##### 



EXHIBIT 10.4

ESTOPPEL AND WAIVER AGREEMENT

This Estoppel and Waiver Agreement (the Agreement) is made and
entered into effective as of the 15th day of February, 1999, by and between
Sanifill, Inc., a Delaware corporation (Sanifill), and U S Liquids Inc., a
Delaware corporation (Liquids).

RECITALS

WHEREAS, pursuant to the terms of that certain Asset Purchase
Agreement (the Asset Purchase Agreement), dated as of December 2, 1996, among
Liquids, Sanifill, Campbell Wells, L.P. and Campbell Wells NORM, L.P., Liquids
acquired substantially all of the assets of and assumed certain liabilities
relating to Campbell Wells L.P. and Campbell Wells NORM, L.P., each a Delaware
limited partnership and a wholly-owned subsidiary of Sanifill;

WHEREAS, in connection with the consummation of the transactions
contemplated by the Asset Purchase Agreement, on December 13, 1996, Liquids
issued to Sanifill a warrant (the Warrant) to purchase shares of common
stock, par value $.01 (Common Stock), of Liquids.

WHEREAS, Liquids is exploring the possibility of conducting a public
offering of its Common Stock (the Public Offering).

NOW, THEREFORE, in consideration of the mutual covenants and
conditions contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:

1.     Waiver of Certain Registration Rights. Sanifill acknowledges and
agrees that Liquids intends to file a registration statement on Form S-3
registering for sale an aggregate of 3,450,000 shares of Common Stock, of which
3,000,000 shares (the Firm Shares) will be sold by Liquids and an existing
stockholder of Liquids and 450,000 shares (the Additional Shares) will be
subject to an over-allotment option granted to the underwriters of the Public
Offering. Sanifill hereby waives its right to have any Warrant Shares (as
defined in the Warrant) included among the Firm Shares. If the underwriters
exercise their over-allotment option in full, Sanifill shall be entitled to
include 275,000 Warrant Shares among the Additional Shares. If, however, the
underwriters exercise their over-allotment option only in part, Liquids shall
use commercially reasonably efforts to cause the underwriters to purchase the
Additional Shares in the following sequence: (i) 275,000 Warrant Shares, and
(ii) 175,000 total shares held by W. Gregory Orr and Earl J. Blackwell.

2.     Expenses. Sanifill agrees that it will pay the fees, disbursements
and expenses of its counsel in connection with the registration and delivery of
the Warrant Shares as contemplated in Section 1 hereof.

3.     Suspension of Shelf Registration Statement. Sanifill acknowledges
that the shelf registration statement filed by Liquids on Form S-1 (the Shelf
Registration Statement), SEC

File No. 333-34875, is stale. Within thirty (30) days after the closing or
withdrawal of the Public Offering, Liquids shall file a post-effective
amendment to the Shelf Registration Statement and use its commercially
reasonable efforts to cause such amendment to become effective or shall file
another registration statement registering for resale all of the Warrant Shares
not sold by Sanifill in the Public Offering and use its commercially reasonable
efforts to cause such registration statement to become effective.

4.     Existing Restrictions on Registration. The parties hereby
acknowledge that Sanifills sale of Warrant Shares pursuant to Section 1 hereof
shall not be considered in determining, under Section 3.4 of the Warrant, as
amended, the maximum number of Warrant Shares that Sanifill is entitled to
offer during 1999 under the Shelf Registration Statement.

5.     Amendment to Warrant. Section 3.4 of the Warrant shall be amended
in its entirety to read as follows:

3.4 Restrictions on Registration.



| |                                                                                                                                                                                                                                          
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Warrantholder agrees that, without the prior written
consent of the Company, the number of Warrant Shares to be offered
pursuant to the shelf registration statement in any calendar year
shall not exceed the following limitations:

|     |  |                              |         | 
|---- |  | ---------------------------- | ------- | 
|     |  | Maximum No. of              
|Year |  | Warrant Shares to be Offered
|     |  |                             
|1999 |  |                              | 200,000 | 
|2000 |  |                              | 250,000 | 
|2001 |  |                              | 300,000 | 
|2002 |  |                              | 300,000 | 
|2003 |  |                              | 300,000 | 
|2004 |  |                              | 300,000 | 
|2005 |  |                              | 300,000 | 
|2006 |  |                              | 300,000 | 



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | ; provided that such maximum number of Warrant Shares shall be subject
to adjustment from time to time in accordance with the provisions of
Section 6 hereof; and further provided, however, that the
Warrantholder shall be entitled to offer Warrant Shares in connection
with (i) any firm commitment underwritten public offering and (ii) any
orderly market transactions (such as cross-trades or arranged block
sales) approved in advance in writing by the Company, which approval
under this Section 3.4 shall not be unreasonably withheld.

6. Representation of Ownership. Sanifill hereby represents that it is
the sole owner of the Warrant, such ownership is free and clear of all liens,
encumbrances or other charges of any kind and no person or entity has any right
to acquire the Warrant or any interest therein.





---



##### 



7.     Miscellaneous. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas. This Agreement may not be
modified or amended except by an instrument in writing signed by Sanifill and
Liquids. This Agreement shall inure to the benefit of and shall be binding upon
Sanifill and Liquids and their respective successors and assigns.

IN WITNESS WHEREOF, this Agreement has been duly executed by each of
the parties effective as of the date first above written.

| |  |     |  |               |  | 
| |  | --- |  | ------------- |  | 
| |  |     |  | SANIFILL INC.
| |  |     |  |               |  | 
| |  | By: |  |               |  | 
| |  |     |  |              
| |  |     |  | Name:         |  | 
| |  |     |  |               |  | 
| |  |     |  | Title:        |  | 
| |  |     |  |               |  | 

| |  |     |  |                  |  | 
| |  | --- |  | ---------------- |  | 
| |  |     |  | U S LIQUIDS INC.
| |  |     |  |                  |  | 
| |  | By: |  |                  |  | 
| |  |     |  |                 
| |  |     |  | Name:            |  | 
| |  |     |  |                  |  | 
| |  |     |  | Title:           |  | 
| |  |     |  |                  |  |