-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QSlK/OGwSGpObbXLxvAHzF3e5LsCXCfAFc1wlKDXPE/Zfal/csEe/v/FCe9lSMt2 onsO9MKYO7phkXY43MmI4Q== 0000899243-96-000053.txt : 19960202 0000899243-96-000053.hdr.sgml : 19960202 ACCESSION NUMBER: 0000899243-96-000053 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 19960201 SROS: NASD SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: FOREST OIL CORP CENTRAL INDEX KEY: 0000038079 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 250484900 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-10360 FILM NUMBER: 96510155 BUSINESS ADDRESS: STREET 1: 2200 COLORADO STATE BANK BLDG STREET 2: 1600 BROADWAY CITY: DENVER STATE: CO ZIP: 80202 BUSINESS PHONE: 3038121400 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: JOINT ENERGY DEVELOPMENT INVESTMENTS LP CENTRAL INDEX KEY: 0001007030 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 1400 SMITH ST CITY: HOUSTON STATE: TX ZIP: 77002 BUSINESS PHONE: 7138534829 MAIL ADDRESS: STREET 1: 1400 SMITH ST CITY: HOUSTON STATE: TX ZIP: 77002 SC 13D 1 SCHEDULE 13D UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D UNDER THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. ________)* Forest Oil Corporation ---------------------- (Name of Issuer) Common Stock, $.10 par value per share -------------------------------------- (Title of Class of Securities) 346091 60 6 --------------------------- (CUSIP Number) Julia Heintz, General Counsel - Finance Enron Capital & Trade Resources Corp. 1400 Smith Street Houston, Texas 77002 (713) 853-4794 -------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) January 24, 1996 ---------------- (Date of Event which Requires Filing of This Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ]. Check the following box if a fee is being paid with the statement [x]. (A fee is not required only if the reporting person (1) has a previous statement on file reporting beneficial ownership of more than five percent of the class of securities described in Item 1; and (2) has filed no amendment subsequent thereto reporting beneficial ownership of five percent or less of such class.) (See Rule 13d-7.) NOTE: Six copies of this statement, including all exhibits, should be filed with the Commission. See Rule 13d-1(a) for other parties to whom copies are to be sent. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). - ----------------------- CUSIP NO.: 346091 60 6 SCHEDULE 13D - ----------------------- - ------------------------------------------------------------------------------ NAME OF REPORTING PERSON 1 S.S. OR IRS IDENTIFICATION NO. OF ABOVE PERSON Joint Energy Development Investments Limited Partnership - ------------------------------------------------------------------------------ CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP 2 (a) [_] N/A (b) [_] - ------------------------------------------------------------------------------ SEC USE ONLY 3 - ------------------------------------------------------------------------------ SOURCE OF FUNDS* 4 00 - ------------------------------------------------------------------------------ CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO 5 ITEM 2(d) or 2(e) [ ] - ------------------------------------------------------------------------------ CITIZENSHIP OR PLACE OF ORGANIZATION 6 Delaware - ------------------------------------------------------------------------------ SOLE VOTING POWER 7 NUMBER OF 0 SHARES ----------------------------------------------------------- SHARED VOTING POWER BENEFICIALLY 8 1,680,000 shares of Common Stock, $.10 par value OWNED BY per share, of Forest Oil Corporation ----------------------------------------------------------- EACH SOLE DISPOSITIVE POWER 9 REPORTING 0 PERSON ----------------------------------------------------------- SHARED DISPOSITIVE POWER WITH 10 1,680,000 shares of Common Stock, $.10 par value per share, of Forest Oil Corporation - ------------------------------------------------------------------------------ AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 11 1,680,000 shares of Common Stock, $.10 par value per share, of Forest Oil Corporation - ------------------------------------------------------------------------------ CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* 12 N/A [ ] - ------------------------------------------------------------------------------ PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 13 13.6% of the Common Stock of Forest Oil Corporation - ------------------------------------------------------------------------------ TYPE OF REPORTING PERSON* 14 PN - ------------------------------------------------------------------------------ - ----------------------- CUSIP NO.: 346091 60 6 SCHEDULE 13D - ----------------------- - ------------------------------------------------------------------------------ NAME OF REPORTING PERSON 1 S.S. OR IRS IDENTIFICATION NO. OF ABOVE PERSON Enron Corp. - ------------------------------------------------------------------------------ CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP 2 (a) [_] N/A (b) [_] - ------------------------------------------------------------------------------ SEC USE ONLY 3 - ------------------------------------------------------------------------------ SOURCE OF FUNDS* 4 00 - ------------------------------------------------------------------------------ CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO 5 ITEM 2(d) or 2(e) [ ] - ------------------------------------------------------------------------------ CITIZENSHIP OR PLACE OF ORGANIZATION 6 Delaware - ------------------------------------------------------------------------------ SOLE VOTING POWER 7 NUMBER OF 0 SHARES ----------------------------------------------------------- SHARED VOTING POWER BENEFICIALLY 8 1,680,000 shares of Common Stock, $.10 par value OWNED BY per share, of Forest Oil Corporation ----------------------------------------------------------- EACH SOLE DISPOSITIVE POWER 9 REPORTING 0 PERSON ----------------------------------------------------------- SHARED DISPOSITIVE POWER WITH 10 1,680,000 shares of Common Stock, $.10 par value per share, of Forest Oil Corporation - ------------------------------------------------------------------------------ AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 11 1,680,000 shares of Common Stock, $.10 par value per share, of Forest Oil Corporation - ------------------------------------------------------------------------------ CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* 12 N/A [ ] - ------------------------------------------------------------------------------ PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 13 13.6% of the Common Stock of Forest Oil Corporation - ------------------------------------------------------------------------------ TYPE OF REPORTING PERSON* 14 CO - ------------------------------------------------------------------------------ Item 1. Security and Issuer. This statement relates to the common stock, $0.10 par value per share (the "Common Stock"), of Forest Oil Corporation, a New York corporation (the "Issuer"). The address of the principal executive offices of the Issuer is 1600 Broadway, Suite 2200, Denver, Colorado 80202. Item 2. Identity and Background. This statement is being filed by (i) Joint Energy Development Investments Limited Partnership, a Delaware limited partnership ("JEDI"), which is engaged primarily in the business of investing in and managing certain energy related assets and (ii) Enron Corp., a Delaware corporation ("Enron"), which is an integrated natural gas company that engages, primarily through subsidiaries, in the gathering, transportation and wholesale marketing of natural gas, the exploration for and production of natural gas and crude oil, the production, purchase, transportation and worldwide marketing and trading of natural gas liquids, crude oil and refined petroleum products, the production and sale of cogenerated electricity and steam and the purchasing and marketing of long-term energy-related commitments. JEDI and Enron are referred to herein as the "Reporting Entities". Additional entities that may be deemed to be control persons of JEDI are (a) Enron Capital Management Limited Partnership, a Delaware limited partnership and the general partner of JEDI ("ECMLP"), whose principal business is to manage oil and gas related investments, (b) Enron Capital Corp., a Delaware corporation and the general partner of ECMLP ("ECC"), whose principal business is to manage oil and gas related investments and (c) Enron Capital & Trade Resources Corp., a Delaware corporation ("ECT"), whose principal business is the purchase of natural gas, gas liquids and power through a variety of contractual arrangements and marketing these energy products to local distribution companies, electric utilities, cogenerators and both commercial and industrial end-users. ECT also provides risk management services. ECC is a wholly owned subsidiary of ECT, which is a wholly owned subsidiary of Enron. The address of the principal business and the principal office of JEDI, ECMLP, ECC, ECT and Enron is 1400 Smith, Houston, Texas 77002. Schedule I attached hereto sets forth certain additional information with respect to each director and each executive officer of ECC and Enron. The filing of this statement on Schedule 13D shall not be construed as an admission that Enron, ECT, ECC, ECMLP or any person listed on Schedule I hereto is, for the purposes of Section 13(d) or 13(g) of the Securities Exchange Act of 1934, the beneficial owner of any securities covered by this statement. None of the Reporting Entities, nor, to their knowledge, ECMLP, ECC, ECT or any person listed on Schedule I hereto, has been, during the last five years (i) convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) a party to a civil proceeding and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, U.S. federal or state securities laws or finding any violation with respect to such laws. Item 3. Source and Amount of Funds or Other Consideration. On January 24, 1996, JEDI acquired an aggregate of 1,680,000 shares of Common Stock (the "Shares") pursuant to a Second Restructure Agreement dated as of December 29, 1995 with the Issuer. JEDI acquired the Shares in exchange for (i) the cancellation of approximately $22.4 million in principal amount of a loan under a Loan Agreement between JEDI and the Issuer and (ii) the assignment of JEDI's interest in certain warrants (that were not then exercisable) to acquire 2,250,000 shares of Common Stock. Item 4. Purpose of Transaction. The transactions described in Item 3 above occurred as a result of negotiated transactions with the Issuer. The Shares were acquired by JEDI for investment purposes. JEDI intends to review its investment in the Issuer on a continuing basis and, depending upon the price of, and other market conditions relating to, the Common Stock, subsequent developments affecting the Issuer, the Issuer's business and prospects, other investment and business opportunities available to JEDI, general stock market and economic conditions, tax considerations and other factors deemed relevant, may decide to increase or decrease the size of its investment in the Issuer. In connection with the transactions described in Item 3 above, the Issuer granted JEDI the right, upon the occurrence of certain events set forth in a Shareholders Agreement dated January 24, 1996 between the Issuer and JEDI, to request that the Issuer take all actions necessary to cause (i) the election as a director of the Issuer of a person selected by JEDI who may lawfully serve as a director and who is reasonably satisfactory to the Issuer and (ii) the calling of meetings of the Board of Directors upon the written request of each such designee. Other than as described above, none of the Reporting Entities, nor, to their knowledge, ECMLP, ECC, ECT or any person listed on Schedule I hereto, has any plan or proposal that would result in any of the consequences listed in paragraphs (a) - (j) of Item 4 of Schedule 13D. Item 5. Interest In Securities of the Issuer. JEDI beneficially owns and has the power to vote and dispose of shares of Common Stock, representing approximately 13.6% of the shares of Common Stock outstanding. Because ECC is an indirect, wholly owned subsidiary of Enron, Enron may also be deemed to beneficially own such shares. Enron disclaims beneficial ownership of all of such shares. Except as described herein, none of the Reporting Entities, nor, to their knowledge, ECMLP, ECC, ECT or any of the persons named in Schedule I hereto, has effected any transactions in any shares of Common Stock since November 30, 1995. Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer. Certain registration rights granted to JEDI by the Issuer are set forth in a Registration Rights Agreement dated July 27, 1995, as amended by Amendment No. 1 to Registration Rights Agreement dated January 24, 1996 between the Issuer and JEDI. JEDI has entered into a Shareholders Agreement dated January 24, 1996 with the Issuer that, among other things, limits JEDI's right to vote its shares of Common Stock and, except in certain limited circumstances, to transfer its shares before July 27, 1998. Item 7. Material to be Filed as Exhibits. Exhibit 1 - Shareholders Agreement dated January 24, 1996 between the Issuer and JEDI. Exhibit 2 - Registration Rights Agreement dated July 27, 1995 between the Issuer and JEDI. Exhibit 3 - Amendment No. 1 to Registration Rights Agreement dated January 24, 1996 between the Issuer and JEDI. Signature. After reasonable inquiry and to the best knowledge and belief of the undersigned, the undersigned certify that the information set forth in this statement is true, complete and correct. February 1, 1996 JOINT ENERGY DEVELOPMENT INVESTMENTS LIMITED PARTNERSHIP By: Enron Capital Management Limited Partnership, its general partner By: Enron Capital Corp., its general partner By: /s/ Peggy B. Menchaca ------------------------------------- Peggy B. Menchaca Vice President and Secretary ENRON CORP. By: /s/ Peggy B. Menchaca ------------------------------------- Peggy B. Menchaca Vice President and Secretary SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS ENRON CAPITAL CORP. NAME AND BUSINESS ADDRESS CITIZENSHIP POSITION AND OCCUPATION - ------------------------- ----------- ----------------------- 1400 Smith Street Houston, Texas 77002 James V. Derrick, Jr. U.S.A. Director John J. Esslinger U.S.A. Director, Vice Chairman and Managing Director Lou L. Pai U.S.A. Director, Chief Operating Officer and Managing Director Jeffrey K. Skilling U.S.A. Director, Chairman, Chief Executive Officer and Managing Director Gene E. Humphrey U.S.A. President and Managing Director Richard A. Causey U.S.A. Vice President Mark E. Haedicke U.S.A. Managing Director and General Counsel Julia A. Heintz U.S.A. Vice President and General Counsel, Finance Robert J. Hermann U.S.A. Vice President, Tax Clifford P. Hickey U.S.A. Vice President Kurt S. Huneke, Sr. U.S.A. Vice President, Finance and Treasurer Peggy B. Menchaca U.S.A. Vice President and Secretary Deborah S. Wernet U.S.A. Vice President
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DIRECTORS AND EXECUTIVE OFFICERS ENRON CORP. NAME AND BUSINESS ADDRESS CITIZENSHIP POSITION AND OCCUPATION - ------------------------- ----------- ----------------------- Robert A. Belfer U.S.A. Director 927 Fifth Avenue Former President and Chairman, New York, NY 10021 Belco Petroleum Corporation Norman P. Blake, Jr. U.S.A. Director USF&G Corporation Chairman and CEO, United States 100 Light Street, 35th Fidelity and Guaranty Company Floor Baltimore, MD 21202 John H. Duncan U.S.A. Director 5110 San Felipe, Suite 332W Former Chairman of the Executive Houston, TX 77057 Committee of Gulf & Western Industries, Inc. Joe H. Foy U.S.A. Director 2900 South Tower Retired Senior Partner, Pennzoil Place Bracewell & Patterson Houston, TX 77002 Wendy L. Gramm U.S.A. Director P.O. Box 39134 Former Chairman, U.S. Commodity Washington, D.C. 20016 Futures Trading Commission Robert K. Jaedicke U.S.A. Director Graduate School of Business Former Dean, Graduate School of Stanford University Business, Stanford University Stanford, CA 94305 Charles A. Lemaistre U.S.A. Director The University of Texas President, University of Texas M.D. M.D. Anderson Cancer Center Anderson Cancer Center 1515 Holcombe Houston, TX 77030
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NAME AND BUSINESS ADDRESS CITIZENSHIP POSITION AND OCCUPATION - ------------------------- ----------- ----------------------- John A. Urquhart U.S.A. Director and Vice Chairman John A. Urquhart Associates Vice Chairman, Enron Corp., 111 Beach Road President, John A. Urquhart Fairfield, CT 06430 Associates, and Former Senior Vice President of Industrial and Power Systems, General Electric Company John Wakeham U.K. Director Pinglestone House Former U.K. Secretary of State for Old Alresford Energy and Leader of the House of Hampshire S024 9TB Lords United Kingdom Charls E. Walker U.S.A. Director Walker/Potter Associates Chairman, Walker/Potter Associates, Suite 200 Inc., and Former Deputy Secretary of 1730 Pennsylvania Avenue, the Treasury NW Washington, D.C. 20006 Herbert S. Winokur, Jr. U.S.A. Director Winokur & Associates, Inc. President, Winokur & Associates, 72 Cummings Point Road Inc., and Former Senior Executive Stamford, CT 06902 Vice President, Penn Central Corporation 1400 Smith Street Houston, Texas 77002 Kenneth L. Lay U.S.A. Director, Chairman and Chief Executive Officer Richard D. Kinder U.S.A. Director, President and Chief Operating Officer Edmund P. Segner, III U.S.A. Executive Vice President and Chief of Staff
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NAME AND BUSINESS ADDRESS CITIZENSHIP POSITION AND OCCUPATION - ------------------------- ----------- ----------------------- 1400 Smith Street Houston, Texas 77002 James V. Derrick, Jr. U.S.A. Senior Vice President and General Counsel Jack I. Tompkins U.S.A. Senior Vice President and Chief Information, Administrative and Accounting Officer Robert H. Butts U.S.A Vice President and Controller Robert J. Hermann U.S.A. Vice President, Tax Kurt S. Huneke, Sr. U.S.A. Vice President, Finance and Treasurer Thomas E. White U.S.A. Chairman and Chief Executive Officer, Enron Operations Company Jeffrey K. Skilling U.S.A. Chairman, Chief Executive Officer and Managing Director Enron Capital & Trade Resources Corp. Rodney L. Gray U.S.A. Chairman, President and Chief Executive Officer, Enron Global Power & Pipelines L.L.C.
I-4 EXHIBIT INDEX Exhibit - ------- Exhibit 1 - Shareholders Agreement dated January 24, 1996 between the Issuer and JEDI. Exhibit 2 - Registration Rights Agreement dated July 27, 1995 between the Issuer and JEDI. Exhibit 3 - Amendment No. 1 to Registration Rights Agreement dated January 24, 1996 between the Issuer and JEDI. EX-1 2 EXHIBIT 1 SHAREHOLDERS AGREEMENT THIS SHAREHOLDERS AGREEMENT (the "Agreement") dated as of January 24, 1996 is between FOREST OIL CORPORATION, a New York corporation (the "Company"), and JOINT ENERGY DEVELOPMENT INVESTMENTS LIMITED PARTNERSHIP, a Delaware limited partnership ("JEDI"). RECITALS A. The parties have entered into the Second Restructure Agreement (the "Second Restructure Agreement") dated as of December 29, 1995. B. Pursuant to the Second Restructure Agreement, JEDI has acquired 1,680,000 (the "JEDI Shares") of the Company's common stock, par value $.10 per share, together with the associated Rights (as defined in the Second Restructure Agreement) (the "Common Stock"). AGREEMENT The parties agree as follows: ARTICLE I DEFINITIONS The following terms have the following meanings: "Action" against a person means an action, suit, investigation, complaint or other proceeding, whether civil or criminal, in law or equity or before any arbitrator or Governmental Body, pending against or affecting the person or its property. "Affiliate" of a person means any other person (i) that directly or indirectly controls, is controlled by or is under common control with, the person or any of its Subsidiaries, (ii) that directly or indirectly beneficially owns or holds 5% or more of any class of voting stock of the person or any of its Subsidiaries or (iii) 5% or more of the voting stock of which is directly or indirectly beneficially owned or held by the person or any of its Subsidiaries. The term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract or otherwise; provided that in relation to JEDI, "Affiliate" shall not include (i) any Affiliate of Enron Corp. that is not wholly owned, directly or indirectly, by Enron Corp., unless such Affiliate (a) beneficially owns any of the JEDI Shares or (b) is a member of a Group in which any person that beneficially owns any of the JEDI Shares is a member or (ii) the California Public Employees Retirement System. "Anschutz" means The Anschutz Corporation, a Kansas corporation. "Anschutz Shareholders Agreement" means the Shareholders Agreement entered into between the Company and Anschutz dated May 17, 1995. "beneficial ownership" has the meaning assigned to that term under Section 13(d) of the Exchange Act, unless otherwise specified herein. "Board of Directors" means the board of directors of the Company, from time to time. "Business Combination Transaction" means a merger, consolidation or similar transaction and each transaction that constitutes a "Change of Control" within the meaning of the Indenture dated as of September 8, 1993 between the Company and Shawmut Bank Connecticut, N.A. (giving effect to other terms and provisions of such indenture that are directly or indirectly incorporated or referenced by the definition therein of "Change of Control"). "Common Stock" has the meaning ascribed to it in Paragraph B of the Recitals hereof. "Equity Securities" of a person means the capital stock of such person and all other securities convertible into or exchangeable or exercisable for any shares of its capital stock, all rights to subscribe for or to purchase, all options for the purchase of, and all calls, commitments, or claims of any character relating to any shares of its capital stock and any securities convertible into or exchangeable or exercisable for any of the foregoing. "Excess JEDI Shares" means, at any time of determination and with respect to the matter subject to the vote or consent for which the Excess JEDI Shares are then being determined, 2 (i) the Equity Securities of the Company owned by any of JEDI and its Affiliates and the Groups in which any of them may be members that may then be voted or with respect to which consent may then be given, in each case with respect to such matter less (ii) the Non-Restricted Shares. "Exchange Act" means the Securities Exchange Act of 1934, as amended, and the related rules and regulations. "Governmental Body" means any agency, bureau, commission, court, department, official, political subdivision, tribunal or other instrumentality of any government, whether federal, state, county or local, domestic or foreign. "Group" has the meaning given such term in Section 13(d)(3) of the Exchange Act. "Independent Director" means any director who is not and has not been during the preceding two years an officer or employee of the Company or a director, officer or employee of a beneficial owner of 5% or more of the shares of Common Stock then issued and outstanding or of any Affiliate of such beneficial owner. "JEDI Registration Rights Agreement" means the Registration Rights Agreement dated July 27, 1995 between JEDI and the Company, as amended the date hereof. "JEDI Designee" shall have the meaning ascribed to it in Section 2.1(a). "JEDI Shares" has the meaning set forth in Paragraph B of the Recitals hereof. "Material Adverse Change" means any of (i) the average price for a share of Common Stock over a period of thirty trading days being less than or equal to $1.75, such number being subject to adjustment for any stock or other non-cash dividends, split-ups, mergers, recapitalizations, combinations, subdivisions, conversions, exchanges of shares or the like; or (ii) (a) any downgrading by any "nationally recognized statistical rating organization" (as that term is defined by the SEC for purposes of Rule 436(g)(2) under the Securities Act of 1933, as amended) in the rating accorded to any debt security of the Company by two or more ratings (including the relative standings within a major rating category) (x) below the rating existing as of the date hereof or (y) if not issued as of the date hereof, below the rating accorded thereto at the time of its initial issuance, or (b) any such downgrading which results in any debt security being accorded a rating of CCC or below by Standard & Poor's Ratings Group, a division of McGraw-Hill, Inc., or a rating of Caa or below by Moody's Investors Service, Inc. or their respective equivalents by any other such nationally recognized statistical rating organization. 3 "Non-Restricted Shares" means those shares of Common Stock, calculated by multiplying (i) the number of Equity Securities of the Company owned by any of JEDI and its Affiliates and the Groups in which any of them may be members that may then be voted or with respect to which consent may then be given by (ii) the quotient of (x) the number of Effective Equity Securities (as defined in the Anschutz Shareholders Agreement) less the number of Excess Purchaser Securities (as defined in the Anschutz Shareholders Agreement) divided by (y) the sum of the number of Effective Equity Securities and the shares of Common Stock issuable to Anschutz or its Affiliates or Groups upon conversion of the shares of Second Series Convertible Preferred Stock owned by Anschutz; provided, however, that if the Excess Purchaser Securities is equal to zero, the Effective Equity Securities shall be deemed to include such number of shares of Common Stock issuable upon conversion of the shares of Second Series Convertible Preferred Stock owned by Anschutz or its Affiliates or Groups, which when added to the Effective Equity Securities would result in Anschutz and its Affiliates and Groups having voting power at the time of determination equal to 19.99% of the aggregate voting power of all Equity Securities of the Company then issued and outstanding. "Permitted Transfer Date" means the earlier to occur of (i) July 27, 1998 or (ii) the date on which Anschutz and its Affiliates or Groups shall have sold 50% or more of the shares of Common Stock beneficially owned by Anschutz and its Affiliates or Groups, which figure shall include shares of Common Stock issuable pursuant to the Second Series Convertible Preferred Stock, the JEDI/Anschutz Option and the Tranche A Warrants (as each such term is defined in the Second Restructure Agreement), held by Anschutz and its Affiliates or Groups on the date hereof, but excluding any shares of Common Stock issuable pursuant to the JEDI/Anschutz Option or the Tranche A Warrants if such option or warrants expires or is canceled or terminated during the period between the date hereof and July 27, 1998. "Related Transaction" means, with respect to any acquisition or disposition, or deemed acquisition or disposition, of any securities, a transaction that (i) has been disclosed in a document filed with the SEC with respect to the Company (that is then available for inspection at the offices of the SEC) or has been otherwise publicly announced and (ii) by its terms is effective upon, or immediately before or after giving effect to, the occurrence of such acquisition or disposition or deemed acquisition or disposition. "Rights Agreement" has the meaning ascribed to it in the Second Restructure Agreement. "SEC" means the United States Securities and Exchange Commission. "Second Restructure Agreement" has the meaning set forth in Paragraph A of the Recitals hereof. 4 "Section 16(b) Liability" means liability under Section 16(b) of the Exchange Act with respect to or as a consequence, directly or indirectly, of JEDI's or JEDI's Affiliate's acquisition (or deemed acquisition) or disposition (or deemed disposition) of "beneficial ownership" of, or a "pecuniary interest" or "indirect pecuniary interest" in, any of the JEDI Shares that shall have been issued or otherwise created, acquired (or deemed to have been acquired) or disposed of (or deemed to have been disposed of) by or pursuant to the Second Restructure Agreement. "Section 16(b) Matter" means each matter or series of matters (including, without limitation, a proposed transaction or series of transactions involving any stock or other non-cash dividend, split-up, reverse split-up, reclassification, recapitalization, reorganization, combination, subdivision, conversion, exchange of shares or Business Combination Transaction) which, directly or indirectly, as a result of the taking of action with respect thereto by the Company, its Board of Directors or shareholders or any Governmental Body having jurisdiction thereover, or the conclusion of any such matter will or may, directly or indirectly, whether taken alone or together with other facts or events, result in Section 16(b) Liability; provided, however, that a Section 16(b) Matter shall not include any of the foregoing matters that will or may, directly or indirectly, result in Section 16(b) Liability with respect to or as a consequence of the transfer by JEDI or any of its Affiliates of any JEDI Shares in violation of the provisions of Section 3.2 or in transfers that would violate the provisions of Section 3.2 but for clauses (a), (d) and (e) thereof (collectively, "Excluded Transfers"). "Significant Transactions" means any one or more of the following: (i) the approval of the annual budget of the Company and any amendments thereto; (ii) the incurrence of any indebtedness (excluding the indebtedness represented by the Loan Agreement (as defined in the Second Restructure Agreement)) by the Company or any Subsidiary in an amount in excess of $20,000,000 in the aggregate, in a single transaction or series of related transactions, or any amendment to any material term of any agreement representing such indebtedness; (iii) the issuance, redemption or repurchase of 20% of the Equity Securities of the Company then outstanding, in one transaction or a series of transactions, whether or not pursuant to a recapitalization, reorganization, merger or consolidation of the Company; (iv) the sale, lease, exchange, transfer or other disposition, directly or indirectly, of the Company's or any Subsidiary's assets, in a single transaction or series of transactions, if such assets constitute or would constitute Substantial Assets; 5 the merger or consolidation of the Company or the adoption of a plan of liquidation or dissolution of the Company; any motion by the Company to commence any case, proceeding or other action (A) under any existing or future law of any jurisdiction relating to bankruptcy, insolvency, reorganization or relief of debtors seeking to have an order for relief entered with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it, or (B) seeking appointment of a receiver, trustee, custodian or other similar official for it or for all or any substantial part of its assets, or making a general assignment for the benefit of its creditors; and (v) any purchase, lease, exchange or other acquisition, directly or indirectly, of assets (including securities) by the Company or any Subsidiary, in a single transaction or series of related transactions, if such assets constitute or would constitute Substantial Assets, except purchases of equipment made in the ordinary course of business. "Subsidiary" of a person means (i) any corporation or other entity of which securities or other ownership interests having ordinary voting power to elect a majority of the board of directors or other persons performing similar functions are at the time directly or indirectly owned by the person or (ii) a partnership in which the person or a Subsidiary of the person is, at the date of determination, a general or limited partner of such partnership, but only if the person or its Subsidiary is entitled to receive more than fifty percent of the assets of such partnership upon its dissolution. For purpose of the foregoing definition, an arrangement by which a person who owns an oil and gas interest is subject to a joint operating agreement, processing agreement, net profits interest, overriding royalty interest, farmout agreement, development agreement, area of mutual interest agreement, joint bidding agreement, unitization agreement, pooling arrangement or other similar agreement or arrangement shall not, by reason of such agreement or arrangement alone, be considered a Subsidiary. Unless the context otherwise requires, references to one or more Subsidiaries shall be references to Subsidiaries of the Company. "Substantial Assets" means assets having a fair market value that, or assets to be acquired for a consideration that, equals or exceeds 10% of the amount of the Consolidated Tangible Net Assets of the Company, as reflected on the most recent audited consolidated balance sheet of the Company existing at the time the Board makes the determination whether or not to approve, adopt or authorize the Significant Transaction involved. The term "Consolidated Tangible Net Assets" means, as of any date of determination, the amount of total assets on a consolidated balance sheet of the Company, determined in accordance with generally accepted accounting principles in 6 the United States as in effect from time to time consistently applied ("GAAP"), less the sum of the amounts of all intangible assets determined in accordance with GAAP. "Transaction Documents" has the meaning ascribed to it in the Second Restructure Agreement. ARTICLE II COMPANY COVENANTS Section 2.1 Board of Directors. (a) At any time during the period of 90 days following the occurrence of a Material Adverse Change, JEDI may, in writing, request that the Company take all actions necessary (including, without limitation, the amendment of the bylaws of the Company and other applicable agreements, including the Anschutz Shareholders Agreement) to cause (1) the election as a director of the Company of a person selected by JEDI who may lawfully serve as a director and who shall be reasonably satisfactory to the Company (the "JEDI Designee"), (2) if the JEDI Designee shall cease to be a director for any reason, the filling of the vacancy resulting thereby with another JEDI Designee and (3) the calling of meetings of the Board of Directors upon the written request of the JEDI Designee. JEDI shall only be entitled to one JEDI Designee at any given time. The term of the JEDI Designee shall be until the second annual meeting of the Company's shareholders following the date of such Material Adverse Change (which term may be extended by JEDI for consecutive periods of one year each if a Material Adverse Change is in existence or continuing on the date of such second annual meeting). Upon termination of this Agreement, the Company may remove the JEDI Designee as a director. (b) At any time during which a JEDI Designee is not serving as a director of the Company, one individual who shall be designated from time to time in writing by JEDI to the Company and who shall be reasonably satisfactory to the Company (each such individual, during the period of such designation, a "JEDI Observer") shall be entitled to (1) receive prior notice (at the time given to members of the Board of Directors) of any meeting of the Board of Directors of the Company at which the authorization or approval of a Significant Transaction is proposed to be considered, (2) attend such portion of such meeting at which such Significant Transaction shall be so considered and (3) receive all written management reports relating to any Significant Transaction that shall be considered for authorization and approval at such meeting; provided, however, that (x) JEDI and each JEDI Observer shall agree to keep strictly confidential all information relating to the Company, whether or not related to any Significant Transaction, that JEDI and such JEDI Observer shall obtain in connection with the foregoing and shall acknowledge his, her or its responsibilities 7 under securities laws and other laws in connection therewith, (y) JEDI and each such JEDI Observer shall not be entitled to receive any such notice, attend any such meeting (or portion thereof) or receive such written management reports if doing so could, in the judgment of the Company, violate any obligation or duty (whether contractual, statutory, fiduciary or otherwise) to which the Company or its officers, directors or employees were then subject (including, without limitation, obligations of confidentiality) or otherwise subject the Company or any of such persons to any liability or otherwise materially and adversely affect the interests of the Company and (z) JEDI and each such JEDI Observer shall not be entitled to attend such portion of such meeting if, in the judgment of the Chairman of the Board of Directors or a majority of the directors of the Company, such attendance would impair the due consideration by the Board of Directors of any matter. (c) If at any time when permitted to be appointed by JEDI pursuant to Section 2.1(a) the JEDI Designee shall not be elected to the Board of Directors by the shareholders of the Company (notwithstanding JEDI and its Affiliates having voted all shares of Common Stock owned by them in favor of such election) and the JEDI Designee shall not otherwise have been elected to the Board of Directors before a date that is 10 days after the date of such vote by the shareholders of the Company and, in any event, before any other material action or matter is considered and resolved by the Board of Directors, the provisions set forth in Article III shall thereafter be of no further force or effect. Section 2.2 Exchange Act Section 16(b). (a) Without the prior written consent of JEDI, for a period of six months from the date hereof, the Company shall take no action with respect to a Section 16(b) Matter that will or may, directly or indirectly, whether taken alone or together with other facts or events, result in JEDI or an Affiliate of JEDI having Section 16(b) Liability, provided that the Company may take any such action (1) with respect to a Section 16(b) Matter if there shall have been entered a final judgment to the effect that JEDI and its Affiliates do not and will not, directly or indirectly, have any Section 16(b) Liability, which judgment shall not be subject to appeal and is res judicata as to all matters that may give rise to Section 16(b) Liability in connection therewith, or (2) that may, directly or indirectly, result in any such liability with respect to or as a consequence of any Excluded Transfer. (b) The Company may seek to determine by an Action brought against JEDI in the United States District Court in the Southern District of New York, or other jurisdiction approved by the Company and JEDI, the respective rights and obligations of the parties under Section 2.2(a). Section 2.3 Restrictions on JEDI. Without the prior written consent of JEDI, the Company shall not take or recommend to its shareholders any action which would impose 8 limitations on the legal rights to be enjoyed by JEDI or Affiliates of JEDI as a shareholder of the Company, other than those imposed by the express terms of this Agreement and the Transaction Documents including, without limitation, any action which would impose or increase restrictions on JEDI or Affiliates of JEDI (a) based upon the size of its security holdings, the business in which it is engaged or other considerations applicable to it and not to security holders generally, (b) by means of the issuance of or proposal to issue any other class of securities having voting power disproportionately greater than the equity investment in the Company represented by such securities or by charter or by-law amendment or (c) by reducing by any means (including, without limitation, by split-up, reverse split-up, reclassification, recapitalization, reorganization, combination, redemption, repurchase, or cancellation of securities or rights or by a Business Combination Transaction) the number of shares of Common Stock that are then issued and outstanding or are then subject to issuance upon the conversion of or exercise or exchange for any Equity Securities (including securities exchangeable or convertible into Equity Securities) of the Company then outstanding, excepting only (i) the reduction in such number of shares of Common Stock then issued and outstanding or subject to issuance resulting from the conversion of, exercise or exchange for, or cancellation, termination or modification of, Equity Securities of the Company and adjustments in the number of shares of Common Stock subject to issuance under the outstanding stock options issued by the Company to current and former employees of the Company and its Subsidiaries pursuant to which 3,059,000 shares of Common Stock are reserved for issuance or under other Equity Securities of the Company, or (ii) the reduction in the number of shares of Common Stock issued and outstanding as a result of the one-for-five reverse stock split contemplated by the Company to be approved by shareholders of the Company at a special meeting to be held January 5, 1996. Section 2.4 Access to Information. (a) The Company shall promptly furnish to JEDI all information that is required by GAAP to enable JEDI to account for its investment in the Company. To the extent reasonably requested by JEDI, the Company shall, and shall cause its employees, independent public accountants and other representatives to, provide information regarding the Company to, and otherwise cooperate with, JEDI and the representatives of JEDI so as to enable JEDI to prepare financial statements in accordance with GAAP. (b) Upon reasonable notice, JEDI may from time to time request that the Company (1) promptly disclose to JEDI the number of shares of Common Stock issued and outstanding on a date not more than five days prior to the date of such request and the number of shares of Common Stock subject to issuance upon the conversion of or exercise or exchange for the Equity Securities of the Company outstanding on such date and (2) give JEDI reasonable access to all books and records of the Company, including its minute books. 9 ARTICLE III JEDI RESTRICTIONS Section 3.1 Voting Restrictions. (a) In connection with each vote or written consent of the holders of Common Stock, JEDI and its Affiliates shall vote, or consent with respect to, and cause each of its Affiliates and each Group of which it is a member, to vote or consent with respect to, all Excess JEDI Shares in respect of the matters subject to such vote or consent in the same proportion that all other Equity Securities of the Company (other than Equity Securities of the Company owned by JEDI, Anschutz, any of their respective Affiliates or any Group of which any such entity is a member) are voted or with respect to which such consent is given by holders of such Equity Securities with respect to such matter; provided, however, that notwithstanding the foregoing, each of JEDI, its Affiliates and such Groups at all times may vote, or consent with respect to, Excess Purchaser Securities (1) for the election of the JEDI Designee, (2) as JEDI, such Affiliate or such Group shall determine with respect to each Section 16(b) Matter with respect to which (A) any of JEDI and its Affiliates and the respective Groups in which any of them may be members will have or may, directly or indirectly, have Section 16(b) Liability and (B) there shall not have been entered, as of the date such vote or consent shall be required to be given, a final judgment to the effect that JEDI and its Affiliates and the respective Groups in which any of them may be members do not and will not, directly or indirectly, have any Section 16(b) Liability, which judgment shall not be subject to appeal and is res judicata as to all matters that may give rise to Section 16(b) Liability in connection therewith, and (3) as otherwise approved by the Board of Directors of the Company, including a majority of Independent Directors, with respect to the matter subject to such vote or consent. (b) Notwithstanding anything contained in this Agreement, JEDI and its Affiliates and the respective Groups in which any of them may be members shall not be restricted in any manner whatsoever from voting, or consenting with respect to, Equity Securities of the Company owned by any of them that are not Excess JEDI Shares with respect to the matter subject to such vote or consent. (c) The provisions of Section 3.1(a) shall terminate contemporaneously with the termination of the restrictions contained in the Anschutz Shareholders Agreement on the voting by Anschutz of its Excess Purchaser Securities (as defined in the Anschutz Shareholders Agreement). Section 3.2 Transfer Restrictions. Unless otherwise permitted under the JEDI Registration Rights Agreement to include Registrable Shares (as defined in the JEDI Registration 10 Rights Agreement) in an offering of the Company's Equity Securities, prior to the Permitted Transfer Date JEDI shall not, and shall not cause or permit its Affiliates to, transfer the beneficial ownership of any JEDI Shares, except in one or more of the following transactions: (a) each transfer approved by the Board of Directors, including a majority of Independent Directors; and (b) each transfer in a Business Combination Transaction approved by the Board of Directors, including a majority of Independent Directors, or by two- thirds of the shares of Common Stock voted with respect to the transaction (in which the JEDI Shares are voted in accordance with the restrictions contained in Section 3.1, if applicable); and (c) each transfer pursuant to a tender or exchange offer for outstanding Common Stock by any person other than JEDI, any of its Affiliates or any Group including JEDI or any of its Affiliates (1) which the Board of Directors, including a majority of the Independent Directors, does not oppose, or (2) which the Board of Directors or a majority of Independent Directors opposes if after completion of such tender or exchange offer securities not tendered or exchanged may be treated less favorably than securities tendered; provided that no tender, indication or arrangement to tender Common Stock may be made in the case of the preceding clause (2) until forty-eight hours prior to the expiration of any time after which securities tendered may be treated less favorably than securities tendered prior thereto; and (d) each bona fide pledge of or the granting of a security interest in or any other mortgage, deed of trust, lien, hypothecation, charge, deposit, arrangement, preference, priority, or encumbrance ("Lien") relating to the JEDI Shares to secure a bona fide loan, guarantee or other financial support, the foreclosure of such pledge or security interest or any Lien that may be placed involuntarily upon any JEDI Shares, or the subsequent sale or other disposition of such JEDI Shares by such lender or its agent, provided that such lender is not a member of a Group with respect to Common Stock which Group includes JEDI or Affiliates of JEDI; and (e) each transfer of JEDI Shares to any Affiliate of JEDI, or a bona fide pledge of or the granting of a security interest in or any other Lien relating to such JEDI Shares to an Affiliate of JEDI, provided in each case that such Affiliate shall expressly assume by written instrument satisfactory to the Company and JEDI all of the obligations and restrictions contained in this Agreement to which such JEDI Shares shall be subject immediately before such transfer; and (f) a transfer upon the liquidation or dissolution of the Company or a transfer which is effected by operation of law. 11 ARTICLE IV TERMINATION Section 4.1 Termination. This Agreement shall terminate on the earlier of (i) the date of termination of the Anschutz Shareholders Agreement and (ii) the date on which JEDI has beneficial ownership of JEDI Shares constituting less than 3% of the issued and outstanding shares of Common Stock. ARTICLE V MISCELLANEOUS Section 5.1 Legends. Certificates representing the JEDI Shares shall bear the legends set forth in Exhibit C to the Second Restructure Agreement; provided, however, that after (a) the transfer of any JEDI Shares in accordance with Section 3.2 or (b) the termination of this Agreement, the third paragraph of such legend shall be removed with respect to such JEDI Shares and all JEDI Shares, respectively. Section 5.2 Notices. All notices, requests and other communications given under this Agreement shall be in writing. Each communication shall be given to such party at its address stated on the signature pages of this Agreement or at any other address as such party may from time to time specify in writing to the other party. Each communication shall be effective (a) if given by telecopy, when the telecopy is transmitted to the proper address and the receipt of the transmission is confirmed, (b) if given by mail, 72 hours after the communication is deposited in the mails properly addressed with first class postage prepaid, or (c) if given by any other means, when delivered to the proper address and a written acknowledgment of delivery is received. Section 5.3 No Waivers; Remedies; Specific Performance. (a) No failure or delay by either party in exercising any right, power or privilege under this Agreement shall operate as a waiver of such right, power or privilege. A single or partial exercise of any right, power or privilege shall not preclude any other or further exercise of such right, power or privilege or the exercise of any other right, power or privilege. The rights and remedies provided in this Agreement shall be cumulative and not exclusive of any rights or remedies available at law or in equity. (b) In view of the uniqueness of the agreements contained in this Agreement and the transactions contemplated hereby and the fact that each party would not have an 12 adequate remedy at law for money damages in the event that any obligation under this Agreement is not performed in accordance with its terms, each party therefore agrees that the other party to this Agreement shall be entitled to specific enforcement of the terms of this Agreement in addition to any other remedy to which either of them may be entitled, at law or in equity. Section 5.4 Amendments, Etc. No amendment, modification, termination, or waiver of any provision of this Agreement, and no consent to any departure by a party from any provision of this Agreement, shall be effective unless it shall be in writing and signed and delivered by the other party to this Agreement, and then it shall be effective only in the specific instance and for the specific purpose for which it is given. Section 5.5 Successors and Assigns. (a) Except as expressly contemplated by this Agreement, no party may assign its rights or delegate its obligations under this Agreement without the prior written consent of the other party; provided that JEDI may assign its rights and delegate its responsibilities under this Agreement (other than those set forth in Article II) pursuant to Sections 3.2(d) or (e) without the consent of the Company; provided, further, that the consent of the Company shall not be unreasonably withheld with respect to an assignment and delegation of JEDI's rights and obligations under Article II if all of the JEDI Shares then owned are transferred pursuant to Section 3.2(e). Any assignment or delegation in contravention of this Section 5.5 shall be void ab initio and shall not relieve the delegating party of any of its obligations under this Agreement. (b) The provisions of this Agreement shall be binding upon and inure to the benefit of the parties to this Agreement and their respective permitted successors and assigns. (c) Notwithstanding anything herein to the contrary, each transferee of JEDI Shares transferred in one or more of the transactions specified in any of clauses (a) through (f), inclusive, of Section 3.2 shall acquire such JEDI Shares free and clear of any restrictions or obligations contained in this Agreement. Section 5.6 Governing Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York. All rights and obligations of the parties shall be in addition to and not in limitation of those provided by applicable law. Section 5.7 Counterparts; Effectiveness. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if all signatures were on the same instrument. 13 Section 5.8 Severability of Provisions. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of the prohibition or unenforceability without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of the provision in any other jurisdiction. Section 5.9 Headings and References. Article and section headings in this Agreement are included for the convenience of reference only and do not constitute a part of this Agreement for any other purpose. References to parties and articles and sections in this Agreement are references to the parties to or the articles and sections of this Agreement, as the case may be, unless the context shall require otherwise. Section 5.10 Entire Agreement. Except for the Second Restructure Agreement and the agreements referred to therein, this Agreement embodies the entire agreement and understanding of the parties and supersedes all prior agreements or understandings with respect to the subject matters of this Agreement. Section 5.11 Survival. Except as otherwise specifically provided in this Agreement, each representation, warranty or covenant of each party contained in this Agreement shall remain in full force and effect, notwithstanding any investigation or notice to the contrary. Section 5.12 Waiver of Jury Trial. Each party waives any right to a trial by jury in any action to enforce or defend any right under this Agreement or any amendment, instrument, document or agreement delivered, or which in the future may be delivered, in connection with this Agreement and agrees that any action shall be tried before a court and not before a jury. Section 5.13 Affiliate. Nothing contained in this Agreement shall cause JEDI to be or be deemed an "affiliate" of any of the Company and its Subsidiaries within the meaning of Rule 13e-3 under the Exchange Act. [The remainder of this page is intentionally left blank.] 14 IN WITNESS WHEREOF, the parties hereto have executed and delivered this Shareholders Agreement as of the date first written above. Forest Oil Corporation By: /s/ Daniel L. McNamara ------------------------------- Name: Daniel L. McNamara Title: Secretary Address: 1600 Broadway Suite 2200 Denver, Colorado 80202 Telecopy: (303) 812-1510 Joint Energy Development Investments Limited Partnership By: Enron Capital Management Limited Partnership, its General Partner By: Enron Capital Corp., its General Partner By: /s/ Clifford P. Hickey --------------------- Clifford P. Hickey Vice President Address: 1200 17th Street, Suite 2750 Denver, Colorado 80202 Telecopy: (303) 534-2205 with a copy to: Joint Energy Development Investments Limited Partnership c/o Enron Capital Corp. Attention: Keith Power/Brenda McGee 1400 Smith Street, Room 2940 Houston, Texas 77002 Telecopy: (713) 646-4485 Enron Capital & Trade Resources Corp. Attention: Lance Schuler 1400 Smith Street, 38th Floor Houston, Texas 77002 Telecopy: (713) 646-3393 15 EX-2 3 EXHIBIT 2 REGISTRATION RIGHTS AGREEMENT REGISTRATION RIGHTS AGREEMENT dated as of JULY 27, 1995 between FOREST OIL CORPORATION, a New York corporation (the "Company"), and JOINT ENERGY DEVELOPMENT INVESTMENTS LIMITED PARTNERSHIP, a Delaware limited partnership ("JEDI") (the "Shareholder"). Terms not otherwise defined herein have the meanings stated in the Restructure Agreement (as defined below). RECITALS A. The Shareholder and the Company are parties to the Loan Agreement dated as of December 28, 1993, as amended as of the date hereof and by the Restructure Agreement dated as of the date hereof (the "Restructure Agreement"), pursuant to which, concurrently herewith, the Shareholder is acquiring the Tranche B Warrants to purchase the Tranche B Warrant Shares. The Tranche B Warrant Shares acquired by JEDI are referred to as the "Registrable Shares". B. The Company and The Anschutz Corporation, a Kansas corporation (the "Other Shareholder"), are parties to a Purchase Agreement (the "Purchase Agreement") dated as of May 17, l995, pursuant to which, among other things, (i) on May l9, 1995 the Other Shareholder purchased the Purchaser Note (as defined in the Purchase Agreement) and may, upon the conversion thereof, thereafter acquire the Purchaser Note Conversion Shares (as defined in the Purchase Agreement) and (ii) concurrently herewith the Other Shareholder is purchasing the Purchaser Additional Shares, the Purchaser Preferred Shares and the Tranche A Warrants (each as defined in the Purchase Agreement) and may, upon conversion of the Purchaser Preferred Shares and exercise of the Tranche A Warrants, thereafter acquire the Purchaser Preferred Conversion Shares and the Tranche A Warrant Shares (each as defined in the Purchase Agreement). The Purchaser Note Conversion Shares, the Purchaser Additional Shares, the Purchaser Preferred Conversion Shares and the Tranche A Warrant Shares are collectively referred to as the "Other Shareholder Shares". C. Pursuant to the Purchase Agreement, on May l9, 1995 the Company and the Other Shareholder entered into a Registration Rights Agreement (the "Other Registration Rights Agreement") pursuant to which the Company granted to the Other Shareholder and certain other persons (the Other Shareholder and such other persons, collectively, the "Other Registering Shareholders") certain rights with respect to the registration under the Securities Act of the disposition of the Other Registrable Shares (as defined below). D. Concurrently herewith, the Shareholder will execute and deliver to tbe Other Shareholder the JEDI/Anschutz Option providing for an option to purchase the Tranche B Warrant Shares. The Other Shareholder Shares and, when acquired by the Other Shareholder, the Tranche A Warrant Shares and the Tranche B Warrant Shares are hereinafter referred to as the "Other Registrable Shares". E. The Company and the Shareholder desire to enter into this Agreement providing for the registration under the Securities Act of the disposition of the Registrable Shares. AGREEMENT The parties agree as follows: Section 1. Registration Rights. (a) From and after the date that is the Termination Date (as defined in the JEDI/Anschutz Option) (the "Effective Date") and to and including the tenth anniversary of the Effective Date, subject to extension pursuant to Section l(f), on one or more occasions when the Company shall have received the written request of the Shareholder, any pledgee of Registrable Shares from the Shareholder or holders of at least l,OOO,OOO Registrable Shares in the aggregate (as such number of shares may be adjusted in the event of any change in the Registerable Shares by reason of stock dividends, split-ups, reverse split-ups, mergers, recapitalizations, subdivisions, conversions, exchanges of shares or the like) that shall have been acquired directly or indirectly from the Shareholder, in each case in a transaction or series of transactions not constituting a Rule 144 Transaction (as defined in Section l(h)) (each such person, when requesting registration under this Section 1 and thereafter in connection with any such registration, being hereinafter referred to as a "Registering Shareholder"), as expeditiously as practicable the Company shall include not less than l,OOO,OOO Registrable Shares (as such number may be adjusted) specifled by the Registering Shareholder in a Registration Statement (as defined in Section l(h)). If the requested registration pursuant to this Section l(a) shall involve an underwritten offering, the Registering Shareholder initiating a request for registration of Registrable Shares pursuant to this Section l(a) shall select (with the consent of the Company, not to be unreasonably withheld) the managing underwriter in connection with the offering and any additional investment bankers and managers to be used in connection with the offering. Notwithstanding anything to the contrary in the foregoing: (1) The Company shall not be required to prepare and file pursuant to this Section l more than two Registration Statements; provided, that if lO% or more of the Registrable Shares requested to be registered by the Registering Shareholder initiating a request for registration of Registrable Shares pursuant to this Section l(a) are excluded 2 from any registration in accordance with Section l(a)(2) and an investment banking firm of recognized national standing shall advise the Company that the number of the Registerable Shares requested to be registered by the Registering Shareholder was not so great, at the time of the request and in light of the market conditions then prevailing, as would adversely affect the offering, including the price at which the Registerable Shares can be sold, there shall be provided one additional registration under this Section (l)(a)(l) in respect of each such exclusion, and (2) if a requested registration pursuant to this Section 1(a) shall involve an underwritten offering, and if the managing underwriter shall advise in writing the Company and the Registering Shareholders that, in its opinion, the number of Registrable Shares of any class proposed to be included in the registration (including securities of the Company which are proposed to be offered by persons other than Registering Shareholders) exceeds the number which would have an adverse effect on the offering, including the price at which the Registrable Shares can be sold, the Company will include in the registration the maximum number of securities which it is so advised can be sold without the adverse effect, allocated as follows: (A) first, all Registrable Shares owned by Registering Shareholders and requested to be included in such registration (if necessary, allocated pro rata among all Registering Shareholders on the basis of the relative number of Registrable Shares each such Registering Shareholder has requested to be included in the registration); (B) second, any other Registrable Shares owned by Other Registering Shareholders and requested to be included in the registration or otherwise (if necessary, allocated pro rata among all Other Registering Shareholders on the basis of the relative number of Other Registrable Shares each such Other Registering Shareholder has requested to be included in the registration); and (C) third, any other securities proposed to be included in the registration. (b) From and after the Effective Date to and including the tenth anniversary thereof, if the Company shall determine to register or qualify by a registration statement filed under the Securities Act and under any applicable state securities laws, any offering of any Equity Securities of the Company, whether pursuant to Section l(a) or otherwise, the Company shall give notice of such determination to each potential Registering Shareholder and Other Registering Shareholder (collectively, the "Transaction Registering Shareholders" about which the Company has knowledge; it being understood that without prior notice to the Company, the Company shall not be deemed to have knowledge of the existence of any pledgee of Registrable Shares. The Company shall, as expeditiously as possible and in good faith, include in the registration statement such Registrable Shares and Other Registrable Shares (collectively, the "Transaction Registrable Shares"), as those persons shall specify by notice received by the Company not later than 3O days after the giving of the notice by the Company 3 (each person so notifying the Company being hereinafter referred to as a "Piggy- Back Shareholder"). Notwithstanding anything in the foregoing to the contrary, (1) the Company shall not be required to include any shares owned by Piggy-Back Shareholders in a registration statement on Form S-4 or S-8 (or any successor form) or a registration statement filed in connection with an exchange offer or other offering of securities solely to the then existing shareholders of the Company; (2) if a registration pursuant to this Section 1(b) is made with respect to a registration under Section 1(a) of the Other Registration Rights Agreement, and if the registration involves an underwritten offering, the Other Shareholder shall select (with the consent of the Company, not to be unreasonably withheld) the managing underwriter for the offering and any additional investment bankers and managers to be used in connection with the offering, and if the managing underwriter advises the Company in writing that, in its opinion, the number of securities requested to be included in the registration is so great as would adversely affect the offering, including the price at which the Registrable Shares can be sold, the Company will include in the registration the maximum number of securities which it is so advised can be sold without the adverse effect, allocated as follows: (A) first, all Other Registrable Shares proposed to be registered pursuant to the request under the Other Registration Rights Agreement (if necessary, allocated pro rata among the Other Registering Shareholders on the basis of the relative number of Other Registrable Shares each such Other Registering Shareholder has requested to be included in the registration); and, (B) second, all Registrable Shares owned by Registering Shareholders and requested to be included in the registration (if necessary, allocated pro rata among all the Registering Shareholders on the basis of the relative number of Registrable Shares each such Registering Shareholder has requested to be included in the registration), and (C) third, any other securities proposed to be registered by the Company; and (3) if a registration pursuant to this Section 1(b) is not made pursuant to a request under Section l(a) of the Other Registration Rights Agreement, and if the registration involves an underwritten offering, the Company shall select the managing underwriter for the offering and any additional investment bankers and managers to be used in connection with the offering, and if the managing underwriter advises the Company in writing that, in its opinion, the number of securities requested to be included in the registration is so great as would adversely affect the offering, including the price at which the Registrable Shares can be sold, the Company will include in the registration the maximum number of securities which it is so advised can be sold without the adverse effect, allocated as follows: 4 (A) first, all securities proposed to be registered by the Company for its own account, (B) second, all Transaction Registrable Shares requested to be included in the registration under Section l(b) of this Agreement or under Section l(b) of the Other Registration Rights Agreement (if necessary, allocated pro rata among all requesting Transaction Registering Shareholders, on the basis of the relative number of Transaction Registrable Shares, each Transaction Registering Shareholder has requested to be included in the registration); and (C) third, any other securities proposed to be registered by the Company other than for its own account; (c) The Company shall provide each Registering Shareholder and its representatives reasonable opportunity for due diligence in connection with each registration of Registrable Shares of the Registering Shareholder pursuant to this Section 1. (d) At the request of one or more of the Registering Shareholders or the Company in connection with any registration pursuant to this Section 1, the Company and the requesting Registering Shareholders shall enter into an appropriate underwriting agreement containing terms and provisions customary in agreements of that nature, including provisions with respect to expenses substantially the same as those set forth in Section 2 and provisions with respect to indemnification and contribution substantially the same as those set forth in Section 3. (e) Notwithstanding anything herein to the contrary, the Company shall not be required to include in any registration pursuant to this Section 1 any Registrable Shares owned by a Registering Shareholder (l) if the Company shall deliver to the Registering Shareholder an opinion, satisfactory in form, scope and substance to the Registering Shareholder and addressed to the Registering Shareholder by legal counsel satisfactory to the Registering Shareholder, to the effect that the distribution of Registrable Shares proposed by the Registering Shareholder is exempt from registration under the Securities Act and all applicable state securities laws or (2) if such Registering Shareholder or any underwriter of Registrable Shares shall fail to furnish to the Company the information in respect of the distribution of the shares that may be required under this Agreement to be furnished by the Registering Shareholder or the underwriter to the Company. (f) Upon written notice to each Registering Shareholder, the Company may postpone effecting a registration pursuant to this Section 1 on one occasion during any period of nine consecutive months, may require other holders of shares registered pursuant to this Section 1 to refrain from disposing of the shares under the registration or may require Transaction Registering Shareholders to refrain from otherwise disposing of any shares of Equity Securities of the Company owned by them (whether pursuant to Rule 144 under the Securities Act or otherwise), in each case for a reasonable time specified in the notice but not exceeding 5 90 days (which period may not be extended or renewed), if (1) an investment banking firm of recognized national standing shall advise the Company and the Registering Shareholders in writing that effecting the registration or disposition would materially and adversely affect an offering of Equity Securities of the Company the preparation of which had then been commenced or (2) the Company is in possession of material non-public information the disclosure of which during the period specified in such notice the Company believes would not be in the best interests of the Company. The period during which the rights granted under Section 1 may be exercised by a Registering Shareholder shall be extended by one day beyond the tenth-anniversary of the Effective Date for each day that pursuant to this Section 1(f), the Company postpones effecting a registration, requires the Registering Shareholder to refrain from disposing of Registrable Shares under a registration or otherwise requires the Registering Shareholder to refrain from disposing of shares of Equity Securities of the Company pursuant to this Section l(f). (g) In the event the registration of Registrable Shares shall be required by this Section l: (l) Each Registering Shareholder shall furnish, and shall cause each underwriter of the Registrable Shares of the Registering Shareholder to be distributed pursuant to the registration to furnish, to the Company in writing promptly upon the request of the Company the additional information regarding the Registering Shareholder or the underwriter, the contemplated distribution of the Registrable Shares and the other information regarding the proposed distribution by the Registering Shareholder and the underwriter that shall be required in connection with the proposed distribution by the applicable securities laws of the United States of America and the states thereof in which the Registrable Shares are contemplated to be distributed. The information furnished by any Registering Shareholder or any underwriter shall be certified by the Registering Shareholder or the underwriter, as the case may be, and shall be stated to be specifically for use in connection with the registration. (2) The Company shall prepare and file with the Securities and Exchange Commission the Registration Statement, including the Prospectus (as defined in Section l(h)), under the Securities Act and as required under any applicable state securities laws, on the form that is then required or available for use by the Company to permit each Registering Shareholder, upon the effective date of the Registration Statement, to use the Prospectus in connection with the contemplated distribution by the Registering Shareholder of the Registrable Shares so registered. The Company shall deliver to each Registering Shareholder one executed copy of the Registration Statement and each amendment thereof. If the registration shall have been initiated solely by the Company or shall not have been initiated by the Registering Shareholder, the Company shall not be obligated to prosecute the registration, and may withdraw the Registration Statement at any time prior to the effectiveness thereof, if the Company shall determine in good faith not to proceed with the offering of securities included in the Registration Statement. In all other cases, the Company shall use its best efforts to cause the 6 Registration Statement to become effective and, as soon as practicable after the effectiveness thereof, shall deliver to each Registering Shareholder evidence of the effectiveness and a reasonable supply of copies of the Prospectus. In addition, if necessary for resale by the Registering Shareholders, the Company shall qualify or register in such states as may be reasonably requested by each Registering Shareholder the Registrable Shares of the Registering Shareholder that shall have been included in the Registration Statement; provided that the Company shall not be obligated to file any general consent to service of process or to qualify as a foreign corporation in any state in which it is not subject to process or qualified as of the date of the request. (3) The Company shall use its best efforts to cause the Registration Statement and the Prospectus to remain current, including the filing of necessary amendments and supplements, and shall furnish copies of such amendments and supplements to the Registering Shareholders, so as to permit distributions by the Registering Shareholders during the respective contemplated periods of distribution, but in no event longer than three months from the effective date of the Registration Statement; provided that the period shall be increased by the number of days that any Registering Shareholder shall have been required by Section l(f) to refrain from disposing of the Registrable Shares owned by the Registering Shareholder in the distribution. Notwithstanding anything in the foregoing to the contrary, the Company may at any time upon notice to each Registering Shareholder terminate the effectiveness of the Registration Statement or upon notice to any Registering Shareholder withdraw from the Registration Statement the Registrable Shares of the Registering Shareholder if, in the opinion of counsel for the Company, there shall have arisen any legal impediment to the offer of the Registrable Shares made by the Prospectus or if any legal action or administrative proceeding shall have been instituted or threatened or any other claim shall have been made relating to the offer made by the Prospectus or against any of the parties involved in the offer; provided that, promptly after those matters shall be resolved to the satisfaction of counsel for the Company, pursuant to this Section l the Company shall cause the registration of Registrable Shares formerly covered by the Registration Statement that were removed from registration by the action of the Company. (4) Each Registering Shareholder shall report to the Company distributions made by the Registering Shareholder of Registrable Shares pursuant to the Prospectus and, upon written notice by the Company that an event has occurred as a result of which an amendment or supplement to the Registration Statement or the Prospectus is required, the Registering Shareholder shall cease further distributions pursuant to the Prospectus until notified by the Company of the effectiveness of the amendment or supplement. Each Registering Shareholder shall distribute Registrable Shares only in accordance with the manner of distribution contemplated by the Prospectus with respect to the Registrable Shares. Each Registering Shareholder, by participating in a registration pursuant to this Section 1, acknowledges that the remedies of the Company at law for failure by the Registering Shareholder to comply with the undertaking contained in this Section l(g) would be inadequate and that the failure would not be adequately compensable in 7 damages and would cause irreparable harm to the Company, and therefore agrees that undertakings made by the Registering Shareholder in this Section l(g) may be specifically enforced. (5) The Company shall deliver to the Registering Shareholders, their counsel and the underwriters, if any, of Registrable Shares owned by Registering Shareholders to be distributed pursuant to such registration, the certificates, opinions of counsel and comfort letters that are customarily delivered in connection with underwritten public offerings. (h) For the purposes of this Section 1, the following terms shall have the following meanings: (1) "Action" against any person means an action, suit, investigation, complaint or other proceeding pending against or affecting the person or its property, whether civil or criminal, in law or in equity or before any Governmental Body. (2) "Affiliate" of a person means any other person (1) that directly or indirectly controls, is controlled by or is under common control with, the person or any of its subsidiaries, (2) that directly or indirectly beneficially owns or holds 5% or more of any class of voting stock of the person or any of its subsidiaries or (3) 5 % or more of the voting stock of which is directly or indirectly beneficially owned or held by the person or any of its subsidiaries. The term "Control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract or otherwise. (3) "Consolidated Subsidiary" of a person at any date means any subsidiary of the person or other entity the accounts of which would be consolidated with those of the person in its consolidated financial statements as of that date. (4) "Equity Securities" of a person means the capital stock of the person and all other securities convertible into or exchangeable or exercisable for any shares of its capital stock, all rights to subscribe for or to purchase, all options for the purchase of, and all calls, commitments or claims of any character relating to, any shares of its capital stock and any securities convertible into or exchangeable or exercisable for any of the foregoing. (5) "Registration Statement" means a registration statement filed by the Company in accordance with Section l(g)(2), including exhibits and financial statements thereto, in the form in which it shall become effective and, in the event of any amendment thereto after the effective date of the registration statement, also means (from and after the effectiveness of the amendment) the registration statement as so amended; 8 (6) "Rule 144 Transaction" means a transaction involving the sale of Registrable Shares to a person other than an affiliate of the Company under circumstances in which all of the applicable conditions of Rule 144 or Rule 144A (or any similar provisions then in force) under the Securities Act are satisfied. (7) "Prospectus" means the prospectus relating to the Registrable Shares owned by the Registering Shareholders included in a Registration Statement at the time it becomes effective and, in the event of any amendment or supplement to the Prospectus after the effective date of the Registration Statement, also means (from and after the effectiveness of the amendment or the filing with the Securities and Exchange Commission of the supplement) the Prospectus as so amended or supplemented; and Section 2. Expenses. (a) The Company shall bear all expenses of the following: (l) preparing, printing and filing each Registration Statement and Prospectus and each qualification required to be filed under federal and state securities laws in connection with a registration pursuant to Section 1; (2) furnishing to each Registering Shareholder one executed copy of the related Registration Statement and the number of copies of the related Prospectus that may be required by Sections l(g)(2) and l(g)(3) to be so furnished, together with a like number of copies of each amendment or supplement; (3) performing its obligations under Section l(g)(5); (4) printing and issuing share certificates, including the transfer agent's fees, in connection with each distribution so registered; and (5) preparing audited financial statements required by the Securities Act and the rules and regulations thereunder to be included in the Registration Statement and preparing audited financial statements for use in connection with the registration other than audited financial statements required by the Securities Act and the rules and regulations thereunder; (6) internal expenses (including without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties; (7) listing of the Registrable Shares; and (8) fees and expenses of any special experts retained by the Company in connection with the registration. 9 (b) The Registering Shareholders shall bear all other expenses incident to the distribution by the respective Registering Shareholders of their Registrable Shares in connection with a registration pursuant to Section 1, including without limitation the selling expenses of the Registering Shareholders, commissions, underwriting discounts, insurance, fees of counsel for the Registering Shareholders and their underwriters. Section 3. Indemnification (a) The Company shall indemnify and hold harmless each Registering Shareholder participating in a registration pursuant to Section 1, each underwriter of any of the Registrable Shares owned by the Registering Shareholder to be distributed pursuant to the registration, each partner in each Registering Shareholder, the officers and directors of the Registering Shareholder and the underwriter and each person, if any, who controls the Registering Shareholder, each partner in each Registering Shareholder or the underwriter within the meaning of Section 15 (or any successor provision) of the Securities Act, and their respective successors, against all claims, losses, damages and liabilities to third parties (or actions in respect thereof) arising out of or based on any untrue statement (or alleged untrue statement) of a material fact contained in the Registration Statement or the Prospectus or other document incident thereto or any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and shall reimburse each such Registering Shareholder and each other person indemnified pursuant to this Section 3(a) for any legal and any other expenses reasonably incurred in connection with investigating or defending any such claim, loss, damage, liability or action; provided that the Company shall not be liable in any case to the extent that any such claim, loss, damage or liability arises out of or is based on any untrue statement or omission based upon written information furnished to the Company by any Registering Shareholder or underwriter for a Registered Shareholder specifically for use in the Registration Statement or the Prospectus. (b) Each Registering Shareholder, by participating in a registration pursuant to Section 1, thereby agrees to indemnify and to hold harmless the Company and its officers and directors and each person, if any, who controls any of them within the meaning of Section 15 (or any successor provision) of the Securities Act, and their respective successors, against all claims, losses, damages and liabilities to third parties (or actions in respect thereof) arising out of or based upon any untrue statement (or alleged untrue statement) of a material fact contained in the Registration Statement or the Prospectus or other document incident thereto or any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and shall reimburse the Company and each other person indemnified pursuant to this Section 3(b) for any legal and any other expenses reasonably incurred in connection with investigating or defending any such claim, loss, damage, liability or action; provided that this Section 3(b) shall apply only if (and only to the extent that) the statement or omission was made in reliance upon and in conformity with information furnished to the Company in writing by the Registering Shareholder specifically for use in the Registration Statement or the Prospectus. 10 (c) If any action or proceeding (including any governmental investigation or inquiry) shall be brought or asserted against any person indemnified under this Section 3, the indemnified person shall promptly notify the indemnifying party in writing, and the indemnifying party shall assume the defense of the action or proceeding, including the employment of counsel satisfactory to the indemnified person and the payment of all expenses. The indemnified person shall have the right to employ separate counsel in any action or proceeding and to participate in the defense of the action or proceeding, but the fees and expenses of that counsel shall be at the expense of the indemnified person unless (1) the indemnifying party shall have agreed to pay those fees and expenses; or (2) the indemnifying party shall have failed to assume the defense of the action or proceeding or shall have failed to employ counsel reasonably satisfactory to the indemnified person in the action or proceeding; or (3) the named parties to the action or proceeding (including any impleaded parties) include both the indemnified person and the indemnifying party, and the indemnified person shall have been advised by counsel that there may be one or more legal defenses available to the indemnifed person that are different from or additional to those available to the indemnifying party (in which case, if the indemnified person notifies the indemnifying party in writing that it elects to employ separate counsel at the expense of the indemnifying party, the indemnifying party shall not have the right to assume the defense of such action or proceeding on behalf of the indemnified person; it being understood, however, that the indemnifying party shall not, in connection with any one action or proceeding or separate but substantially similar or related actions or proceedings in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the reasonable fees and expenses of more than one separate firm of attorneys at any time for the indemnifed person, which firm shall be designated in writing by the indemnified person). The indemnifying party shall not be liable for any settlement of any action or proceeding effected without its written consent, but if settled with its written consent, or if there be a final judgment for the plaintiff in any such action or proceedings, the indemnifying party shall indemnify and hold harmless the indemnified person from and against any loss or liability by reason of the settlement or judgment. (d) If the indemnification provided for in this Section 3 is unavailable to an indemnified person (other than by reason of exceptions provided in this Section 3, in respect of losses, claims, damages, liabilities or expenses referred to in this Section 3, then each applicable indemnifying party, in lieu of indemnifying the indemnified person, shall contribute to the amount paid or payable by the indemnified person as a result of the losses, claims, damages, liabilities or expenses in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and of the indemnified person on the other in 11 connection with the statements or omissions which resulted in the losses, claims, damages, liabilities or expenses as well as any other relevant equitable considerations. The relative fault of the indemnifying party on the one hand and of the indemnified person on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified person and by these persons' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The amount paid or payable by a person as a result of the losses, claims, damages, liabilities and expenses shall be deemed to include any legal or other fees or expenses reasonably incurred by the person in connection with investigating or defending any action or claim. (e) Each Registering Shareholder participating in a registration pursuant to Section l shall cause each underwriter of any of the Registrable Shares owned by the Registering Shareholder to be distributed pursuant to the registration to agree in writing on terms reasonably satisfactory to the Company to indemnify and to hold harmless the Company and its officers and directors and each person, if any, who controls any of them within the meaning of Section 15 (or any successors provision) of the Securities Act, and their respective successors, against all claims, losses, damages and liabilities to third parties (or actions in respect thereof) arising out of or based upon any untrue statement (or alleged untrue statement) of a material fact contained in the Registration Statement or the Prospectus or other document incident thereto or any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and to reimburse the Company and each other person indemnified pursuant to the agreement for any legal or any other expense reasonably incurred in connection with investigating or defending any claim, loss, damage, liability or action; provided that the agreement shall apply only if (and only to the extent that) the statement or omission was made in reliance upon and in conformity with information furnished to the Company in writing by the underwriter specifically for use in the Registration Statement or the Prospectus. Section 4. Transfer Restrictions. (a) The Shareholder acknowledges that the Company issued and sold the Registrable Shares owned by the Shareholder in reliance upon the exemption afforded by Section 4(2) of the Securities Act for transactions by an issuer not involving any public offering. The Shareholder represents that (l) it has acquired the Tranche B Warrants for investment and without any view toward distribution of any of the shares to any other person, (2) it will not sell or otherwise dispose of the Registrable Shares except in compliance with the registration requirements or exemption provisions under the Securities Act and (3) before any sale or other disposition of any of the Registrable Shares other than in a sale registered under the Securities Act, or pursuant to Rule 144 under the Securities Act unless the Company shall have been advised by counsel that the sale does not meet the requirements of Rule 144 for the sale, it will deliver to the Company an opinion of counsel reasonably satisfactory to the Company to the effect that such registration is unnecessary. 12 (b) Each certificate for Registrable Shares and any certificate issued in exchange therefor or on conversion or upon transfer, except certificates issued in connection with a sale registered under the Securities Act and except as provided below, shall bear the legends to the following effect: (1) "The shares represented by this certificate have not been registered under the Securities Act of 1933 and may not be offered, sold, transferred or otherwise disposed of except in compliance with said Act." (2) "The shares represented by this certificate are subject to the restrictions contained in the Registration Rights Agreement dated as of , l995, a copy of which is on file at the office of the Secretary of the Company." (3) "This certificate also evidences and entitles the holder hereof to certain Rights as set forth in a Rights Agreement between Forest Oil Corporation and Mellon Securities Trust Company, dated as of October 14, 1993 (the "Rights Agreement"), the terms of which are hereby incorporated herein by reference and a copy of which is on file at the principal executive offices of Forest Oil Corporation. Under certain circumstances, as set forth in the Rights Agreement, those Rights will be evidenced by separate certificates and will no longer be evidenced by this certificate. Forest Oil Corporation will mail to the holder of this certificate a copy of the Rights Agreement without charge after receipt of a written request therefor. As described in the Rights Agreement, Rights issued to or acquired by any Acquiring Person (as defined in the Rights Agreement) shall, under certain circumstances, become null and void." (c) The legend stated in Section 4(b)(1) shall be removed by delivery of one or more substitute certificates without such legend if the holder thereof shall have delivered to the Company a copy of a letter from the staff of the Securities and Exchange Commission or an opinion of counsel, in form and substance reasonably satisfactory to the Company, to the effect that the legend is not required for purposes of the Securities Act. (d) The legend stated in Section 4(b)(2) shall be removed at such time as the related securities are no longer subject to this Agreement. Section 5. Filings. The Company shall make all filings with the Securities and Exchange Commission required in order to make available to the holders of Registrable Shares the exemption from the registration requirements provided by Rule 144 (or any successor regulation) under the Securities Act. Section 6. Merger, Consolidation, Exchange, Etc. In the event, directly or indirectly, (1) the Company shall merge with and into, or consolidate with, or consummate a share exchange pursuant to Article 9 of the New York Business Corporation Law (or successor provisions or statutes) with, any other person, or (2) any person shall merge with and into, or 13 consolidate, the Company and the Company shall be the surviving corporation of such merger or consolidation and, in connection with such merger or consolidation, all or part of the Registrable Shares shall be changed into or exchanged for stock or other securities of any other person, then, in each such case, proper provision shall be made so that such other person shall be bound by the provisions of this Agreement and the term "Company" shall thereafter be deemed to refer to such other person. Section 7. Other Agreements. (a) The Company shall cause the Other Registration Rights Agreement at all times to contain provisions consistent with clause (2) of the last sentence of Section 1(a) and with clauses (2) and (3) of the last sentence of Section 1(b) (collectively, the "Priority Clauses"). (b) The Company, on behalf of itself and its Affiliates (other than a Registering Shareholder), agrees (1) not to effect any public sale or distribution of any securities similar to the Registrable Shares being registered pursuant to this Agreement or any securities convertible into or exchangeable or exercisable for such Registrable Shares during the 14 days prior to, and during the 9O-day period beginning on, the effective date of the Registration Statement (except (x) on Form S-4 or Form S-8 (or comparable form) or (y) as part of the Registration Statement; provided, that with respect to clause (y) in the case of a registration pursuant to Section l(a) the Registering Shareholder initiating the registration consents to such inclusion), or the commencement of a public distribution of Registrable Shares; (2) not to enter into any agreement inconsistent with any of the Priority Clauses or any other provision of this Agreement; (3) that any agreement entered into after the date of this Agreement pursuant to which the Company issues or agrees to issue any privately placed securities shall contain a provision under which holders of such securities agree not to effect any public sale or distribution of any of the securities during the periods described in clause (1) of this Section 7(b), in each case including a sale in a Rule 144 Transaction (except as part of any such registration, if permitted); provided, the provisions of this Section 7(b) shall not prevent the conversion or exchange of any securities pursuant to their terms into or for other securities or the issuance of Common Stock in lieu of cash dividends otherwise payable in respect of the Convertible Preferred Stock. (c) If and to the extent requested by the Company in the case of a non-underwritten public offering and if and to the extent requested by the managing underwriter in the case of an underwritten public offering, the Registering Shareholder agrees not to effect any public sale or distribution of any securities similar to the securities being registered or any securities convertible into or exchangeable or exercisable for such securities during the 14 days prior to, and during the 9O-day period beginning on, the effective date of such registration statement (except as part of such registration agreement). Section 8. Notices. All notices, requests and other communications to any party under this Agreement shall be in writing. Communications may be made by telecopy or similar 14 writing. Each communication shall be given to the party at its address stated on the signature pages of this Agreement or at any other address as the party may specify for this purpose by notice to the other party. Each communication shall be effective (l) if given by telecopy, when the telecopy is transmitted to the proper address and the receipt of the transmission is confirmed, (2) if given by mail, 72 hours after the communication is deposited in the mails properly addressed with first class postage prepaid or (3) if given by any other means, when delivered to the proper address and a written acknowledgement of delivery is received. Section 9. No Waivers; Remedies. No failure or delay by any party in exercising any right, power or privilege under this Agreement shall operate as a waiver of the right, power or privilege. A single or partial exercise of any right, power or privilege shall not preclude any other or further exercise of the right, power or privilege or the exercise of any other right, power or privilege. The rights and remedies provided in this agreement shall be cumulative and not exclusive of any rights or remedies provided by law. Section lO. Amendments, Etc. (a) No amendment, modification, termination or waiver of any provision of this Agreement, and no consent to any departure by a party to this Agreement from any provision of this Agreement, shall be effective unless it shall be in writing and signed and delivered by the other party to this Agreement, and then it shall be effective only in the specific instance and for the specific purpose for which it is given. (b) If and so long as any Other Registrable Shares remain subject to the Other Registration Rights Agreement, (1) the Company shall not agree to any amendment or modification of this Agreement without the prior written consent of the Other Shareholder and (2) the Company shall not agree to any amendment or modification of the Other Registration Rights Agreement without the prior written consent of the Shareholder. Section 11. Successors and Assigns. (a) The Shareholder may assign to any transferee of Tranche B Warrants or Registrable Shares its rights and delegate its obligations under this Agreement; provided that such transferee assignee shall accept those rights and assume those obligations for the benefit of the Company in writing in form reasonably satisfactory to the Company. Thereafter, without any further action by any person, all references in this Agreement to the "Shareholder", and all comparable references, shall be deemed to be references to the transferee, and the Shareholder shall be released from any obligation or liability under this Agreement with respect to the Tranche B Warrants or Registrable Shares so transferred. (b) The provisions of this Agreement shall be binding upon and inure to the benefit of the parties to this Agreement and their respective successors and permitted assigns pursuant to Section 1l(a). The provisions of Section lO(b) shall inure to the benefit of the Other Shareholder. 15 Section 12. Governing Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York. All rights and obligations of the Company and the Shareholder shall be in addition to and not in limitation of those provided by applicable law. Section 13. Counterparts; Effectiveness. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if all signatures were on the same instrument. Section 14. Severability of Provisions. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of the prohibition or unenforceability without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of the provision in any other jurisdiction. Section l5. Headings and References. Section headings in this Agreement are included for the convenience of reference only and do not constitute a part of this Agreement for any other purpose. References to parties and sections in this Agreement are references to the parties to or the sections of this Agreement, as the case may be, unless the context shall require otherwise. Section 16. Entire Agreement. Except as otherwise specifically provided in the following sentence, the Transaction Documents embody the entire agreement and understanding of the respective parties and supersede all prior agreements or understandings with respect to the subject matters of those documents. Section 17. Survival. Except as otherwise specifically provided in this Agreement, each representation, warranty or covenant of each party to this Agreement contained in or made pursuant to this Agreement shall survive each Closing and remain in full force and effect, notwithstanding any investigation or notice to the contrary or any waiver by any other party of a related condition precedent to the performance by the other party of an obligation under this Agreement. Section 18. Non-Exclusive Jurisdiction. Each party (1) agrees that any legal action with respect to this Agreement may be brought in the courts of the State of New York or of the United States of America for the Southern District of New York, (2) accepts for itself and in respect of its property, generally and unconditionally, the jurisdiction of those courts and (3) irrevocably waives any objection, including, without limitation, any objection to the laying of venue or based on the grounds of forum non conveniens, which it may now or hereafter have to the bringing of any legal action in those jurisdictions. Section 19. Waiver of Jury Trial. Each party waives any right to a trial by jury in any Action to enforce or defend any right under this Agreement or any amendment, instrument, document or agreement delivered, or which in the future may be delivered, in 16 connection with this Agreement and agrees that any Action shall be tried before a court and not before a jury. Section 2O. Affiliate. Nothing contained in this Agreement shall constitute the Shareholder an "affiliate" of any of the Company and its Subsidiaries within the meaning of Rule 13e-3 under the Exchange Act. 17 IN WITNESS WHEREOF, the parties have executed and delivered this Registration Rights Agreement as of the date first written above in New York, New York. FOREST OIL CORPORATION By: /s/ Robert S.Boswell --------------------------- Robert S. Boswell President Address: l500 Colorado National Building 950 - 17th Street Denver, Colorado 80202 Telecopy: (303) 592-2602 JOINT ENERGY DEVELOPMENT INVESTMENTS LIMITED PARTNERSHIP By: Enron Capital Corp., its General Partner By: /s/ Clifford P. Hickey ----------------------------- Name: Clifford P. Hickey Title: Attorney-in-fact Address: Joint Energy Development Investments Limited Partnership Attention: Keith Power Telecopy: (713) 646-3602 With a Copy to: Enron Capital & Trade Resources Corp. 1200 17th Street, Suite 2750 Denver, Colorado 80202 Attention: Mr. Clifford Hickey Telecopier: (303) 534-2205 18 EX-3 4 EXHIBIT 3 AMENDMENT NO. 1 TO REGISTRATION RIGHTS AGREEMENT THIS AMENDMENT TO REGISTRATION RIGHTS AGREEMENT ("Amendment") dated January 24, 1996 is between FOREST OIL CORPORATION, a New York corporation (the "Company"), and JOINT ENERGY DEVELOPMENT INVESTMENTS LIMITED PARTNERSHIP, a Delaware limited partnership (the "Shareholder"). RECITALS WHEREAS, the Company and the Shareholder entered into a Registration Rights Agreement (the "Registration Rights Agreement") dated July 27, 1995 relating to registration rights granted by the Company to the Shareholder in respect of certain Tranche B Warrant Shares. WHEREAS, pursuant to the Second Restructure Agreement dated December 29, 1995 between the Company and the Shareholder, the Tranche B Warrants shall, on the closing of the Second Restructure Agreement, be exchanged for 1,680,000 shares of common stock of the Company, par value $.10 per share, together with the associated Rights. WHEREAS, the Company and the Shareholder wish to amend the Registration Rights Agreement to take account of the exchange referred to above and to make certain other amendments thereto. AGREEMENT NOW, THEREFORE, for good and valuable consideration the adequacy and sufficiency of which are hereby acknowledged by the parties, it is agreed as follows: 1. The Registration Rights Agreement shall be amended as follows: (a) In the Recitals, the last sentence of Paragraph A shall be deleted and the following substituted therefor: "The 1,680,000 shares of the Common Stock of the Company acquired pursuant to the Second Restructure Agreement are referred to as the "Registrable Shares"." (b) In Section 1(a), the phrase "Termination Date (as defined in the JEDI/Anschutz Option)" shall be deleted and the following substituted therefor: "Permitted Transfer Date (as defined in the Shareholders Agreement dated January 24, 1996, between the Company and the Shareholder)". (c) In Section 1(b): (i) The following clause shall be inserted at the beginning of the first sentence of Section 1(b): "Subject to the provisions of Section 1(b)(4),"; (ii) The following Section 1(b)(4) shall be inserted: "(4) If prior to the Effective Date the Other Shareholder requests inclusion or demands registration of any Other Registrable Shares in an offering pursuant to its rights under the Other Registration Rights Agreement, the Shareholder shall be permitted to include in such offering the same percentage of its Registrable Shares as the percentage of Other Registrable Shares for which such request has been made; provided that the percentage of Other Registrable Shares shall be calculated based on the number of shares of Common Stock of the Company owned by the Other Shareholder, together with shares of Common Stock issuable pursuant to any derivative security owned by the Other Shareholder which is then in effect and convertible into or exchangeable for, or which entitles the Other Shareholder to purchase, Common Stock of the Company. If the managing underwriter of such offering advises the Company in writing that, in its opinion, the number of securities requested to be included in the registration is so great as would adversely affect the offering, including the price as to which the Registrable Shares can be sold, the Company will include in the registration the maximum number of securities which it is so advised can be sold without the adverse effect, allocated in accordance with the priorities set forth in Section 1(b)(2) or Section 1(b)(3), as the case may be." 2. Except as modified by the terms of this Amendment, the terms of the Registration Rights Agreement shall continue in full force and effect. Any reference in the Registration Rights Agreement to "this Agreement" shall be deemed to include the amendments to the Registration Rights Agreement effected by this Amendment. 3. This Amendment may be signed in any number of counterparts, each of which shall be an original, with the same effect as if all signatures were on the same instrument. 4. This Amendment shall be governed by and construed in accordance with the internal laws of the State of New York. 2 IN WITNESS WHEREOF, the parties have executed and delivered this Amendment as of the date first written above. Joint Energy Development Investments Limited Partnership By: Enron Capital Management Limited Partnership, its General Partner By: Enron Capital Corp., its General Partner By: s/ Clifford P. Hickey --------------------- Clifford P. Hickey Vice President Forest Oil Corporation By: s/ Daniel L. McNamara --------------------- Name: Daniel L. McNamara Title: Secretary 3 -----END PRIVACY-ENHANCED MESSAGE-----