exv4w16



 



EXHIBIT 4.16



October 25, 2002


U S Liquids Inc.

411 N. Sam Houston Pkwy. E.

Houston, TX 77060

Attention: Treasurer


     Re: Waiver, Tenth Amendment 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 an Unmatured
Event 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 was previously waived by the Required Banks pursuant to a waiver
letter dated October 4, 2002 (the “Prior Waiver Letter”), continues to exist
and could mature into an Event of Default.


     (b)  The Company has requested that the Required Banks agree to certain
modifications to the calculations of the financial covenants set forth in
Section 10.6.1 (Net Worth) and Sections 10.6.3 and 11.2.1(e) (Funded Debt to
Adjusted EBITDA Ratio) of the Credit Agreement.


     (c)  The Company has advised the Agent and the Banks that it plans to
consummate the Trinity Acquisition (as defined in the Prior Waiver Letter) on
or prior to November 15, 2002.


     2.     Waiver, Amendments 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 December 31, 2002 the
Unmatured Event of Default and Event of Default described in Section 1(a)
(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)  The Company and the Required Banks agree as follows:



 






 



		
	 	     (i) Notwithstanding anything in Credit Agreement to the contrary, at
all times through December 30, 2002, the Company may subtract all FAS 142
Charges taken since December 31, 2001 in calculating the minimum required
Net Worth required by Section 10.6.1 of the Credit Agreement (without
regard to the $95,000,000 limitation set forth in clause (a) of such
Section 10.6.1);
	 
	 	     (ii) The table in Section 10.6.3 of the Credit Agreement is amended
in its entirety to read as follows:




	 	 	 	 	 
	 	 	Funded Debt to
	Period	 	Adjusted EBITDA Ratio
	
	 	

	3/27/02 through 6/30/02
	 	3.25 to 1.0
	9/30/02
	 	3.70 to 1.0
	12/31/02 and thereafter
	 	3.00 to 1.0.




		
	 	     (iii) Clause (i) of Section 11.2.1(e) of the Credit Agreement is
amended in its entirety to read as follows:
	 
	 	     "(i) at any time prior to December 30, 2002, 3.70 to 1.0 and”.
	 
	 	     (iv) The following new Section 10.27 is added to the Credit
Agreement in proper sequence:




		
	 	     “10.27 Accounts Receivable Coverage Ratio. Not permit
the ratio of (a) the net book value of accounts receivable
(determined in accordance with GAAP and by excluding all intercompany
receivables) to (b) the Total
Outstandings to be less than 0.32 to 1 as of October 31,
2002, November 28, 2002 or December 31, 2002.”



     (c)  The Required Banks agree that the Company may use the Earmarked Amount
(as defined in the Prior Waiver Letter) to consummate the Trinity Acquisition
so long as the Trinity Acquisition is consummated on or prior to November 15,
2002.


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


     (a)  Limitation on Outstandings. The limitation on the Total Outstandings
set forth in Section 3(a) of the Prior Waiver Letter shall remain in effect
through December 31, 2002; provided that each of the amounts set forth in
clauses (i) and (ii) of such Section 3(a) as the maximum amount of Total
Outstandings permitted during the applicable period shall be reduced
concurrently with, and in the amount of, any reduction in the Commitment Amount
pursuant to Section 3(d)(i) of the Prior Waiver Letter.


     (b)  Reduction of the Commitment Amount; Mandatory Prepayment.



 






 



		
	 	     (i) Except to the extent modified below, the Company shall comply
with the commitment reduction requirements set forth in Section 3(d) of
the Prior Waiver Letter.
	 
	 	     (ii) If the Trinity Acquisition is not consummated on or prior to
November 15, 2002, the Earmarked Amount shall be immediately applied by
the Company in accordance with Section 3(d)(iii) of the Prior Waiver
Letter.
	 
	 	     (iii) Notwithstanding the provisions of Section 6.2(b) of the Credit
Agreement, the Company shall prepay Loans concurrently with, and in the
amount of, any reduction in the Commitment Amount pursuant to Section
3(d)(i) of the Prior Waiver Letter.



     (c)  File Review. Without limiting the generality of any of the provisions
of the Credit Agreement or any other Loan Document, the Company shall, and
shall cause the Guarantors to, (i) continue to cooperate in the existing file
review being undertaken by special counsel to the Agent, (ii) promptly execute
and deliver any agreement, mortgage, financing statement, power of attorney or
other instrument requested by such special counsel to be executed and delivered
in order to clarify the implementation of (or to better implement) the
provisions of the Loan Documents, and (iii) promptly reimburse the Agent for
the fees and expenses arising in connection with such file review.


     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) a waiver fee in the amount of
$124,000, to be shared among the Banks pro rata in accordance with their
respective Percentages, (d) copies of resolutions of the Board of Directors of
the Company authorizing the execution and delivery by the Company of this
letter and the performance by the Company of its obligations hereunder, (e) a
certificate of the General Counsel of the Company certifying the true legal
name, chief executive office, jurisdiction of formation and state
organizational identification number (as applicable) of each Subsidiary of the
Company and (f) 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.


     (d)  Except as otherwise expressly amended or modified herein, each of the
Credit Agreement and the Prior Waiver Letter (including the representations,
warranties, covenants and




 






 




Events of Default contained therein) shall remain in full force and effect
and are hereby ratified and confirmed in all respects.



 






 


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






	 	 	 	 	 	 	 
	 	 	 	 	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 __, 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, amendment 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 Consent 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
	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 GREAT LAKES, 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: