Exhibit 10.4

 

STOCKHOLDER AGREEMENT

 

THIS STOCKHOLDER AGREEMENT (the “Agreement”) is entered into as of May 21, 2004,
by and among Forest Oil Corporation, a New York corporation (together with its
successors, “Parent”), TWOCO Acquisition Corp., a Delaware corporation and a
wholly owned subsidiary of Parent (“Merger Subsidiary”), and the stockholder
listed on Schedule I hereto (the “Stockholder”) of The Wiser Oil Company, a
Delaware corporation (the “Company”).

 

RECITALS

 

Parent, Merger Subsidiary and the Company are entering into an Agreement and
Plan of Merger of even date herewith (the “Merger Agreement”) which provides,
among other things, that Merger Subsidiary will make a cash tender offer (the
“Offer”) for all of the issued and outstanding shares of Company Common Stock
(as defined below) and, following the consummation of the Offer, will merge with
and into the Company (the “Merger”), in each case upon the terms and subject to
the conditions set forth in the Merger Agreement.

 

The Stockholder is the beneficial owner (as defined in Rule 13d-3 under the
Exchange Act) of such number of securities of the Company as indicated on the
Schedule I to this Agreement; and

 

In order to induce Parent and Merger Subsidiary to enter into the Merger
Agreement, the Stockholder is entering into this Agreement.

 

NOW, THEREFORE, intending to be legally bound, the parties hereto agree as
follows:

 

Section 1.              Certain Definitions.

 

For purposes of this Agreement:

 

(a)           “Company Common Stock” shall mean the common stock, par value
$0.01 per share, of the Company.

 

(b)           “Company Warrants” shall mean warrants to purchase 741,716 shares
of Company Common Stock at an exercise price of $4.25 per share.

 

(c)           “Expiration Date” shall mean the earliest of:

 

(i)            the date upon which the Merger Agreement is validly terminated
pursuant to Section 8.01 thereof;

 

(ii)           the date on which the Parent or Merger Subsidiary shall have
purchased and paid for all of the Subject Securities;

 

(iii)          the date upon which the Merger becomes effective;

 

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(iv)          the date upon which the Merger Agreement is amended to reduce the
Offer Price or in any other manner adverse in any material respect to the
Stockholder; and

 

(v)           the End Date.

 

(d)           The Stockholder shall be deemed to “Own” or to have acquired
“Ownership” of a security if the Stockholder is the record and/or beneficial
owner (as defined in Rule 13d-3 under the Exchange Act) of such security.

 

(e)           “Person” shall mean any individual, corporation, limited liability
company, partnership, trust or other entity, or governmental authority.

 

(f)            “Subject Securities” shall mean: (i) all securities of the
Company (including all shares of Company Common Stock and all options and other
rights to acquire shares of Company Common Stock including Company Warrants)
Owned by the Stockholder as of the date of this Agreement; and (ii) all
additional securities of the Company (including all additional shares of Company
Common Stock and all additional options and other rights to acquire shares of
Company Common Stock) of which the Stockholder acquires Ownership during the
period from the date of this Agreement through the Expiration Date.

 

(g)           A Person shall be deemed to have a effected a “Transfer” of a
security if such Person directly or indirectly: (i) sells, pledges, encumbers,
grants an option with respect to, transfers, distributes or disposes of such
security or any interest in such security; (ii) enters into an agreement or
commitment contemplating the possible sale of, pledge of, encumbrance of, grant
of an option with respect to, transfer of or disposition of such security or any
interest therein; (iii) grants any proxy, power-of-attorney or other
authorization or consent with respects to any such security or any interest
therein; (iv) deposits any such security or any interest therein into a voting
trust, or enters into a voting agreement or arrangement with respect to any such
security or any interest therein; or (v) takes any other action that would in
any way materially restrict, limit or interfere with the performance of the
Stockholder’s obligations hereunder or the transactions contemplated hereby.

 

(h)           Capitalized terms not otherwise defined herein shall have the
respective meanings ascribed to them in the Merger Agreement.

 

Section 2.              Transfer of Subject Securities.

 

(a)           Transferee of Subject Securities to be Bound by this Agreement. 
The Stockholder agrees that, except as may be provided herein, during the period
from the date of this Agreement through the Expiration Date, the Stockholder
shall not cause or permit any Transfer of any of the Subject Securities to be
effected; provided, that nothing in this Agreement shall prohibit the
Stockholder from Transferring Subject Securities to Merger Subsidiary pursuant
to Section 3 hereof.   Parent and Merger Subsidiary acknowledge and agree that
the Stockholder has previously entered into a voting agreement with Wiser
Investment Company, LLC (“WIC”) granting WIC certain voting

 

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rights with respect to the Subject Securities.  If Section 3(c) applies, the
Stockholder agrees that during the period from the Expiration Date through the
date the provisions of Section 3(c) terminate pursuant to Section 9(m), the
Stockholder shall not cause or permit any Transfer of any of the Subject
Securities to be effected unless the Person to whom such Subject Securities are
Transferred shall have:  (i) executed a counterpart of this Agreement and (ii)
agreed to hold such Subject Securities subject to the terms and provisions of
Section 3(c) hereof and be treated as a Stockholder thereunder.

 

(b)           No Transfer of Voting Rights.  The Stockholder shall ensure that,
except for voting agreements in favor of WIC existing on the date hereof and
except for the Stockholders Agreement dated May 26, 2000 among the Company, the
Stockholder and certain other stockholders of the Company (the “Stockholders
Agreement”), during the period from the date of this Agreement through the
Expiration Date: (a) none of the Subject Securities Owned by the Stockholder is
deposited into a voting trust; and (b) no proxy is granted, and no voting
agreement or similar agreement is entered into, with respect to any of the
Subject Securities Owned by the Stockholder.

 

Section 3.              Tender of Subject Securities.

 

The Stockholder agrees:

 

(a)           to tender the Company Common Stock Owned by the Stockholder into
the Offer promptly, and in any event no later than the tenth Business Day
following the commencement of the Offer, or, if any Stockholder has not received
the Offer Documents by such time, within five Business Days following receipt of
such documents but in any event prior to the date of expiration of such Offer,
in each case, free and clear of any liens, claims, options, rights of first
refusal, co-sale rights, charges or other encumbrances (collectively, “Liens”)
and (ii) not to withdraw any Company Common Stock so tendered so long as there
is no decrease in the Offer Price and the Offer Price is payable in cash.  The
Stockholder shall have no obligations or liabilities to Parent or Merger
Subsidiary under this Section 3(a) at any time after the Expiration Date.  If
the Stockholder acquires additional Subject Securities after the date hereof,
the Stockholder shall tender (or cause the record holder to tender) such Subject
Securities on or before the tenth Business Day following the commencement of the
Offer, or, if later, on or before the fifth Business Day after such acquisition
but in any event prior to the date of expiration of such Offer.  The Stockholder
acknowledges and agrees that the obligation of Merger Subsidiary to accept for
payment and pay for any Subject Securities in the Offer is subject to the terms
and conditions of the Offer (as described in the Merger Agreement).  Parent and
Merger Subsidiary acknowledge that the Stockholder’s obligation to sell any
Subject Securities to Merger Subsidiary and termination of any voting agreement
in favor of WIC is expressly conditioned upon Merger Subsidiary’s acceptance and
payment for the Subject Securities in the Offer pursuant to the terms of the
Offer as the same may be amended from time to time, consistent with the terms of
this Agreement and the Merger Agreement;

 

(b)           to permit Parent, Merger Subsidiary and the Company to publish and
disclose in the Offer Documents and Schedule 14D-9 and, if approval of the
stockholders of the Company is required under applicable law, the Proxy
Statement (including all documents and schedules filed with the SEC) and any
similar filing required by

 

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applicable law in connection with the transactions contemplated by the Offer and
Merger Agreement, the Stockholder’s identity and ownership of the Subject
Securities and the nature of the Stockholder’s commitments, arrangements and
understandings under this Agreement;

 

(c)           in the event (i) the Merger Agreement is terminated pursuant to
Sections 8.01(e), 8.01(f) or 8.01(h) of the Merger Agreement (in the case of
8.01(h), only if the Minimum Condition had not been satisfied and an Acquisition
Proposal existed or had been previously announced prior to the termination of
the Merger Agreement), and (ii) within nine months following such termination
the Stockholder (A) receives consideration in respect of some or all of the
Subject Securities in connection with the consummation of an Acquisition
Proposal or (B) makes a bona fide sale of some or all of its Subject Securities
to a third party, to pay Parent an amount in immediately available funds by wire
transfer to a bank account designated by Parent equal to 100% multiplied by the
difference between (i) the aggregate fair value of the consideration received by
the Stockholder pursuant to such Acquisition Proposal or third party sale, as
applicable, and (ii) the aggregate cash consideration that would have been
received by the Stockholder pursuant to the Offer based on the initial Offer
Price of $10.60 per share with respect to the Subject Securities sold in
connection with such Acquisition Proposal or third party sale, as applicable (or
in the case of Subject Securities other than Company Common Stock, the amount of
cash consideration that would have been received had such Subject Securities
been exercised for Company Common Stock prior to the expiration of the Offer net
of the applicable exercise price).  Such payment to Parent shall be made as
follows: (i) if the consideration paid to the Stockholder is cash, immediately
following the consummation of such Acquisition Proposal or third party sale or
(ii) if the consideration paid to the Stockholder consists of marketable
securities, within ten Business Days following consummation of such Acquisition
Proposal or third party sale.  In the event the consideration received by the
Stockholder in respect of an Acquisition Proposal or third party sale, as
applicable, consists of marketable securities, the fair value of such securities
shall be determined based on the closing market price of such securities on the
principal securities exchange or other trading market for such securities on the
Business Day immediately preceding the closing date of such Acquisition Proposal
or third party sale.  In the event the consideration received by the Stockholder
in respect of an Acquisition Proposal or third party sale, as applicable,
consists of non-marketable securities or other property, the fair value of such
consideration shall be determined by a nationally recognized investment banking
firm selected by Stockholder that has not provided services to Stockholder or
its affiliates during the prior five years and is reasonably acceptable to
Parent as soon as possible after the closing of such Acquisition Proposal, and
the fair value determination of such firm shall be binding upon the parties.  In
the event the consideration received by the Stockholder consists of any
non-marketable securities or other property, the Stockholder shall pay Parent
its good faith estimate (the “Estimated Payment”) of the amount owed pursuant to
this Section 3(c) in respect of such consideration within ten Business Days
following consummation of the Acquisition Proposal or third party sale, as
applicable.  Following the determination of the fair value of any non-marketable
securities or other property (as described above), the Stockholder or Parent
shall promptly pay the other party in immediately available funds by wire
transfer to a bank account designated by the payee party an amount equal to the

 

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difference between the Estimated Payment and finally determined amount owing to
Parent under Section 3(c) (with Parent receiving payment to the extent such
amount exceeds the Estimated Payment and the Stockholder receiving payment to
the extent the Estimated Payment exceeds such amount).  In addition, if
Stockholder makes a bona fide sale of some or all of its Subject Securities to a
third party at a time when the Company is then a party to an agreement that
provides for an Acquisition Proposal (which agreement has not then been
terminated pursuant to its terms), then if such Acquisition Proposal is
consummated (or if that Acquisition Proposal is not consummated because another
Acquisition Proposal supplants that Acquisition Proposal because the Company
determines such Acquisition Proposal is superior, then if such subsequent
Acquisition Proposal is consummated) within nine months following the
termination of the Merger Agreement, Stockholder shall pay to Parent within ten
Business Days of the consummation of such Acquisition Proposal the Top-up
Amount.  The Top-up Amount shall be equal to 100% multiplied by the difference
between (i) the aggregate fair value of the consideration that would have been
received by the Stockholder pursuant to such Acquisition Proposal in respect of
the Subject Securities that were sold in such bona fide sale to a third party
and (ii) the aggregate fair value of the consideration received by such
Stockholder in connection with such bona fide sale.  For the avoidance of doubt,
Parent and Merger Subsidiary acknowledge and agree that because of the
undertaking by Stockholder in this Section 3(c) to disgorge a portion of the
improved price of such Acquisition Proposal or Superior Proposal over the Offer
Price (i) on and after the termination of the Merger Agreement (or the
Expiration Date, if earlier) the Stockholder may take any actions necessary to
consummate an Acquisition Proposal or Superior Proposal in lieu of the Offer,
including, without limitation, withdrawing its shares from the Offer and voting
in favor of such other Acquisition Proposal or Superior Proposal and (ii) prior
to the termination of the Merger Agreement (or the Expiration Date, if earlier)
the Stockholder may take any action except those prohibited by this Agreement,
including the prohibitions referred to in Section 5 of this Agreement, and any
of the Stockholder’s designees or affiliates who is a director or officer of the
Company may expressly take such actions as are contemplated by the last two
sentences of section 5 in connection with an Acquisition Proposal or Superior
Proposal; and

 

(d)           that it will not enter into an agreement, arrangement or
understanding (whether written or oral) with WIC or Wiser Investors, L.P. or
their direct or indirect owners (and will not permit its direct or indirect
owners to enter into any such agreements, arrangements or understandings) that
affects or otherwise modifies the sharing agreement contemplated by Section 3(c)
hereof or any other provisions of this Agreement in a manner adverse to Parent
or Merger Subsidiary without the prior written consent of Parent.

 

Section 4.              Voting of Subject Securities.

 

Stockholder Agreement.  The Stockholder agrees that, during the period from the
date of this Agreement until the Expiration Date:

 

(i)            at any meeting of stockholders of the Company, however called,
and at every adjournment or postponement thereof, the Stockholder shall (A)
appear at the meeting, or otherwise cause all shares of Company Common

 

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Stock Owned by the Stockholder to be counted as present thereat for purposes of
establishing a quorum, (B) vote or cause all shares of Company Common Stock
Owned by the Stockholder to be voted in favor of the approval and adoption of
the Merger Agreement and the approval of the Merger and (C) vote or cause all
shares of Company Common Stock Owned by the Stockholder to be voted, against (1)
any Acquisition Proposal (other than one by Parent or Merger Subsidiary) and (2)
any amendment of the Company’s Certificate of Incorporation or Bylaws or other
proposal, action or transaction involving the Company or any of its subsidiaries
or any of its stockholders, which amendment or other proposal, action or
transaction could reasonably be expected to prevent or materially impede or
delay the consummation of the Offer, the Merger or the other transactions
contemplated by the Merger Agreement or this Agreement or to deprive Parent or
Merger Subsidiary of any material portion of the benefits anticipated by Parent
or Merger Subsidiary to be received from the consummation of the Offer, the
Merger or the other transactions contemplated by the Merger Agreement or this
Agreement, or change in any manner the voting rights of Company Common Stock
presented to the stockholders of the Company or in respect of which vote or
consent of the stockholders is requested or sought, unless such transaction has
been approved in advance by Parent or Merger Subsidiary; and

 

(ii)           in the event written consents are solicited or otherwise sought
from stockholders of the Company with respect to the approval or adoption of the
Merger Agreement or with respect to the approval of the Merger, the Stockholder
shall cause to be validly executed, with respect to all shares of Company Common
Stock Owned by the Stockholder as of the record date fixed for the consent to
the proposed action, a written consent or written consents to such proposed
action.

 

Section 5.              No Solicitation.

 

During the period from the date of this Stockholder Agreement through the
Expiration Date, the Stockholder shall not, nor shall the Stockholder authorize
or permit any representative of the Stockholder to, directly or indirectly take
any action prohibited by Section 6.03 of the Merger Agreement.  Nothing
contained in this Section 5 shall prevent any person affiliated with the
Stockholder who is a director or officer of the Company or designated by the
Stockholder as a director of officer of the Company, when acting in his capacity
as a director or officer of the Company, from exercising his fiduciary duties as
a director or officer of the Company including, without limitation, taking any
actions permitted under Section 6.03 of the Merger Agreement.  In addition,
nothing in this Agreement shall (or require the Stockholder to attempt to) limit
or restrict any designee or affiliate of the Stockholder who is a director or
officer of the Company from acting in such capacity or voting in such person’s
sole discretion on any matter (it being understood that this Agreement shall
apply to the Stockholder solely in the Stockholder’s capacity as a stockholder
of the Company).  The Stockholder shall have no liability to Parent, Merger
Subsidiary or any of their respective affiliates under this Agreement as a
result of any action or inaction by any designee or affiliate of Stockholder who
is a director or officer of the Company, in either case serving on the Company’s
board of directors or as an officer of the Company and acting in such person’s
capacity as a director, officer or fiduciary of the Company.

 

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Section 6.              Representations and Warranties of Stockholders.

 

The Stockholder hereby represents and warrants to Parent and Merger Subsidiary
as follows:

 

(a)           Due Organization; Qualification.  The Stockholder, if a
corporation, limited liability company, limited partnership or other entity, has
been duly incorporated, organized or formed and is validly existing and in good
standing under the laws of the State of its incorporation, formation or
organization.  The Stockholder is duly licensed or qualified to do business and
is in good standing in each jurisdiction in which the properties owned or leased
by it or the operation of its business makes such licensing or qualification
necessary, except where the failure to so qualify or be licensed would not have
a material adverse effect on the Stockholder.

 

(b)           Power; Due Authorization; Binding Agreement.  The Stockholder has
full legal capacity, power and authority to execute and deliver this Agreement,
to perform its obligations hereunder and to consummate the transactions
contemplated hereby.  This Agreement has been duly and validly executed and
delivered by the Stockholder and constitutes a legal, valid and binding
agreement of the Stockholder, enforceable against the Stockholder in accordance
with its terms, except as that enforceability may be subject to the effect of
any applicable bankruptcy, reorganization, insolvency, moratorium or other
similar laws affecting or relating to the enforcement of creditors’ rights
generally and to general principles of equity.  The Stockholder, if a
corporation, limited liability company, limited partnership or other entity, has
on the date hereof provided Parent a legal opinion or other evidence reasonably
satisfactory to Parent that this Agreement has been duly authorized, executed
and delivered by the Stockholder.

 

(c)           No Conflicts or Consents.

 

(i)            The execution and delivery of this Agreement by the Stockholder
does not, and the performance of this Agreement by the Stockholder will not: (A)
conflict with or violate any certificate of incorporation or bylaws or
equivalent organizational documents of the Stockholder, (B) subject to the
consent of the Company (which consent of the Company has been obtained),
conflict with or violate any law, rule, regulation, order, decree or judgment
applicable to the Stockholder or by which the Stockholder or any of the
Stockholder’s properties or assets is or may be bound or affected; or (C) result
in or constitute (with or without notice or lapse of time) any breach of or
default under, or give to any other Person (with or without notice or lapse of
time) any right of termination, amendment, acceleration or cancellation of, or
result (with or without notice or lapse of time) in the creation of any Lien on
any of the Subject Securities pursuant to, any contract to which the Stockholder
is a party or by which the Stockholder or any of the Stockholder’s affiliates or
properties is or may be bound or affected except that the consent of the Company
and WIC (which consents of the Company and WIC have been obtained), are required
for any Transfer, including the execution of this Agreement.

 

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(ii)           Except for the consent of the Company and WIC (which consents of
the Company and WIC have been obtained) the execution and delivery of this
Agreement by the Stockholder do not, and the performance of this Agreement by
the Stockholder will not, require any consent or approval of any other Person.

 

(d)           Title to Securities.  As of the date of this Agreement: (a) except
for the voting agreements and proxies in favor or WIC and the Stockholders
Agreement, the Stockholder holds of record free and clear of any Liens the
number of outstanding shares of Company Common Stock set forth under the heading
“Company Common Stock Owned” on Schedule I hereto; and (b) the Stockholder does
not directly or indirectly Own any shares of capital stock or other securities
of the Company, or any option, warrant or other right to acquire (by purchase,
conversion or otherwise) any shares of capital stock or other securities of the
Company.

 

(e)           Absence of Litigation.  As of the date hereof, there is no
litigation, suit, claim, action, proceeding or investigation pending, or to the
knowledge of the Stockholder, threatened against the Stockholder, or any
property or asset of the Stockholder, before any Governmental Authority that
seeks to delay or prevent the consummation of the transactions contemplated by
this Agreement.

 

(f)            Accuracy of Representations.  The representations and warranties
contained in this Agreement are true and correct as of the date of this
Agreement and will be true and correct in all material respects at all times
until the Expiration Date.

 

Section 7.              Representations and Warranties of Parent and the Merger
Subsidiary.

 

Each of Parent and the Merger Subsidiary hereby represents and warrants to the
Stockholder as follows:

 

(a)           Due Organization, etc.  Each of Parent and the Merger Subsidiary
has been duly incorporated and is validly existing and in good standing under
the laws of the State of its incorporation.  Each of Parent and Merger
Subsidiary has all necessary corporate power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated by this
Agreement.  The execution and delivery of this Agreement and the consummation of
the transactions contemplated by this Agreement by Parent and the Merger
Subsidiary have been duly authorized by all necessary action on the part of
Parent and the Merger Subsidiary.

 

(b)           No Conflict.

 

(i)            The execution and delivery of this Agreement by Parent and Merger
Subsidiary does not, and the performance of this Agreement by Parent and Merger
Subsidiary will not: (A) conflict with or violate any certificate of
incorporation or bylaws of Parent or Merger Subsidiary, (B) conflict with or
violate any law, rule, regulation, order, decree or judgment applicable to
Parent or Merger Subsidiary or by which Parent or Merger Subsidiary or any of
their

 

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properties or assets are or may be bound or affected; or (C) result in or
constitute (with or without notice or lapse of time) any breach of or default
under, or give to any other Person (with or without notice or lapse of time) any
right of termination, amendment, acceleration or cancellation of, or result
(with or without notice or lapse of time) in the creation of any Lien on any of
the assets of Parent or Merger Subsidiary pursuant to, any contract to which
Parent or Merger Subsidiary is a party or by which Parent or Merger Subsidiary
or any of their affiliates or properties is or may be bound or affected.

 

(ii)           The execution and delivery of the Merger Agreement by Parent and
Merger Subsidiary do not, and the performance of the Merger Agreement by Parent
and Merger Subsidiary will not: (A) conflict with or violate any certificate of
incorporation or bylaws of Parent or Merger Subsidiary, (B) conflict with or
violate any law, rule, regulation, order, decree or judgment applicable to
Parent or Merger Subsidiary or by which Parent or Merger Subsidiary or any of
their properties or assets are or may be bound or affected; or (C) result in or
constitute (with or without notice or lapse of time) any breach of or default
under, or give to any other Person (with or without notice or lapse of time) any
right of termination, amendment, acceleration or cancellation of, or result
(with or without notice or lapse of time) in the creation of any Lien on any of
the assets of Parent or Merger Subsidiary pursuant to, any contract to which
Parent or Merger Subsidiary is a party or by which Parent or Merger Subsidiary
or any of their affiliates or properties is or may be bound or affected, except
in the case of matters described in clauses (B) and (C) that, individually or in
the aggregate, would not have a Parent Material Adverse Effect.

 

(iii)          The execution and delivery of this Agreement by Parent or Merger
Subsidiary do not, and the performance of this Agreement by Parent or Merger
Subsidiary will not, require any consent or approval of any other Person except
as specifically set forth in the Merger Agreement.

 

(iv)          The execution and delivery of the Merger Agreement by Parent or
Merger Subsidiary do not, and the performance of the Merger Agreement by Parent
or Merger Subsidiary will not, require any consent or approval of any other
Person except as specifically set forth in the Merger Agreement or except where
the failure to obtain such consents or approvals would not, individually or in
the aggregate, have a Parent Material Adverse Effect.

 

(c)           Reliance by the Stockholder.  Each of Parent and Merger Subsidiary
understands and acknowledges that the Stockholder is entering into this
Agreement in reliance upon the execution and delivery of the Merger Agreement by
Parent and Merger Subsidiary.

 

Section 8.              Further Assurances.

 

From time to time the Stockholder, Parent and Merger Subsidiary shall execute
and deliver, or cause to be executed and delivered, such additional transfers,
assignments, endorsements, proxies, consents and other instruments, and shall
take such further actions, as the

 

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other parties hereto may reasonably request for the purpose of carrying out and
furthering the intent of this Agreement.

 

Section 9.              Miscellaneous.

 

(a)           Specific Performance.  The Stockholder agrees that in the event of
any breach or threatened breach by the Stockholder of any covenant, obligation
or other provision contained in this Agreement, Parent and Merger Subsidiary
shall be entitled (in addition to any other remedy that may be available to
Parent or Merger Subsidiary) to: (a) a decree or order of specific performance
or mandamus to enforce the observance and performance of such covenant,
obligation or other provision; and (b) an injunction restraining such breach or
threatened breach.

 

(b)           Notices.  Any notice or other communication required or permitted
to be delivered to Parent, Merger Subsidiary or the Stockholder under this
Agreement shall be in writing and shall be deemed properly delivered, given and
received when delivered to the address or facsimile telephone number set forth
beneath the name of such party below (or to such other address or facsimile
telephone number as such party shall have specified in a written notice given to
the other party):

 

If to Parent or Merger Subsidiary, to:

 

Forest Oil Corporation

1600 Broadway

Suite 2200

Denver, Colorado  80202

Attention:   General Counsel

Telephone: (303) 812-1400

Facsimile:  (303) 812-1510

 

If to the Stockholder: to the address set forth on the signature page hereto.

 

(c)           Severability.  If any provision of this Agreement or any part of
any such provision is held under any circumstances to be invalid or
unenforceable in any jurisdiction, then (a) such provision or part thereof
shall, with respect to such circumstances and in such jurisdiction, be deemed
amended to conform to applicable laws so as to be valid and enforceable to the
fullest possible extent, (b) the invalidity or unenforceability of such
provision or part thereof under such circumstances and in such jurisdiction
shall not affect the validity or enforceability of such provision or part
thereof under any other circumstances or in any other jurisdiction, and (c) the
invalidity or unenforceability of such provision or part thereof shall not
affect the validity or enforceability of the remainder of such provision or the
validity or enforceability of any other provision of this Agreement.

 

(d)           Governing Law; Jurisdiction.  This Agreement is made under, and
shall be construed and enforced in accordance with, the laws of the State of
Delaware applicable to agreements made and to be performed solely therein,
without giving effect to principles of conflicts of law.  In any action between
the parties hereto, whether arising

 

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out of this Agreement or otherwise: (a) each of the parties irrevocably and
unconditionally consents and submits to the jurisdiction and venue of the
Chancery or other Courts of the State of Delaware; (b) if any such action is
commenced in a state court, then, subject to applicable law, no party shall
object to the removal of such action to any federal court located in Delaware;
(c) each of the parties irrevocably waives the right to trial by jury; and (d)
each of the parties irrevocably consents to service of process by first class
certified mail, return receipt requested, postage prepaid, to the address at
which such party is to receive notice in accordance with Section 9(b) hereof.

 

(e)           Waiver.  No failure of any party to this Agreement to exercise any
power, right, privilege or remedy under this Agreement, and no delay on the part
of any such party in exercising any power, right, privilege or remedy under this
Agreement, shall operate as a waiver of such power, right, privilege or remedy;
and no single or partial exercise of any such power, right, privilege or remedy
shall preclude any other or further exercise thereof or of any other power,
right, privilege or remedy.  No party to this Agreement shall be deemed to have
waived any claim arising out of this Agreement, or any power, right, privilege
or remedy under this Agreement, unless the waiver of such claim, power, right,
privilege or remedy is expressly set forth in a written instrument duly executed
and delivered by such person; and any such waiver shall not be applicable or
have any effect except in the specific instance in which it is given.

 

(f)            Attorneys’ Fees.  If any legal action or other legal proceeding
relating to this Agreement or the enforcement of any provision of this Agreement
is brought against any other party to this Agreement, the prevailing party shall
be entitled to recover reasonable attorneys’ fees, costs and disbursements (in
addition to any other relief to which the prevailing party may be entitled).

 

(g)           Captions.  The captions contained in this Agreement are for
convenience of reference only, shall not be deemed to be a part of this
Agreement and shall not be referred to in connection with the construction or
interpretation of this Agreement.

 

(h)           Entire Agreement.  This Agreement sets forth the entire
understanding of Parent, Merger Subsidiary and the Stockholder relating to the
subject matter hereof and supersedes all other prior agreements and
understandings between Parent, Merger Subsidiary and the Stockholder relating to
the subject matter hereof.

 

(i)            Non-exclusivity.  The rights and remedies of any party to this
Agreement are not exclusive of or limited by any other rights or remedies which
such party may have, whether at law, in equity, by contract or otherwise, all of
which shall be cumulative (and not alternative).

 

(j)            Amendments.  This Agreement may not be amended, modified, altered
or supplemented other than by means of a written instrument duly executed and
delivered on behalf of Parent, Merger Subsidiary and the Stockholder.

 

(k)           Assignment; Binding Effect.  Neither this Agreement nor any of the
interests or obligations hereunder may be assigned or delegated by any party
hereto without the prior written consent of the other parties, and any attempted
or purported

 

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assignment or delegation of any of such interests or obligations without such
consent shall be void.  Subject to the preceding sentence, this Agreement shall
be binding upon each party’s heirs, estate, executors, personal representatives,
successors and assigns, and shall inure to the benefit of each party and their
successors and assigns.  Without limiting any of the restrictions set forth in
Section 2 or elsewhere in this Agreement, this Agreement shall be binding upon
any Person to whom any Subject Securities are Transferred until such time as is
provided in clause (m) below.  Nothing in this Agreement is intended to confer
on any Person (other than Parent, Merger Subsidiary, the Stockholder and their
successors and assigns) any rights or remedies of any nature.

 

(l)            Expenses.  Except as specifically provided elsewhere in this
Agreement, all costs and expenses incurred in connection with the transactions
contemplated by this Agreement shall be paid by the party incurring such costs
and expenses.

 

(m)          Termination.  This Agreement shall automatically terminate and be
of no further force and effect on the Expiration Date; provided, however, that
the obligations of the Stockholder in Section 3(c), if applicable, will survive
for a period of ten months following the Expiration Date; provided, however,
that the termination of this Agreement shall not relieve any party from any
liability for any previous breach of this Agreement by such party.

 

(n)           Public Announcement.  Except as required by Law, the parties to
this Agreement shall consult with the other parties or with such other parties’
counsel before issuing any press release or otherwise making any public
statements with respect to the transactions contemplated by the Merger Agreement
and this Agreement.

 

(o)           Certain Events.  In the event of any stock split, stock dividend,
merger, reorganization, recapitalization or other change in the capital
structure of the Company affecting the Company Common Stock or the acquisition
of additional Company Common Stock or other securities or rights of the Company
by the Stockholder, through the exercise of options or otherwise, the number of
Subject Securities shall be adjusted appropriately, and this Agreement and the
obligations hereunder shall attach to any additional Company Common Stock or
other securities or rights of the Company issued to or acquired by the
Stockholder.

 

(p)           Stockholder Capacity.  No person executing this Agreement
(including, without limitation, such person’s representatives, designees or
affiliates) who is or becomes during the term hereof a director or officer of
the Company makes any agreement or understanding herein or is obligated
hereunder in his capacity as such director or officer.  The Stockholder executes
this Agreement solely in its capacity as the Owner of Subject Securities (as
further set forth on Schedule I hereto), and nothing herein shall limit or
affect any actions taken by the Stockholder (including, without limitation, such
person’s representatives, designees or affiliates) in that person’s capacity as
an officer or director of the Company.

 

(q)           Stop Transfer Order; Legend.  In furtherance of this Agreement,
concurrently herewith, the Stockholder shall, and hereby does authorize the
Company or its counsel to, notify the Company’s transfer agent that there is a
stop transfer order with

 

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respect to all of the Subject Securities (and that this Agreement places limits
on the voting and transfer of such shares); provided that, the stop transfer
order shall not restrict or prohibit any Transfer of the Subject Securities if
such transfer is made pursuant to the Offer or such Transfer is made at any time
following the Expiration Date.

 

(r)            Counterparts.  This Agreement may be executed by the parties in
separate counterparts, each of which when so executed and delivered shall be an
original, but all of which shall together constitute one and the same
instrument.

 

(s)           Construction.

 

(i)            For purposes of this Agreement, whenever the context requires:
the singular number shall include the plural, and vice versa; the masculine
gender shall include the feminine and neuter genders; the feminine gender shall
include the masculine and neuter genders; and the neuter gender shall include
masculine and feminine genders.

 

(ii)           The parties agree that any rule of construction to the effect
that ambiguities are to be resolved against the drafting party shall not be
applied in the construction or interpretation of this Agreement.

 

(iii)          As used in this Agreement, the words “include” and “including,”
and variations thereof, shall not be deemed to be terms of limitation, but
rather shall be deemed to be followed by the words “without limitation.”

 

(iv)          Except as otherwise indicated, all references in this Agreement to
“Sections” and “Exhibits” are intended to refer to Sections of this Agreement
and Exhibits to this Agreement.

 

(t)            Certain Agreement.  Stockholder agrees that in connection with an
Acquisition Proposal subject to Section 3(c) hereof, Stockholder will not at a
time when the Company is party to an agreement providing for an Acquisition
Proposal or when Stockholder has knowledge that the Company intends to promptly
enter into such an agreement, agree to accept a lower consideration per share in
connection with such Acquisition Proposal than that paid to other stockholders
of the Company if such agreement would result in Parent receiving less a lesser
amount pursuant to Section 3(c).

 

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IN WITNESS WHEREOF, Parent, Merger Subsidiary and the Stockholder have caused
this Agreement to be executed as of the date first written above.

 

Forest Oil Corporation

 

 

By:

 

 

Name:

Newton W. Wilson III

 

Title:

Senior Vice President, General Counsel

 

 

& Secretary

 

 

 

 

 

TWOCO Acquisition Corp.

 

 

 

 

 

By:

 

 

Name:

Newton W. Wilson III

 

Title:

Vice President

 

 

 

 

 

STOCKHOLDER:

 

 

 

Dimeling, Schreiber and

 

Park Reorganization Fund II, L.P.

 

 

 

 

 

By:

DSP Investors, L.L.C.

 

 

 

By:

 

 

 

Richard R. Schreiber, Member

 

 

 

Address:

1629 Locust St.

 

Philadelphia, PA  19103

 

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Schedule I

 

Stockholder

 

Company Common
Stock Owned

 

 

 

 

 

Dimeling, Schreiber and Park Reorganization Fund II, L.P.

 

3,014,642

 

 

1

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