Sample Business Contracts

Employment Agreement - Warren Resources Inc. and Jack B. King

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                       [Warren Resources, Inc. letterhead]

May 2, 2001

Jack B. King
Vice President - National Sales Director
Warren Resources, Inc.
2512 Chambers Road, Suite 107

Re:      2001 Cash Compensation

Dear Jack:

As the National Sales Director of Warren  Resources,  Inc.,  (the Company),  you
will be responsible for the overall  supervision of the private  placement sales
of the Company's  drilling fund  investment  products by the Company's  national
wholesaler network (Wholesaler Network).  Your duties shall include creating new
and  maintaining  existing  relationships  with the Broker  Dealer  community in
connection  with  the  Company's  private  placement  of  drilling  funds by the
Wholesaler Network. You will report directly to me as the CEO.

Additionally,  you will continue to be a regional wholesaler  generally covering
the  Southwest  and Hawaii as set forth in Schedule C,  hereto.  However,  it is
recognized  that  you  may  need  to  alter  the  composition  of the  wholesale
territories in consultation with me as circumstances dictate during 2001.

Your  cash  compensation  for  2001  will  consist  of the  following,  (1) base
compensation  of $16,666.67  per month to be recovered by the Company solely out
of the  incentive  compensation  earned  by you  and  (2)  the  balance  of your
incentive cash  compensation in excess of base  compensation as set forth in the
Attachment A, hereto.

Your incentive cash compensation for 2001 shall be based upon the drilling funds
raised by the Wholesaler Network during 2001 as follows: (1) an override of 0.3%
of drilling  funds raised  nationally by the Wholesaler  Network,  (2) an amount
based upon the sliding  scale set forth in  Attachment  A, hereto,  for drilling
funds raised in your sales territory and (3) an override for the first two years
of 0.25% of drilling funds raised  nationally by the Wholesaler  Network for all
new Broker Dealers you personally add to the Wholesaler Network.


The Company will provide you with a budget of 1.7% of all drilling  funds raised
nationally by the Wholesaler  Network for agreed  marketing  expenses under your
control (See  Schedule B). You may use your own credit  card(s) or a credit card
provided to you by the  Company.  You are  required to submit  reimbursable  and
non-reimbursable  expense  reports on a timely basis along with receipts for all
items in accordance with the Company's expense  reimbursement  policies.  If the
total agreed  marketing  expenses for 2001,  net of  reimbursements  made to the
Company,  exceed 1.7% of drilling  funds  raised  nationally  by the  Wholesaler
Network, you shall reimburse the difference to the Company out of your incentive
compensation.  If the total expenses for 2001, net of  reimbursements,  are less
than 1.7% of drilling  funds raised  nationally by the Wholesaler  Network,  the
difference shall be added to your incentive compensation.

The Company shall  continue to provide you with a health  insurance plan for you
and your  dependents.  You will continue to participate  in the Company's  401-k
Retirement  Plan  in  which  the  Company  has  agreed  to  match  50%  of  your
contributions up to 6% of your annual compensation.

Please sign and return one copy of this letter to indicate  your  acceptance  of
the terms of employment  for calendar year 2001.  The term of this contract ends
December 31, 2001.

Sincerely,                                           ACCEPTED:

/s/ Norman F. Swanton                                /s/ Jack B. King
Norman F. Swanton                                    Jack B. King
Chief Executive Officer                              5-7-01
& Chairman of the Board                              -------



                                                                    ($30 million)
    Drilling funds raised             Compensation                  Compensation                   Cumulative
        in territory                   percentage                      earned                     compensation
----------------------------- ----------------------------- ----------------------------- -----------------------------
      $1 - 7.5 million                    1.00%                          75,000                        75,000
     $7.5 - $15 million                   1.50%                         112,500                       187,500
      over $15 million                    2.00%                         300,000                       487,500

Drilling funds raised nationally by all wholesalers (assume $65 million)

          all funds                       0.30%                         195,000                       682,500

New Broker Dealers introduced by Jack King (assume $4 million):

          all funds                       0.25%                          10,000                       692,500

                        /s/ NS                             /s/  JK
                        -----------------                  -----------------
                           initials                           initials



Generally, all marketing expenses will be included in your 2001 budget.

Items specifically excluded include the following:

Printing and artwork related to brochures
New York mailing expenses, including all UPS charges

Items specifically included include the following:

Due diligence expenses, including FSX, Nationwide and IPA
Hotels, lodging
Airfare, transportation
Auto expenses
Meals and Entertainment
Car rental
Seminars, conferences, including national broker dealer conferences
Office rents
Computer hardware, software and maintenance
Professional education
Medical insurance
Telephone, pager, cellphone
Office supplies
Memberships, dues
Gifts, awards
Michael Hughes' salary and bonus
Christy's salary and bonus
All overrides

                        /s/ NS                             /s/  JK
                        -----------------                  -----------------
                           initials                           initials



Regional territory description

New Mexico

Consulting relationships

Northpoint - CPAs
Lido - Kushner

National territory
All states
All CBM Joint Venture  Transactions  consummated by National  Wholesaler Network
(excluding NFS)
All Syndicated  Drilling Funds Transactions  consummated by National  Wholesaler
Network through the Company's  broker dealer network,  including  broker dealers
who have become the Company's underwriters

                        /s/ NS                             /s/  JK
                        -----------------                  -----------------
                           initials                           initials