exv4w15



 



EXHIBIT 4.15



October 4, 2002


U S Liquids Inc.

411 N. Sam Houston Pkwy. E.

Houston, TX 77060

Attention: Treasurer


     Re: Waiver and Consent


Ladies and Gentlemen:


     Please refer to the Second Amended and Restated Credit Agreement dated as
of February 3, 1999 (as amended, the “Credit Agreement”) among U S Liquids Inc.
(the “Company”), various financial institutions and Bank of America, N.A.
(formerly known as Bank of America National Trust and Savings Association), as
Agent. Capitalized terms used but not otherwise defined herein have the
respective meanings assigned thereto in the Credit Agreement.


     1.     Introduction.


     (a)  The Company has advised the Agent and the Banks that (i) Unmatured
Events of Default resulting from the resignation by Michael P. Lawlor from his
position as the Chairman of the Board and Chief Executive Officer of the
Company, which were previously waived by the Required Banks pursuant to a
waiver letter dated September 12, 2002, continue to exist; and (ii) an Event of
Default exists resulting from the failure of the Company to comply with Section
10.6.3 (Funded Debt to Adjusted EBITDA Ratio) of the Credit Agreement.


     (b)  The Company has advised the Agent and the Banks that (i) it plans to
purchase assets (the “Trinity Acquisition”) pursuant to the Purchase and Sale
of Assets Agreement dated as of [July 15, 2002] (the “Trinity Acquisition
Agreement”) among U S Liquids of LA., L.P., the Company, Trinity Storage
Services, L.P. (“Trinity”) and CCBS, INC. and (ii) US Liquids of Houston, LLC,
US Liquids of Dallas, LLC, and US Liquids of Central Texas, LLC plan to sell
various assets located in Houston, Dallas, and San Antonio, Texas (the “Texas
Assets”).


     2.     Waiver and Consent.


     (a)  At the Company’s request, and subject to the agreements of the Company
set forth herein, the Required Banks hereby waive through October 25, 2002 (i)
each of the Unmatured Events of Default described in Section 1(a) and (ii) the
Events of Default described in Section 1(a) so long as the Funded Debt to
Adjusted EBITDA Ratio is not greater than 3.70 to 1 at any time from the date
hereof through October 25, 2002 (collectively the “Waived Defaults”); provided
that this waiver shall terminate immediately upon (x) a breach of any of the
terms of this letter or (y) the occurrence of any other Event of Default or
Unmatured Event of Default under the Credit Agreement. Upon the termination or
expiration of this waiver, the Waived Defaults shall be deemed immediately
reinstated, and the Agent and the Banks may thereafter exercise their rights
and remedies under the Credit Agreement with respect thereto without further
notice.



 






 


     (b)  Notwithstanding any provision of the Credit Agreement to the contrary
but subject to the terms and conditions set forth in Section 3, the Required
Banks consent to:



		
	 	     (i) the use by the Company of up to $965,000 of the $2,150,000 in
proceeds received by the Company from the provider of the Company’s
business interruption insurance to pay (x) advances to Trinity (the
“Trinity Advances”) in an amount not exceeding $500,000 in a structure
acceptable to the Agent, pending the consummation or termination of the
Trinity Acquisition Agreement, and (y) not more than $465,000 for the
purchase of the building with the common street address of 1620 Bernheim
Lane, Louisville, Kentucky (the “Building”), in each case pursuant to
documentation acceptable to the Required Banks;




		
	 	     (ii) the proposed sale of the Texas Assets, so long as (x) the
documentation governing such sale is in form and substance acceptable to
the Required Banks, (y) the gross consideration paid by the purchaser in
connection with such sale is at least $15,000,000 and (z) the net
proceeds received by the Company in connection with such sale (the “Net
Texas Proceeds”) shall not be less than $11,500,000 (after deducting (1)
transaction costs not exceeding $175,000 in the aggregate, (2) amounts
paid in connection with non-assumed liabilities not exceeding $1,575,000
in the aggregate and (3) amounts reserved (the “Holdback Amounts”)
pursuant to the terms of the applicable purchase agreement (including a
working capital adjustment and various indemnity claims) not exceeding
$1,750,000 in the aggregate); and




		
	 	     (iii) the use of up to $2,500,000 of the Net Texas Proceeds (the
“Earmarked Amount”) to consummate the Trinity Acquisition.



     (c)  The property that was the subject matter of the Envirovac sale, which
was approved by the Required Lenders in February, 2002, shall be treated as
Specified Property for purposes of Section 10.11(c) of the Credit Agreement.
The annual permitted $500,000 sale basket of Section 10.11 shall reduced to
$200,000 for the 2002 calendar year.


     3.     Terms and Conditions of Waiver and Consent. In consideration of the
foregoing waivers and consents, the Company agrees with the Agent and the
Required Banks as follows:


     (a)  Limitation on Outstandings. During the period from the date hereof
through October 25, 2002, the Company shall not request, and the Banks shall
have no obligation to make (and the Issuing Bank shall have no obligation to
issue), any Loan or Letter of Credit if the Total Outstandings would exceed (i)
$93,047,000, if the weekly average of collections of accounts receivable by the
Company and its Subsidiaries for the period from September 27, 2002 to the last
Business Day of the week preceding any borrowing request is less than
$2,900,000, or (ii) otherwise, $92,547,000 (which amount in either case shall
exclude a Letter of Credit in the Stated Amount not exceeding $2,986,000, or an
increase not exceeding $2,986,000 in the Stated Amount of the existing Letter
of Credit, issued for the account of the Company for the benefit of Liberty
Mutual as contemplated by the letter dated September 3, 2002 from Liberty
Mutual to the Company), it being understood that under no circumstances shall
the Company be entitled to have Total Outstandings in excess of the then
Commitment Amount (including as it may have been reduced pursuant to the other
provisions of this letter and the Credit Agreement).



 






 


     (b)  Continued Employment of Financial Advisor. The Company will continue
to employ KPMG as its financial advisor.


     (c)  No Eurodollar Loans. Each outstanding Eurodollar Loan shall, on the
last day of the current Interest Period for such Eurodollar Loan, automatically
be converted to a Floating Rate Loan. From and after the date hereof, the
Company shall not have the right to borrow or continue, or to convert Floating
Rate Loans into, Eurodollar Loans. Notwithstanding any provision in the Credit
Agreement (including the concept of the Pricing Change Date), all Floating Rate
Loans shall bear interest from the date hereof at a per annum rate equal to the
Base Rate from time to time in effect plus 4.0%.


     (d)  Reduction of the Commitment Amount.



		
	 	     (i) The amount of insurance proceeds referred to in Section 2(b)(i)
in excess of $965,000 shall be applied, promptly upon the effectiveness
of this waiver pursuant to paragraph 4 hereof by the Company or any
Subsidiary, in compliance with the commitment reduction and prepayment
provisions contained in Sections 6.1 and 6.2 of the Credit Agreement as
if such proceeds were Net Cash Proceeds from an Asset Sale and, if
received on or prior to December 31, 2002, shall reduce the amount of the
reduction in the Commitment Amount required to be made on December 31,
2002 pursuant to Section 6.1(b)(i)(B) of the Credit Agreement on a
dollar-for-dollar basis.




		
	 	     (ii) The amount of Net Texas Proceeds (other than the Earmarked
Amount) in an amount not less than $9,000,000 shall be applied by the
Company upon receipt in compliance with the commitment reduction and
prepayment provisions contained in Sections 6.1 and 6.2 of the Credit
Agreement. Consistent therewith, none of this amount shall be credited
against the balance of the Commitment Amount reduction required pursuant
to Section 6.1(b)(i) on or before December 31, 2002.




		
	 	     (iii) If the Trinity Acquisition is not consummated on or prior to
October 31, 2002, the Earmarked Amount shall applied by the Company upon
receipt in compliance with the commitment reduction and prepayment
provisions contained in Section 6.2 of the Credit Agreement as if such
proceeds were Net Cash Proceeds from an Asset Sale, with such amount not
being applied against the balance of the $4,600,000 Commitment Amount
reduction required pursuant to Section 6.1(b)(i) on or before December
31, 2002.




		
	 	     (iv) Any portion of the Trinity Advances repaid to the Company shall
applied by the Company upon receipt in compliance with the commitment
reduction and prepayment provisions contained in Sections 6.1 and 6.2 of
the Credit Agreement as if such amounts were Net Cash Proceeds from an
Asset Sale and, if such amounts are applied on or prior to December 31,
2002, shall reduce the amount of the reduction in the Commitment Amount
required to be made on December 31, 2002 pursuant to Section 6.1(b)(i)(B)
of the Credit Agreement on a dollar-for-dollar basis.




		
	 	     (v) Any return of the Holdback Amount (including any increase in
such amount as a result of the actual application of a working capital
adjustment) shall be applied upon receipt by the Company in compliance
with the commitment reduction and





 






 





		
	 	prepayment provisions contained in Sections 6.1 and 6.2 of the
Credit Agreement as if such amounts were Net Cash Proceeds from an Asset
Sale.



     (e)  Collateral Matters. The Company shall take such actions as are
necessary, or as the Agent or the Required Banks may request, to ensure that
(i) the Agent has a perfected first-priority security interest or mortgage in
(x) all rights of the Company to receive repayment of the Trinity Advances, (y)
all assets (including real estate) purchased by the Company pursuant to the
Trinity Acquisition contemporaneously with the consummation of the Trinity
Acquisition and (z) the Building (and related real and personal property),
contemporaneously with the consummation of the Company’s acquisition of the
Building through the permitted use of $465,000 of the insurance proceeds, and
(ii) the Agent has a perfected first-priority security interest in any security
interest in Trinity’s assets granted to the Company in connection with the
Trinity Advances.


     4.     Effectiveness. This letter shall become effective upon receipt by the
Agent of (a) counterparts hereof (or facsimiles thereof) executed by the
Company and the Required Banks, (b) a confirmation of the Guarantors
substantially in the form of Exhibit A, (c) copies of insurance certificates
for all insurance coverage maintained by the Company and its Subsidiaries in
form and substance acceptable to the Agent, (d) copies of authorizing
resolutions of the Board of Directors of the Company and (e) evidence that the
Company has paid all fees and expenses of the Agent (including all attorneys’
fees and expenses) incurred on or prior to the date hereof.


     5.     Miscellaneous.


     (a)  This letter is limited to the matters specifically set forth herein
and shall not be deemed to constitute a waiver or consent with respect to any
other matter whatsoever. The Agent and the Banks hereby reserve all of their
rights, powers and remedies under the Credit Agreement and applicable law.


     (b)  This letter may be executed in counterparts and by the parties hereto
on separate counterparts.


     (c) This letter shall be governed by the laws of the State of Illinois
applicable to contracts made and to be performed entirely within such State.




 






 


     Please acknowledge the foregoing by signing a copy of this letter and
returning it to the Agent.



	 	 	 	 	 	 	 
	 	 	 	 	Very truly yours,
	 	 	 	 	 	 	 
	 	 	 	 	BANK OF AMERICA, N.A., as Agent
	 	 	 	 	 	 	 
	 	 	 	 	By:	 	 
	 	 	 	 	 	

	 	 	 	 	Title:	 	 
	 	 	 	 	 	

	 	 	 	 	 	 	 
	 	 	 	 	BANK OF AMERICA, N.A., as a Bank
	 	 	 	 	 	 	 
	 	 	 	 	By:	 	 
	 	 	 	 	 	

	 	 	 	 	Title:	 	 
	 	 	 	 	 	

	 	 	 	 	 	 	 
	 	 	 	 	FLEET NATIONAL BANK
	 	 	 	 	 	 	 
	 	 	 	 	By:	 	 
	 	 	 	 	 	

	 	 	 	 	Title:	 	 
	 	 	 	 	 	

	 	 	 	 	 	 	 
	 	 	 	 	BANK ONE, NA
	 	 	 	 	 	 	 
	 	 	 	 	By:	 	 
	 	 	 	 	 	

	 	 	 	 	Title:	 	 
	 	 	 	 	 	

	 	 	 	 	 	 	 
	 	 	 	 	THE BANK OF NOVA SCOTIA
	 	 	 	 	 	 	 
	 	 	 	 	By:	 	 
	 	 	 	 	 	

	 	 	 	 	Title:	 	 
	 	 	 	 	 	

	 	 	 	 	 	 	 
	 	 	 	 	UNION BANK OF CALIFORNIA
	 	 	 	 	 	 	 
	 	 	 	 	By:	 	 
	 	 	 	 	 	

	 	 	 	 	Title:	 	 
	 	 	 	 	 	






 






 




	 	 	 	 	 	 	 
	 	 	 	 	COMERICA BANK
	 	 	 	 	 	 	 
	 	 	 	 	By:	 	 
	 	 	 	 	 	

	 	 	 	 	Title:	 	 
	 	 	 	 	 	

	 	 	 	 	 	 	 
	 	 	 	 	WELLS FARGO BANK, N.A.
	 	 	 	 	By:	 	 
	 	 	 	 	 	

	 	 	 	 	Title:	 	 
	 	 	 	 	 	

	 	 	 	 	 	 	 
	 	 	 	 	BNP PARIBAS
	 	 	 	 	 	 	 
	 	 	 	 	By:	 	 
	 	 	 	 	 	

	 	 	 	 	Title:	 	 
	 	 	 	 	 	

	 	 	 	 	 	 	 
	 	 	 	 	By:	 	 
	 	 	 	 	 	

	 	 	 	 	Title:	 	 
	 	 	 	 	 	

	 	 	 	 	 	 	 
	
ACKNOWLEDGED
AND AGREED:	 	 	 	 
	 	 	 	 	 	 	 
	
U S LIQUIDS INC.	 	 	 	 
	 	 	 	 	 	 	 
	By:	 	 	 	 	 	 
	 	

	 	 	 	 
	Title:	 	 	 	 	 	 
	 	

	 	 	 	 





 






 



CONFIRMATION


Dated as of October 4, 2002



	 	 	 
	To:	 	
Bank of America, N.A., individually and as Administrative Agent,
and the other financial institutions party to the
Credit Agreement referred to below



     Please refer to the waiver and consent letter dated as of October      , 2002
(the “Waiver and Consent”) with respect to the Second Amended and Restated
Credit Agreement dated as of February 3, 1999 (as amended, the “Credit
Agreement”) among U S Liquids Inc., various financial institutions (the
“Banks”) and Bank of America, N.A. (formerly known as Bank of America National
Trust and Savings Association), as administrative agent (the “Administrative
Agent”).


     Each of the undersigned hereby confirms to the Administrative Agent and
the Banks that such undersigned has received a copy of the Waiver and Consent
and that, after giving effect to the Waiver and the transactions contemplated
thereby, each Loan Document to which such undersigned is a party continues in
full force and effect and is the legal, valid and binding obligation of such
undersigned, enforceable against such undersigned in accordance with its terms.



	 
	EARTH BLENDS, INC
	MBO, INC
	THE NATIONAL SOLVENT EXCHANGE CORP
	NORTHERN A-1 SANITATION SERVICES, INC
	PARALLEL PRODUCTS OF FLORIDA, INC
	PARALLEL PRODUCTS OF KENTUCKY, INC
	RE-CLAIM ENVIRONMENTAL LOUISIANA, L.L.C
	ROMIC ENVIRONMENTAL TECHNOLOGIES CORPORATION
	USL FIRST SOURCE, INC
	U S LIQUIDS OF HOUSTON, L.L.C
	U S LIQUIDS OF DALLAS, L.L.C
	U S LIQUIDS OF CENTRAL TEXAS, L.L.C
	U S LIQUIDS OF CONNECTICUT, INC
	U S LIQUIDS OF GREATER CHICAGO, INC
	U S LIQUIDS OF PENNSYLVANIA, INC
	U S LIQUIDS OF TEXAS, INC
	U S LIQUIDS LP HOLDING CO
	U S LIQUIDS NORTHEAST, INC
	U S LIQUIDS TERMINAL SERVICES, INC
	U S LIQUIDS OF DETROIT, INC
	U S LIQUIDS OF FLORIDA, INC






 






 




	 	 	 
	
USL ENVIRONMENTAL SERVICES, INC.
	
USL GENERAL MANAGEMENT, INC.
	
USL PARALLEL PRODUCTS OF CALIFORNIA
	
WASTE RESEARCH AND RECOVERY, INC.
	
WASTE STREAM ENVIRONMENTAL, INC.
	 	 	 
	By:	 	 
	 	


	Name:	 	 
	 	


	Title:	 	 
	 	


	 	 	 
	
U S LIQUIDS OF LA., L.P.
	 	 	 
	By:	 	
MBO, Inc., its General Partner
	 	 	 
	 	 	 
	By:	 	 
	 	


	Name:	 	 
	 	


	Title:	 	 
	 	


	 	 	 
	
USL MANAGEMENT LIMITED PARTNERSHIP
	 	 	 
	By:	 	
USL General Management, Inc., its General Partner
	 	 	 
	 	 	 
	By:	 	 
	 	


	Name:	 	 
	 	


	Title:	 	 
	 	


	 	 	 
	
GEM MANAGEMENT, INC.
	 	 	 
	By:	 	 
	 	 	


	Name:	 	 
	 	 	


	Title: