Exhibit 10.1
 
[EXECUTION COPY]
 
SECOND AMENDMENT TO
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
 
THIS SECOND AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT (this
“Amendment”), dated as of March 31, 2014 but effective as of the Second
Amendment Effective Date set forth below, among FOREST OIL CORPORATION, a New
York corporation (the “Borrower”), each of the lenders that is a signatory to,
or which becomes a signatory to, the Credit Agreement (together with its
successors and assigns, the “Lenders”), and JPMORGAN CHASE BANK, N.A., as
Administrative Agent (in such capacity, together with its successors in such
capacity, the “Administrative Agent”).
 
W I T N E S S E T H:
 
1.           The Borrower, the Administrative Agent, the Lenders and others as
agents are parties to that certain Third Amended and Restated Credit Agreement,
dated as of June 30, 2011, as previously amended by that certain First Amendment
to Third Amended and Restated Credit Agreement, dated as of September 12, 2013
(as previously amended, the “Credit Agreement”), pursuant to which the Lenders
agreed to make loans to, and extensions of credit on behalf of, the Borrower.
 
2.           The parties to the Credit Agreement intend to amend the Credit
Agreement as set forth herein.
 
NOW, THEREFORE, in consideration of the premises and the mutual covenants herein
contained, the parties hereto agree as follows:
 
I.   Amendments.
 
A.          Section 1.1 of the Credit Agreement hereby is amended by inserting
the following definitions of “Available Liquidity”, “Lantern Drilling” and
“Permitted Indebtedness” in such section in appropriate alphabetical order:
 
“            “Available Liquidity” means, at the time of determination the sum
of:

(a) all cash and cash equivalents on the consolidated balance sheet of Borrower;
plus

(b) (i)    at any time when an Unsecured Election is not in effect, the amount
by which (A) the lesser of either (1) the then effective Borrowing Base and (2)
the aggregate Commitments then in effect exceeds (B) the Credit Exposure of all
Lenders, or
 
      (ii)          at any time when an Unsecured Election is in effect, the
amount by which (A) the lesser of either (1) the then effective Borrowing Base
minus the then current aggregate amount of Other Borrowing Base Debt and (2) the
aggregate Commitments then in effect exceeds (B) the Credit Exposure of all
Lenders.”
 
 
 

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“           “Lantern Drilling” means Lantern Drilling Company, a Delaware
corporation.”

“           “Permitted Indebtedness” means the Senior Notes and any other
unsecured or otherwise junior Indebtedness which is outstanding but excluding,
if applicable, any Capital Lease Obligations permitted by Section 7.1(a)(vii).”

B.          Section 1.1 of the Credit Agreement hereby is amended by deleting
the definitions of “Consolidated Net Income”, “Loan Parties” and “Total Debt”
and inserting the following:
 
“           “Consolidated Net Income” means for any period, the consolidated net
income (or loss) of Borrower and its Restricted Subsidiaries, determined on a
consolidated basis in accordance with GAAP; provided that there shall be
excluded (a) the income (or deficit) of any Person accrued prior to the date it
becomes a Restricted Subsidiary of Borrower or is merged into or consolidated
with Borrower or any of its Restricted Subsidiaries, (b) the income (or deficit)
of any Person (other than a Restricted Subsidiary of Borrower) in which Borrower
or any of its Restricted Subsidiaries has an ownership interest, except to the
extent that any such income is actually received by Borrower or such Restricted
Subsidiary in the form of dividends or similar distributions, (c) the
undistributed earnings of any Restricted Subsidiary of Borrower to the extent
that the declaration or payment of dividends or similar distributions by such
Restricted Subsidiary is not at the time permitted by the terms of any
contractual obligation (other than under any Loan Document) or requirement of
law applicable to such Restricted Subsidiary, (d) unrealized losses and gains
from Hedging Agreements resulting from the application of the Financial
Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 815,
(e) any non-cash compensation charge or expense realized from grants of Equity
Interests or other rights to officers, directors and employees, (f) any gains or
losses from, or related to, currency conversions, and (g) any losses associated
with, or related to, Lantern Drilling (it being understood that any such losses
shall be excludable from the fiscal quarter during which such losses occurred)
for any period of four consecutive fiscal quarters (i) ending in calendar year
2014, in an amount up to $15,000,000 and (ii) ending in calendar year 2015, in
an amount up to $5,000,000.
 
             For purposes of Section 7.8, Consolidated Net Income of Borrower
and its Restricted Subsidiaries on a consolidated basis shall exclude the
following non-cash items (provided that the same shall be included when they
become cash items): (x) any impairment of Property for accounting purposes under
a ceiling test adjustment, (y) any extraordinary item or (z) any gain or loss
which, at the time of recognition in the financial statements of Borrower and
its Restricted Subsidiaries, is not a cash item.  To the extent future cash
payments are made or received with respect to a change in accounting method and
such payment is not otherwise included in the computation of consolidated net
income for such period, consolidated net income shall be reduced or increased by
the amount of such cash payment or receipt.”
 
 
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“           “Loan Parties” means Borrower and, after the date of this Agreement,
any other Subsidiary of Borrower that executes a Loan Document, for so long as
such Loan Document is in effect.”
 
“           “Total Debt” means, as of any date of determination, an amount equal
to (a) all Indebtedness of Borrower and its Restricted Subsidiaries on a
consolidated basis described under clauses (a), (b), (d), (e), (f), (g), (h),
(i), (k) and (l) of the definition thereof on such date, less (b) the sum of the
following: (i) any attributable Indebtedness amount with an Approved Sale and
Leaseback outstanding on such date, (ii) all obligations of such Person
outstanding on such date with respect to volumetric Production Payments sold by
such Person which in the aggregate are in an amount less than $125,000,000, and
(iii) during any period of four fiscal quarters ending on or before September
30, 2015, any cash proceeds from the sale of any Property permitted pursuant to
the terms and provisions of the Loan Documents which is reported on Borrower’s
consolidated balance sheet on such date.”
 
C.         Subsection (a) of the third sentence of Section 2.20 of the Credit
Agreement hereby is amended in its entirety to read as follows:
 
“(a) the aggregate amount of the Commitments of the Lenders (including any
Person that becomes a Lender by delivery of such a Lender Certificate)
automatically without further action by Borrower, the Administrative Agent or
any Lender shall be increased by the amount indicated in such Lender Certificate
(provided that the aggregate increases in Lender Commitments shall not exceed
$300,000,000 for all such increases pursuant to this Section) on the effective
date set forth in such Lender Certificate (such increased amount herein the
“Increased Commitment Amount”),”.
 
D.         Section 3.4(e) of the Credit Agreement hereby is amended by deleting
the phrase “March 31, 2011” therein and replacing it with the phrase “December
31, 2013.”
 
E.          Section 6.1 of the Credit Agreement hereby is amended in its
entirety to read as follows:
 
“           SECTION 6.1.  Ratio of Total Debt to EBITDA.  Borrower will not
permit as of the last day of any fiscal quarter its ratio of Total Debt as of
such date to EBITDA (calculated for the preceding four consecutive fiscal
quarter period then most recently ended for which financial statements are
available) to be greater than (a) at the end of the calendar quarters ending
March 31, 2014, June 30, 2014 and September 30, 2014, 5.75 to 1.0, (b) at the
end of the calendar quarter ending December 31, 2014, 5.50 to 1.0, (c) at the
end of the calendar quarter ending March 31, 2015, 5.25 to 1.0, (d) at the end
of the calendar quarter ending June 30, 2015, 5.00 to 1.0, (e) at the end of the
calendar quarter ending September 30, 2015, 4.75 to 1.0, and (f) at the end of
any calendar quarter ending after September 30, 2015, 4.50 to 1.0.”
 
 
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F.            Section 7.8 of the Credit Agreement hereby is amended in its
entirety to read as follows:
 
“             SECTION 7.8.  Restricted Payments.  Borrower will not, and will
not permit any Restricted Subsidiary to, declare or make, or agree to pay or
make, directly or indirectly, any Restricted Payment, or incur any obligation
(contingent or otherwise) to do so, except that:
 
 
(a)
any Restricted Subsidiary may pay dividends to Borrower or any Restricted
Subsidiary; and

 
 
(b)
Borrower may make Restricted Payments provided that:

 
(i)    such Restricted Payments are in shares of common stock or other Equity
Interests of Borrower, or
 
(ii)  such Restricted Payments may only be made in cash or of Property not
constituting Equity Interests if (A) the ratio (calculated on a pro forma basis
after giving effect to such Restricted Payment) of Total Debt to EBITDA
determined using the methodology set forth in Section 6.1 is less than 4.50 to
1.0 and (B) the Available Liquidity on a pro forma basis after giving effect to
such Restricted Payment exceeds the greater of (1) $100,000,000 and (2) 30% of
the then effective Borrowing Base; provided, however, that, notwithstanding
anything to the contrary contained herein, the aggregate amount of all such
Restricted Payments shall not exceed (in cash or fair market value of Property)
an amount equal to the sum of (X) $50,000,000, plus (Y) 50% of the Consolidated
Net Income for the period commencing December 31, 2010 to and including the last
day of the most recently ended fiscal quarter for which financial statements
have been delivered under Section 5.1 taken as a single accounting period
(provided that in no event shall the amount under this Clause (Y) be less than
$0.00), plus (Z) 50% of the net cash proceeds received by Borrower from any sale
of Equity Interests after December 31, 2010 (including 50% of the net cash
proceeds from the initial public offering of Equity Interests of Lone Pine).”
 
G.            Article VII of the Credit Agreement hereby is amended by inserting
the following Section 7.12 immediately following Section 7.11:
 
“             SECTION 7.12.  Prepayments of Permitted Indebtedness.  Borrower
will not, and will not permit any Subsidiary to, declare or make, or agree to
pay or make, directly or indirectly, any voluntary prepayments, redemptions or
purchases of any Permitted Indebtedness, or incur any obligation (contingent or
otherwise) to do so, unless (A) the ratio (calculated on a pro forma basis after
giving effect to such Restricted Payment) of Total Debt to EBITDA determined
using the methodology set forth in Section 6.1 is less than 4.50 to 1.0 and (B)
the Available Liquidity on a pro forma basis after giving effect to such payment
exceeds the greater of (1) $100,000,000 and (2) 30% of the then effective
Borrowing Base; provided that, notwithstanding the foregoing, the Borrower may
refinance the principal amount of outstanding Senior Notes using net cash
proceeds from either (X) the issuance of Senior Notes having a stated maturity
no earlier than the stated maturity of the Senior Notes being refinanced and an
average life no shorter than the average life of such refinanced Senior Notes or
(Y) the issuance of Equity Interests of the Borrower.”
 
 
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H.          The Credit Agreement hereby is amended by replacing Schedule 2.1
attached thereto with Schedule 2.1 attached to this Amendment to reflect the
decrease in the aggregate Commitments from $1,500,000,000 to $500,000,000.
 
I.            The Credit Agreement hereby is amended by replacing Schedule 3.6
attached thereto with Schedule 3.6 attached to this Amendment to reflect current
material litigation proceedings.
 
II.           Borrowing Base. Each of the Administrative Agent, the Borrowing
Base Required Lenders and the Borrower agrees that, as of the Second Amendment
Effective Date but subject to Section 2.7 of the Credit Agreement in all
respects, the Borrowing Base will be set at $300,000,000 until the then
scheduled Borrowing Base redetermination as of November 1, 2014 or such time as
the Borrowing Base is otherwise redetermined or adjusted in accordance with
Section 2.7.
 
III.          Effectiveness.  This Amendment shall become effective as of March
31, 2014 (the “Second Amendment Effective Date”) when the Administrative Agent
shall have received:
 
A.          Counterparts hereof duly executed by the Borrower, the
Administrative Agent and the Borrowing Base Required Lenders (or, in the case of
any party as to which an executed counterpart shall not have been received,
telegraphic or other written confirmation from such party of execution of a
counterpart hereof by such party; and
 
B.           Payment of any fees or compensation then due and owing to any
Lender or the Administrative Agent pursuant to the terms of any Loan Document.
 
IV.         Reaffirmation of Representations and Warranties.  To induce the
Lenders and the Administrative Agent to enter into this Amendment, the Borrower
hereby reaffirms, as of the date hereof, the following:
 
A.          The representations and warranties of each Loan Party set forth in
the Loan Documents (including such representations and warranties as amended by
this Amendment) to which it is a party are true and correct on and as of the
date hereof (or, if stated to have been made expressly as of an earlier date,
were true and correct in all material respects as of such earlier date).
 
B.           Each of the Borrower and its Restricted Subsidiaries is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, has all requisite power and authority to carry
on its business as now conducted and, except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect, is qualified to do business in, and is in good
standing in, every jurisdiction where such qualification is required.
 
 
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C.           The execution, delivery and performance by the Borrower of this
Amendment are within the Borrower’s corporate powers, and have been duly
authorized by all necessary corporate action.  This Amendment has been duly
executed and delivered by the Borrower and, when duly executed and delivered by
the other parties hereto, will constitute, a legal, valid and binding obligation
of the Borrower, enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other laws affecting
creditors’ rights generally and subject to general principles of equity,
regardless of whether considered in a proceeding in equity or at law.
 
D.          The execution, delivery and performance by the Borrower of this
Amendment (i) do not require any Governmental Approval or third party approvals,
except such as have been obtained or made and are in full force and effect, (ii)
will not violate any applicable Governmental Rule or the Organic Documents of
the Borrower or any order of any Governmental Authority, (iii) will not violate
or result in a default under any indenture, agreement or other instrument
binding upon the Borrower or of its assets, or give rise to a right thereunder
to require any payment to be made by the Borrower, and (iv) will not result in
the creation or imposition of any Lien on any asset of the Borrower (other than
Liens created under the Loan Documents).
 
E.           No Default under the Loan Documents has occurred and is continuing
and the Borrower is in compliance with the financial covenant set forth in
Article VI of the Credit Agreement (as amended by this Amendment).
 
F.           No event or events have occurred which individually or in the
aggregate could reasonably be expected to have a Material Adverse Effect.
 
V.          Defined Terms.  Except as amended hereby, terms used herein when
defined in the Credit Agreement shall have the same meanings herein unless the
context otherwise requires.
 
VI.         Reaffirmation of Credit Agreement.  This Amendment shall be deemed
to be an amendment to the Credit Agreement, and the Credit Agreement, as amended
hereby, is hereby ratified, approved and confirmed in each and every
respect.  All references to the Credit Agreement herein and in any other
document, instrument, agreement or writing shall hereafter be deemed to refer to
the Credit Agreement as amended hereby.
 
VII.       Governing Law.  THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
 
VIII.      Severability of Provisions. Any provision of this Amendment held to
be invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
 
 
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IX.         Counterparts. This Amendment may be executed in counterparts (and by
different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract.  Delivery of an executed counterpart of a signature page of
this Amendment by telecopy shall be effective as delivery of a manually executed
counterpart of this Amendment.
 
X.          Headings.  Article and section headings used herein are for
convenience of reference only, are not part of this Amendment and shall not
affect the construction of, or be taken into consideration in interpreting, this
Amendment.
 
XI.         Successors and Assigns.  This Amendment shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns.
 
XII.        No Oral Agreements.  THIS AMENDMENT, THE CREDIT AGREEMENT, AS
AMENDED HEREBY, AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
 
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
 
[SIGNATURES BEGIN ON FOLLOWING PAGE]
 
 
 
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed by their respective Authorized Officers as of the day and year first
above written.
 

 
BORROWER:
         
FOREST OIL CORPORATION
            By:  /s/ Victor A. Wind      Name: 
Victor A. Wind
    Title: 
EVP & CFO

 
 
S - 1
[Signature Page - Forest Oil Corporation Second Amendment]

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ADMINISTRATIVE AGENT AND LENDERS:
       
JPMORGAN CHASE BANK, N.A., as
Administrative Agent and as a Lender
            By:  /s/ David Morris     Name: 
David Morris
    Title: 
Authorized Officer

 
 
S - 2
[Signature Page - Forest Oil Corporation Second Amendment]

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WELLS FARGO BANK, N.A., as a Lender
       
 
    By:  /s/ Michael E. Braun     Name: 
Michael E. Braun
    Title: 
Director

 
 
S - 3
[Signature Page - Forest Oil Corporation Second Amendment]

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BANK OF AMERICA, N.A., as a Lender
       
 
    By:  /s/ Ronald E. McKaig     Name: 
Ronald E. McKaig
    Title: 
Managing Director

 
 
S - 4
[Signature Page - Forest Oil Corporation Second Amendment]

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THE BANK OF NOVA SCOTIA, as a Lender
       
 
    By:  /s/ Terry Donovan     Name: 
Terry Donovan
    Title: 
Managing Director

 
 
S - 5
[Signature Page - Forest Oil Corporation Second Amendment]

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CREDIT SUISSE AG, CAYMAN ISLANDS
BRANCH, as a Lender
       
 
    By:  /s/ Michael Spaight     Name: 
Michael Spaight
    Title: 
Authorized Signatory

 

  By: 
/s/ Ryan Long
    Name: 
Ryan Long
    Title: 
Authorized Signatory

 
 
S - 6
[Signature Page - Forest Oil Corporation Second Amendment]

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DEUTSCHE BANK AG NEW YORK
BRANCH, as a Lender
       
 
    By:  /s/ Michael Getz     Name: 
Michael Getz
    Title: 
Vice President

 

  By:  /s/ Michael Shannon     Name: 
Michael Shannon
    Title: 
Vice President

 
 
S - 7
[Signature Page - Forest Oil Corporation Second Amendment]

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TORONTO DOMINION (TEXAS) LLC, as a Lender
       
 
    By:  /s/ Masood Fikree     Name: 
Masood Fikree
    Title: 
Authorized Signatory

 
 
S - 8
[Signature Page - Forest Oil Corporation Second Amendment]

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COMPASS BANK, as a Lender
       
 
    By:  /s/ James Neblett     Name: 
James Neblett
    Title: 
Vice President

 
 
S - 9
[Signature Page - Forest Oil Corporation Second Amendment]

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BMO HARRIS FINANCING, INC.,
as a Lender
       
 
    By:  /s/ James V. Ducote     Name: 
James V. Ducote
    Title: 
Managing Director

 
 
S - 10
[Signature Page - Forest Oil Corporation Second Amendment]

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CITIBANK, N.A., as a Lender
       
 
    By:  /s/ Eamon Baqui     Name: 
Eamon Baqui
    Title: 
Vice President

 
 
S - 11
[Signature Page - Forest Oil Corporation Second Amendment]

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U.S. BANK NATIONAL ASSOCIATION, as a Lender
       
 
    By:  /s/ John C. Lozano     Name: 
John C. Lozano
    Title: 
Vice President

 
 
S - 12
[Signature Page - Forest Oil Corporation Second Amendment]

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BARCLAYS BANK PLC, as a Lender
       
 
    By:  /s/ Nina Guinchard     Name: 
Nina Guinchard
    Title: 
Assistant Vice President

 
 
S - 13
[Signature Page - Forest Oil Corporation Second Amendment]

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BRANCH BANKING AND TRUST
COMPANY, as a Lender
       
 
    By:  /s/ Ryan K. Michael     Name: 
Ryan K. Michael
    Title: 
Senior Vice President

 
 
S - 14
[Signature Page - Forest Oil Corporation Second Amendment]

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CIBC INC., as a Lender
       
 
    By:  /s/ Trudy Nelson     Name: 
Trudy Nelson
    Title: 
Authorized Signatory

 
 

  By:  /s/ Daria Mahoney     Name: 
Daria Mahoney
    Title: 
Authorized Signatory

 
 
S - 15
[Signature Page - Forest Oil Corporation Second Amendment]

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CRÉDIT AGRICOLE CORPORATION AND
INVESTMENT BANK, as a Lender
       
 
    By:  /s/ Michael Willis     Name: 
Michael Willis
    Title: 
Managing Director

 
 

  By:  /s/ Sharade Manne     Name: 
Sharade Manne
    Title: 
Managing Director

 
 
S - 16
[Signature Page - Forest Oil Corporation Second Amendment]

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EXPORT DEVELOPMENT CANADA,
as a Lender
       
 
    By:  /s/ Trevor Mulligan     Name: 
Trevor Mulligan
    Title: 
Asset Manager

 
 

  By:   /s/ Richard Leong     Name: 
Richard Leong
    Title: 
Asset Manager

 
 
S - 17
[Signature Page - Forest Oil Corporation Second Amendment]

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SANTANDER BANK, N.A. (f/k/a
SOVEREIGN BANK), as a Lender
       
 
    By:   /s/ Aidan Lanigan     Name: 
Aidan Lanigan
    Title: 
Senior Vice President

 
 

  By:   /s/ Puiki Lok     Name: 
Puiki Lok
    Title: 
Vice President

 
 
S - 18
[Signature Page - Forest Oil Corporation Second Amendment]

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MIZUHO CORPORATE BANK, LTD., as a Lender
       
 
    By:        Name: 
 
    Title: 
 

 
 
S - 19
[Signature Page - Forest Oil Corporation Second Amendment]

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ROYAL BANK OF CANADA, as a Lender
       
 
    By:  /s/ Jay T. Sartain     Name: 
Jay T. Sartain
    Title: 
Authorized Signatory

 
 
S - 20
[Signature Page - Forest Oil Corporation Second Amendment]

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UNION BANK, as a Lender
       
 
    By:  /s/ Haylee Dallas     Name: 
Haylee Dallas
    Title: 
Vice President

 
 
S - 21
[Signature Page - Forest Oil Corporation Second Amendment]

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BOKF, NA DBA BANK OF OKLAHOMA, as a Lender
       
 
    By:  /s/ Benjamin H. Adler     Name: 
Benjamin H. Adler
    Title: 
Vice President

 
 
S - 22
[Signature Page - Forest Oil Corporation Second Amendment]

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SCHEDULE 2.1
 
COMMITMENTS
 

 
Lender
Commitments
 
Applicable
Percentage
               
JPMorgan Chase Bank, N.A.
$28,333,333.34
 
5.6667%
   
Bank of America, N.A.
$28,333,333.33
 
5.6667%
   
Wells Fargo Bank, N.A.
$56,666,666.66
 
11.333%
   
Credit Suisse AG, Cayman Islands Branch
$28,333,333.33
 
5.6667%
   
Deutsche Bank AG New York Branch
$28,333,333.33
 
5.6667%
   
The Bank of Nova Scotia
$28,333,333.33
 
5.6667%
   
Toronto Dominion (Texas) LLC
$28,333,333.33
 
5.6667%
   
Compass Bank
$28,333,333.33
 
5.6667%
   
BMO Harris Financing, Inc.
$28,333,333.33
 
5.6667%
   
Citibank, N.A.
$28,333,333.33
 
5.6667%
   
U.S. Bank National Association
$28,333,333.33
 
5.6667%
   
Barclays Bank PLC
$16,666,666.67
 
3.3333%
   
Branch Banking and Trust
$16,666,666.67
 
3.3333%
   
CIBC Inc.
$16,666,666.67
 
3.3333%
   
Crédit Agricole Corporation and Investment Bank
$16,666,666.67
 
3.3333%
   
Export Development Canada
$16,666,666.67
 
3.3333%
   
Bank of Scotland plc
$16,666,666.67
 
3.3333%
   
Mizuho Corporate Bank, Ltd.
$16,666,666.67
 
3.3333%
   
Royal Bank of Canada
$16,666,666.67
 
3.3333%
   
Union Bank
$16,666,666.67
 
3.3333%
   
BOKF N.A. dba Bank of Oklahoma
$10,000,000.00
 
2.0000%
               
TOTAL:
$500,000,000
 
100%
 

 
 
Schedule 2.1 - Page 1

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SCHEDULE 3.6
 
DISCLOSED MATTERS
 
 
1.           On February 29, 2012, two members of a three-member arbitration
panel reached a decision adverse to Forest in the proceeding styled Forest Oil
Corp., et al. v. El Rucio Land & Cattle Co., et al., which occurred in Harris
County, Texas. The third member of the arbitration panel dissented. The
proceeding was initiated in January 2005 and involves claims asserted by the
landowner-claimant based on the diminution in value of its land and related
damages allegedly resulting from operational and reclamation practices employed
by Forest in the 1970s, 1980s, and early 1990s. The arbitration decision awards
the claimant $23 million in damages and attorneys’ fees and additional
injunctive relief regarding future surface-use issues. On October 9, 2012, after
vacating a portion of the decision imposing a future bonding requirement on
Forest, the trial court for the 55th Judicial District, in the District Court in
Harris County, Texas, reduced the arbitration decision to a judgment. Forest is
seeking to have this judgment reversed on appeal and believes it has meritorious
arguments in support thereof.

2.           On May 25, 2012, a lawsuit, styled Augenbaum v. Lone Pine Resources
Inc. et al., was brought as a purported class action in the Supreme Court of the
State of New York, New York County against Forest, Lone Pine, certain of Lone
Pine’s current and former directors and officers (the “Individual Defendants”),
and certain underwriters (the “Underwriter Defendants”) of Lone Pine’s initial
public offering (the “IPO”), which was completed on June 1, 2011. The complaint
alleges that Lone Pine’s registration statement and prospectus issued in
connection with the IPO contained untrue statements of material fact or omitted
to state material facts relating to forest fires that occurred in Northern
Alberta in May 2011, the rupture of a third-party oil sales pipeline in Northern
Alberta in April 2011, and the impact of those events on Lone Pine, that the
alleged misstatements or omissions violated Section 11 of the Securities Act,
and that Lone Pine, the Individual Defendants, and the Underwriter Defendants
are liable for such violations. (The complaint was subsequently amended to drop
the allegation regarding the forest fires.) The complaint further alleges that
the Underwriter Defendants offered and sold Lone Pine’s securities in violation
of Section 12(a)(2) of the Securities Act, and the putative class members seek
rescission of the securities purchased in the IPO that they continue to own and
rescissionary damages for securities that they have sold. Finally, the complaint
asserts a claim against Forest under Section 15 of the Securities Act, alleging
that Forest was a “control person” of Lone Pine at the time of the IPO. The
complaint alleges that the putative class, which purchased shares of Lone Pine’s
common stock pursuant and/or traceable to Lone Pine’s registration statement and
prospectus, was damaged when the value of the stock declined in August 2011. The
complaint does not specify the amount of such damages. Forest believes that
these claims are without merit and intends to defend the claim against it
vigorously.

Schedule 3.6 - Page 1