exv10w33



 



EXHIBIT 10.33



LICENSE AGREEMENT



     This License Agreement (the “Agreement”) is entered into as of this 1st
day of November, 2002, by and between U S LIQUIDS INC., a Delaware corporation
(“USL”), and LIQUID ENVIRONMENTAL SOLUTIONS OF TEXAS, L.P., a Texas limited
partnership (“LES”).


WITNESSETH:



     WHEREAS, USL and LES, along with US Liquids of Houston, LLC, a Texas
limited liability company, US Liquids of Dallas, LLC, a Texas limited liability
company, US Liquids of Central Texas, LLC, a Texas limited liability company,
and US Liquids of Texas, Inc., a Texas corporation (collectively with USL, the
“Seller Entities”), have entered into an Asset Purchase Agreement dated as of
November 1, 2002 (the “Asset Purchase Agreement”), providing, among other
things, for the sale by USL and the Seller Entities and the purchase by LES of
the Purchased Assets and the Acquired Business Operations (all capitalized
terms used herein without definition shall have the meanings assigned to them
in the Asset Purchase Agreement); and


     WHEREAS, USL has developed certain proprietary IMS software and purchased
certain other software (collectively, the “Software”), as described in Exhibit
A attached hereto and incorporated by reference herein, which is utilized by
USL in its business, including, but not limited to, the Acquired Business
Operations; and


     WHEREAS, LES desires to obtain a limited license of the Software, along
with access to USL’s technology staff, and USL desires to grant to LES such
limited license of the Software and access to its technology staff, subject to
the terms and conditions set forth herein.


     NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein and in the Asset Purchase Agreement, the parties hereto agree
as follows:


I. GRANT OF LICENSE




	 	 	 
	1.01	 	
Grant of License. In exchange for a single license fee of One Hundred
Twenty Thousand and No/100 Dollars ($120,000), paid concurrently herewith,
USL hereby grants to LES an exclusive, nontransferable right and license
to use the Software for the license term as designated herein. In
connection with the foregoing, LES is further granted a license under and
to any applicable patents and applications for patent owned or licensed by
USL with respect to the Software, and the right to use all formulations,
trade secrets, trade names, registrations and other proprietary
information relating to the Software necessary to give effect to the
license set forth in the preceding sentence. The effectiveness of the
license granted herein is subject to the following conditions: (i) LES
shall not further sell, assign or otherwise transfer, convey or deliver
the Software, or the license granted to LES hereunder, to any other party
without the prior written consent of USL; and (ii) LES will use the
Software exclusively in the conduct of the Acquired Business Operations.





 






 




	 	 	 
	1.02	 	
No Transfer of Ownership. LES acknowledges that the Software and all
patents, trade secrets and other proprietary information relating to the
Software, are licensed by USL and that nothing in this Agreement shall be
construed to transfer to LES any ownership rights in or to the Software or
such information other than the limited license granted in Section 1.01
hereto.



II. ADDITIONAL AGREEMENTS




	 	 	 
	2.01	 	
Provision of Services by USL. For a period of six (6) months from the
date of this Agreement, USL shall provide and perform, or cause its
affiliates to provide and perform, certain information technology
maintenance and support services as reasonably requested from time to time
by LES (the “USL Services”). The USL Services to be provided hereunder
will be as more particularly set forth on Exhibit A hereto, and may
include the utilization by LES of the services of USL’s technology staff
on an “as available” basis not to exceed 40 hours per month. Additional
services may be provided by USL to LES upon the mutual agreement of the
parties. The personnel comprising USL’s technology staff shall be and
remain employees of USL at all times when performing the USL Services, and
LES shall not incur any responsibility for the payment of salary, wages,
benefits or severance claims arising out of or relating to the provision
of the USL Services hereunder.
	 	 	 
	2.02	 	
Service Fee. In exchange for the USL Services provided hereunder, LES
shall pay to USL 1.33 times USL’s straight labor cost, as set forth on
Exhibit B attached hereto, for the technology staff providing such USL
Services. Exhibit B may be modified from time to time by the mutual
agreement of the parties.
	 	 	 
	2.03	 	
Standards of Services. USL shall use reasonable efforts to cause any and
all personnel providing USL Services to perform such USL Services with the
same degree of care, skill and diligence with which it causes similar
services to be performed for itself and its various other subsidiaries.
	 	 	 
	2.04	 	
Payment of Service Fees. USL shall submit an invoice to LES each month
setting forth the USL Services performed during the preceding month and
the fees incurred and required to be paid by LES for such month. LES
shall pay all such invoices net thirty (30) days of receipt.
	 	 	 
	2.05	 	
Indemnification. Subject to the limitations on indemnities set forth in
the Asset Purchase Agreement, LES agrees to defend, indemnify and hold
harmless USL and its affiliates and its and their officers, directors,
managers, agents and employees, when performing the USL Services to be
provided hereunder, against any and all claims, losses, liabilities,
damages and causes of action, whether based on tort, breach of contract or
any other legal theory in favor of anyone, resulting in damage to LES’
property (including data), in connection with, or as an incident to, any
act or omission in connection with the performance of the USL Services or
fulfillment of the responsibilities under this Agreement, including
negligence (but not gross negligence or willful misconduct) of USL, its
affiliates, or their respective officers, directors, managers, agents or
employees.





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	2.06	 	
Disclaimer of Warranties. EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES
OF USL EXPRESSLY SET FORTH HEREIN AND IN THE ASSET PURCHASE AGREEMENT, USL
MAKES NO WARRANTY REGARDING THE SOFTWARE, EXPRESS OR IMPLIED. USL
SPECIFICALLY DISCLAIMS THAT THE SOFTWARE IS MERCHANTABLE OR FIT FOR ANY
PARTICULAR PURPOSE; THE SOFTWARE IS BEING LICENSED TO LES ON AN “AS IS”
“WHERE IS” BASIS.
	 	 	 
	2.07	 	
Historical Data. All historical data relative to the Acquired Business
Operations, together with any such data generated by LES after the Closing
Date, whether or not it resides on USL’s hardware, shall be and remain the
sole and exclusive property of LES. Notwithstanding the foregoing, USL
shall have the right to keep and maintain a copy of all such data for
archive purposes.



III. TERM AND TERMINATION




	 	 	 
	3.01	 	
Term. Unless terminated earlier by the mutual agreement of the parties,
this Agreement shall commence on the Closing Date and shall continue for a
term of one (1) year, except as otherwise set forth herein.
	 	 	 
	3.02	 	
Termination by Either Party. Either party may terminate this Agreement
prior to its expiration on the occurrence of a material default by the
other party which has not been cured within thirty (30) days of written
notice given to the defaulting party by the non-defaulting party.
	 	 	 
	3.03	 	
Duties Upon Termination. Upon expiration or termination of this
Agreement, LES agrees to immediately cease all use of the Software and to
promptly return to USL all manuals, memoranda, machinery, devices, and
other materials and property pertaining to the Software then in its
possession or control.



IV. CONSIDERATION




	 	 	 
	4.01	 	
Royalty. The consideration for the grant of the license of the Software
by USL to LES hereunder shall be as set forth in Section 1.01.



V. MISCELLANEOUS




	 	 	 
	5.01	 	
Assignment. Neither party may assign any of its rights or delegate any
of its duties under this Agreement without the prior written approval of
the other party.
	 	 	 
	5.02	 	
Governing Law. This Agreement shall be governed by and interpreted under
the internal laws of the State a Texas applicable to Agreements made and
to be performed wholly within the State of Texas.
	 	 	 
	5.03	 	
Entire Agreement. The terms of this Agreement are confidential and are
intended by the parties as the final expression of their agreement with
respect to such terms as are included in





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this Agreement and may not be
contradicted by evidence of any prior or contemporaneous agreement.
	 	 	 
	5.04	 	
Modifications and Amendments. This Agreement may not be modified, changed
or supplemented, nor may any obligations hereunder be waived, except by
written instrument signed by the parties to be charged.
	 	 	 
	5.05	 	
Waiver and Extension. No waiver of any breach of any agreement or
provision herein contained shall be deemed a waiver of any proceeding or
succeeding breach thereof, or of any other agreement or provision herein
contained. No extension of time for performance of any obligations or
acts hereunder shall be deemed an extension of the time for performance of
any other obligations or acts.
	 	 	 
	5.06	 	
Successors and assigns. This Agreement shall be binding upon each of the
parties, and their respective approved successors and assigns.
	 	 	 
	5.07	 	
Partial Invalidity. If any provision of this Agreement is found to be
invalid by any court of competent jurisdiction, the invalidity of such
provision shall not affect the validity of the remaining provisions
hereof. Without limiting the generality of the preceding sentence, if any
remedy set forth in this Agreement is determined to have failed its
essential purpose, then all other provisions of this Agreement, including
the limitations of liability and exclusions of damages shall nevertheless
remain in full force and effect.
	 	 	 
	5.08	 	
Corporate Authority. Each individual executing this Agreement on behalf
of any corporation or other entity which is a party to this Agreement
represents and warrants that he or she is duly authorized to execute and
deliver this Agreement on behalf of said entity.
	 	 	 
	5.09	 	
Notices. All notices required or permitted to be given hereunder shall be
in writing and may be personally served, transmitted by telegram or
facsimile, or may be deposited in the United States mail, registered or
certified, return receipt requested, postage prepaid to the address set
forth below or to such other address as such party shall have specified
most recently by written notice delivered in such manner. Notice
transmitted by personal delivery shall be deemed given on the date of
receipt. Notice transmitted by telegram, or fax shall be deemed given on
the date transmitted, provided receipt of the transmission shall have been
confirmed by telephone to the appropriate party.




	 	 	 
	LES:	 	
Liquid Environmental Solutions of Texas, L.P.
	 	 	
4960 Singleton Blvd.
	 	 	
Dallas, TX 75212
	 	 	
Attn: Alan Viterbi
	 	 	
Fax: 214-252-5065





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	USL:	 	
U S Liquids Inc.
	 	 	
411 N. Sam Houston Parkway, Suite 400
	 	 	
Houston, TX 77060
	 	 	
Attn: General Counsel
	 	 	
Fax: 281-272-4545




	 	 	 
	5.10	 	
Relationship of Parties. LES and USL shall not be deemed to be partners
or joint venturers nor to have any relationship other than that of
independent contractors and of licensor and licensee. No party shall have
the right to perform any act on behalf of or bind the other party without
the written authorization or agreement from the other party.





[Signatures on Following Page]



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     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.



	 	 	 
	
U S LIQUIDS, INC.
	 	 	 
	By:	 	 
	 	 	


	 	 	
William M. DeArman, Chief Executive Officer
	 	 	 
	
LIQUID ENVIRONMENTAL SOLUTIONS
OF TEXAS, L.P.,
	
By CLST, Inc., its General Partner
	 	 	 
	By:	 	 
	 	 	


	 	 	
Alan Viterbi, President





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EXHIBIT A



Agreements Regarding Software and USL Services




	1.	 	IT Hardware and shrink-wrap Software




	 	a.	 	Site Location Hardware and Infrastructure
	 
	 	 	 	All hardware and infrastructure assets at the LES site necessary
for the performance of the USL Services will be provided by LES and
shall at all times remain the property of LES.
	 
	 	b.	 	Datacenter Hardware and Infrastructure
	 
	 	 	 	USL will allow LES to utilize datacenter hardware and
infrastructure for normal business operations for a period of 6
months after the Closing Date. In the event LES needs additional
equipment or infrastructure components, LES will provide a hardware
and infrastructure request form which must be approved by USL’s IT
group.
	 
	 	c.	 	Shrink-Wrapped Software
	 
	 	 	 	USL currently has open license agreements with most of its
shrink-wrapped software vendors. These licenses are
non-transferable, and as such, USL will allow use of these software
licenses for a period of 6 months after the Closing Date
royalty-free.




	2.	 	Custom USL Applications




	 	a.	 	IMS
	 
	 	 	 	USL will allow LES to use its proprietary IMS software and database
for a period of 6 months after the Closing Date, royalty-free.
Additionally, LES will only be allowed to use IMS as part of the
normal conduct of the Acquired Business Operations. Any sale,
assignment, transfer, conveyance or unlawful use of this IMS
software will result in termination of this Agreement.
	 
	 	b.	 	Management Reporting Database and Application (MRD&A)
	 
	 	 	 	USL will allow LES to use its proprietary management reporting
application and database for a period of 6 months after the
transaction Closing Date, royalty-free. Additionally, LES will only
be allowed to use MRD&A as part of the normal conduct of the
Acquired Business Operations. Any sale, assignment, transfer,
conveyance or unlawful use of the MRD&A will result in termination
of this Agreement.
	 
	 	c.	 	Pricing Database and Application (PD&A)
	 
	 	 	 	USL will allow LES to use its proprietary pricing application and
database for a period of 6 months after the Closing Date,
royalty-free. Additionally, LES will only be allowed to use PD&A
as part of the normal conduct of the Acquired Business Operations.
Any sale, assignment, transfer, conveyance or unlawful use of the
PD&A will result in termination of this Agreement.





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	Note:	 	
It is expressly understood and agreed that all works, inventions,
programs, source code and other materials created, developed or performed
by USL in the course of its performance of this Agreement will be and will
remain the exclusive property of USL or its affiliates, and USL or its
affiliates will have all rights, title and interest therein, including
without limitation, copyrights, patents, trade secrets and any other
proprietary rights. LES will have a royalty-free, non-exclusive and
non-transferable right and license to use the aforementioned applications
and databases during the term of this Agreement solely for LES internal
purposes in accordance with the terms of this Agreement.




	3.	 	USL Services



     USL will provide service and support in the following areas for a period
of 6 months after the transaction Closing Date:



	 	a.	 	General
	 
	 	 	 	USL will provide general desktop, server and infrastructure support
to LES regardless of issue or problem. LES understands that this
support will be provided under the agreement that current USL load
sets and configuration will be supported. New applications or
configurations can not and will not be supported.
	 
	 	b.	 	Telco
	 
	 	 	 	USL will provide high-level support to LES relative to Telco issue
resolutions. However, USL has no control over current Telco
operations; thus, issue resolution time frame may vary based on
Telco timeliness. Additionally, all voice Telco services will be
transferred to LES on transaction Closing Date, and Frame Relay \
Internet charges will be billed to LES on a monthly basis relative
the acquired entities \ locations.
	 
	 	c.	 	IMS
	 
	 	 	 	IMS is a USL developed application, thus, USL will provide full
service and support for this application and database for the
duration indicated above. This will include general support, work
stoppage bug modifications, database support, report support, and
overall functional support. This does not include major code
revisions nor modifications of the existing IMS system as
determined by USL’s IT staff and Arya Farinpour.
	 
	 	d.	 	Great Plains 5.5 & FRX
	 
	 	 	 	USL will provide baseline support on Great Plains; however, this
application is fully supported by Microsoft. Thus, a support
agreement should be obtained from Microsoft and\or independent
consultant.
	 
	 	e.	 	Citrix
	 
	 	 	 	USL will provide baseline support on Citrix MetaFrame, however,
this application is fully supported by Citrix. Thus, a support
agreement should be obtained from Citrix and\or independent consultant.





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	 	f.	 	Management Reporting and Pricing Application
	 
	 	 	 	USL hired outside consultants to created two additional custom
databases and applications to support management reporting issues
and pricing modeling within USL. Thus, USL will only provide
base-line support for these applications and databases. Higher
level support will be provided by Jane McManus (independent
contractor). LES will need to contract with Ms. McManus for code
modifications, database modifications, report creation and
modifications, and overall functional support.
	 
	 	g.	 	Disaster Recovery
	 
	 	 	 	USL will provide DRP support as part of their normal operating
procedures. Arya Farinpour will review current procedures and
continue to review and perform quality assurance checks throughout
to 6 month period in order to insure safeguard of data, and
operations.
	 
	 	h.	 	PBX
	 
	 	 	 	All PBX support agreements will transfer to LES on the transaction
Closing Date.




	 	 	 
	Note:	 	
If USL’s IT support team is unable to provide support based on
backlogged support work\issues in Keystone, LES will be required to seek
outside independent consultants in order to assist USL’s in house IT Team.
All service and support issues will be responded to within a 24 hour
period. However, resolution time for issues logged may vary, thus no fix
issue resolution time will be quoted. In the event that both parties do
not agree on resolution time, Arya Farinpour will insert himself in the
process as liaison in order to resolve the resolution time issue.
	 	 	 
	 	 	
Additionally, USL will endeavor to submit to LES invoices for USL
Services rendered hereunder within 15 days after the end of each month.
LES may have such invoices reviewed by Arya Farinpour prior to payment.





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EXHIBIT B



Service Fees for USL Services




	 	 	 	 	 
	USL Employee	 	Hourly Rate
	
	 	

	Greg Fleck
	 	$	35.90	 
	Kevin Fletcher
	 	$	28.85	 
	Denise Poston
	 	$	36.06	 
	Don Sharp
	 	$	33.65	 
	Glenn Wyers
	 	$	43.27	 




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