**Exhibit4.10**

 

EIGHTH AMENDMENT

 

                THIS EIGHTHAMENDMENT dated as of March 27, 2002 (this “Amendment”) amends the SecondAmended and Restated Credit Agreement dated as of February 3, 1999 (aspreviously amended, the “Credit Agreement”) among U S Liquids Inc. (the“Company”), various financial institutions (the “Banks”), Fleet National Bank,as Syndication Agent, and Bank of America, N.A. (formerly known as Bank ofAmerica National Trust and Savings Association), as administrative agent (insuch capacity, the “Administrative Agent”). Terms defined in the Credit Agreement are, unless otherwise definedherein or the context otherwise requires, used herein as defined therein.

 

                WHEREAS, the Company, the Banks and theAdministrative Agent have entered into the Credit Agreement; and

 

                WHEREAS, the parties hereto desire to amend theCredit Agreement in certain respects as more fully set forth herein;

 

                NOW, THEREFORE, the parties hereto agree as follows:

 

                SECTION 1  Amendments.  Subject to the satisfaction of the conditionsprecedent set forth in Section 3, the Credit Agreement shall be amendedas follows:

1.1           Addition of Definitions.  The following new definitions are added toSection 1.1 of the Credit Agreement in appropriate alphabetical sequence:

 

                                                                FixedCharge Coverage Ratio means, for any Computation Period, the ratio of (a)the result of (i) Adjusted EBITDA for such Computation Period less (ii) theamount Capital Expenditures made during such Computation Period to (b) the sumof (i) Interest Expense to the extent payable in cash for such ComputationPeriod plus (ii) the aggregate amount of reductions in the Commitment Amountscheduled to occur during such Computation Period pursuant to Section6.1(b)(i) plus (iii) income tax expense to the extent payable in cash forsuch Computation Period.

 

                                                                PricingChange Date means the date, following the effective date of the EighthAmendment to this Agreement, on which the Aggregate Commitment has been reducedby at least $15,000,000 from the application of Net Cash Proceeds received fromthe issuance of equity or Subordinated Debt or in connection with Asset Salespursuant to Section 6.1(b)(ii).

 

                1.2           Amendmentsto Definitions.

 

                (a)           Clause(iii) of the definition of “Excess Cash Flow” is amended in its entirety toread as follows:

 

 

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                                                                (iii)         all federal, state, local andforeign income taxes paid in cash by the Company and its Subsidiaries duringsuch period.

 

                (b)           Thedefinition of “Floating Rate Margin” is amended in its entirety to read asfollows:

 

                                                                FloatingRate Margin means (a) if the Pricing Change Date has occurred, the“Floating Rate Margin” set forth on Schedule 1.1 and (b) if the PricingChange Date has not occurred, (i) 3.5% on or prior to September 30, 2002 and(ii) 4.0% thereafter.

 

                (c)           Thedefinition of “Eurodollar Margin” is amended in its entirety to read asfollows:

 

                                                                EurodollarMargin means (a) if the Pricing Change Date has occurred, the “EurodollarMargin” set forth on Schedule 1.1 and (b) if the Pricing Change Date hasnot occurred, (i) 4.5% on or prior to September 30, 2002 and (ii) 5.0%thereafter.

 

                (d)           Clause(b) of the definition of “Net Cash Proceeds” is amended in its entirety to readas follows:

 

                                                                (b)           with respect to any issuance of Debtor equity securities, the aggregate cash proceeds received by the Company orany Subsidiary pursuant to such issuance, net of the direct costs relating tosuch issuance (including sales and underwriter’s discounts and commissions andlegal, accounting and investment banking fees).

 

                (e)          The definition of “TerminationDate” is amended by deleting the date “June 15, 2002” therein and substituting“April 15, 2003” therefor.

 

                1.3          Deletion of Definition.  The definition of “Interest Coverage Ratio”is deleted in its entirety.

 

                 1.4          Amendmentto Section 2.1.2.  Section 2.1.2 isamended by deleting the reference to “$15,000,000” therein and substituting“$10,000,000” therefor.

 

                1.5          Amendment to Section 5.1.  The first sentence of Section 5.1 is amendedin its entirety to read as follows:

 

                                                                The Company agreesto pay to the Agent for the account of each Bank a non-use fee, for the periodfrom the Effective Date to the Termination Date, in an

 

 

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amount equal to the daily average of theunused amount of such Bank’s Percentage of the Commitment Amount multiplied by(a) if the Pricing Change Date has occurred, the rate per annum in effect fromtime to time pursuant to Schedule 1.1, and (b) if the Pricing ChangeDate has not occurred, a rate per annum equal to 0.50%.

 

                1.6          Amendment to Section 5.2.  Clause (a) of Section 5.2 is amended in itsentirety to read as follows:

 

                                                                (a)           The Company agrees to pay to the Agentfor the account of the Banks pro rata according to their respective Percentagesa letter of credit fee for each Letter of Credit in an amount equal to theundrawn amount of such Letter of Credit (computed for the actual number of dayselapsed on the basis of a year of 360 days) multiplied by (a) if the PricingChange Date has occurred, the rate per annum in effect from time to timepursuant to Schedule 1.1 and (b) if the Pricing Change Date has notoccurred, a rate per annum equal to (i) with respect to Financial Letters ofCredit, (x) 4.5% on or prior to September 30, 2002 and (y) 5.0% thereafter and(ii) with respect to Non-Financial Letters of Credit, (x) 4.5% on or prior toSeptember 30, 2002 and (y) 5.0% thereafter;provided that the rate applicable to eachLetter of Credit shall be increased by 2% at any time that an Event of Defaultexists.

 

                1.7          Amendment to Section 6.1.  Clause (b) of Section 6.1 is amended in itsentirety to read as follows:

 

                                                                (b)           MandatoryReductions of the Commitments.

 

                                                                (i)            The Commitment Amount shall bepermanently reduced by (A) $250,000 on each of June 30, 2002 and September 30,2002, (B) $4,600,000 on December 31, 2002 and (C) $2,100,000 on March 31, 2003.

 

                                   (ii)            Concurrentlywith the receipt by the Company or any Subsidiary of any Net Cash Proceeds fromany Asset Sale, issuance of equity (other than any equity issued in connectionwith the employee stock purchase plan of the Company) or issuance of Debt(other than Debt permitted under Section 10.7(a), (b), (c),(d), (e), (g) or (h)), the Commitment Amount shallbe permanently reduced by an amount (rounded down, if necessary, to an integralmultiple of $100,000) equal to the excess of (A) 100% of all such Net CashProceeds received after March 25, 2002 over (B) all reductions of theCommitment Amount made pursuant to this clause (ii) since March 25,2002; provided that the requirements of this clause (ii) shallnot apply to any Net Cash Proceeds from any Asset Sale that are intended to beused, and are in fact used, to purchase similar assets within 60 days aftersuch Asset Sale.

 

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                                                              (iii)          Concurrently with the delivery of thecompliance certificate as of the end of any Fiscal Year pursuant to Section10.1.3, beginning with the Fiscal Year ending December 31, 2002, theCommitment Amount shall be permanently reduced by an amount (rounded down, ifnecessary, to an integral multiple of $100,000) equal to 100% of Excess CashFlow for such Fiscal Year.

 

                                                              (iv)          Notwithstanding any other provision ofthis Section 6.1(b), the Company may, prior to the date of delivery ofany compliance certificate referred to in clause (iii) above or thereceipt of Net Cash Proceeds from any issuance of equity, deliver writtennotice to the Administrative Agent that the Company will use a portion of suchExcess Cash Flow and/or Net Cash Proceeds (not to exceed $5,000,000 in theaggregate) to pay penalties or fines in connection with matters set forth on Schedule9.15 relating to the Detroit Facility (each a “Detroit Payment”).  Any such funds so designated shall bedeposited into an account of the Company with the Administrative Agent, shallconstitute cash collateral for the obligations of the Company hereunder and, solong as the Aggregate Commitment will be at least $3,000,000 greater than theTotal Outstandings after giving effect to the applicable Detroit Payment, shallbe released upon request of the Company to make such Detroit Payment.  After all anticipated Detroit Payments havebeen made, all such funds held by the Administrative Agent shall (and at therequest of the Company at any time any such funds may) be applied to reduce theCommitment Amount.

 

                                                              (v)           All reductions of the CommitmentAmount pursuant to this clause (b) shall reduce the Commitments pro rataamong the Banks according to their respective Percentages.

 

               1.8          Amendment to Section 10.6.1.  Section 10.6.1 is amended in its entirety toread as follows:

 

                                                              10.6.1      Minimum Net Worth.  Not permit the Net Worth of the Company atany time to be less than $160,000,000 minus (a) the aggregate amount (upto $95,000,000) of FAS 142 Charges taken by the Company since December 31, 2001plus (b) 75% of the sum of Consolidated Net Income for each FiscalQuarter ending after the effective date of the Eighth Amendment to thisAgreement (provided that, if Consolidated Net Income is less than zerofor any Fiscal Quarter, for purposes of this Section 10.6.1 ConsolidatedNet Income will be deemed to have been zero for such Fiscal Quarter) plus(c) 100% of the net proceeds of any equity issued by the Company or any of itsSubsidiaries (on a consolidated basis) after the effective date of the EighthAmendment to this Agreement.

 

               1.9           Amendmentto Section 10.6.2.  Section 10.6.2is amended in its entirety to read as follows:

 

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                                                              10.6.2      Fixed Charge Coverage Ratio.  Not permit the Fixed Charge Coverage Ratiofor any Computation Period to be less than the applicable ratio set forthbelow:

 
| **Computation Period**

** Ending** |   | **Fixed Charge**

**Coverage Ratio** |
|------------------------------------------|--------|--------------------------------------|
| 3/31/02 through 6/30/02                  |   | 1.20 to 1.0                          |
| 9/30/02 and thereafter                   |   | 1.10 to 1.0.                         |

 

          1.10              Amendment to Section10.6.3.  Section 10.6.3 is amendedin its entirety to read as follows:

 

                                                              10.6.3      Funded Debt to Adjusted EBITDA Ratio.  Not permit the Funded Debt to AdjustedEBITDA Ratio for any Computation Period to be greater than the applicable ratioset forth below:

 
| **Period**              |   | **Funded Debt to**

**Adjusted EBITDA Ratio** |
|-------------------------|--------|-----------------------------------------------|
| 3/27/02 through 9/30/02 |   | 3.25 to 1.0                                   |
| 10/1/02 and thereafter  |   | 3.00 to 1.0.                                  |

 

          1.11              Amendment to Section10.6.4.  Section 10.6.4 is amendedin its entirety to read as follows:

 

                                                              10.6.4      Capital Expenditures.  Not permit the aggregate amount of CapitalExpenditures (excluding amounts, if any, paid to consummate acquisitionspermitted by Section 10.11(c) which constitute Capital Expenditures)made by the Company and its Subsidiaries to exceed (a) $5,000,000 during anyFiscal Quarter of 2002 or (b) $6,000,000 during any Fiscal Quarter thereafter; providedthat (i) the aggregate amount of Capital Expenditures made during any FiscalYear shall not exceed $14,000,000 and (ii) the amount set forth in clause(a) or (b) may be increased for any Fiscal Quarter by an amountequal to the lesser of (x) $2,000,000 and (y) the excess of the amount setforth in such clause over the actual amount of Capital Expenditures made duringthe prior Fiscal Quarter.

 

               1.12        Amendment to Section 11.2.1.  Clause (e) of Section 11.2.1 is amended inits entirety to read as follows:

 

                                                              (e)           after giving effect to the making ofsuch Loan or the issuance of such Letter of Credit (and, in the case of themaking of a Loan, the use of the proceeds thereof), the Funded Debt to AdjustedEBITDA Ratio will not exceed (i)

 

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at any time on or prior to September 30,2002, 3.25 to 1.0 and (ii) at any time thereafter, 3.00 to 1.0.

 

               1.13        Amendment to Schedule 1.1.  Schedule 1.1 is amended to read as set forthas Schedule 1.1.

 

                SECTION2  Representations and Warranties.  The Company represents and warrants to theAdministrative Agent and the Banks that, after giving effect to theeffectiveness hereof, (a) each warranty set forth in Section 9 (excludingSection 9.14 with respect to U S Liquids of Central Texas, L.L.C. and Re–ClaimEnvironmental Louisiana, L.L.C.) of the Credit Agreement is true and correct asof the date of the execution and delivery of this Amendment by the Company,with the same effect as if made on such date, and (b) no Event of Default orUnmatured Event of Default exists.

 

                SECTION3  Effectiveness.  The amendments set forth herein shall becomeeffective when the Administrative Agent shall have received (i) counterparts ofthis Amendment executed by the Company and all Banks, (ii) a Confirmation,substantially in the form of Exhibit A, signed by the Company and eachSubsidiary and (iii) an amendment fee for each Bank in an amount equal to 1.0%of such Bank’s Commitment.

 

                SECTION4  Miscellaneous.

 

                4.1          Continuing Effectiveness, etc.  As herein amended, the Credit Agreementshall remain in full force and effect and is hereby ratified and confirmed inall respects.  After the effectivenessof this Amendment, all references in the Credit Agreement and the other LoanDocuments to “Credit Agreement” or similar terms shall refer to the CreditAgreement as amended hereby.

 

                4.2           Counterparts.  This Amendment may be executed in any numberof counterparts and by the different parties on separate counterparts, and eachsuch counterpart shall be deemed to be an original but all such counterpartsshall together constitute one and the same Amendment.

 

                4.3           GoverningLaw.  This Amendment shall be acontract made under and governed by the laws of the State of Illinoisapplicable to contracts made and to be performed entirely within such state.

 

                4.4           Successorsand Assigns.  This Amendment shall bebinding upon the Company, the Banks and the Administrative Agent and theirrespective successors and assigns, and shall inure to the benefit of theCompany, the Banks and the Administrative Agent and the respective successorsand assigns of the Banks and the Administrative Agent.

 

 

[REMAINDER OF PAGEINTENTIONALLY LEFT BLANK]

 

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                Deliveredat Chicago, Illinois, as of the day and year first above written.

 
|   | U S LIQUIDS INC.                                         |
|--------|----------------------------------------------------------|
|   |                                                     |
|   |                                                     |
|   | By                                                       |   |
|   | Title                                                    |   |
|   |                                                     |
|   |                                                     |
|   | BANK OF AMERICA, N.A., as Administrative Agent           |
|   |                                                     |
|   |                                                     |
|   | By                                                       |   |
|   | Title                                                    |   |
|   |                                                     |
|   |                                                     |
|   | BANK OF AMERICA, N.A., as a Bank                         |
|   |                                                     |
|   |                                                     |
|   | By                                                       |   |
|   | Title                                                    |   |
|   |                                                     |
|   |                                                     |
|   | FLEET NATIONAL BANK, as Syndication Agent and as  a Bank |
|   |                                                     |
|   |                                                     |
|   | By                                                       |   |
|   | Title                                                    |   |
|   |                                                     |
|   |                                                     |
|   | BANK ONE, NA                                             |
|   |                                                     |
|   |                                                     |
|   | By                                                       |   |
|   | Title                                                    |   |

 

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|   | 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                    |   |

 

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**                                                                                                                                                                                               ExhibitA**

 

CONFIRMATION

 

Datedas of March    , 2002

 

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

 

                Pleaserefer to (a) the Second Amended and Restated Credit Agreement dated as ofFebruary 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), asagent (the “Agent”); (b) the other “Loan Documents” (as defined in the CreditAgreement), including the Guaranty and the Security Agreement; and (c) theEighth Amendment dated as of March     ,2002 to the Credit Agreement (the “Eighth Amendment”).

 

                Eachof the undersigned hereby confirms to the Agent and the Banks that, aftergiving effect to the Eighth Amendment and the transactions contemplatedthereby, each Loan Document to which such undersigned is a party continues infull force and effect and is the legal, valid and binding obligation of suchundersigned, enforceable against such undersigned in accordance with its terms.

 

                                                                                US LIQUIDS INC.

 

 
| By:                                      |   |
|------------------------------------------|--------|
|                                     |   |
| Name Printed:                            |   |
| Title:                                   |   |
|                                     |   |
| 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.         |   |
|                                          |        |  |  |  |

A-1

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| 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:                                                                                                       |   |
|                                                                                                              |  |  |  |

 

 

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SCHEDULE1.1

 

PRICINGSCHEDULE

 

                TheFloating Rate Margin, the Eurodollar Margin, the rate per annum for non-usefees and the rate per annum for letter of credit fees for Financial Letters ofCredit and Non-Financial Letters of Credit, respectively, shall be determinedin accordance with the table below and the other provisions of this Schedule1.1.

 
|                          |   | **Level I** |   | **Level II** |   | **Level III** |   | **Level IV** |
|-------------------------------|--------|-------------|--------|--------------|--------|---------------|--------|--------------|
| Rate forNon-Use Fee           |   | 0.500%      |   | 0.500%       |   | 0.400%        |   | 0.300%       |
| Eurodollar Margin             |   | 3.500%      |   | 3.250%       |   | 3.000%        |   | 2.750%       |
| Floating Rate Margin          |   | 2.500%      |   | 2.250%       |   | 2.000%        |   | 1.750%       |
| Rate forNon-Financial LC  Fee |   | 2.125%      |   | 2.000%       |   | 1.875%        |   | 1.750%       |
| Rate forFinancial LC Fee      |   | 3.500%      |   | 3.250%       |   | 3.000%        |   | 2.750%       |

 

                LevelI applies when the ratio of Funded Debt to Adjusted EBITDA is greater than2.50 to 1.0.

 

                LevelII applies when the ratio of Funded Debt to Adjusted EBITDA is less than orequal to 2.50 to 1.0 but greater than 2.00 to 1.0.

 

                LevelIII applies when the ratio of Funded Debt to Adjusted EBITDA is less thanor equal to 2.00 to 1.0 but greater than 1.50 to 1.0.

 

                LevelIV applies when the ratio of Funded Debt to Adjusted EBITDA is less than orequal to 1.50 to 1.0.

 

                Theapplicable Level shall be adjusted, to the extent applicable, 45 days (or, inthe case of the last Fiscal Quarter of any Fiscal Year, 90 days) after the endof each Fiscal Quarter based on the Funded Debt to Adjusted EBITDA Ratio as ofthe last day of such Fiscal Quarter; provided that if the Company failsto deliver the financial statements required by Section 10.1.1 or 10.1.2,as applicable, and the related certificate required by Section 10.1.3 bythe 45th day (or, if applicable, the 90th day) after any Fiscal Quarter, LevelI shall apply until such financial statements are delivered.

 

 

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