STANDBY PURCHASE AGREEMENT
February 7, 1997
Xxxxxx Brothers Inc.
3 World Financial Center
16th Floor
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
(000) 000-0000
(000) 000-0000 (fax)
Gentlemen and Ladies:
Forest Oil Corporation, a New York corporation (the
Company), proposes to redeem on February 28, 1997 (the "Redemption
Date") all of its outstanding $.75 Convertible Preferred Stock
(the "Preferred Stock") at $10.00 per share, plus accrued and
unpaid dividends to and including the Redemption Date (for an
aggregate of $10.06 per share) (the "Redemption Price"). The
Preferred Stock is convertible into 0.7 shares of Common Stock,
$.10 par value per share, of the Company (the "Common Stock").
The right to convert the Preferred Stock into shares of Common
Stock will terminate at the close of business (5:00 p.m. New York
City time) on February 21, 1997 (the "Conversion Termination
Date").
The Company desires to make arrangements with you (the
"Purchaser") pursuant to which the Purchaser will purchase from
the Company the number of shares of Common Stock necessary to
provide the Company with the funds required to pay the aggregate
redemption price of Preferred Stock outstanding on the Redemption
Date.
The Company wishes to confirm as follows its agreement
with the Purchaser in respect of such arrangement:
1. Representations and Warranties. The Company represents
and warrants to, and agrees with, the Purchaser as set forth below
in this Section 1. Certain terms used in this Section 1 are
defined in paragraph (c) hereof.
(a) The Company meets the requirements for use of Form
S-3 under the Securities Act of 1933, as amended (the "Act"),
and has filed with the Securities and Exchange Commission
(the "Commission") a registration statement on such Form,
including a related Prospectus, for the registration under
the Act of the offering and sale of the Acquired Shares (as
defined in Section 2 hereof). The Company has filed one or
more amendments thereto, including the related Prospectus
Supplement, each of which has previously been furnished to
you. The registration statement has become effective.
(b) To the best of the Company's knowledge, no order
preventing or suspending the use of the Prospectus and
Prospectus Supplement has been issued by the Commission. On
the Effective Date, the Registration Statement did comply in
all material respects with the applicable requirements of the
Act and the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and the respective rules and regulations
thereunder. On the Effective Date, the Registration
Statement did not contain any untrue statement of a material
fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein
not misleading, and, on the Effective Date, the Prospectus
did not include any untrue statement of a material fact or
omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however, that
the Company makes no representations or warranties as to the
information contained in or omitted from the Registration
Statement, or the Prospectus and Prospectus Supplement (or
any supplement thereto) in reliance upon and in conformity
with information furnished in writing to the Company by or on
behalf of the Purchaser specifically for inclusion in or
omission from the Registration Statement or the Prospectus
and the Prospectus Supplement (or any supplement thereto).
(c) The terms which follow, when used in this Agreement,
shall have the meanings indicated. The term the
"Effective Date" shall mean each date that the Registration
Statement and any post-effective amendment or amendments
thereto became or become effective. "Execution Time" shall
mean the date and time that this Agreement is executed and
delivered by the parties hereto. The "Preliminary Prospectus
Supplement" shall mean any preliminary prospectus supplement
with respect to the offering of the Acquired Securities. The
"Prospectus Supplement" shall mean any prospectus supplement
with respect to the offering of the Acquired Securities. The
"Prospectus" shall mean the form of prospectus relating to
the Acquired Securities included in the Registration
Statement at the Effective Date. "Registration Statement"
shall mean the registration statement referred to in
paragraph (a) above, including incorporated documents,
exhibits and financial statements, as amended at the
Execution Time and, in the event any post-effective amendment
thereto becomes effective prior to the Closing Date (as
hereinafter defined), shall also mean such registration
statement as so amended. "Rule 424" refers to such rule
under the Act. Any reference herein to the Registration
Statement, a Preliminary Prospectus Supplement, the
Prospectus Supplement or the Prospectus shall be deemed to
refer to and include the documents (or any portions thereof)
incorporated by reference therein pursuant to Item 12 of Form
S-3 which were filed under the Exchange Act on or before the
Effective Date of the Registration Statement or the issue
date of the Preliminary Prospectus Supplement, the Prospectus
Supplement or the Prospectus, as the case may be; and any
reference herein to the terms "amend", "amendment" or
"supplement" with respect to the Registration Statement, the
Preliminary Prospectus Supplement, the Prospectus Supplement
or the Prospectus shall be deemed to refer to and include the
filing of any document under the Exchange Act after the
Effective Date of the Registration Statement, or the issue
date of the Preliminary Prospectus Supplement, the Prospectus
Supplement or the Prospectus, as the case may be, deemed to
be incorporated therein by reference.
(d) The only corporate subsidiaries of the Company are
listed on Schedule I attached hereto and are each referred to
herein as a "subsidiary" and are collectively referred to
herein as the "subsidiaries".
(e) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the
laws of the State of New York, and each subsidiary of the
Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of its
jurisdiction of incorporation or organization, as the case
may be, and each has the corporate power and authority to own
its properties and conduct its business as described (if
described) in the Prospectus and the Prospectus Supplement,
and has been duly qualified as a foreign corporation and is
in good standing under the laws of each other jurisdiction in
which its ownership or leasing of its properties or its
conduct of its material business makes such qualification
necessary, except to the extent that any failure to so
qualify or be in good standing would not have a material
adverse effect on the condition (financial or other),
earnings, business or properties of the Company and its
subsidiaries, taken as a whole.
(f) The issuance and sale of Purchased Shares and the
issuance of the Additional Shares (each as defined in Section
2 hereof) to be sold by the Company under this Agreement (as
defined in Section 2 hereof) do not result in a breach of any
of the terms or provisions of, or constitute a default (or an
event which, with notice or lapse of time or both, would
constitute a default) under, (i) the Restated Certificate of
Incorporation or Bylaws of the Company or its subsidiaries,
(ii) any bond, debenture, note, loan agreement, indenture,
mortgage, deed of trust, lease or other agreement or instrument
to which the Company or its subsidiaries is now a party
or by which any of them is bound, or (iii) any order of any
court or governmental agency or authority entered in any
proceeding to which the Company or its subsidiaries was or is
now a party or by which either of them is bound, which
default or breach would have a material adverse effect on the
condition (financial or other), earnings, business or
properties of the Company and its subsidiaries, taken as a
whole.
(g) Neither the Company, nor any of its subsidiaries
has sustained since the date of the latest audited financial
statements included or incorporated by reference in the
Prospectus any material loss or interference with its business
from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any court or governmental
action, order or decree, otherwise than as set forth or
contemplated in the Prospectus and Prospectus Supplement; and,
since the respective dates as of which information is given
in the Registration Statement and the Prospectus and the
Prospectus Supplement, there has not been any material
increase in the long-term debt of the Company or any of its
subsidiaries.
(h) The Company has all requisite corporate power and
authority to enter into this Agreement, to issue, sell and
deliver the Purchased Shares, to issue the Additional Shares
upon conversion of the Preferred Stock as provided herein and
to consummate the transactions contemplated herein. This
Agreement has been duly authorized, executed and delivered by
the Company. Each consent, approval, authorization, order,
declaration or filing by or with any governmental agency or
body necessary for the offer and sale of the Acquired Shares
and the execution, delivery and performance of this Agreement
by the Company and the consummation by the Company of the
transactions contemplated hereby, have been made or obtained,
except such as may be necessary to make the Registration
Statement remain effective under the Act and to qualify the
Acquired Shares for public offering by you under state
securities or Blue Sky laws or by the National Association of
Securities Dealers, Inc. ("NASD") in connection with the
purchase and distribution of the Acquired Shares by the
Purchaser.
(i) The actual and as adjusted capitalization of the
Company is as set forth under the heading "Capitalization" in
the Prospectus Supplement; the issued shares of capital stock
of the Company conform to the description thereof in the
Prospectus and Prospectus Supplement and have been duly
authorized and validly issued and are fully paid and
nonassessable; all outstanding shares of capital stock of
each of the subsidiaries have been duly authorized and validly
issued, and are fully paid and nonassessable and (except
as described in the Registration Statement) are owned
directly by the Company or by another subsidiary of the
Company free and clear of any liens, encumbrances, equities
or claims.
(j) The Purchased Shares to be issued and sold by the
Company to the Purchaser hereunder and the Additional Shares
to be issued to the Purchaser by the Company, have been duly
authorized and, when issued and paid for as contemplated
herein, will be validly issued, fully paid and nonassessable
and will conform to the description thereof in the Prospectus
and Prospectus Supplement and will not have been issued in
violation of or subject to any preemptive rights or rights of
first refusal.
(k) Except as described in the Registration Statement,
there are no options, warrants, agreements, preemptive
rights, conversion rights, contracts or other rights in
existence to purchase or acquire from the Company any shares
of the capital stock or securities or obligations convertible
into, or any contracts or commitments to issue or sell shares
of capital stock or any such rights or other securities of
the Company.
(l) There are no legal, regulatory, administrative or
governmental actions, suits or proceedings pending to which
the Company or any of its subsidiaries or any of their
officers is a party or of which any properties of the Company
or any of its subsidiaries is the subject except as set forth
in the Prospectus and Prospectus Supplement, or as
individually or in the aggregate, do not now have and are not
reasonably expected in the future to have any material
adverse effect in the condition (financial or other),
earnings, business or properties of the Company and its
subsidiaries, taken as a whole; and to the best knowledge of
the Company, no such proceedings are threatened or
contemplated by any of such governmental, regulatory or
administrative authorities or others and there are no
agreements, contracts, leases or documents of the Company or
any of its subsidiaries that are required to be described in
the Prospectus and Prospectus Supplement or to be filed as
exhibits to the Registration Statement by the Act or the
Exchange Act or the rules and regulations thereunder which
have not been described in all materials respects in the
Prospectus and Prospectus Supplement or filed as exhibits to
the Registration Statement.
(m) All material agreements to which the Company or any
of its subsidiaries is a party and which are required to be
described in the Registration Statement or the Prospectus and
Prospectus Supplement are described therein. The Company is
not in breach of or in violation under any of the material
terms or provisions of, or in default under, (i) any material
contract, indenture, mortgage, deed of trust, permit,
license, note agreement or other material agreement or
material instrument to which the Company is a party or by
which any of its properties are bound, (ii) its Restated
Certificate of Incorporation or Bylaws, or (iii) any order,
judgment, statute, rule or regulation of any court or
governmental, administrative or regulatory agency or body
having jurisdiction over the Company or any of its
properties, except as may be properly described in the
Prospectus and Prospectus Supplement or such as individually
or in the aggregate do not now have and are not reasonably
expected to have a material adverse effect upon the condition
(financial or other), earnings, business or properties of the
Company and its subsidiaries, taken as a whole.
(n) The Company has obtained the agreement of each of
the Company's directors and executive officers and the
Company's principal shareholder that, in the event the number
of Purchased Shares (as hereinafter defined) is greater than
201,437, such persons will not, for a period of 60 days
following the Execution Time, offer to sell, contract to sell
or otherwise sell (including without limitation in a short
sale), grant any option to purchase, or dispose of any shares
of any equity stock of the Company, any options or warrants
to purchase any shares of any equity stock of the Company, or
any securities convertible into or exchangeable for shares of
any equity stock of the Company, without the prior written
consent of the Purchaser except the Company may issue
securities pursuant to the Company's retirement savings,
stock option or other benefit or incentive plans maintained
for its officers, directors or employees and there may be
sold up to 100,000 shares of Common Stock, in the aggregate,
upon the exercise of management stock options.
(o) The Company has not taken and will not take,
directly or indirectly, prior to the earlier of 90 days from
the date of this Agreement and the termination of the
Purchase syndicate contemplated by this Agreement, any action
designed to stabilize or manipulate the price of any security
of the Company, or which caused or resulted in, or which
might in the future reasonably be expected to cause or result
in, stabilization or manipulation of the price of any
security of the Company.
(p) KPMG Peat Marwick LLP, who have certified certain
financial statements of the Company and its subsidiaries, are
independent public accountants as required by the Act and the
Exchange Act and the rules and regulations of the Commission
thereunder.
(q) The consolidated financial statements of the
Company (including the related notes and supporting schedules)
filed as part of the Registration Statement or included or
incorporated by reference in the Prospectus and Prospectus
Supplement present fairly in all material respects the
condition (financial or other) and results of operations of
the Company and its consolidated subsidiaries, at the dates
and for the periods indicated, and have been prepared in
conformity with generally accepted accounting principles
applied on a consistent basis throughout the periods
involved, except as set forth in the notes to such financial
statements and except to the extent that certain footnote
disclosures regarding the unaudited financial statements have
been omitted in accordance with the applicable rules of the
Commission. The amounts included in the Registration
Statement and the amounts in the Prospectus and Prospectus
Supplement under the captions "Selected Financial and
Operating Data" and "Prospectus Summary" fairly present, in
all material respects, the information shown therein and have
been determined on a basis consistent with the financial
statements included or incorporated by reference in the
Registration Statement and the Prospectus and Prospectus
Supplement.
2. Agreement to Sell and Purchase.
(a) On the basis of the representations and warranties
herein contained, but subject to all the terms and conditions
herein set forth, the Purchaser will purchase from the
Company at $14.37 per share (the "Purchase Price") the number
of shares of Common Stock necessary to provide the Company
with the funds required to pay the aggregate redemption price
of the Preferred Stock outstanding on the Redemption Date.
Shares acquired by the Purchaser pursuant to this
Section 2(a) are referred to herein as "Purchased Shares."
The Purchaser shall pay the Company for the Purchased Shares
in same day funds on February 28, 1997 (the "Closing Date").
(b) Until 5:00 p.m. New York City time on the
Conversion Termination Date, the Purchaser may (but shall
have no obligation to) purchase Preferred Stock ("Acquired
Preferred Stock") and Common Stock in the open market or
otherwise in such amounts and at such prices as the Purchaser
may deem advisable. The Purchaser agrees to surrender for
conversion not later than 5:00 p.m. New York City time on the
Conversion Termination Date any Preferred Stock owned by the
Purchaser on such date. Purchased Shares and shares of
Common Stock issued to the Purchaser upon conversion of
Acquired Preferred Stock may be sold by the Purchaser at any
time or from time to time pursuant to the Registration
Statement or an applicable exemption under the 1933 Act.
Shares of Common Stock acquired by the Purchaser upon
conversion of Acquired Preferred Stock are referred to herein
as "Additional Shares." Purchased Shares and Additional
Shares are referred to in this Agreement as "Acquired
Shares."
(c) As compensation to the Purchaser for its commitment
hereunder, the Company will pay to the Purchaser, in same day
funds, (i) on the Effective Date, a standby fee of $200,000
and (ii) on the Closing Date, an amount equal to (w) in the
event the number of Purchased Shares is less than or equal to
100,719 shares, $0.14 per Purchased Share, (x) in the event
the number of Purchased Shares is greater than 100,719 shares
but less than or equal to 201,437 shares, $0.29 per Purchased
Share, (y) in the event the number of Purchased Shares is
greater than 201,437 shares but less than or equal to 503,593
shares, $0.57 per Purchased Share, or (z) in the event the
number of Purchased Shares is greater than 503,593, $0.75 per
Purchased Share.
(d) As soon as possible after the Redemption Date, the
Purchaser agrees to pay to the Company the portion of the
Profit (as defined below) realized by the Purchaser on the
sale of Purchased Shares that is allocable to the Company in
accordance with this Section 2(d). "Profit" means the excess
of the total proceeds received on the sale of the Purchased
Shares over the total purchase price paid to the Company for
such shares, after deducting from such proceeds of sale the
cost of funds to carry Purchased Shares at 6% per annum, any
selling concessions, transfer taxes and other direct out-or-
pocket selling expenses. For the purpose of determining the
total proceeds received by the Purchaser from the sale of
Purchased Shares, the sale price of each Purchased Share
shall be deemed to be the average sale price for the total
number of Purchased Shares sold by the Purchaser. On
completion of the sale of such shares, the Purchaser will
furnish the Company with a statement setting forth the total
proceeds received on the sale and the applicable cost of
funds to carry Purchased Shares, selling concessions,
transfer taxes and other direct out-of-pocket selling
expenses.
Profit shall be allocated between the Company and the
Purchaser 50% to the Purchaser and 50% to the Company, except
that the first $200,000 of any such Profit realized shall be
paid solely to the Company.
(e) The Purchaser agrees to inform the Company when all
Acquired Shares have been sold or if any offering of Acquired
Shares is otherwise terminated.
3. Offering by Purchasers. It is understood that the
Purchaser proposes to offer the Acquired Shares for sale to the
public as set forth in the Prospectus and Prospectus Supplement.
4. Agreements. The Company agrees with the Purchaser that:
(a) Prior to the termination of the offering of the
Acquired Shares, the Company will not file any amendment of
the Registration Statement or supplement to the Prospectus
Supplement without your prior consent, which consent shall
not be unreasonably withheld. The Company will promptly
advise the Purchaser (i) when the Registration Statement, if
not effective at the Execution Time, and any amendment
thereto, shall have become effective, (ii) when the
Prospectus Supplement, and any supplement thereto, shall have
been filed with the Commission pursuant to the Act, (iii)
when, prior to termination of the offering of the Acquired
Shares, any amendment to the Registration Statement shall
have been filed or become effective, (iv) of any request by
the Commission for any amendment of the Registration
Statement or supplement to the Prospectus Supplement or for
any additional information, (v) of the issuance by the
Commission of any stop order suspending the effectiveness of
the Registration Statement or the institution or threatening
of any proceeding for that purpose and (vi) of the receipt by
the Company of any notification with respect to the
suspension of the qualification of the Acquired Shares for
sale in any jurisdiction or the initiation or threatening of
any proceeding for such purpose. The Company will use its
best efforts to prevent the issuance of any such stop order
and, if issued, to obtain as soon as possible the withdrawal
thereof.
(b) If, at any time when a prospectus relating to the
Acquired Shares is required to be delivered under the Act,
any event occurs as a result of which the Prospectus and
Prospectus Supplement as then supplemented would include any
untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in
the light of the circumstances under which they were made,
not misleading, or if it shall be necessary to amend the
Registration Statement or supplement the Prospectus and
Prospectus Supplement to comply with the Act or the Exchange
Act or the respective rules thereunder, the Company promptly
will prepare and file with the Commission, subject to the
first sentence of paragraph (a) of this Section 4, an
amendment or supplement which will correct such statement or
omission or effect such compliance.
(c) As soon as practicable, the Company will make
generally available to its security holders and to the
Representative an earnings statement or statements of the
Company and its subsidiaries which will satisfy the
provisions of Section 11(a) of the Act and Rule 158 under the
Act.
(d) The Company will furnish to the Purchaser and
counsel for the Purchaser, without charge, signed copies of
the Registration Statement (including exhibits thereto) and,
so long as delivery of a prospectus by the Purchaser or
dealer may be required by the Act, as many copies of each
Prospectus, Preliminary Prospectus Supplement and Prospectus
Supplement and any supplement thereto as the Purchaser may
reasonably request. The Company will pay the expenses of
printing or other production of all documents relating to the
offering.
(e) The Company will arrange for the qualification of
the Acquired Shares for sale under the laws of such
jurisdictions as the Purchaser may designate, will maintain
such qualifications in effect so long as required for the
distribution of the Acquired Shares; provided, however, that
the Company shall not be required to qualify to do business
in any jurisdiction where it is not now qualified or to file
a general consent to service of process in any jurisdiction.
The Company will pay the fee of the NASD in connection with
its review of the offering, if any.
(f) In the event the number of Purchased Shares is
greater than 201,437, the Company will not, for a period of
60 days following the Execution Time, without the prior
written consent of the Purchaser, offer, sell or contract to
sell, or otherwise dispose of, directly or indirectly, or
announce the offering of, any other shares of equity
securities or any securities convertible into, or
exchangeable for, shares of equity securities; provided,
however, that the Company may issue equity securities (y)
pursuant to this Agreement and, (z) pursuant to any stock
option, retirement savings or other benefit or incentive
plans maintained for the Company's officers, directors or
employees, in effect at the Execution Time and the Company
may sell up to 100,000 shares of Common Stock, in the
aggregate, upon the exercise of management stock options.
5. Conditions to the Obligations of the Purchaser. The
obligations of the Purchaser to purchase the Purchased Shares and
to surrender for conversion any Acquired Preferred Stock owned by
it shall be subject to the accuracy of the representations and
warranties on the part of the Company contained herein as of the
Execution Time and the Closing Date, to the accuracy of the
statements of the Company made in any certificates pursuant to the
provisions hereof, to the performance by the Company of its
obligations hereunder and to the following additional conditions:
(a) If filing of the Prospectus Supplement, or any
supplement thereto, is required pursuant to the Act, the
Prospectus Supplement, and any such supplement, will be filed
in the manner and within the time period required by the Act;
and no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or
threatened.
(b) Prior to the Execution Time and prior to the
mailing of the notice of redemption, the Company shall have
furnished to the Purchaser the opinion of Xxxxxx X. XxXxxxxx,
Esq., Corporate Counsel and Secretary for the Company, dated
the date hereof, to the effect that:
(i) each of the Company and its subsidiaries has
been duly incorporated and is validly existing as a
corporation in good standing under the laws of the
jurisdiction in which it is chartered or organized, with
full corporate power and authority to own its properties
and conduct its business as described in the Prospectus
and Prospectus Supplement, and is duly qualified to do
business as a foreign corporation and is in good
standing under the laws of each jurisdiction in which
its ownership or leasing of its material properties or
its conduct of its material business makes such
qualification necessary, except to the extent the
failure, individually or in the aggregate, to be so
qualified or in good standing could not have a material
adverse effect on the condition (financial or other),
earnings, business or properties of the Company and its
subsidiaries, taken as a whole;
(ii) all the outstanding shares of capital stock of
the subsidiaries have been duly and validly authorized
and issued and are fully paid and nonassessable, and,
except as otherwise set forth in the Prospectus and
Prospectus Supplement, all outstanding shares of capital
stock of the subsidiaries are owned by the Company
either directly or through wholly owned subsidiaries
free and clear of any perfected security interest and,
to the knowledge of such counsel, any other security
interests, claims, liens or encumbrances;
(iii) the Company's authorized equity capitalization
is as set forth in the Prospectus Supplement; the
capital stock of the Company conforms to the description
thereof contained in the Prospectus and Prospectus
Supplement; all of the outstanding shares of capital
stock have been duly authorized and validly issued and
are fully paid and nonassessable and were not issued in
violation of or subject to any preemptive or other
rights to subscribe for the capital stock; the Acquired
Securities have been duly authorized, and, when issued
and delivered to and paid for by the Purchasers pursuant
to this Agreement, will be validly issued, fully paid
and nonassessable; based upon information provided by
the NASD and assuming the Acquired Securities are sold
in the manner described in the Registration Statement,
the Acquired Securities are duly authorized for
quotation on the Nasdaq National Market; the
certificates for the Acquired Securities are in valid
and sufficient form; and, except as otherwise set forth
in the Prospectus and Prospectus Supplement, the holders
of outstanding shares of capital stock of the Company
are not entitled to preemptive or other rights to
subscribe for the New Securities;
(iv) to the best knowledge of such counsel, there
is no pending or threatened action, suit or proceeding
before any court or governmental agency, authority or
body or any arbitrator involving the Company or any of
its subsidiaries of a character required to be disclosed
in the Registration Statement which is not adequately
disclosed in the Prospectus and Prospectus Supplement,
and there is no contract, agreement, lease, instrument,
license or other document of a character required to be
described in the Registration Statement or the
Prospectus, and the Prospectus Supplement, or to be
filed as an exhibit, which is not described or filed as
required; and the statements in the Form 10-K/A
incorporated herein by reference under the heading
"Business and Properties -- Legal Proceedings" fairly
summarizes the matters therein described;
(v) such counsel has no reason to believe that, at
the Effective Date, the Registration Statement contained
any untrue statement of a material fact or omitted to
state any material fact required to be stated therein or
necessary to make the statements therein not misleading
or that the Prospectus and Prospectus Supplement include
any untrue statement of a material fact or omit to state
a material fact necessary to make the statements
therein, in the light of the circumstances under which
they were made, not misleading;
(vi) this Agreement has been duly authorized,
executed and delivered by the Company;
(vii) no consent, approval, authorization or order
of any court or governmental agency or body is required
for the consummation of the transactions contemplated
herein and the distribution of the Acquired Securities
by the Purchaser, except such as have been obtained
under the Act and such as may be required under the blue
sky or foreign laws of any jurisdiction in connection
with the purchase and distribution of the Acquired
Securities by the Purchaser, and by the NASD, and such
other approvals (specified in such opinion) as have been
obtained;
(viii) neither the issuance, sale or delivery of the
Purchased Shares, nor the conversion of the Acquired
Preferred Stock into Additional Shares, nor the issuance
or delivery of the Additional Shares, nor the
consummation of any other of the transactions herein
contemplated nor the fulfillment of the terms hereof
will conflict with, result in a breach or violation of,
or constitute a default under any law, rule or
regulation (except that such counsel need not express
any opinion with respect to any federal or state
securities laws) or the Restated Certificate of
Incorporation or Bylaws of the Company or the terms of
any indenture or other agreement or instrument known to
such counsel and to which the Company or any of its
subsidiaries is a party or bound or any judgment, order,
or decree known to such counsel to be applicable to the
Company or any of its subsidiaries of any court,
regulatory body, administrative agency, governmental
body or arbitrator having jurisdiction over the Company
or any of its subsidiaries;
(ix) no holders of securities of the Company have
rights to the registration of such securities under the
Registration Statement; and
(x) upon the mailing of a notice of redemption,
all outstanding Preferred Shares will have been duly
called for redemption on the Redemption Date.
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of any laws other than the
Business Corporation Law of the State of New York and the
laws of any jurisdiction other than the United States to the
extent he deems proper and specified in such opinion, upon
the opinion of other counsel of good standing whom he
believes to be reliable and who is satisfactory to counsel
for the Purchaser and (B) as to matters of fact, to the
extent he deems proper, on certificates of responsible
officers of the Company and public officials. References to
the Prospectus and Prospectus Supplement in this paragraph
(b) include any supplements thereto at the Closing Date.
(c) Prior to the Execution Time and prior to the
mailing of the notice of redemption, the Company shall have
furnished to the Purchaser the opinion of Xxxxxx & Xxxxxx
L.L.P., counsel for the Company, dated the date hereof, to
the effect that:
(i) the Registration Statement has become effective
under the Act; any required filing of the Prospectus
and Prospectus Supplement, and any supplements
thereto, pursuant to the Act has been made in the manner
and within the time period required by the Act; to the
best knowledge of such counsel, no stop order suspending
the effectiveness of the Registration Statement has been
issued, no proceedings for that purpose have been
instituted or threatened and the Registration Statement
and the Prospectus and Prospectus Supplement (other than
the financial statements and other financial and
statistical information contained therein as to which
such counsel need express no opinion) comply as to form
in all material respects with the applicable
requirements of Form S-3, the Act and the Exchange Act
and the respective rules and regulations thereunder; and
such counsel has no reason to believe that, at the
Effective Date, the Registration Statement contained any
untrue statement of a material fact or omitted to state
any material fact required to be stated therein or
necessary to make the statements therein not misleading
or that the Prospectus and Prospectus Supplement include
any untrue statement of a material fact or omit to state
a material fact necessary to make the statements
therein, in the light of the circumstances under which
they were made, not misleading;
(ii) no consent, approval, authorization or order
of any court or governmental agency or body is required
for the consummation of the transactions contemplated
herein, except such as have been obtained under the Act
and such as may be required under the blue sky or
foreign laws of any jurisdiction in connection with the
purchase and distribution of the Acquired Securities by
the Purchaser, and by the NASD, and such other approvals
(specified in such opinion) as have been obtained; and
(iii) neither the issuance, sale or delivery of
the Purchased Shares, nor the conversion of the
Preferred Stock into Additional Securities, nor the
issuance or delivery of the Additional Securities, nor
the consummation of any other of the transactions herein
contemplated nor the fulfillment of the terms hereof
will conflict with, result in a breach or violation of,
or constitute a default under any law, rule or
regulation (except that such counsel need not express
any opinion with respect to any federal or state
securities laws) or the Restated Certificate of
Incorporation or Bylaws of the Company or the terms of
any indenture or other agreement or instrument known to
such counsel and to which the Company or any of its
subsidiaries is a party or bound or any judgment, order
or decree known to such counsel to be applicable to the
Company or any of its subsidiaries of any court,
regulatory body, administrative agency, governmental
body or arbitrator having jurisdiction over the Company
or any of its subsidiaries.
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws of any jurisdiction
other than the State of Texas or the United States, to the
extent they deem proper and specified in such opinion, upon
the opinion of other counsel of good standing whom they
believe to be reliable and who are satisfactory to counsel
for the Purchaser and (B) as to matters of fact, to the
extent they deem proper, on certificates of responsible
officers of the Company and public officials. References to
the Prospectus and Prospectus Supplement in this paragraph
(c) include any supplements thereto at the Closing Date.
(d) Prior to the Execution Time and prior to the
mailing of the notice of redemption, the Purchaser shall have
received from Xxxxxx Xxxxxx & Xxxxxxx, counsel for the
Purchaser, such opinion or opinions, dated the date hereof,
with respect to the issuance and sale of the Acquired Shares,
the Registration Statement, the Prospectus and Prospectus
Supplement (together with any supplement thereto) and other
related matters as the Purchaser may reasonably require, and
the Company shall have furnished to such counsel such
documents as they request for the purpose of enabling them to
pass upon such matters.
(e) Prior to the Execution Time and prior to the
mailing of the notice of redemption, the Company shall have
furnished to the Purchaser a certificate of the Company,
signed by the Chairman of the Board or the President and the
principal financial or accounting officer of the Company,
dated the date hereof, to the effect that the signers of such
certificate have carefully examined the Registration
Statement, the Prospectus and Prospectus Supplement, any
supplement to the Prospectus Supplement and this Agreement
and that:
(i) the representations and warranties of the
Company in this Agreement are true and correct in all
material respects on and as of the Closing Date with the
same effect as if made on the Closing Date and the
Company has complied with all the agreements and satisfied
all the conditions on its part to be performed or
satisfied at or prior to the Closing Date pursuant to
this Agreement;
(ii) no stop order suspending the effectiveness of
the Registration Statement has been issued and no
proceedings for that purpose have been instituted or, to
the Company's knowledge, threatened; and
(iii) since the date of the most recent financial
statements included in the Prospectus and Prospectus
Supplement (exclusive of any supplement thereto), there
has been no material adverse change in the condition
(financial or other), earnings, business or properties
of the Company and its subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary
course of business, except as set forth in or
contemplated in the Prospectus and Prospectus Supplement
(exclusive of any supplement thereto).
(f) Prior to the Execution Time and prior to the
mailing of the notice of redemption, KPMG Peat Marwick LLP
shall have furnished to the Purchaser a letter or letters,
dated as of the date hereof, in form and substance
satisfactory to the Purchaser.
(g) Subsequent to the Execution Time or, if earlier,
the dates as of which information is given in the Registration
Statement (exclusive of any amendment thereof) and the
Prospectus and Prospectus Supplement (exclusive of any
supplement thereto), there shall not have been any change, or
any development involving a prospective change, in or
affecting the business or properties of the Company and its
subsidiaries, taken as a whole, the effect of which is, in
the judgment of the Purchaser, so material and adverse as to
make it impractical or inadvisable to proceed with the
offering or delivery of the Acquired Shares as contemplated
by the Registration Statement (exclusive of any amendment
thereof) and the Prospectus and Prospectus Supplement
(exclusive of any supplement thereto).
(h) Prior to the Execution Time and prior to the
mailing of the notice of redemption, the Company shall have
furnished to the Purchaser a letter substantially in the form
of Exhibit A hereto from each executive officer, director and
the principal shareholder of the Company addressed to the
Purchaser, in which, in the event the number of Purchased
Shares is greater than 201,437, each such person agrees not
to offer, sell or contract to sell, or otherwise dispose of,
directly or indirectly, or announce an offering of, any
shares of equity securities beneficially owned by such person
or any securities convertible into, or exchangeable for,
shares of equity securities for a period of 60 days following
the Execution Time without the prior consent of the
Purchaser, other than shares of equity securities disposed of
as bona fide gifts or by act of law and the sale by the
Company and all such persons of up to 100,000 shares of
Common Stock in the aggregate upon the exercise of management
stock options.
(i) Prior to the Execution Time, the Company shall have
furnished to the Purchaser such further information,
certificates and documents as the Purchaser may reasonably
request.
If any of the conditions specified in this Section 5 shall
not have been fulfilled in all material respects when and as
provided in this Agreement, or if any of the opinions and
certificates mentioned above or elsewhere in this Agreement shall
not be in all material respects reasonably satisfactory in form
and substance to the Purchaser and counsel for the Purchaser, this
Agreement and all obligations of the Purchaser hereunder may be
canceled at, or at any time prior to, the Closing Date by the
Purchaser. Notice of such cancellation shall be given to the
Secretary of the Company in writing or by telephone or telegraph
confirmed in writing.
The documents required to be delivered by this Section 5
shall be delivered at the office of Xxxxxx Xxxxxx & Xxxxxxx,
counsel for the Purchaser, at 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx,
xx the Closing Date.
6. Reimbursement of Purchaser's Expenses. The Company will
reimburse the Purchaser on the Closing Date for all reasonable out-
of-pocket expenses (including reasonable fees and disbursements of
counsel), not to exceed $75,000 in the aggregate, that shall have
been incurred by the Purchaser in connection with the proposed
purchase and/or conversion and sale of the Acquired Shares.
7. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless
the Purchaser, the directors, officers, employees and agents of
the Purchaser and each person who controls the Purchaser within
the meaning of either the Act or the Exchange Act against any and
all losses, claims, damages or liabilities, joint or several, to
which they or any of them may become subject under the Act, the
Exchange Act or other Federal or state statutory law or
regulation, at common law or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in the Registration
Statement for the registration of the Acquired Shares as
originally filed or in any amendment thereof, or in any
Preliminary Prospectus Supplement or in the Prospectus Supplement,
or in any amendment thereof or supplement thereto, or arise out of
or are based upon the 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 agrees to
reimburse each such indemnified party, as incurred, for any legal
or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability
or action; provided, however, that the Company will not be liable
in any such case to the extent that any such loss, claim, damage
or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged
omission made therein in reliance upon and in conformity with
written information furnished to the Company by or on behalf of
the Purchaser specifically for inclusion therein; and provided,
further, that such indemnity with respect to any preliminary
prospectus supplement shall not inure to the benefit of the
Purchaser (or any person controlling the Purchaser) from whom the
person asserting any such loss, claim, damage or liability
purchased the Acquired Shares which are the subject thereof if
such person did not receive a copy of the Prospectus Supplement
(or the Prospectus Supplement as amended and supplemented) at or
prior to the confirmation of the sale of such Acquired Shares to
such person in any case where such delivery is required by the Act
and the untrue statement or omission of a material fact contained
in such preliminary prospectus supplement was corrected in the
Prospectus Supplement (or the Prospectus Supplement as amended or
supplemented) provided that the Company shall have delivered the
Prospectus Supplement, as amended or supplemented, to the
Purchaser on a timely basis to permit such delivery. This
indemnity agreement will be in addition to any liability which the
Company may otherwise have.
(b) The Purchaser agrees to indemnify and hold harmless
the Company, each of the Company's directors, each of the
Company's officers who signs the Registration Statement, and each
person who controls the Company within the meaning of either the
Act or the Exchange Act, to the same extent as the foregoing
indemnity from the Company to the Purchaser, but only with
reference to written information relating to the Purchaser
furnished to the Company by or on behalf of the Purchaser
specifically for inclusion in the documents referred to in the
foregoing indemnity. This indemnity agreement will be in addition
to any liability which the Purchaser may otherwise have.
(c) Promptly after receipt by an indemnified party
under this Section 7 of notice of the commencement of any action,
such indemnified party will, if a claim in respect thereof is to
be made against the indemnifying party under this Section 7,
notify the indemnifying party in writing of the commencement
thereof; but the failure so to notify the indemnifying party (i)
will not relieve it from liability under paragraph (a) or (b)
above unless and to the extent it did not otherwise learn of such
action and such failure results in the forfeiture by the
indemnifying party of substantial rights and defenses and (ii)
will not, in any event, relieve the indemnifying party from any
obligations to any indemnified party other than the
indemnification obligation provided in paragraph (a) or (b) above.
The indemnifying party shall be entitled to appoint counsel of the
indemnifying party's choice at the indemnifying party's expense to
represent the indemnified party in any action for which
indemnification is sought (in which case the indemnifying party
shall not thereafter be responsible for the fees and expenses of
any separate counsel retained by the indemnified party or parties
except as set forth below); provided, however, that such counsel
shall be satisfactory to the indemnified party. Notwithstanding
the indemnifying party's election to appoint counsel to represent
the indemnified party in an action, the indemnified party shall
have the right to employ separate counsel (including local counsel),
and the indemnifying party shall bear the reasonable fees,
costs and expenses of such separate counsel if (i) the use of
counsel chosen by the indemnifying party to represent the
indemnified party would present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets
of, any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably
concluded that there may be legal defenses available to it and/or
other indemnified parties which are different from or additional
to those available to the indemnifying party, (iii) the
indemnifying party shall not have employed counsel satisfactory to
the indemnified party to represent the indemnified party within a
reasonable time after notice of the institution of such action or
(iv) the indemnifying party shall authorize the indemnified party
to employ separate counsel at the expense of the indemnifying
party. An indemnifying party will not, without the prior written
consent of the indemnified parties, settle or compromise or
consent to the entry of any judgment with respect to any pending
or threatened claim, action, suit or proceeding in respect of
which indemnification or contribution may be sought hereunder
(whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement,
compromise or consent includes an unconditional release of each
indemnified party from all liability arising out of such claim,
action, suit or proceeding.
(d) In the event that the indemnity provided in
paragraph (a) or (b) of this Section 7 is unavailable to or
insufficient to hold harmless an indemnified party for any reason,
the Company and the Purchaser agree to contribute to the aggregate
losses, claims, damages and liabilities (including legal or other
expenses reasonably incurred in connection with investigating or
defending same) (collectively "Losses") to which the Company and
the Purchaser may be subject in such proportion as is appropriate
to reflect the relative benefits received by the Company on the
one hand and by the Purchaser on the other from the offering of
the Acquired Shares; provided, however, that in no case shall the
Purchaser be responsible for any amount in excess of the Acquired
Shares discount or commission applicable to the Acquired Shares
purchased by the Purchaser hereunder. If the allocation provided
by the immediately preceding sentence is unavailable for any
reason, the Company and the Purchaser shall contribute in such
proportion as is appropriate to reflect not only such relative
benefits but also the relative fault of the Company on the one
hand and of the Purchaser on the other in connection with the
statements or omissions which resulted in such Losses as well as
any other relevant equitable considerations. Benefits received by
the Company shall be deemed to be equal to the total net proceeds
from the offering (after deducting expenses), and benefits
received by the Purchaser shall be deemed to be equal to the total
discounts and commissions, in each case as set forth on the cover
page of the Prospectus. Relative fault shall be determined by
reference to whether any alleged untrue statement or omission
relates to information provided by the Company or the Purchaser.
The Company and the Purchaser agree that it would not be just and
equitable if contribution were determined by pro rata allocation
or any other method of allocation which does not take account of
the equitable considerations referred to above. Notwithstanding
the provisions of this paragraph (d), no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f)
of the Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. For purposes
of this Section 7, each person who controls the Purchaser within
the meaning of either the Act or the Exchange Act and each
director, officer, employee and agent of the Purchaser shall have
the same rights to contribution as the Purchaser, and each person
who controls the Company within the meaning of either the Act or
the Exchange Act, each officer of the Company who shall have
signed the Registration Statement and each director of the Company
shall have the same rights to contribution as the Company, subject
in each case to the applicable terms and conditions of this
paragraph (d).
8. Termination. This Agreement shall be subject to
termination in the absolute discretion of the Purchaser, by notice
given to the Company prior to delivery of and payment for the
Acquired Shares, if prior to such time (i) trading in the Common
Stock shall have been suspended by the Commission or the Nasdaq
National Market (or on the principal exchange or market on which
the Common Stock is then traded) or trading in securities
generally on the New York Stock Exchange or the Nasdaq National
Market (or on the principal exchange or market on which the Common
Stock is then traded) shall have been suspended or limited or
minimum prices shall have been established on either of such
Exchange or Market, (ii) a banking moratorium shall have been
declared either by Federal or New York State authorities or (iii)
there shall have occurred any outbreak or escalation of
hostilities, declaration by the United States of a national
emergency or war or other calamity or crisis the effect of which
on financial markets is such as to make it, in the judgment of the
Purchaser, impracticable or inadvisable to proceed with the
offering or delivery of the Acquired Shares as contemplated by the
Prospectus and Prospectus Supplement (exclusive of any supplement
thereto).
9. Representations and Indemnities to Survive. The
respective agreements, representations, warranties, indemnities
and other statements of the Company or its officers and of the
Purchaser set forth in or made pursuant to this Agreement will
remain in full force and effect, regardless of any investigation
made by or on behalf of the Purchaser or the Company or any of the
officers, directors or controlling persons referred to in Section
7 hereof, and will survive delivery of and payment for the
Acquired Shares. The provisions of Sections 6 and 7 hereof shall
survive the termination or cancellation of this Agreement.
10. Notices. All communications hereunder will be in
writing and effective only on receipt, and, if sent to the
Purchaser, will be mailed, delivered or telegraphed and confirmed
to it, at the address set forth in this Standby Purchase
Agreement; or, if sent to the Company, will be mailed, delivered,
or telegraphed and confirmed to it at 0000 Xxxxxxxx, Xxxxx 0000,
Xxxxxx, Xxxxxxxx 00000, Attention: Xxxxxx X. XxXxxxxx, Esq.
11. Successors. This Agreement will inure to the benefit of
and be binding upon the parties hereto and their respective
successors and the officers and directors and controlling persons
referred to in Section 7 hereof, and no other person will have any
right or obligation hereunder.
12. Applicable Law. This Agreement will be governed by and
construed in accordance with the laws of the State of New York,
without regard to the principles of conflicts of laws.
13. Counterparts. This Agreement may be executed in more than one
counterpart each of which shall be deemed an original and each of
which shall constitute one and the same instrument.
If the foregoing is in accordance with your
understanding of our agreement, please so indicate in the space
provided below, whereupon this letter and your acceptance shall
represent a binding agreement among the Company and you.
Very truly yours,
FOREST OIL CORPORATION
By: /s/ XXXXXXX X. XXXX
Name: Xxxxxxx X. Xxxx
Title: Chairman of the Board
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
Xxxxxx Brothers Inc.
By: /s/ XXXX XXXXXX
Name: Xxxx Xxxxxx
Title: Senior Vice President
Schedule I
Forest Oil Corporation
SUBSIDIARIES
State/
Percentage Country
of Date Acq'd of
Name Ownership or Created Incorporation
Forest I Development Co. 100% 12/19/91 Delaware, USA
Forest Pipeline Company 100% 01/05/90 Delaware, USA
Oklatex Corporation 100% 06/02/75 Texas, USA
(a wholly owned
subsidiary of Forest I
Development Corporation)
Forest Canada I 100% 05/11/92 Alberta, Canada
Development Ltd.
Forest Oil of Turkey, 100% 11/12/80 Delaware, USA
Ltd.
Forest Merger Corporation 100% 11/08/90 Delaware, USA
3189503 Canada Ltd. 100% 09/29/95 Canada
509830 B.C. Ltd. 100% 12/12/95 British
Columbia, Canada
Canadian Forest Oil Ltd. 100% 01/31/96 Alberta, Canada
Producers Marketing Ltd. 100% 01/31/96 Alberta, Canada
CU Energy Marketing Inc. 100% 01/31/96 Delaware, USA
Altex Resources, Inc. 100% 01/31/96 Alberta, Canada
Altex Resources, Inc. 100% 01/31/96 Nevada, USA
AT&S Exploration, Ltd. 33.97% 01/31/96 Canada
Canadian Commander 100% 01/31/96 Delaware, USA
Resources, Inc.
Saxon Petroleum Inc. 48% 12/20/95 Alberta, Canada
EXHIBIT A
Forest Oil Corporation
Standby Purchase and Public Offering of Common Stock
__________, 1997
Xxxxxx Brothers Inc.
3 World Financial Center
16th Floor
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
This letter is being delivered to you in connection with
the Standby Purchase Agreement (the "Standby Purchase Agreement")
between Forest Oil Corporation, a New York corporation (the
"Company") and you as the Purchaser named therein, relating to
your public offering of shares of Common Stock, $.10 par value
("Common Stock"), of the Company under the circumstances described
therein.
In order to induce you to enter into the Standby
Purchase Agreement, the undersigned agrees, in the event the
number of Purchased Shares (as defined in the Standby Purchase
Agreement) is greater than 201,437, not to offer, sell or contract
to sell, or otherwise dispose of, directly or indirectly, or
announce an offering of, any shares of Common Stock beneficially
owned by the undersigned or any securities convertible into, or
exchangeable for, shares of Common Stock for a period of 60 days
following the day on which the Purchase Agreement is executed
without your prior consent, other than shares of Common Stock
disposed of as bona fide gifts or by act of law and the sale by
the undersigned, other persons executing letters substantially
similar hereto and the Company of up to 100,000 shares of Common
Stock upon the exercise of management stock options.
If for any reason the Standby Purchase Agreement shall
be terminated prior to the Closing Date (as defined in the Standby
Purchase Agreement), the agreement set forth above shall likewise
be terminated.
Sincerely,
___________________________
Name:
Title:
Address:
