transfer
Agent, at the Conversion Rate in effect at such time. (iii) Upon the vote or written consent of the holders of two-thirds
of the then outstanding shares of the Convertible Preferred Stocks, voting
together as a class, the shares of the Convertible Preferred Stock, plus
accrued and unpaid dividends, shall be converted into Common Stock at the
then applicable Conversion Rate. (iv) If any shares of the Convertible Preferred Stock shall be
called for redemption, the right to convert such shares shall terminate at
the close of business on the Business Day (defined in Section 10) next
preceding the Redemption Date, unless the Corporation defaults in the
payment of the Redemption Price, in which event the conversion right shall
terminate at the close of business on the Business Day next preceding the
date the default is cured. (v) The shares of Common Stock issuable upon conversion of shares of
the Convertible Preferred Stock, when issued in accordance with the terms
hereof, are hereby declared to be, and shall be, fully paid and
nonassessable shares of Common Stock in the hands of the holders thereof. (d) ADJUSTMENTS TO CONVERSION RATE. The Conversion Rate shall be adjusted
from time to time, as follows: (i) In the event the Corporation shall hereafter pay a dividend or
make a distribution in shares of Common Stock to holders of its
outstanding Common Stock, the Conversion Rate in effect at the opening of
business on the date following the Record 8




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Date for such dividend or other distribution shall be adjusted by dividing
the Conversion Rate by a fraction, the numerator of which shall be the
number of shares of Common Stock outstanding at the close of business on
the Record Date and the denominator shall be the sum of such number of
shares and the total number of shares of Common Stock constituting the
dividend or other distribution, such adjustment to become effective
immediately after the opening of business on the day following the Record
Date. In no event shall a dividend or distribution be paid or made on
shares of Common Stock held in the Corporations treasury. (ii) In the event the Corporation shall hereafter issue rights or
warrants to holders of its outstanding Common Stock entitling them to
subscribe for or purchase shares of Common Stock at a price per share
that, on the Record Date, is less than the Current Market Price (as
defined in Section 10), the Conversion Rate shall be adjusted by dividing
the Conversion Rate in effect at the close of business on the Record Date
by a fraction, the numerator of which shall be the number of shares of
Common Stock outstanding at the close of business on the Record Date plus
the number of shares which the aggregate offering price of the total
number of shares so offered would purchase at such Current Market Price,
and the denominator shall be the number of shares of Common Stock
outstanding on such Record Date plus the total number of additional shares
of Common Stock offered for subscription or purchase. The adjustment shall
become effective immediately after the opening of business on the day
following the Record Date for distribution of the rights or warrants. To
the extent the rights or warrants are not exercised and the shares of
Common Stock, accordingly, are not issued and delivered, following the
expiration of the rights or warrants the Conversion Rate shall be
readjusted to the Conversion Rate which would then be in effect had the
adjustments with respect to the issuance of such rights or warrants been
made on the basis only of the number of shares of Common Stock actually
issued and delivered. (iii) In the event the outstanding shares of Common Stock shall be
subdivided into a greater number of shares of Common Stock and,
conversely, in the event the outstanding shares of Common Stock shall be
combined into a smaller number of shares of Common Stock, in either such
event the Conversion Rate in effect at the opening of business on the day
following the Record Date for the subdivision or the combination, as the
case may be, shall be adjusted proportionately, the adjustment to take
effect immediately. (iv) In the event the Corporation shall distribute to holders of its
Common Stock (x) shares of any class of capital stock by dividend or
otherwise, other than by a dividend or distribution to which Section
9(d)(i) applies, or (y) evidences of its indebtedness or assets, including
securities, other than by a dividend or distribution to which
Section 9(d)(ii) applies, or in connection with the liquidation,
dissolution or winding up of the Corporation, whether voluntary or
involuntary, or paid exclusively in cash 9




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in each such case the Conversion Rate shall be adjusted by dividing
the Conversion Rate in effect at the close of business on the Record
Date for determining the holders of Common Stock entitled to the
distribution by a fraction, the numerator of which shall be the
Current Market Price of the Common Stock on such Record Date less,
on such Record Date, the Fair Market Value (to be determined by the
Board, whose determination shall be conclusive and described in a
resolution of the Board) of the Securities so distributed (the items
constituting the foregoing dividends and distributions, other than
those excluded, hereinafter in this Section 9(d)(iv) referred to as
Securities), allocable to one share of Common Stock, and the
denominator shall be the aforesaid Current Market Price per share of
Common Stock, such adjustment to become effective immediately prior
to the opening of business on the day following the Record Date. In
lieu of the foregoing adjustment, the Corporation may elect to
reserve sufficient Securities for the benefit of the holders of
shares of the Convertible Preferred Stock so that upon conversion of
their shares they would receive, in addition to the shares of Common
Stock to which they were entitled (determined by multiplying the
Conversion Rate, as then in effect, by the number of shares of the
Convertible Preferred Stock being converted), but also the amount
and kind of Securities they would have received had they converted
their shares into Common Stock immediately prior to the Record Date
for distribution of the Securities; provided, however, that in the
event the Fair Market Value (determined as set forth above) on the
Record Date of the Securities distributed allocable to one share of
Common Stock is equal to or greater than the Current Market Price
per share of the Common Stock on such date, the Corporation shall
not have a right of election but must make adequate provision to
assure that the holders of shares of the Convertible Preferred Stock
have the right to receive, upon conversion, the amount and kind of
Securities they would have received had they converted their shares
on or before the Record Date previously described. If the Board
determines the Fair Market Value of any distribution for purposes of
this Section 9(d)(iv) by reference to the actual or when issued
trading market for any securities comprising a distribution of
Securities, it must in so doing consider the prices in such market
over the same period in computing the Current Market Price of the
Common Stock. (v) In the event the consummation of a tender or exchange offer by
the Corporation or any subsidiary of the Corporation for all or any
portion of the Common Stock involves the payment per share of Common Stock
by the Corporation or such subsidiary of consideration having a Fair
Market Value (determined as provided in Section 9(d)(iv) above)
immediately prior to the expiration of the tender or exchange offer (the
Expiration Time) that exceeds the Closing Price per share of the Common
Stock on the Trading Day next preceding the Expiration Time, the
Conversion Rate shall be adjusted by dividing the Conversion Rate in
effect immediately prior to the Expiration Time by a fraction, the
numerator of which shall be the number of shares of Common Stock
outstanding (including any shares tendered or exchanged) at the Expiration
Time multiplied by the Closing Price per share of Common Stock on the
Trading Day 10




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immediately preceding the Expiration Time, and the denominator shall be
the sum of (x) the Fair Market Value (determined as aforesaid) of the
aggregate consideration payable to holders of the Common Stock based on
the acceptance (up to any maximum specified in the terms of the tender or
exchange offer) of all shares validly tendered or exchanged and not
withdrawn as of the Expiration Time (the shares deemed so accepted, up to
any such maximum, being referred to as the Purchased Shares) and (y) the
product of the number of shares of Common Stock outstanding (less any
Purchased Shares) at the Expiration Time and the Closing Price per share
of Common Stock on the Trading Day next preceding the Expiration Time,
such adjustment to become effective immediately prior to the opening of
business on the day following the Expiration Time. (vi) The Corporation may make such adjustments in the Conversion
Rate, in addition to those required by this Section 9(d), as the Board
considers to be advisable to avoid or diminish any income tax to holders
of Common Stock or of rights to purchase Common Stock, resulting from any
dividend or distribution of stock (or rights to acquire stock) or from any
event treated as such for income tax purposes. The Corporation, from time
to time, to the extent permitted by applicable law, may adjust the
Conversion Rate by any amount for any period of time; provided, however,
that if the period is at least 20 days, the Board shall have determined
that such adjustment would be in the best interests of the Corporation,
which determination shall be conclusive, and the reduction shall be
irrevocable during the period; provided, however, that no adjustment made
pursuant to this Section 9(d)(vi) shall adversely affect the Conversion
Rate then in effect for the holders of the Convertible Preferred Stock.
Whenever the Conversion Rate is adjusted pursuant to the preceding
sentence, the Corporation shall mail to holders of record of shares of the
Convertible Preferred Stock a notice of the adjustment at least 15 days
prior to the date the adjusted Conversion Rate takes effect, and such
notice shall state the adjusted Conversion Rate and the period it is to be
in effect. (vii) No adjustment in the Conversion Rate shall be required unless
such adjustment would require a change of at least 1% to the Conversion
Rate then in effect; provided, however, that any adjustment that otherwise
would be required to be made shall be carried forward and taken into
account in determining any subsequent adjustment. (viii) Whenever the Conversion Rate is adjusted as herein provided,
the Corporation shall compute the adjusted Conversion Rate and (x) file
with the Transfer Agent a certificate signed by the Chief Financial
Officer or Treasurer of the Corporation setting forth the adjusted
Conversion Rate and showing in reasonable detail the facts upon which such
adjustment is based, and (y) as soon as practicable, mail a notice to all
record holders of shares of the Convertible Preferred Stock at their last
addresses as they appear upon the stock transfer books of the Corporation
stating the Conversion Rate has been adjusted and setting forth the
adjusted Conversion Rate. (ix) In any event in which this Section 9(d) provides that an
adjustment shall become effective immediately after the Record Date of an
event, until the event occurs the Corporation may defer (x) issuing to
holders of the Convertible Preferred Stock 11




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converting their shares after the Record Date and prior to the occurrence
of the event, the additional shares of Common Stock deliverable as a
result of the adjustment required by the event and (y) paying the holders
cash in lieu of a fractional share of Common Stock as provided in Section
9(e). (e) NO FRACTIONAL SHARES. No fractional shares or scrip representing
fractional shares of Common Stock shall be issued upon conversion of shares of
the Convertible Preferred Stock but, in lieu thereof, in the sole discretion of
the Board, either (i) the fractional interest shall be rounded up to the next
whole share or (ii) a cash payment shall be made to the converting holder in an
amount equal to the Closing Price of a share of Common Stock at the close of
business on the Trading Date immediately preceding the date of conversion (or,
if there is no such Closing Price, the Fair Market Value of a share of Common
Stock, as determined or prescribed by the Board at the close of business on the
Trading Date immediately preceding the date of conversion), multiplied by the
fraction of the share as determined. (f) RECLASSIFICATION, CONSOLIDATION, MERGER OR SALE OF ASSETS. In the
event the Corporation shall be a party to any transaction (including, without
limitation) (i) any recapitalization or reclassification of the Common Stock
(other than a change in par value, or from par value to no par value, or
from no par value to par value, or as a result of a subdivision or
combination of the Common Stock), (ii) any consolidation or merger of the Corporation with or into any
other person or any merger of another person into the Corporation (other
than a merger which does not result in a reclassification, conversion,
exchange or cancellation of outstanding shares of the Common Stock), (iii) any sale or transfer of all or substantially all of the assets
of the Corporation, or (iv) any compulsory share exchange pursuant to which the Common
Stock shall be exchanged for, converted into, acquired for or constitute
solely the right to receive other securities, cash or other property, then
appropriate provision shall be made as part of the terms of such
transaction whereby (i) in the event the transaction does not constitute a Common
Stock Fundamental Change (as defined in Section 9(i)) and subject to
funds being legally available therefor at the time of conversion,
the holders of shares of the Convertible Preferred Stock then
outstanding shall thereafter have the right to convert their shares
only into the kind and amount of securities, cash and other property
they would have received had they converted their shares immediately
prior to the transaction, after giving effect, in the event of a
Non-Stock Fundamental Change, to any adjustment in the Conversion
Rate required by the provisions of Section 9(i), and 12




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(ii) in the event the transaction does constitute a Common
Stock Fundamental Change, the holders of shares of the Convertible
Preferred Stock then outstanding shall thereafter have the right to
convert their shares only into common stock of the kind received by
holders of Common Stock as a result of the Common Stock Fundamental
Change in an amount determined pursuant to the provisions of Section
9(i). The Corporation or the person formed by the consolidation or
resulting from the merger or which acquired such assets or which
acquired the Corporations shares, as the case may be, shall make
provision in its certificate or articles of incorporation or other
constituent document to establish such right and provide for
adjustments which, for events subsequent to the effective date of
such certificate or articles of incorporation or other constituent
document, shall be nearly equivalent, as may be practicable, to the
adjustments provided for in this Section 9.  The above provisions shall similarly apply to successive transactions of
the type described in this Section 9(f). (g) RESERVATION OF SHARES; TRANSFER TAXES; ETC. The Corporation shall at
all times reserve and keep available out of its authorized and unissued Common
Stock, solely for the purpose of effecting the conversion of shares of the
Convertible Preferred Stock, such number of shares of Common Stock, free of
preemptive rights, as shall be sufficient to effect the conversion of all shares
of the Convertible Preferred Stock from time to time outstanding. The
Corporation shall, from time to time, in accordance with the laws of the State
of Maryland, use its best efforts to increase the authorized number of shares of
Common Stock if, at any time, the number thereof shall not be sufficient to
permit the conversion of all the then outstanding shares of the Convertible
Preferred Stock. If any shares of Common Stock required to be reserved for
conversion of the shares of the Convertible Preferred Stock need to be
registered with, or approved by, any governmental authority under any federal or
state law before such shares may be issued upon conversion, the Corporation
shall, in good faith and as expeditiously as possible, endeavor to cause the
shares to be duly registered or approved, as the case may be. If the Common
Stock is listed on the Nasdaq Stock Market or a national securities exchange,
the Corporation shall, in good faith and as expeditiously as possible, if
permitted by the rules of such exchange, endeavor to list and keep listed on
such exchange, upon official notice of issuance, all shares of Common Stock
issuable upon conversion of shares of the Convertible Preferred Stock. (h) ADJUSTMENTS IN CASE OF FUNDAMENTAL CHANGES. Notwithstanding any other
provision in this Section 9 to the contrary, in the event a Fundamental Change
(as defined in Section 9(i)) occurs, then the Conversion Rate in effect shall be
adjusted immediately thereafter (for purposes of the adjustment, the Fundamental
Change shall be deemed to take place at the earlier to occur of the Fundamental
Change and the Record Date, if any, fixed for determining the holders of Common
Stock entitled to receive the cash, securities, property or other assets
distributable pursuant to the Fundamental Change), as described below: (i) In the event of a Non-Stock Fundamental Change, the Conversion
Rate immediately following the Non-Stock Fundamental Change shall be the
more beneficial to the holders of shares of the Convertible Preferred
Stock of 13




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(x) the Conversion Rate in effect immediately prior to the
Non-Stock Fundamental Change, after giving effect to any other prior
adjustments pursuant to this Section 9, and (y) the Conversion Rate in effect immediately prior to the
Non-Stock Fundamental Change adjusted by dividing the Applicable
Price (as defined in Section 9(i)) by a fraction, the numerator of
which shall be the sum of the Liquidation Preference and an amount
equal to the full accrued but unpaid cumulative dividends on shares
of the Convertible Preferred Stock up to, but excluding, the date of
the Non-Stock Fundamental Change, and the denominator of which shall
be the Redemption Price. (ii) In the event of a Common Stock Fundamental Change, the
Conversion Rate shall be adjusted for such Change by dividing the
Conversion Rate in effect immediately prior thereto by a fraction, the
numerator of which shall be the Purchaser Stock Price (as defined in
Section 9(i)) and the denominator of which shall be the Applicable Price
and, as so determined, shall constitute and be deemed the Conversion Rate
in effect immediately prior to the Common Stock Fundamental Change;
provided, however, that in the event the Common Stock Fundamental Change
consisted of a transaction in which all of the Common Stock shall have
been exchanged, converted into or acquired solely for common stock of the
successor, acquirer or other third party (and cash with respect to
fractional interests), the Conversion Rate shall be adjusted for the
Common Stock Fundamental Change by dividing the Conversion Rate in effect
immediately prior thereto by a fraction, the numerator of which is one and
the denominator of which is the number of shares of common stock of the
successor, acquirer, or other third party allocable to one share of Common
Stock and, as so determined, shall constitute and be deemed the Conversion
Rate in effect immediately prior to the Common Stock Fundamental Change. (i) DEFINITIONS. The following definitions shall apply to terms used in
this Section 9: (i) Applicable Price shall mean (x) in the event of a Non-Stock Fundamental Change in which
the holders of the Common Stock receive only cash, the amount of
cash allocable to one share of Common Stock, and (y) in the event of any other Non-Stock Fundamental Change or
any Common Stock Fundamental Change, the weighted average of the
reported closing sales prices for one share of Common Stock (as
defined in Section 10 under Closing Price) during the ten Trading
Days immediately prior to the Record Date fixed for the
determination of the holders of Common Stock entitled to receive the
cash, securities, property or other assets resulting from the
Non-Stock Fundamental Change or Common Stock Fundamental Change or,
if there is no such Record Date, prior to the date upon which the
holders of Common Stock shall have the right to receive such cash,
securities, property or other assets. 14




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(ii) Common Stock Fundamental Change shall mean any Fundamental
Change in which more than 50% by value (as determined in good faith by the
Board) of the consideration received by the holders of Common Stock
pursuant to such transaction consists of common stock that, for the ten
Trading Days immediately prior to such Fundamental Change, has been
admitted for listing, or admitted for listing subject to notice of
issuance, on a national securities exchange or quoted on The Nasdaq Stock
Market; provided, however, that a Fundamental Change shall not be a Common
Stock Fundamental Change unless either (x) the Corporation continues to
exist after the occurrence thereof and the outstanding shares of the
Convertible Preferred Stock continue to exist as such, or (y) not later
than the occurrence of the Fundamental Change, the outstanding shares of
the Convertible Preferred Stock are converted into or exchanged for shares
of Convertible preferred stock of a corporation succeeding directly or
indirectly to the business of the Corporation, which Convertible preferred
stock has powers, preferences and relative participating, optional or
other rights, and qualifications, limitations and restrictions
substantially similar to those of the Convertible Preferred Stock. (iii) Fundamental Change shall mean the occurrence of any
transaction or event or series of transactions or events pursuant to which
all, or substantially all, of the Common Stock shall be exchanged for,
converted into, acquired for or constitute solely the right to receive,
cash, securities, property or other assets (whether by means of an
exchange offer, liquidation, tender offer, consolidation, merger,
combination, reclassification, recapitalization or otherwise); provided,
however, in the case of any such series of transactions or events, for
purposes of adjustment of the Conversion Rate, such Fundamental Change
shall be deemed to have occurred when substantially all of the Common
Stock shall be exchanged for, converted into, or acquired for or
constitute solely the right to receive cash, securities, property or other
assets, but the adjustment shall be based upon the consideration which the
holders of Common Stock received in such transaction or event as a result
of which more than 50% of the Common Stock shall have been exchanged for,
converted into, acquired for, or constitute solely, the right to receive
cash, securities, property or other assets; provided, further, that such
term does not include (x) any such transaction or event in which the
Corporation and/or any of its subsidiaries are the issuers of all the
cash, securities, property or other assets exchanged, acquired or
otherwise issued in such transaction or event, or (y) any such transaction
or event in which the holders of Common Stock receive securities of an
issuer other than the Corporation if, immediately following such
transaction or event, such holders hold a majority of the securities
having the power to vote normally in the election of directors of such
other issuer outstanding immediately following the transaction or other
event. (iv) Non-Stock Fundamental Change shall mean any Fundamental
Change other than a Common Stock Fundamental Change. (v) Purchaser Stock Price shall mean, with respect to any Common
Stock Fundamental Change, the average of the Closing Prices (as defined in
Section 10) for one share of the common stock received as a result of the
Common Stock Fundamental 15




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Change, during the ten Trading Days immediately prior to the date fixed
for the determination of the holders of Common Stock entitled to receive
the common stock, or if there is no such date, prior to the date upon
which the holders of the Common Stock shall have the right to receive the
common stock. (j) DIVIDEND OR INTEREST REINVESTMENT PLANS; OTHER. Notwithstanding the
foregoing provisions, the issuance of any shares of Common Stock pursuant to any
plan providing for the reinvestment of dividends or interest payable on
securities of the Corporation and the investment of additional optional amounts
in shares of Common Stock under any such plan, and the issuance of any shares of
Common Stock or options or rights to purchase such shares pursuant to any
employee benefit plan or program of the Corporation, or pursuant to any option,
warrant, right or exercisable, exchangeable or convertible security outstanding
as of the date the Convertible Preferred Stock was first designated, shall not
be deemed to constitute an issuance of Common Stock or exercisable, exchangeable
or convertible securities by the Corporation to which any of the adjustment
provisions described above applies. There shall be no adjustment of the
Conversion Rate in case of the issuance of any stock (or securities convertible
into or exchangeable for stock) of the Corporation except as described in this
Section 9. Except as expressly set forth in this Section 9, if any action would
require adjustment of the Conversion Rate pursuant to more than one of the
provisions described above, only one adjustment shall be made and such
adjustment shall be the amount of adjustment, which has the highest absolute
value. (k) CALCULATION OF COMMON STOCK OUTSTANDING. For purposes of this Section
9, the number of shares of Common Stock at any time outstanding shall not
include any shares of Common Stock owned or held by or for the account of the
Corporation. 10. ADDITIONAL DEFINITIONS. For purposes of these Articles Supplementary
of the Convertible Preferred Stock, the following terms shall have the meanings
indicated: (a) Business Day shall mean any day other than a Saturday, Sunday, or a
day on which commercial banks in New York City are authorized or required by law
or executive order to close, or a day which is, or is declared to be, a national
or New York State holiday; (b) Change of Control shall mean (i) the acquisition at any time of beneficial ownership (as defined
in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities representing 50% or more of the combined voting power in the
election of directors of the then outstanding securities of the
Corporation or any successor of the Corporation by a person or group
(as such terms are used in Sections 13(d) and 14(d)(2) of the Exchange
Act); (ii) the termination of service of directors, for any reason other
than death, disability or retirement from the Board, during any period of
two consecutive years or less, of individuals who at the beginning of such
period constituted a majority of the Board, unless the election of or
nomination for election of each new director during such 16




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period was approved by a vote of at least two-thirds of the directors
still in office who were directors at the beginning of the period; (iii) approval by the stockholders of the Corporation of any merger,
consolidation, or statutory share exchange as a result of which the Common
Stock shall be changed, converted or exchanged (other than a merger,
consolidation or share exchange with a wholly-owned Subsidiary) or
liquidation of the Corporation or any sale or disposition of 80% or more
of the assets or earning power or the Corporation; or (iv) approval by the stockholders of the Corporation of any merger,
consolidation, or statutory share exchange to which the Corporation is a
party as a result of which the persons who were stockholders immediately
prior to the effective date of the merger, consolidation or share exchange
shall have beneficial ownership of less than 50% of the combined voting
power in the election of directors of the surviving corporation; provided,
however, that no change in control shall be deemed to have occurred if,
prior to such time as a change in control would otherwise be deemed to
have occurred, the Board deems otherwise. (c) Closing Price with respect to any securities on any day shall mean
the closing sale price regular way on such day or, in case no such sale takes
place on such day, the average of the reported closing bid and asked prices,
regular way, in each case on The Nasdaq Stock Market, or, if such security is
not listed or admitted to trading thereon, on the principal national securities
exchange or quotation system on which such security is quoted or listed or
admitted to trading or, if not quoted or listed or admitted to trading on any
national securities exchange or quotation system, the average of the closing bid
and asked prices of such security in the over-the- counter market on the day in
question as reported by the National Quotation Bureau Incorporated, or a
similarly generally accepted reporting service, or if not so available, in such
manner as furnished by any National Association of Securities Dealers, Inc.
member firm selected from time to time by the Board for that purpose or a price
determined in good faith by the Board. (d) Current Market Price shall mean the weighted average sale price of a
share of Common Stock for the Trading Days indicated, as reported by the Nasdaq
National or Small Cap Market of The Nasdaq Stock Market or any national
securities exchange or electronic OTC listing service on which the shares of
Common Stock are then traded (e) Fair Market Value shall mean the amount a willing buyer would pay a
willing seller in an arms length transaction as determined by the Board. (f) Trading Day shall mean (x) if the applicable security is listed or
admitted for trading on the New York Stock Exchange or another national
securities exchange, a day on which the New York Stock Exchange or other
national securities exchange is open for business or (y) if the applicable
security is quoted on the Nasdaq National or Small Cap Market of The Nasdaq
Stock Market, a day on which trades may be made or the applicable Market or (z)
if the applicable security is not so listed, admitted for trading or quoted, any
Business Day. 17




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(g) Transfer Agent shall mean American Stock Transfer & Trust Co. or any
other national or state bank or trust company designated by the Corporation as
the transfer agent and/or registrar of the Convertible Preferred Stock, or if no
such designation is made, the Corporation. * * * * * IN WITNESS WHEREOF, Warren Resources, Inc. has caused these Articles
Supplementary to be executed under the seal in its name and on its behalf by
Norman F. Swanton, the Corporations President and Chief Executive Officer, and
attested to by David E. Fleming, its Corporate Secretary, this 23rd day of June,
2004. WARREN RESOURCES, INC.By:
    
    /s/ Norman F. SwantonNorman F. Swanton
President and Chief Executive OfficerAttest:/s/ David E. FlemingDavid E. Fleming
Corporate Secretary
 18