**Exhibit 4.1**

 

**FIRST AMENDMENT TO THE U.S. CREDIT AGREEMENT**

** **

THIS FIRST AMENDMENT TOTHE U.S. AMENDED AND RESTATED CREDIT AGREEMENT, dated effective as of October 19,2005 (the “Amendment”), among **FOREST OIL CORPORATION**, a New York corporation (the “U.S. Borrower”), **CANADIANFOREST OIL LTD.** and each other subsidiary of Canadian Forest whichbecomes a “Borrower” (as defined in the Canadian Credit Agreement) under theCanadian Credit Agreement (the “Canadian Borrowers”),each of the lenders that is a signatory to, or which becomes a signatory to,the U.S. Credit Agreement (together with its successors and assigns, the “U.S. Lenders”), each of the lenders that is asignatory to, or which becomes a signatory to, the Canadian Credit Agreement(together with its successors and assigns, the “CanadianLenders”, and together with the U.S. Lenders, the “Combined Lenders”), **BANK OFAMERICA, N.A.** and **CITIBANK, N.A.**,as Co-Global Syndication Agents, **BNP PARIBAS** and**HARRIS NESBITT FINANCING, INC.**, asCo-U.S. Documentation Agents, **BANK OF MONTREAL**and **THE TORONTO-DOMINION BANK**, asCo-Canadian Documentation Agents, **JPMORGAN CHASE BANK, N.A.,TORONTO BRANCH**, formerly known as JPMorgan Chase Bank, TorontoBranch, as Canadian Administrative Agent and **JPMORGANCHASE BANK**, N.A., formerly known as JPMorgan Chase Bank, as GlobalAdministrative Agent (in such capacity, together with its successors in suchcapacity, the “Global Administrative Agent”).

 

**W**ITNESSETH:

** **

1.                                       TheU.S. Borrower, Global Administrative Agent, the Co-Global Syndication Agents,the Co-U.S. Documentation Agents, and the U.S. Lenders are parties to thatcertain Amended and Restated Credit Agreement, dated as of September 28,2004 (as previously amended and restated, the “U.S.Credit Agreement”), pursuant to which the U.S. Lenders agreed tomake loans to and extensions of credit on behalf of the U.S. Borrower.

 

2.                                       TheCanadian Borrowers, Global Administrative Agent, the Canadian AdministrativeAgent, the Co-Global Syndication Agents, the Co-Canadian Documentation Agents,and the Canadian Lenders are parties to that certain Amended and RestatedCredit Agreement, dated as of September 28, 2004 (as previously amendedand restated, the “Canadian Credit Agreement”,and together with the U.S. Credit Agreement, the “CombinedCredit Agreements”), pursuant to which the Canadian Lenders agreedto make loans to and extensions of credit on behalf of the Canadian Borrowers.

 

3.                                       Theparties to the Combined Credit Agreements intend to amend the Combined CreditAgreements as follows:

 

NOW, THEREFORE, inconsideration of the premises and the mutual covenants herein contained, theparties hereto agree as follows:

 

**I.****                                        ****Amendments to U.S.Credit Agreement****.**

 

A.                                   Section 7.4(h) ofthe U.S. Credit Agreement is hereby amended through the addition of a newsentence at the end of Section 7.4(h) to read as follows:

 

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 “Notwithstandingthe foregoing, Borrower shall be permitted to transfer all or substantially allof its Oil and Gas Properties located on the Outer Continental Shelf of theGulf of Mexico and State waters of the States of Louisiana and Texas****(collectively, the “Offshore Gulf Properties”)****to its Unrestricted Subsidiary, Forest Energy Resources, Inc.(“FERI”), in connection with the spin-off and merger of FERI with a subsidiaryof Mariner Energy, Inc.”

 

B.                                     Section 7.5(f) ofthe U.S. Credit Agreement is hereby amended through the insertion of thefollowing text in the last line of such Section between the words “U.S.$50,000,000;”and the word “and”:

 

“; and providedfurther that, the foregoing restriction shall not apply to the transferby Borrower of all or substantially all of its Offshore Gulf Properties to itsUnrestricted Subsidiary, Forest Energy Resources, Inc. (“FERI”), inconnection with the spin-off and merger of FERI with a subsidiary of MarinerEnergy, Inc.”

 

C.                                     Section 7.5(g) ofthe U.S. Credit Agreement is hereby amended through the addition of thefollowing sentence at the end of such Section:

 

“The foregoingrestriction shall not apply to the transfer by Borrower of all or substantiallyall of its Offshore Gulf Properties to its Unrestricted Subsidiary, ForestEnergy Resources, Inc. (“FERI”), in connection with the spin-off andmerger of FERI with a subsidiary of Mariner Energy, Inc.”

 

D.                                    Section 7.8(b)(3) ofthe U.S. Credit Agreement is hereby amended to read as follows:

 

“(3) 50%of the net cash proceeds received by Borrower from any sale of Equity Interestsafter October 1, 2000; provided, however, that this calculation shall notinclude any proceeds relating to the sale of Equity Interests in FERI (asdefined below). Notwithstanding the foregoing restriction, Borrower shall bepermitted to make a one-time dividend to the holders of its Equity Interests inthe form of Equity Interests in Borrower’s Unrestricted Subsidiary, ForestEnergy Resources, Inc. (“FERI”), in connection with the spin-off andmerger of FERI with a subsidiary of Mariner Energy, Inc.”

 

**II.****                                     **Effectiveness****.****  This Amendment shall become effective as of October 19,2005 when the Global Administrative Agent shall have received Counterpartshereof duly executed by the U.S. Borrower, the Global Administrative Agent, theCanadian Administrative Agent, and the Majority Lenders (or, in the case of anyparty as to which an executed counterpart shall not have been received,telegraphic, telex, or other written confirmation from such party of executionof a counterpart hereof by such party).

 

**III.****                                 **Reaffirmation ofRepresentations and Warranties****.****  To induce the Combined  Lenders, the Global Administrative Agent andthe Canadian Administrative Agent to enter into this Amendment, the U.S.Borrower hereby reaffirms, as of the date hereof, the following:

 

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A.                                   Therepresentations and warranties of each Loan Party (as such term is defined inthe U.S. Credit Agreement and the Canadian Credit Agreement, collectively, the “CombinedLoan Parties”) set forth in the Combined Loan Documents to which it is a partyare true and correct on and as of the date hereof (or, if stated to have beenmade expressly as of an earlier date, were true and correct in all materialrespects as of such date).

 

B.                                     Eachof the U.S. Borrower and its Restricted Subsidiaries is duly organized, validlyexisting and in good standing under the laws of the jurisdiction of itsorganization, has all requisite power and authority to carry on its business asnow conducted and, except where the failure to do so, individually or in theaggregate, could not reasonably be expected to result in a Material AdverseEffect, is qualified to do business in, and is in good standing in, everyjurisdiction where such qualification is required.

 

C.                                     Theexecution, delivery and performance by U.S. Borrower and the Canadian Borrowersof this Amendment are within U.S. Borrower’s and the Canadian Borrowers’ corporatepowers, and have been duly authorized by all necessary corporate action.  This Amendment has been duly executed anddelivered by U.S. Borrower and the Canadian Borrowers and, when duly executedand delivered by the other parties hereto, will constitute, a legal, valid andbinding obligation of U.S. Borrower and the Canadian Borrowers, enforceable inaccordance with its terms, subject to applicable bankruptcy, insolvency,reorganization, moratorium or other laws affecting creditors’ rights generallyand subject to general principles of equity, regardless of whether consideredin a proceeding in equity or at law.

 

D.                                    Theexecution, delivery and performance by the U.S. Borrower and the CanadianBorrowers of this Amendment (i) do not require any Governmental Approvalor third party approvals, except such as have been obtained or made and are infull force and effect, (ii) will not violate any applicable Governmental Rule orthe Organic Documents of U.S. Borrower and the Canadian Borrowers or any orderof any Governmental Authority, (iii) will not violate or result in adefault under any indenture, agreement or other instrument binding upon U.S.Borrower or the Canadian Borrowers or either of their assets, or give rise to aright thereunder to require any payment to be made by U.S. Borrower or theCanadian Borrowers, and (iv) will not result in the creation or impositionof any Lien on any asset of U.S. Borrower or the Canadian Borrowers.

 

E.                                      NoDefault under the Combined Loan Documents has occurred and is continuing andthe U.S. Borrower is in compliance with the financial covenants set forth in Article VI of the U.S. Credit Agreement.

 

F.                                      Noevent or events have occurred which individually or in the aggregate couldreasonably be expected to have a Material Adverse Effect.

 

**IV.****                                **Defined Terms****.****  Except as amended hereby, terms used hereinwhen defined in the U.S. Credit Agreement shall have the same meanings hereinunless the context otherwise requires.

 

**V.****                                    **Reaffirmation ofCombined Credit Agreements****.****  This Amendment shall be deemed to be anamendment to the Combined Credit

 

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Agreements,and the Combined Credit Agreements, as amended hereby, are hereby ratified,approved and confirmed in each and every respect.  All references to the Combined CreditAgreements herein and in any other document, instrument, agreement or writingshall hereafter be deemed to refer to the Combined Credit Agreements as amendedhereby.

 

**VI.****                                **Governing Law****.****  **THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THESTATE OF NEW YORK.**

 

**VII.****                            **Severability ofProvisions****.**** Any provision of this Amendment held to be invalid,illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, beineffective to the extent of such invalidity, illegality or unenforceabilitywithout affecting the validity, legality and enforceability of the remainingprovisions hereof; and the invalidity of a particular provision in a particularjurisdiction shall not invalidate such provision in any other jurisdiction.

 

**VIII.****                        **Counterparts****.**** ThisAmendment may be executed in counterparts (and by different parties hereto ondifferent counterparts), each of which shall constitute an original, but all ofwhich when taken together shall constitute a single contract.  Delivery of an executed counterpart of asignature page of this Amendment by telecopy shall be effective asdelivery of a manually executed counterpart of this Amendment.

 

**IX.****                                **Headings****.****  Article and section headings usedherein are for convenience of reference only, are not part of this Amendmentand shall not affect the construction of, or be taken into consideration ininterpreting, this Amendment.

 

**X.****                                    **Successors andAssigns****.****  This Amendmentshall be binding upon and inure to the benefit of the parties hereto and theirrespective successors and assigns.

 

**XI.****                               ****No Oral Agreements****.**  **THIS AMENDMENT, THE COMBINED CREDIT AGREEMENTS, AS AMENDED HEREBY, ANDTHE OTHER COMBINED LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THEPARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS,OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.**

 

**THERE ARE NO UNWRITTEN ORAL AGREEMENTSBETWEEN THE PARTIES.**

 

**[SIGNATURESBEGIN ON FOLLOWING PAGE]**

 

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IN WITNESS WHEREOF, the U.S. Borrower, theCanadian Borrower, the Combined undersigned Lenders, the Global AdministrativeAgent, and the other “agents” under the Combined Credit Agreements haveexecuted this Amendment as of the date first above written.

 

 
|   | **U.S.  BORROWER**        |
|--------|---------------------------|
|   |                      |   |
|   | FOREST OIL  CORPORATION   |
|   |                      |   |
|   |                      |   |
|   | By:                       |   | /s/ DAVID H.  KEYTE |
|   | Name:                     | David H.  Keyte |
|   | Title:                    | Executive  Vice President and Chief |
|   | Financial  Officer        |
|   |                      |   |
|   |                      |   |
|   | **CANADIAN  BORROWER**    |
|   |                      |   |
|   | CANADIAN  FOREST OIL LTD. |
|   |                      |   |
|   |                      |   |
|   | By:                       |   | /s/ CAROLINE  M. MCCLURG |
|   | Name:                     | Caroline M.  McClurg |
|   | Title:                    | Treasurer |

 

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| ** ** | **AGENTS  AND COMBINED LENDERS**                                                                                              |
|------------|-------------------------------------------------------------------------------------------------------------------------------|
|       |                                                                                                                          |
| ** ** | **JPMORGAN  CHASE BANK**, N.A.,  formerly known as JPMorgan Chase Bank,  as Global Administrative Agent and as a  U.S. Lender |
|       |                                                                                                                          |
|       |                                                                                                                          |
|       | By:                                                                                                                           | /s/ ROBERT C. MERTENSOTTO |   |
|       | Name:                                                                                                                         | Robert C. Mertensotto |
|       | Title:                                                                                                                        | Managing Director |
|            |                                                                                                                               |  |  |  |

 

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|   | **BANK OF AMERICA, N.A.**, as a  Co-Global  Syndication Agent and as a U.S. Lender |                |
|--------|------------------------------------------------------------------------------------|---------------------|
|   |                                                                               |                |
|   |                                                                               |                |
|   | By:                                                                                | /s/ JOSEPH F. SCOTT |
|   | Name:                                                                              | Joseph F. Scott     |   |
|   | Title:                                                                             | Vice President      |   |
|        |                                                                                    |                     |  |  |

 

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|   | **CITIBANK, N.A.**, as a  Co-Global  Syndication Agent and as a U.S. Lender |
|--------|-----------------------------------------------------------------------------|
|   |                                                                        |
|   |                                                                        |
|   | By:                                                                         | /s/ TODD J. MOGIL |
|   | Name:                                                                       | Todd J. Mogil |
|   | Title:                                                                      | Attorney-In-Fact |
|        |                                                                             |  |  |

 

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|   | **BNP PARIBAS**, as a Co-U.S.  Documentation Agent and as a U.S. Lender |
|--------|-------------------------------------------------------------------------|
|   |                                                                    |
|   |                                                                    |
|   | By:                                                                     | /s/ DAVID DODD |
|   | Name:                                                                   | David Dodd |
|   | Title:                                                                  | Director |
|   |                                                                    |
|   |                                                                    |
|   | By:                                                                     | /s/ BETSY JOCHER |
|   | Name:                                                                   | Betsy Jocher |
|   | Title:                                                                  | Vice President |
|        |                                                                         |  |  |

 

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|   | **HARRIS NESBITT FINANCING, INC.**,  as a Co-U.S. Documentation Agent and as a  U.S. Lender |
|--------|---------------------------------------------------------------------------------------------|
|   |                                                                                        |
|   |                                                                                        |
|   | By:                                                                                         | /s/ JAMES V. DUCOTE |
|   | Name:                                                                                       | James V. Ducote |
|   | Title:                                                                                      | Vice President |
|        |                                                                                             |  |  |

 

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|   | **CREDIT SUISSE, Cayman Islands Branch (formerly known  as CREDIT SUISSE FIRST BOSTON,**acting through its  Cayman Islands branch, as a Lender) |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                            |
|   |                                                                                                                                            |
|   | By:                                                                                                                                             | /s/ VANESSA GOMEZ |
|   | Name:                                                                                                                                           | Vanessa Gomez |
|   | Title:                                                                                                                                          | Vice President |
|   |                                                                                                                                            |
|   |                                                                                                                                            |
|   | By:                                                                                                                                             | /s/ NUPUR KUMAR |
|   | Name:                                                                                                                                           | Nupur Kumar |
|   | Title:                                                                                                                                          | Associate |
|        |                                                                                                                                                 |  |  |

 

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|   | **U.S. BANK NATIONAL ASSOCIATION****,**  as a Lender |                    |
|--------|------------------------------------------------------|-------------------------|
|   |                                                 |                    |
|   |                                                 |                    |
|   | By:                                                  | /s/ MATTHEW J. PURCHASE |
|   | Name:                                                | Matthew J. Purchase     |   |
|   | Title:                                               | Vice President          |   |
|        |                                                      |                         |  |  |

 

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|   | **THE BANK OF NOVA SCOTIA****,** as a  Lender |        |
|--------|-----------------------------------------------|-------------|
|   |                                          |        |
|   |                                          |        |
|   | By:                                           | /s/ N. BELL |
|   | Name:                                         | N. Bell     |   |
|   | Title:                                        | Sr. Manager |   |
|        |                                               |             |  |  |

 

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|   | **FORTIS  CAPITAL CORP.****,**  as a Lender |
|--------|---------------------------------------------|
|   |                                        |
|   |                                        |
|   | By:                                         | /s/ DAVID MONTGOMERY |
|   | Name:                                       | David Montgomery |
|   | Title:                                      | Senior Vice President |
|   |                                        |
|   |                                        |
|   | By:                                         | /s/ DARRELL HOLLEY |
|   | Name:                                       | Darrell Holley |
|   | Title:                                      | Managing Director |
|        |                                             |  |  |

 

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|   | **DEUTSCHE BANK TRUST COMPANY  AMERICAS,** as a Lender |
|--------|--------------------------------------------------------|
|   |                                                   |
|   |                                                   |
|   | By:                                                    | /s/ MARCUS TARKINGTON |
|   | Name:                                                  | Marcus Tarkington |
|   | Title:                                                 | Director |
|   |                                                   |
|   |                                                   |
|   | By:                                                    | /s/ OMAYRA LAUCELLA |
|   | Name:                                                  | Omayra Laucella |
|   | Title:                                                 | Vice President |
|        |                                                        |  |  |

 

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|   | **BANK OF SCOTLAND****,** as a  Lender |
|--------|----------------------------------------|
|   |                                   |
|   |                                   |
|   | By:                                    | /s/ KAREN WEICH |
|   | Name:                                  | Karen Weich |
|   | Title:                                 | Assistant Vice President |
|        |                                        |  |  |

 

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|   | **ABN AMRO BANK N.V.****,** as a Lender |
|--------|-----------------------------------------|
|   |                                    |
|   |                                    |
|   | By:                                     | /s/ SCOTT DONALDSON |
|   | Name:                                   | R. Scott Donaldson |
|   | Title:                                  | Vice President |
|   |                                    |
|   |                                    |
|   | By:                                     | /s/ TODD D. VAUBEL |
|   | Name:                                   | Todd D. Vaubel |
|   | Title:                                  | Assistant Vice  President |
|        |                                         |  |  |

 

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|   | **UBS LOAN FINANCE LLC****,** as a Lender |
|--------|-------------------------------------------|
|   |                                      |
|   |                                      |
|   | By:                                       | /s/ JOSELIN FERNANDES |
|   | Name:                                     | Joselin Fernandes |
|   | Title:                                    | Associate Director  Banking Products  Services, US |
|   |                                      |
|   |                                      |
|   | By:                                       | /s/ MARIA PINA |
|   | Name:                                     | Maria Pina |
|   | Title:                                    | Associate Director  Banking Products  Services, US |
|        |                                           |  |  |

 

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|   | **TORONTO DOMINION (TEXAS) LLC**  (as  successor in interest to Toronto Dominion (Texas),  Inc.)**,** as a  Lender |
|--------|--------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                               |
|   |                                                                                                               |
|   | By:                                                                                                                | /s/ JIM BRIDWELL |
|   | Name:                                                                                                              | Jim Bridwell |
|   | Title:                                                                                                             | Authorized Agent |
|        |                                                                                                                    |  |  |

 

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|   | **COMPASS BANK****,** as a Lender |
|--------|-----------------------------------|
|   |                              |
|   |                              |
|   | By:                               | /s/ PATRICK MCWILLIAMS |
|   | Name:                             | Patrick McWilliams |
|   | Title:                            | Asst. Vice President |
|        |                                   |  |  |

 

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|   | **HIBERNIA NATIONAL BANK****,** as  a  Lender |
|--------|----------------------------------------------------|
|   |                                               |
|   |                                               |
|   | By:                                                | /s/ CORWIN DUPREE |
|   | Name:                                              | Corwin Dupree |
|   | Title:                                             | Vice President |
|        |                                                    |  |  |

 

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|   | **JPMORGAN CHASE BANK, N.A.,  TORONTO BRANCH**, formerly known as  JPMorgan Chase Bank, Toronto Branch, as  Canadian Administrative Agent and as a  Lender |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                       |
|   |                                                                                                                                                       |
|   | By:                                                                                                                                                        | /s/ D. MCDONALD |
|   | Name:                                                                                                                                                      | Drew McDonald |
|   | Title:                                                                                                                                                     | Vice President |
|        |                                                                                                                                                            |  |  |

 

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|   | **BANK OF MONTREAL**, as a Co-Canadian  Documentation Agent and as a Lender |
|--------|-----------------------------------------------------------------------------|
|   |                                                                        |
|   |                                                                        |
|   | By:                                                                         | /s/ JAMES V. DUCOTE |
|   | Name:                                                                       | James V. Ducote |
|   | Title:                                                                      | Vice President |
|        |                                                                             |  |  |

 

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|   | **THE TORONTO-DOMINION BANK**, as a  Co-Canadian Documentation Agent and as a Lender |
|--------|--------------------------------------------------------------------------------------|
|   |                                                                                 |
|   |                                                                                 |
|   | By:                                                                                  | /s/ D. BRITO |
|   | Name:                                                                                | Debbi Brito |
|   | Title:                                                                               | Manager, Credit  Compliance  and Administration—Canada |
|        |                                                                                      |  |  |

 

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|   | **BANK OF AMERICA, N.A., CANADA  BRANCH**, as a Lender |
|--------|--------------------------------------------------------|
|   |                                                   |
|   |                                                   |
|   | By:                                                    | /s/ MEDINA SALES DE ANDRADE |
|   | Name:                                                  | Medina Sales de Andrade |
|   | Title:                                                 | Assistant Vice  President |
|        |                                                        |  |  |

 

 

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|   | **CITIBANK, N.A.**, **CANADIAN  BRANCH**, as a Lender |
|--------|-------------------------------------------------------|
|   |                                                  |
|   |                                                  |
|   | By:                                                   | /s/ J. HASTINGS |
|   | Name:                                                 | John R. Hastings |
|   | Title:                                                | Managing Director |
|        |                                                       |  |  |

 

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