October 15, 1993
Union Bank, as Agent and as a Bank
445 South Figueroa Street
Los Angeles, California 90071
Attention: Energy Capital Services
Banque Paribas
Houston Agency
1200 Smith Street, Suite 3100 Houston,
Texas 77002
Attention: Mr. Edward K. Chin
Vice President
Den norske Bank AS
Representative Office
1100 Milam Building, Suite 2770
Houston, Texas 77002
Attention: Mr. Byron L. Cooley
First Vice President
Re: Waiver Under Guaranty of Frontier Oil Corporation
Gentlemen:
We refer to the Guaranty dated as of August 18, 1992, as amended by the
First Amendment to Guaranty dated as of October 8, 1992 (said Guaranty, as so
amended, herein called the "Guaranty"), executed by Frontier Oil Corporation
("FOC") in favor of each of Union Bank, Banque Paribas and Den norske Bank AS
(the "Banks") and Union Bank, as agent (the "Agent") for the Banks. Unless
otherwise defined herein, the terms defined in the Guaranty and the Credit
Agreement (as defined in the Guaranty) are used herein as therein defined.
FOC has requested that the Banks waive certain requirements contained in
(i) the definition of Liquidity Coverage Ratio in Section 1 of the Guaranty and
(ii) Section 7.1(j) of the Guaranty, as set forth below.
1. With respect to only the months ended August 31, September 30,
October 31 and November 30, 1993, the Banks hereby waive the requirement
contained in the definition of Liquidity Coverage Ratio in Section 1 of the
Guaranty that the Liquidity Coverage Ratio be determined in accordance with
generally accepted accounting principles consistently applied; provided,
however, that said waiver shall be effective only to the extent that (a) a
receivable shown on FOC's balance sheet as due from FHI may be treated as a
current receivable in the amount equal to the lesser of (i) $2,900,000.00 and
(ii) the minimum amount necessary in order for FOC to comply with its covenant
concerning the Liquidity Coverage Ratio contained in Section 7.2(k) of the
Guaranty and (b) there is at all times a receivable due to FHI from Wainoco in
an amount at least as great as said receivable shown on FOC s balance sheet.
October 15, 1993
Page 2
2. With respect to only that financial information that FOC is required
to deliver to the Banks pursuant to Section 7.1(j)(i) of the Guaranty for the
months ended August 31, October 31 and November 30, 1993 and pursuant to
Section 7.1(j)(ii) of the Guaranty for the quarter ended September 30, 1993,
the Banks hereby waive any requirement in Sections 7.1(j)(i) and 7.1(j)(ii) of
the Guaranty that the financial information to be provided by FOC to the Banks
pursuant thereto be, or be certified to have been, prepared in accordance with
generally accepted accounting principles consistently applied; provided,
however, that said waiver shall be effective only to the extent that (a) a
receivable shown on FOC's balance sheet as due from FHI may be treated as a
current receivable in the amount equal to the lesser of (i) $2,900,000.00 and
(ii) the minimum amount necessary in order for FOC to comply with its covenant
concerning the Liquidity Coverage Ratio contained in Section 7.2 of the
Guaranty and (b) there is at all times a receivable due to FHI from Wainoco in
an amount at least as great as said receivable shown on FOC's balance sheet.
3. FOC hereby represents and warrants for the benefit of the Banks that
(a) the representations and warranties contained in each Credit Document are
correct in all material respects on and as of the date of this letter of
waiver, before and after giving effect to the same, as if made on and as of
such date and (b) no event has occurred and is continuing (except as waived in
paragraphs 1 and 2 above), or would result from the effectiveness of this
letter of waiver, that constitutes a Default or an Event of Default.
4. The execution, delivery and effectiveness of this letter of waiver
and amendment shall not, except as expressly provided herein, operate as a
waiver of any right, power or remedy of any Bank or the Agent under any of the
Credit Documents or constitute a waiver of any provision of any of the Credit
Documents.
5. This letter of waiver and amendment may be executed in any number of
counterparts and by any combination of the parties hereto in separate
counterparts, each of which counterparts shall be an original and all of which
taken together shall constitute one and the same letter of waiver.
October 15, 1993
Page 3
6. This letter of waiver shall become effective as of the date first
written above when and if counterparts hereof have been executed and delivered
by Union Bank and at least one of the other Banks and by the Borrower, Wainoco
and the Guarantors other than FOC.
Very truly yours,
FRONTIER OIL CORPORATION
By: /s/ Jon D. Galvin
Vice President and Chief Financial Officer
Agreed as of the date first written above:
UNION BANK, as Agent and as a Bank
By: /s/ Richard P. DeGrey, Jr.
Vice President
By: /s/ Walter Roth
Title: Vice President
October 15, 1993
Page 4
BANQUE PARIBAS
By: /s/ Philippe De Gentile
Title: DGM
By: /s/ Edward K. Chin
Title: Vice Presient
DEN NORSKE BANK AS
By: /s/ Melvin Farstad
Title: Senior Vice President
By: /s/ Philip F. Krupiewski
Title: Vice President, New York Branch
October 15, 1993
Page 5
Consented to as of the date first written above:
FRONTIER OIL AND REFINING COMPANY
By: /s/ Jon D. Galvin
Vice President and Chief Financial Officer
WAINOCO OIL CORPORATION
By: /s/ Julie H. Edwards
Vice President, Secretary and Treasurer
FRONTIER HOLDINGS INC.
By: /s/ Jon D. Galvin
Vice President and Chief Financial Officer
FRONTIER REFINING INC.
By: /s/ Jon D. Galvin
Vice President and Chief Financial Officer
October 15, 1993
Page 6
FRONTIER PIPELINE INC.
By: /s/ Jon D. Galvin
Vice President
FRONTIER PRODUCTS INC.
By: /s/ Jon D. Galvin
Vice President