<PAGE>
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).
<PAGE>
- -----------------------
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
- ------------------------------------------------------------------------------
<PAGE>
- -----------------------
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
- ------------------------------------------------------------------------------
<PAGE>
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.
<PAGE>
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
<PAGE>
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.
<PAGE>
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
<PAGE>
SCHEDULE I
<TABLE>
<CAPTION>
DIRECTORS AND EXECUTIVE OFFICERS
ENRON CAPITAL CORP.
NAME AND BUSINESS ADDRESS CITIZENSHIP POSITION AND OCCUPATION
- ------------------------- ----------- -----------------------
<S> <C> <C>
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
</TABLE>
I-1
<PAGE>
<TABLE>
<CAPTION>
DIRECTORS AND EXECUTIVE OFFICERS
ENRON CORP.
NAME AND BUSINESS ADDRESS CITIZENSHIP POSITION AND OCCUPATION
- ------------------------- ----------- -----------------------
<S> <C> <C>
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
</TABLE>
I-2
<PAGE>
<TABLE>
<CAPTION>
NAME AND BUSINESS ADDRESS CITIZENSHIP POSITION AND OCCUPATION
- ------------------------- ----------- -----------------------
<S> <C> <C>
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
</TABLE>
I-3
<PAGE>
<TABLE>
<CAPTION>
NAME AND BUSINESS ADDRESS CITIZENSHIP POSITION AND OCCUPATION
- ------------------------- ----------- -----------------------
<S> <C> <C>
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.
</TABLE>
I-4
<PAGE>
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.
<PAGE>
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.
<PAGE>
"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
<PAGE>
(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
<PAGE>
"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
<PAGE>
"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
<PAGE>
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
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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
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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
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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
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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
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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.
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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
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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.
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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.]
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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
<PAGE>
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
<PAGE>
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
<PAGE>
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
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(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:
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(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
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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
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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
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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;
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(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.
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(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.
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(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
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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.
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(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
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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
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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.
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<PAGE>
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
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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
<PAGE>
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
<PAGE>
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),";
<PAGE>
(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
<PAGE>
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
