Document:

EXHIBIT 4.1

 

Exhibit 4.1

SUBSCRIPTION AND REGISTRATION RIGHTS AGREEMENT

Warren Resources, Inc.

489 Fifth Avenue, 32nd Floor

New York, New York 10017

Gentlemen and Ladies:

     The undersigned desires to invest in Warren Resources, Inc. (the
“Company”) on the terms and conditions described in this Subscription And
Registration Rights Agreement (this “Subscription Agreement”) and the Company’s
Confidential Private Placement Memorandum dated November 10, 2004 (the
“Memorandum”). Pursuant to the terms described in the Memorandum and in this
Subscription Agreement, the Company is offering to subscribers who are
accredited investors up to 3,000,000 (the “Units”), with each Unit consisting
of one share of the Company’s common stock, par value $0.0001 per share (the
“Common Shares”), 0.25 Class A Warrants, with an entire Class A Warrant
entitling its holder to purchase one Common Share at an exercise price of
$10.00 per share, and 0.25 Class B Warrants, with an entire Class B Warrant
entitling its holder to purchase one Common Share at an exercise price of
$12.50 per share. Notwithstanding anything to the contrary in the foregoing,
the undersigned acknowledges that 0.25 Class A Warrants equal one-fourth of a
Class A Warrant and that 0.25 Class B Warrants equal one-fourth of a Class B
Warrant. The Units are offered at the price of $7.00 per Unit (the “Offering
Price”) for an aggregate of up to $21,000,000 (the “Offering”).

     The Class A Warrants and Class B Warrants (collectively, the “Warrants”)
are exercisable beginning one year after the date of their issuance and ending
five years after the date of their issuance. The Warrants will terminate, if
not exercised, five years from the date of their issuance. The undersigned
shall be entitled to registration rights for the Common Shares, including the
Common Shares issuable upon exercise of the Warrants, as further described in
this Subscription Agreement. In the event that the Company’s common stock has
not commenced public trading within one year after the closing of this
Offering, the Company will issue an additional 0.05 Class A Warrants and 0.05
Class B Warrants to the undersigned for each Unit purchased in the Offering by
the undersigned.

	1.	 	Subscription

     (a) Subject to and in accordance with the terms and conditions of this
Subscription Agreement, the undersigned hereby offers to purchase
                    Units. In accordance with the Irrevocable Instruction Letter,
incorporated herein as Exhibit A, the undersigned shall cause to be delivered
to the Company the full purchase price of $                    (the “Purchase Price”)
for the subscription for the Units in the form of a check or wire transfer to
the Company. It is understood by the undersigned that the Company reserves the
right in its sole discretion to reject all or any part of any subscription.
After completion of the Offering, the undersigned will be notified promptly by
the Company whether the undersigned’s subscription has been accepted.

     (b) As more fully described in the undersigned’s warrant agreements in
connection with the Warrants, the exercise price of each Warrant and the number
of Common Shares issuable upon the exercise of a Warrant are subject to
adjustment in the event of: (i) any subdivision or combination of the Company’s
outstanding Common Shares; or (ii) any distribution by the Company to holders
of Common Shares of a stock dividend, or assets (other than cash dividends
payable out of retained earnings).

 

 

	2.	 	Representations And Warranties Of The Undersigned

     The undersigned hereby represents and warrants to, and agrees with, the
Company as follows:

	 	(i)	 	the undersigned can bear the economic risk of losing the undersigned’s entire
investment;
	 
	 	(ii)	 	the undersigned is acquiring the Units for its
own account and not with a view to, or for resale in
connection with, a distribution of the Units, or of the Common
Shares or Warrants included in the Units, in violation of the
Securities Act of 1933, as amended (the “Securities Act”);
	 
	 	(iii)	 	the undersigned’s overall commitments to
investments that are not readily marketable is not
disproportionate to the undersigned’s net worth and the
undersigned’s investment in the Units will not cause such
overall commitments to become excessive;
	 
	 	(iv)	 	the undersigned’s financial condition is such
that the undersigned is under no present or contemplated
future need to dispose of any portion of the Units to satisfy
any existing or contemplated undertaking, need or
indebtedness;
	 
	 	(v)	 	the undersigned has adequate means of providing
for the undersigned’s current needs and personal contingencies
and has no need for liquidity in the undersigned’s investment
in the Units; and
	 
	 	(vi)	 	the undersigned has sufficient knowledge and
experience in business and financial matters to evaluate, and
has evaluated, the merits and risks of this investment.

     (b) The address set forth below on the signature page of this Subscription
Agreement is the undersigned’s true and correct principal office, and the
undersigned has no present intention of relocating its principal office to any
other state or jurisdiction.

     (c) The undersigned is an “accredited investor” as that term is defined in
Rule 501 of Regulation D, as promulgated under the Securities Act because the
undersigned meets one of the following criteria (if the undersigned is not an
“accredited investor”, place an “X” in the following blank:                    ):

	 	(i)	 	An individual with a net worth, individually or
jointly with the undersigned’s spouse, of $1,000,000; or
	 
	 	(ii)	 	An individual with income in excess of $200,000
in each of the two most recent years, or joint income with the
undersigned’s spouse in excess of $300,000 in each of those
years, and the undersigned has a reasonable expectation of
reaching the same income level in the current year; or
	 
	 	(iii)	 	An individual who is an officer or director of
the Company; or
	 
	 	(iv)	 	A corporation, Massachusetts or similar business
trust, or partnership, not formed for the specific purpose of
acquiring the securities offered, with total assets in excess
of $5,000,000; or

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	 	(v)	 	A trust with total assets in excess of $5,000,000
not formed for the specific purpose of acquiring the
securities offered, whose purchase is directed by a
sophisticated person as described in Rule 506(b)(2)(ii) of
Regulation D, as promulgated under the Securities Act; or
	 
	 	(vi)	 	An entity in which all of the equity owners are
accredited investors.

     (d) The undersigned confirms that all documents, records and books
pertaining to an investment in the Units that have been requested by the
undersigned have been made available or delivered to the undersigned. Without
limiting the foregoing, the undersigned has reviewed the Memorandum together
with the following documents: (a) the Company’s Registration Statement (No.
333-118535) on Form S-1 filed with the SEC on August 25, 2004; (b) the
Company’s Annual Report on Form 10-K for the fiscal year ended December 31,
2003; (c) the Company’s Quarterly Reports on Form 10-Q for the periods ended
March 31, 2004, June 30, 2004 and September 30, 2004, respectively (the Form
10-Q for the nine months ended September 30, 2004 will be filed with the SEC
between November 11, 2004 and November 15, 2004); (d) the Company’s Proxy
Statement on Schedule 14A relating to the Company’s Annual Meeting of
Stockholders on June 16, 2004; (e) the Company’s Current Reports on Form 8-K
dated each of February 11, 2004, August 26, 2004 and August 27, 2004; and (e)
any other documents included with the Memorandum, and the undersigned has had
the opportunity to discuss the acquisition of the Units with the Company. The
undersigned has obtained or been given access to all information concerning the
Company that the undersigned has requested. As a result of its review of the
Company, including the review of the materials provided to the undersigned, the
undersigned understands, among other things, the following: the Company has
limited financial resources, has had periods when it has incurred negative cash
flow, and has had periods when it has not operated at a profit; and the Company
has not concurrently, and may not in the future, receive additional investment
funds. The undersigned further represents that the undersigned is cognizant of
the operations, financial condition and capitalization of the Company; is
cognizant of the intended use of proceeds from this financing; and has
available full information concerning the Company’s affairs to evaluate the
merits and risks of an investment in the Units.

     (e) The undersigned has had the opportunity to ask questions of, and
receive answers from, the Company concerning the terms of an investment in the
Units and to receive additional information necessary to verify the accuracy of
the information delivered to the undersigned.

     (f) The undersigned understands that the issuance of the Units has not
been registered under the Securities Act or any state securities laws in
reliance on an exemption for private offerings and no U.S. federal or state
agency has made any finding or determination as to the fairness of this
investment or any recommendation or endorsement of the offering of the Units.

     (g) The undersigned acknowledges that, in making the decision to purchase
the Units, it has relied solely upon independent investigations made by it.

     (h) The undersigned has the full right, power and authority to enter into
this Subscription Agreement and to carry out and consummate the transactions
herein. This Subscription Agreement constitutes the legal, valid and binding
obligation of the undersigned.

     (i) The undersigned represents that an investment in the Units is a
suitable investment for the undersigned.

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     (j) The undersigned acknowledges and is aware that the following legend
will be imprinted on the certificate(s) representing the Common Shares and the
Warrants subscribed to by the undersigned (including those Common Shares
exercisable upon exercise of the Warrants):

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND
EXCHANGE COMMISSION UNDER THE U.S. SECURITIES ACT OF 1933,
AS AMENDED (THE “SECURITIES ACT”), AND ARE ‘RESTRICTED
SECURITIES’ AS THAT TERM IS DEFINED IN RULE 144 UNDER THE
SECURITIES ACT. THE SECURITIES MAY NOT BE OFFERED FOR SALE,
SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT,
OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT, THE AVAILABILITY OF WHICH IS TO BE
ESTABLISHED TO THE SATISFACTION OF THE COMPANY THROUGH
REASONABLE MEANS AS DETERMINED BY THE COMPANY, INCLUDING AN
OPINION OF SELLER’S COUNSEL REASONABLY ACCEPTABLE TO THE
COMPANY.”

     (k) The undersigned acknowledges and is aware of the following, in
addition to other information included in the information provided to the
undersigned:

	 	(i)	 	The Units and the securities included in the
Units constitute a speculative investment and involve a high
degree of risk of loss by the undersigned of the undersigned’s
total investment.
	 
	 	(ii)	 	There are substantial restrictions on the
transferability of the Units. The Units, the Common Shares,
the Warrants and the Common Shares issuable upon exercise of
the Warrants cannot be transferred, pledged, hypothecated,
sold or otherwise disposed of unless they are registered under
the Securities Act, or an exemption from such registration is
available and established to the satisfaction of the Company;
except as provided in Section 3 below, investors in the
Offering have no rights to require that any transfer of the
Units be registered under the Securities Act; there is a
limited public market for the Company’s Common Shares; and
accordingly, the undersigned may have to hold the Units
indefinitely; and it may not be possible for the undersigned
to liquidate the undersigned’s investment in the Company.

     (l) The undersigned understands and agrees that the Company is relying
upon the accuracy, completeness and truth of the undersigned’s representations,
warranties, agreements and certifications contained in this Subscription
Agreement, in determining the undersigned’s suitability as an investor in the
Company and in establishing compliance with federal and state securities laws.
The undersigned understands that any incomplete, inaccurate or untruthful
response, or the breach of the undersigned’s representations, warranties,
agreements or certifications, may result in the undersigned or the Company, or
both, being in violation of federal or state securities laws, and any person,
including the Company, who suffers damage as a result may have a claim against
the undersigned for damages. The undersigned also acknowledges that the
undersigned is indemnifying the Company and others for any such losses in
accordance with Section 5 of this Subscription Agreement.

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     The foregoing representations and warranties are true and accurate in all
material respects as of the date hereof and shall survive the delivery of the
subscription amount and this completed Subscription Agreement.

	3.	 	Registration Rights

     The Common Shares purchased in connection with the Offering and the Common
Shares issuable upon exercise of the Warrants issued in connection with the
Offering constitute “Registrable Shares”, which are entitled to the
registration rights described below.

     (a) At any time after the earlier to occur of (i) 170 days after the
closing of the initial public offering of the Company’s shares of common stock
and (ii) one year after the closing of the Offering, a purchaser or purchaser
in the Offering may request that the Company prepare and file with the
Securities and Exchange Commission (the “SEC”) a registration statement
covering the sale by the undersigned of the Registrable Shares purchased in the
Offering by the undersigned. The Company will undertake reasonable best
efforts to cause the registration statement to become effective with the SEC as
soon as possible after its filing. Notwithstanding the foregoing, the Company
shall not be obligated to effect more than one registration covering the sale
by the undersigned of the Registrable Shares under this Section 3.

     (b) The Company’s obligations contained in this Section 3 shall be
conditioned upon timely receipt by the Company in writing of such information
as the Company reasonably may require from the undersigned to be included in
the registration statement. Such information shall be provided to the Company
in writing within 10 days after the request for that information by the
Company.

     (c) All registration expenses incurred by the Company in connection with
any registration, qualification or compliance pursuant to this Section 3,
including printing expenses, fees and disbursements of the Company’s counsel,
and registration and filing fees relating to the sale of the Registrable Shares
to be registered on behalf of the undersigned pursuant to this Section 3, shall
be borne by the Company. All selling expenses, including commissions,
allocable to the sale of the Registrable Shares registered on behalf of the
undersigned, and all costs of the undersigned’s legal counsel and other
advisors shall be borne by the undersigned.

     (d) In the case of a registration effected by the Company on behalf of the
undersigned pursuant to this Section 3, the Company shall keep the undersigned
advised in writing as to the initiation of such registration and as to the
completion thereof. At its expense, the Company will keep such registration
continuously effective for a period ending on the earlier to occur of the date:
(i) that is two years after the date on which the registration statement
becomes effective with the SEC; (ii) on which the undersigned is eligible to
sell the Registrable Shares pursuant to Rule 144(k) under the Securities Act,
or the successor to such provision; or (iii) on which the undersigned has
completed the distribution described in the registration statement relating
thereto.

     (e) The Company has previously existing registration rights obligations to
holders (the “Preferred Holders”) of its 8% cumulative convertible preferred
stock (the “Preferred Stock”) which require the following limitations on the
registration rights granted hereunder to the undersigned:

	 	(i)	 	Commencing six months after the completion of an
initial public offering by the Company, the Preferred Holders
may request a registration statement covering all or any
portion of the common stock received or receivable upon
exercise of the Preferred Stock (the “Converted Shares”). No
securities other than the Converted Shares may be included in
this registration statement without the prior written consent
of a majority of the Preferred Holders that requested the
registration

-5-

 

statement. In addition, from the date of filing of such
registration statement and until the withdrawal or
abandonment, or until 90 days after the effective date, of
that registration statement, the Company cannot file or cause
to be effected any other registration of any of its equity
securities.

	 	(ii)	 	Commencing six months after the completion of an
initial public offering by the Company, the Preferred Holders
of at least 50 percent of the Preferred Stock may request and
obtain piggyback rights for Converted Shares on a registration
statement filed by the Company. If this registration
statement is an underwritten secondary registration, and the
managing underwriters advise the Company in writing of their
opinion that the number of securities requested to be included
in that registration exceeds the number that can be sold in an
orderly manner in that offering within a price range
acceptable to the Company and the holders of a majority of the
Converted Shares requested to be included in such
registration, the Company shall include in such registration
the Preferred Stock requested to be included and the
Registrable Shares acquired in the Offering, pro rata among
the holders of all such securities on the basis of the number
of securities owned by each such holder.

     (f) In the case of a registration effected by the Company on behalf of the
undersigned pursuant to this Section 3, the Company shall use its best efforts
to register and qualify the securities covered by such registration statement
under such other securities or blue sky laws of such jurisdictions within the
United States as the undersigned may reasonably request that allow registration
by coordination and to do any and all other acts and things which may be
necessary or advisable to enable the undersigned to complete such proposed sale
or other distribution by the undersigned of Registrable Shares in any such
jurisdiction; provided however, that in no event shall the Company be obligated
to register or qualify under the blue sky laws of any state in which the Common
Stock of the Company currently is not qualified for resale, or be obligated to
register or qualify the securities in any jurisdiction which would require the
Company to qualify to do business or to file a general consent to service of
process in any jurisdiction where it shall not then be qualified.

     (g) The Company shall prepare and file with the SEC such amendments and
supplements to the registration statement and the prospectus used in connection
therewith as may be necessary to comply with the provisions of the Securities
Act with respect to the disposition of all Registrable Shares; shall furnish to
the undersigned such number of copies of a prospectus, including a preliminary
prospectus, in conformity with the requirements of the Securities Act, and such
other documents (including, without limitation, prospectus amendments and
supplements as are prepared by the Company) as the undersigned may reasonably
request in order to facilitate the disposition of the Registrable Shares; shall
notify the undersigned at any time when a prospectus relating to such
registration statement is required to be delivered under the Securities Act;
shall immediately notify the undersigned of the happening of any event as a
result of which the prospectus included in or relating to such registration
statement contains an untrue statement of a material fact or omits any fact
necessary to make the statements therein not misleading; and, thereafter, the
Company will promptly prepare (and, when completed, give notice to the
undersigned) a supplement or amendment to such prospectus so that, as
thereafter delivered to the purchasers of such Registrable Shares, such
prospectus will not contain an untrue statement of a material fact or omit to
state any fact necessary to make the statements therein not misleading;
provided that upon such notification by the Company, the undersigned will not
offer or sell Registrable Shares under the registration statement until the
Company has notified the undersigned that it has prepared a supplement or
amendment to such prospectus and delivered copies of such supplement or
amendment to the undersigned (it being understood and agreed by the Company
that the foregoing proviso shall in no way diminish or otherwise impair the
Company’s obligation

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to promptly prepare a prospectus amendment or supplement as above provided and
deliver copies of same as above provided).

     (h) To the fullest extent permitted by law, the Company will indemnify and
hold harmless the undersigned, each officer, director, fiduciary, employee,
member, general partner and limited partner (and affiliates thereof) of the
undersigned, each broker or other person acting on behalf of the undersigned
and each person, if any, who controls the undersigned within the meaning of the
Securities Act, against any loss, claim, damage or liability (or action in
respect thereof) to which the undersigned may become subject, under the
Securities Act, or otherwise, insofar as any such loss, claim, damage or
liability (or action in respect thereof) is caused by any untrue statement or
alleged untrue statement of any material facts contained in the registration
statement, any prospectus contained in the registration statement, or any
amendment or supplement thereto, or arises out of or is based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements made therein not misleading, or
arises out of the failure of any representations or warranties of the Company
contained herein to be true and correct and the Company will reimburse on
demand the undersigned, such broker or other person acting on behalf of the
undersigned or such officer, director, fiduciary, employee, member, general
partner, limited partner, affiliate or controlling person for any legal or
other expenses reasonably incurred by any of them in connection with
investigating or defending any such loss, claim, damage, liability or action.
Notwithstanding the foregoing provisions of this paragraph, the Company will
not be liable in any such case to the extent that any such loss, claim, damage,
expense or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission so made in conformity
with information furnished by the undersigned or any agent or other
representative of the undersigned. If the indemnification provided for in this
Section 3 from the indemnifying party is applicable by its terms but
unavailable to an indemnified party hereunder in respect of any losses, claims,
damages, liabilities or expenses referred to therein, then the indemnifying
party, in lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result of such losses,
claims, damages, liabilities or expenses in such proportion as is appropriate
to reflect the relative fault of the indemnifying party and indemnified party
in connection with the actions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable
considerations. The relative faults of such indemnifying party and indemnified
party shall be determined by reference to, among other things, whether any
action in question, including any untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact, has
been made by, or related to information supplied by, such indemnifying party or
indemnified party, and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such action.

     (i) The undersigned will indemnify and hold harmless the Company and any
underwriter (as defined in the Securities Act) for the Company and each person,
if any, who controls the Company or such underwriter against any loss, claim,
damage or liability (or action in respect thereof) to which the Company or such
underwriter or controlling person may become subject, under the Securities Act
or otherwise, insofar as any such loss, claim, damage or liability (or action
in respect thereof) is caused by any untrue statement or alleged untrue
statement or omission or alleged omission made in conformity with information
furnished by the undersigned or any agent or other representative of the
undersigned or other representative of the undersigned for use in the
registration statement.

	4.	 	Public Trading of Common Stock

     In the event that the Company’s common stock has not commenced public
trading within one year after the closing of the Offering, the Company will
issue an additional 0.05 Class A Warrants and 0.05 Class B Warrants to each
purchaser for each Unit purchased in this Offering by that purchaser.

	5.	 	Indemnification

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	 	 	     Both the Company and the undersigned acknowledge and understand the
meaning and legal consequences of the representations, warranties, agreements
and certifications contained above, and the Company and the undersigned hereby
agree to indemnify and hold harmless the other party (including, without
limitation, its respective managers, officers, directors, representatives and
agents) from and against any and all loss, damage or liability due to or
arising out of a breach of any representation, warranty, agreement or
certification, or the inaccuracy of any statement, of the Company or the
undersigned, as the case may be, contained in this Subscription Agreement or
any other document submitted by the Company or the undersigned in connection
with the undersigned’s subscription for the Units. The foregoing
notwithstanding, nothing in this Subscription Agreement, including the
representations, warranties, agreements and certifications contained above,
shall be deemed to constitute a waiver of any rights that the undersigned may
have under the Securities Act and other federal and state securities laws.

	6.	 	Miscellaneous

     (a) This Subscription Agreement may be executed in one or more
counterparts all of which taken together shall constitute a single instrument.

     (b) This Subscription Agreement shall be governed and construed as binding
upon the parties hereto, and their respective successors, and no other person
shall have any right or obligation hereunder. This subscription shall be
irrevocable, and may not be assigned by the undersigned. Subject to the
foregoing, this Subscription Agreement shall be binding upon and inure to the
benefit of the heirs, executors, administrators, legal representatives,
successors and assigns of the undersigned.

     (c) This Subscription Agreement, including Exhibit A hereto, constitutes
the entire agreement between the undersigned and the Company with respect to
the subject matter of this Subscription Agreement and supersedes all prior and
contemporaneous agreements between the undersigned and the Company with respect
to the subject matter of this Subscription Agreement.

     (d) This Subscription Agreement will be construed and enforced in
accordance with and governed by the laws of the State of Maryland, except for
matters arising under the Securities Act, without reference to principles of
conflicts of law.

     With such full understandings and acknowledgements, the undersigned does
hereby affirm the undersigned’s subscription to the purchase of the Units being
offered by the Company as described herein and in the Memorandum. The
undersigned does further acknowledge the undersigned’s understandings of all
the terms and provisions of this Subscription Agreement and, upon acceptance of
this Subscription Agreement by the Company, agrees to be bound by all the terms
and conditions of this Subscription Agreement.

[continued on signature page]

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SIGNATURE PAGE FOR INDIVIDUALS

	 	 	 	 	 
	Please complete the following:	 	 
	 
	 	 	 	 
	Date:
	 	 	 	 
	

	 	
 	 	 
	 
	 	 	 	 
	
 	 	 
	Exact Name in Which Title is to be Held	 	 
	 
	 	 	 	 
	
 	 	
 
	Signature	 	Signature of Co-Owner
	 
	 	 	 	 
	
 	 	
 
	Print Name	 	Print Name of Co-Owner
	 
	 	 	 	 
	
 	 	
 
	Social Security Number or Tax	 	Social Security Number or Tax
	 
	 	 	 	 
	
 
	Address
	 	 	 	 
	 
	 	 	 	 
	
 
	City, State, Postal or Zip Code, Country	 	 

	 	 	 	 	 	 	 	 	 
	STATE OF    

	 	 	)	 	 	 	 	 
	

	 	 	)	 	 	ss.
	 	 
	COUNTY OF    

	 	 	)	 	 	 	 	 

     On this       day of                    , 2004, before me personally appeared
                                      , who being duly sworn by me, acknowledged that (s)he
executed the foregoing instrument for the uses and purposes therein stated.

     My commission expires:                                                         

	 	 	 
	
 

	 	
 
	Notary Public

	 	Address

     • If the Securities are to be held in joint tenancy or as tenants in
common, both persons must sign above and please indicate the manner in which
the Securities are to be held:

	 	 	 
	                    Tenants in Common

	 	                    Joint Tenants

     This subscription is accepted by Warren Resources, Inc. on this       day
of                    , 2004.

	 	 	 	 	 
	 	 	WARREN RESOURCES, INC.
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	
 
	 
	 	 	 	 
	

	 	Name:	 	 
	

	 	 	 	
 
	 
	 	 	 	 
	

	 	Title:	 	 
	

	 	 	 	
 

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SIGNATURE PAGE FOR ENTITIES

	 	 	 	 	 	 	 	 	 	 	 	 
	Date:
	 	 	 	 	 	 	 	 	 	 
	

	 	
 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	
 	 	 	 	 	 	 
	Printed Name of Entity	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:
	 	 	 	 	 	 	 	 	 	 
	

	 	
 	 	 	 	 	 	 	 	 
	

	 	Signature	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	
 	 	 	 	 	 	 
	Printed Name and Title	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	
 	 	 	 	 	 	 
	Address	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	
 	 	 
	City, State, Postal or Zip Code, Country	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	
 	 	 
	Tax Identification Number	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	STATE OF	 	 	)	 	 	 
	

	 	
 	 	 	 	 	 	 	 	 
	

	 	 	 	 	 	 	)	 	 	ss.
	COUNTY OF	 	 	)	 	 	 
	

	 	
 	 	 	 	 	 	 	 	 

     On this       day of                    , 2004, before me personally appeared
                                      , who being duly sworn by me, acknowledged that (s)he
executed the foregoing instrument in the name of said entity, that (s)he had
the authority to execute the same, and that (s)he executed the same as the act
and deed of said entity for the uses and purposes therein stated.

     My commission expires:                                                         

	 	 	 
	
 

	 	
 
	Notary Public

	 	Address

     This subscription is accepted by Warren Resources, Inc. on this       day
of                    , 2004.

	 	 	 	 	 
	 	 	WARREN RESOURCES, INC.
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	
 
	

	 	Name:	 	 
	

	 	 	 	
 
	

	 	Title:	 	 
	

	 	 	 	
 

-10-<PAGE>
                                                                    EXHIBIT 10.1

                IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

                          IN AND FOR NEW CASTLE COUNTY

ROBERT WEISMAN,                        )
                                       )
                                       )
              Plaintiff,               )
                                       )
           v.                          )      C.A. No. 881-N
                                       )
STEVEN ROTH, RUSSELL B. WIGHT, MICHAEL )
D. FASCITELLI, DOUGLAS H. DITTRICK,    )
MARTIN N. ROSEN, RICHARD WEST, VORNADO )
REALTY TRUST, VORNADO REALTY, L.P.,    )
                                       )
                                       )
              Defendants,              )
                                       )
           and                         )
                                       )
VORNADO OPERATING COMPANY,             )
a Delaware corporation,                )
                                       )
Nominal Defendant.                     )
                                       )
                                       )

                            STIPULATION OF SETTLEMENT

      The parties to the above-captioned action, by and through their respective
attorneys, have entered into the following Stipulation of Settlement (the
"Stipulation") subject to the approval of the Court of Chancery of the State of
Delaware, in and for New Castle County (the "Court"). The settlement
contemplated by this Stipulation is referred to herein as the "Settlement."
<PAGE>
WHEREAS

            A. This is an action brought (i) as a putative class action lawsuit
purportedly on behalf of the stockholders of Vornado Operating Company ("VOOC"
or the "Company"), and (ii) as a putative derivative action purportedly on
behalf of the Company currently pending in the Court of Chancery of the State of
Delaware, styled Weisman v. Roth, C.A. No. 881-N (the "Action"), against
defendants Steven Roth, Russell B. Wight, Michael D. Fascitelli, Douglas H.
Dittrick, Martin N. Rosen, and Richard West (the "Individual Defendants") and
against Vornado Realty Trust and Vornado Realty, L.P. (together with the
Individual Defendants, the "Defendants").

            B. The Action challenges (i) a transaction in which Vornado Crescent
Logistics Operating Partnership ("VCLOP") sold its 100% membership interest in
Americold Logistics, LLC ("Americold Logistics") to Americold Realty Trust (the
"Americold Sale"), and (ii) the proposed dissolution of the Company, which is
subject, among other conditions, to the approval of the holders of a majority of
the outstanding stock of the Company (the "Dissolution").

            C. The Company has called a special meeting of its stockholders to
be held on December 17, 2004 (the "Special Meeting"), and, on or about November
17, 2004, distributed a definitive proxy statement (the "Proxy Statement") to
its stockholders seeking their approval of the Dissolution.

            D. The complaint in the Action primarily alleges that the Defendants
violated Delaware law and breached their fiduciary duties to the Company and its

                                       2
<PAGE>
stockholders by approving the Americold Sale, by failing to seek a vote of the
Company's stockholders on the Americold Sale, and by proceeding with the
Dissolution.

            E. Defendants maintain that they have not violated Delaware law and
have committed no breaches of fiduciary duties or any other breaches or
violations whatsoever in connection with the Americold Sale, the Special
Meeting, and/or the Dissolution.

            F. On November 24, 2004, the parties to the Action entered into a
Memorandum of Understanding (the "MOU") providing for a settlement of the
Action.

            G. Prior to and throughout the duration of the Action, plaintiff's
counsel conducted a thorough investigation into the substance of the claims
asserted in the Action, including analyzing publicly available sources and
analyzing applicable case law and other authorities. Based on this thorough
investigation, the events, negotiations and agreements described above, and an
analysis of applicable law, plaintiff and his counsel have concluded
preliminarily that the terms and conditions of the Settlement are fair,
reasonable, adequate and in the best interests of the Company, plaintiff, and
the Class (as defined below).

            H. Plaintiff has entered into this Stipulation after taking into
account, among other things, (i) the substantial benefits to the Company and to
the members of the Class (as defined below) from the Americold Sale, the Special
Meeting and the Dissolution, (ii) the risks of continued litigation in the
Action, (iii) the desirability of permitting the Settlement to be consummated as
provided by the terms of this Stipulation,

                                       3
<PAGE>
and (iv) the preliminary conclusion of plaintiff's counsel that the terms and
conditions of the Settlement are fair, reasonable, adequate and in the best
interests of the Company, the plaintiff and the Class (as defined below).

            I. Defendants have denied, and continue to deny, that any of them
have committed or have threatened to commit any violations of law or breaches of
duty to the plaintiff, the Class or anyone else. Defendants do not concede any
infirmity in their defenses against the claims alleged in the Action. Defendants
are entering into the Stipulation of Settlement solely because the proposed
Settlement will eliminate the uncertainty, distraction, burden and expense of
further litigation.

      NOW, THEREFORE, IT IS STIPULATED AND AGREED, subject to approval by the
Court pursuant to Court of Chancery Rules 23 and 23.1, for the good and valuable
consideration set forth herein and conferred on plaintiff and the Class (as
defined below), that all of the Settled Claims (as defined below) are
completely, fully, finally and forever compromised, settled, released,
discharged, extinguished and dismissed with prejudice, upon and subject to the
terms and conditions set forth herein.

      1. For purposes of this Stipulation:

            A. "Class" means all record and beneficial owners of Company stock
during the period beginning on October 14, 1998, through and including the date
of the completion of the Dissolution, including any and all of their respective
successors in interest, predecessors in interest, representatives, trustees,
executors, administrators, heirs, assigns or transferees, immediate and remote,
and any person or entity acting for or

                                       4
<PAGE>
on behalf of, or claiming under, any of them, and each of them, and excluding
the Defendants;

            B. "Released Persons" means Defendants in the Action or any of their
families, parent entities, associates, affiliates or subsidiaries, and each and
all of their respective past, present or future officers, directors,
stockholders, shareholders, representatives, employees, attorneys, financial or
investment advisors, consultants, accountants, investment bankers, commercial
bankers, engineers, advisors or agents, heirs, executors, trustees, general or
limited partners or partnerships, limited liability companies, members, heirs,
executors, personal and legal representatives, estates, administrators,
predecessors, successors and assigns, whether or not they were named, served
with process or appeared in the Action; and

            C. "Settled Claims" means all claims, demands, rights, actions or
causes of action, liabilities, damages, losses, obligations, judgments, suits,
fees, expenses, costs, matters and issues of any kind or nature whatsoever,
whether known or unknown, contingent or absolute, suspected or unsuspected,
disclosed or undisclosed, matured or unmatured, that have been, could have been,
or in the future can or might be asserted in the Action or in any court,
tribunal or proceeding (including, but not limited to, any claims arising under
federal or state statutory or common law relating to alleged fraud, breach of
any duty, negligence, violations of the federal securities laws or otherwise) by
or on behalf of any member of the Class, whether individual, class, derivative,
representative, legal, equitable or any other type or in any other capacity,
which have

                                       5

<PAGE>
arisen, could have arisen, arise now or hereafter arise out of, or relate in any
manner to the allegations, facts, events, transactions, acts, occurrences,
statements, representations, misrepresentations, omissions, or any other matter,
thing or cause whatsoever, or any series thereof, embraced, involved or set
forth in, or referred to or otherwise related, directly or indirectly, in any
way to, the complaint in the Action or the subject matter of the Action, the
Americold Sale, the Dissolution, any public filings or statements (including,
but not limited to, public statements and the Proxy Statement) by any of the
defendants in the Action or any other Released Persons related directly or
indirectly to the complaint in the Action, the Americold Sale and the
Dissolution; provided however, that the Settled Claims shall not include the
right of plaintiff or any members of the Class to enforce the terms of this
Stipulation.

      2. Upon approval of the Settlement and dismissal with prejudice of the
Action, Vornado Realty Trust shall pay to Vornado Operating L.P. (the
"Partnership"), a subsidiary of the Company, the sum of $4,515,941 (the
"Settlement Payment"). The award of attorneys fees and costs to plaintiff's
counsel relating to this action, the expenses contemplated by paragraph 10 of
this Stipulation, and any other reasonable litigation-related expenses disclosed
to plaintiff's counsel shall be paid from the Settlement Payment. The remaining
amount of the Settlement Payment shall be distributed to all of the interest
holders in the Partnership, including the Company, in proportion to the
interests held. If the Dissolution is approved at the Special Meeting, then the
Company's share of the distribution from the Partnership shall be distributed
pro rata to the

                                       6
<PAGE>
Company's stockholders in proportion to the number of shares held. If Interstate
Properties receives a distribution from the Settlement Payment as a holder of
interests in the Partnership and subsequently converts its interests in the
Partnership into shares of the Company's common stock, then Interstate
Properties shall not receive any portion of the distribution of the Settlement
Payment from the Company with respect to the shares it received as a result of
converting its interests in the Partnership.

      3. The Company shall supplement the Proxy Statement to describe the action
and the Settlement (the "Supplemental Proxy Statement"). Plaintiff's counsel
shall have the opportunity to review and comment upon a draft of the
Supplemental Proxy Statement. Plaintiff's counsel shall provide comments within
48 hours of receiving the draft of the Supplemental Proxy Statement. If no
comments are received within 48 hours, then the draft shall be deemed approved.
Defendants shall exercise their best efforts to mail the Supplemental Proxy
Statement on or before December 7, 2004, to the record holders of Company common
stock as of November 16, 2004 (the record date for the Special Meeting).

      4. Plaintiff's approval of the Supplemental Proxy Statement shall
constitute plaintiff's agreement that the Proxy Statement and the Supplemental
Proxy Statement fairly and adequately disclose information sufficient to enable
Company stockholders to make an informed decision concerning whether to vote in
favor of the Dissolution. This provision shall not limit in any way the right of
the Company to issue the Supplemental Proxy Statement without Plaintiff's
approval.

                                       7
<PAGE>
      5. Plaintiff agrees that the Special Meeting may proceed as scheduled,
subject to the right of the Company to adjourn or postpone the Special Meeting.

      6. Plaintiff shall dismiss with prejudice the action pending in this Court
styled Weisman v. Vornado Operating Company, C.A. No. 882-N.

      7. Defendants shall provide plaintiff's counsel with document production
and will provide for a deposition of one member of the Company's special
committee on or before December 20, 2004, to confirm the fairness, adequacy and
reasonableness of the Settlement and the supplemental disclosures contemplated
herein.

      8. The releases contemplated by this Stipulation extend to claims that any
parties granting a release (the "Releasing Parties") do not know or suspect to
exist at the time of the release, which if known, might have affected the
Releasing Parties' decision to enter into this release. The Releasing Parties
will be deemed to relinquish, to the extent applicable, and to the full extent
permitted by law, the provisions, rights and benefits of Section 1542 of the
California Civil Code which provides:

      A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT
      KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE
      RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
      SETTLEMENT WITH THE DEBTOR.

In addition, the Releasing Parties will be deemed to relinquish, to the extent
applicable, and to the full extent permitted by law, the provisions, rights and
benefits of any law of any state or territory of the United States, federal law,
or principle of common law, which is similar, comparable or equivalent to
Section 1542 of the California Civil Code. The

                                       8
<PAGE>
Releasing Parties acknowledge that the Releasing Parties may discover facts in
addition to or different from those now known or believed to be true with
respect to the Settled Claims, but that it is the intention of the Releasing
Parties to hereby completely, fully, finally and forever compromise, settle,
release, discharge and extinguish any and all Settled Claims known or unknown,
suspected or unsuspected, which now exist, or heretofore existed, or may
hereafter exist, and without regard to the subsequent discovery or existence of
additional or different facts. The Releasing Parties warrant that the Releasing
Parties have read and understand Section 1542 of the California Civil Code and
have had the opportunity to consult with and be advised by counsel regarding its
meaning and effect. The Releasing Parties hereby voluntarily waive the
provisions, rights and benefits of Section 1542 of the California Civil Code and
the provisions, rights and benefits of any law of any state or territory of the
United States, federal law, or principle of common law, which is similar,
comparable or equivalent to Section 1542 of the California Civil Code.

      9. As soon as practicable after this Stipulation is executed, the parties
will jointly apply to the Court for an order in substantially the form attached
hereto as Exhibit A (the "Scheduling Order"), which will include provisions:

            A. scheduling a hearing (the "Settlement Hearing") during the week
of December 27, 2004, at which the Court will: (i) determine whether the Action
should be conditionally certified as a class action pursuant to Court of
Chancery Rules 23(a), 23(b)(1) and (b)(2); (ii) determine whether the terms and
conditions of the Settlement are fair, reasonable, adequate and in the best
interests of the Company and the Class; (iii)

                                       9
<PAGE>
determine whether a final judgment should be entered dismissing the Action as to
the Released Persons with prejudice as against the plaintiffs and the Class,
releasing the Settled Claims, and barring and enjoining prosecution of any and
all Settled Claims; (iv) consider the application of plaintiff's counsel for an
award of attorneys' fees and expenses; (v) hear and determine any objections to
the Settlement and the application of plaintiff's counsel for an award of
attorneys' fees and expenses; and (vi) order such other relief as the Court may
deem necessary and appropriate; and

            B. directing that a Notice of Pendency of Class and Derivative
Action, Proposed Settlement and Settlement Hearing, substantially in the form
attached hereto as Exhibit B (the "Notice"), be sent to all record and
beneficial holders of Company, other than the defendants, on November 16, 2004
(the record date for the Special Meeting), and further provide that distribution
of the Notice substantially in the manner set forth in the Scheduling Order
constitutes the best notice practicable under the circumstances, meets the
requirements of applicable law, is due and sufficient notice of all matters
relating to the Settlement, and fully satisfies the requirements of due process
and the Court of Chancery Rules.

      10. The Company shall be responsible for providing notice of the
Settlement to the members of the Class. All reasonable costs and expenses
incurred in providing notice of the Settlement pursuant to the Scheduling Order
shall be paid out of the Settlement Fund.

                                       10
<PAGE>
      11. If the Settlement (including any modification thereto made with the
consent of the parties as provided for herein) is approved by the Court, the
parties to this Stipulation will promptly request the Court to enter an Order
and Final Judgment, substantially in the form attached hereto as Exhibit C (the
"Final Order"), which among other things:

            A. certifies the Class pursuant to Court of Chancery Rules 23(a),
23(b)(1) and 23(b)(2) for purposes of the Settlement, approves the Settlement,
adjudges the terms of the Settlement to be fair, reasonable, adequate and in the
best interests of the Company and the Class, and directs consummation of the
Settlement in accordance with the terms and conditions of this Stipulation;

            B. determines that the requirements of the Court of Chancery Rules
and due process have been satisfied in connection with notice to the Class; and

            C. dismisses the Action with prejudice, said dismissal subject only
to compliance by the parties with the terms of this Stipulation and any Order of
the Court concerning this Stipulation, and permanently enjoins the plaintiffs,
the Class and their respective affiliates, and anyone claiming through or for
the benefit of any of them, from asserting, commencing, prosecuting, assisting,
instigating or in any way participating in the commencement or prosecution of
any action or other proceeding, in any forum, asserting any Settled Claims,
either directly, representatively, derivatively or in any other capacity.

                                       11
<PAGE>
      12. Pending final determination of whether the Settlement should be
approved, the parties to the Action shall apply jointly to the Court for an
Order enjoining and barring plaintiff and all members of the Class, and any of
them, from commencing, prosecuting, instigating or in any way participating in
the commencement or prosecution of any action asserting any Settled Claims,
either directly, representatively, derivatively or in any other capacity,
against any Released Person, which have been or could have been asserted, or
which arise out of or related in any way to any of the transactions or events
described in any complaint or amended complaint in the Action or either of them.

      13. In the event that the Settlement proposed herein is not approved by
the Court, or the Court approves the Settlement but such approval is reversed or
vacated or substantially modified on appeal, reconsideration or otherwise, and
such order reversing or vacating or modifying the Settlement becomes final by
lapse of time or otherwise, then the Settlement shall be null and void and of no
force and effect, unless otherwise agreed to in writing by the parties to this
Stipulation. In the event the Settlement is rendered null and void for any
reason, Defendants reserve the right to oppose certification of any class in
future proceedings and each party shall be restored to his, her or its
respective position as the party existed prior to execution of the MOU, neither
the MOU nor this Stipulation shall be deemed to prejudice in any way the
respective positions of the parties with respect to the Action, and neither the
existence of the MOU nor this Stipulation, nor their contents, shall be
admissible in evidence or shall be referred to for any purpose in the Action or
in any other litigation or proceeding.

                                       12
<PAGE>
        14. Each Released Person specifically disclaims any liability whatsoever
relating to any of the Settled Claims, expressly denies having engaged in, or
threatened to engage in, any breach of duty, violations of law or wrongful or
illegal activity or having failed to act in any matter required by law or rule,
or having violated, or threatened to violate, any law or regulation or duty,
expressly denies that any person or entity has suffered any harm or damages as a
result of such Released Person's involvement with the Settled Claims (or the
events at issue therein), and such Released Person is making this Settlement
(without conceding any infirmity in such Released Person's defenses against the
Settled Claims) solely to avoid the uncertainty, distraction, burden and expense
occasioned by litigation. Each Released Person believes such Released Person
acted, at all times, in the best interests of the Company and its stockholders.
The Court has made no finding that any Released Person has engaged in any
wrongdoing or wrongful conduct or otherwise acted improperly or in violation of
any law or regulation or duty in any respect.

      15. The provisions contained in this Stipulation and all negotiations,
statements and proceedings in connection therewith, including the MOU, are not,
will not be argued to be, and will not be deemed to be a presumption, concession
or admission by any Defendant of any fault, liability or wrongdoing as to any
facts or claims that have been or might be alleged or asserted in the Action, or
any other action or proceeding that has been, will be, or could be brought, and
shall not be interpreted, construed, deemed,

                                       13
<PAGE>
invoked, offered, or received in evidence or otherwise used by any person in the
Action, or in any other action or proceeding, whether civil, criminal or
administrative.

      16. This Stipulation may be executed in any number of actual or telecopied
counterparts and by each of the different parties on several counterparts, each
of which when so executed and delivered will be an original. The executed
signature page(s) from each actual or facsimile counterpart may be joined
together and attached and will constitute one and the same instrument.

      17. The waiver by any party of any breach of this Stipulation will not be
deemed or construed as a waiver of any other breach of this Stipulation, whether
prior, subsequent, or contemporaneous.

      18. In addition to the actions specifically provided for in this
Stipulation, the parties will use their reasonable best efforts from the date
hereof to take, or cause to be taken, all actions, and to do, or cause to be
done, all things, reasonably necessary, proper or advisable under applicable
laws, regulations and agreements to consummate and make effective this
Stipulation (including, but not limited to, using their best efforts to resolve
any objections raised to the Settlement). Unless plaintiff exercises its right
to withdraw after the completion of confirmatory discovery, the parties and
their attorneys agree to cooperate fully with one another in seeking the Court's
approval of this Stipulation and the Settlement and to use their best efforts to
effect the consummation of this Stipulation and the Settlement.

                                       14
<PAGE>
      19. Without further order of the Court, the parties may agree to
reasonable extensions of time not expressly set by the Court order to carry out
any of the provisions of this Stipulation.

      20. Each party represents and warrants that the party, or a responsible
officer or partner or other fiduciary thereof, has read this Stipulation and
understands the contents hereof.

      21. Each party represents and warrants that the party has made such
investigation of the facts pertaining to the Settlement and of all of the
matters pertaining thereto as the party deems necessary and advisable.

      22. Each term of this Stipulation is contractual and not merely a recital.

      23. Plaintiff intends to petition the Court for an award of attorneys'
fees and expenses. Any such petition shall be filed in advance of the Settlement
Hearing, and the parties shall seek to have the Court rule on the petition at
the Settlement Hearing. Defendants agree not to oppose any petition that seeks
an award of attorneys' fees and expenses in an amount equal to or less than
$250,000 (the "Fee Application"). The Partnership, on its own behalf and/or on
behalf and for the benefit of the Defendants in the Action, agrees to pay any
fees and expenses awarded by the Court out of the Settlement Payment. Final
resolution by the Court of the Fee Application shall not be a precondition to
the dismissal of the Action in accordance with this Stipulation.

      24. The Fee Application may be considered separately from the proposed
Settlement of the Action. The Partnership shall pay any fees and expenses
awarded by

                                       15
<PAGE>
the Court in the Action to plaintiffs' counsel in the Action within five (5)
business days after the date on which the Final Order is approved.

      25. This Stipulation may not be amended, changed, waived, discharged or
terminated (except as explicitly provided herein), in whole or in part, except
by an instrument in writing signed by the party against whom enforcement of such
amendment, change, waiver, discharge or termination is sought.

      26. This Stipulation and the Settlement shall be governed by, and
construed in accordance with, the laws of the State of Delaware, without regard
to Delaware's principles governing choice of law. Any action relating to this
Stipulation or the Settlement will be filed exclusively in the Court. Each party
hereto (i) consents to personal jurisdiction in any such action (but in no other
action) brought in the Court, (ii) consents to service of process by registered
mail upon such party and/or such party's agent, (iii) waives any objection to
venue in the Court and any claim that Delaware or the Court is an inconvenient
forum, and (iv) waives any right to demand a jury trial as to any such action.

      27. This Stipulation constitutes the entire agreement among the parties
with respect to the subject matter hereof, and supersedes all prior or
contemporaneous oral or written agreements, understandings or representations,
including without limitation the MOU. All of the exhibits hereto are
incorporated herein by reference as if set forth herein verbatim, and the terms
of all exhibits are expressly made part of this Stipulation.

                                       16
<PAGE>
      28. This Stipulation is and will be binding upon, and inure to the benefit
of, the parties and their respective affiliates, agents, executors, heirs,
successors and permitted assigns.

      29. Each plaintiff in the Action warrants and represents that he or she
has not assigned, encumbered or in any manner transferred (in whole or in part),
or purported to assign, encumber or in any manner transfer (in whole or in
part), any claim or cause of action (i) referred to in the Action or (ii) which
constitutes a Settled Claim, and that he or she will not do so.

      30. The terms and provisions of this Stipulation are intended solely for
the benefit of the Released Persons, the Class, and their respective successors
and permitted assigns, and it is not the intention of the parties to confer
third party beneficiary rights or remedies upon any other person or entity,
except any attorneys' fees and expenses to be paid pursuant to the terms of this
Stipulation.

      31. This Stipulation will be deemed to have been mutually prepared by the
parties and will not be construed against any of them by reason of authorship.

      32. If any provision of this Stipulation is held to be illegal, invalid,
or unenforceable (i) such provision will be fully severable, (ii) this
Stipulation will be construed and enforced as if such illegal, invalid, or
unenforceable provision had never comprised a part of this Stipulation, and
(iii) the remaining provisions of this Stipulation will remain in full force and
effect and will not be affected by the illegal, invalid, or unenforceable
provision or by its severance from this Stipulation.

                                       17
<PAGE>
      IN WITNESS WHEREOF, the parties have executed this Stipulation effective
as of the date set forth below.

<TABLE>
<S>                                      <C>
/s/ STEPHEN E. JENKINS                   /s/ J. TRAVIS LASTER
----------------------                   --------------------
Stephen E. Jenkins (No. 2152)            J. Travis Laster (No. 3514)
Richard D. Heins (No. 3000)              Philippe Y. Blanchard (No. 4493)
Ashby & Geddes                           Richards, Layton & Finger, P.A.
222 Delaware Avenue                      One Rodney Square
P.O. Box 1150                            P.O. Box 551
Wilmington, Delaware  19899              Wilmington, Delaware  19899
(302) 654-1888                           (302) 651-7700
Attorneys For Plaintiff                  Attorneys For Defendants

DATED: November 29, 2004
</TABLE>

                                       18

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