Exhibit 10.3
 
 

This instrument and the liens, rights and obligations evidenced hereby are
subordinate in the manner and to the extent set forth in that certain
Subordination Agreement, dated as of February 23, 2011 (as amended from time to
time, the “Subordination Agreement”) among Warrior Oil Service, Inc,.  an
Indiana corporation (the “Junior Creditor”), Heritage Crystal Clean, LLC, an
Indiana limited liability company (the “Borrower”), and Bank of America,
N.A.  (the “Senior Creditor”), to the obligations under that certain Third
Amended and Restated Credit Agreement, dated as of December 14, 2009 (as amended
from time to time, the “Senior Credit Agreement”), between the Borrower and the
Senior Creditor Agent and to any senior indebtedness replacing the indebtedness
under the Senior Credit Agreement; and each holder of this instrument, by its
acceptance hereof, irrevocably agrees to be bound by the provisions of the
Subordination Agreement
 
PROMISSORY NOTE
 
U.S. $1,500,000.00
 
February 23, 2011
 
FOR VALUE RECEIVED, the undersigned HERITAGE-CRYSTAL CLEAN, LLC, an Indiana
limited liability company (“Maker”), promises to pay to the order of WARRIOR OIL
SERVICE, INC., an Indiana corporation (“Holder”), in lawful money of the United
States of America, in immediately available funds, and at such place as the
Holder may from time to time designate, or, in the absence of such designation,
at 809 Overstreet Street, Franklin, Indiana 46131-1545, the principal sum of ONE
MILLION FIVE HUNDRED THOUSAND AND NO/100 U.S. DOLLARS (U.S. $1,500,000.00), or
so much thereof as shall be outstanding from time to time without interest
(prior to maturity and in the absence of a default), all without relief from
valuation and appraisement laws, in accordance with the following terms and
provisions and the provisions of the Mortgage (as defined below), (the
“Indebtedness”):
 
1. This Promissory Note (the “Note”) is secured by the following instruments:
Mortgage, Security Agreement and Fixture Filing (the “Mortgage”) and UCC-1
executed by Maker in favor of Holder dated February 23, 2011.
 
2. Payments of the Indebtedness shall be due and payable as follows: one
installment of One Hundred Fifty Thousand and no/100 dollars ($150,000.00) on
May 1, 2011 and eighteen (18) equal quarterly installments of Seventy-Five
Thousand and no/100 dollars ($75,000) commencing on August 1, 2011 and each
November 1, February 1, May 1 and August 1 thereafter, with any remaining amount
of the Indebtedness due on November 1, 2015 (the “Maturity Date”).
 
3. If any default occurs in the payment of any of the Indebtedness or any other
sums which payment default is not cured within ten (10) business days after
Maker’s receipt of Holder’s notice of non-payment, then the entire amount of the
Indebtedness then remaining unpaid hereunder (a) shall accrue interest at the
rate of fifteen percent (15%) per annum (the “Default Rate”) from the date of
the default until the default is cured and (b) at the option of the holder
hereof and without notice, shall become immediately due and payable.  Failure to
exercise
 
 
 
 
 

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 any such option shall not constitute a waiver of the right to exercise the same
at a later time or in the event of any subsequent default.
 
4. Maker hereby waives to the fullest extent permitted by law presentment,
demand, protest, notice of protest, notice of dishonor and notice of any other
kind (except as specifically required herein) in connection with this Note.
 
5. Maker agrees to pay all reasonable costs and out-of-pocket expenses
(including, but not limited to reasonable attorneys’ fees and expenses) incurred
by Holder in connection with the collection or enforcement of this Note.  All
payments received under this Note shall be applied first to costs of collection,
including reasonable attorneys’ fees (if any), then to interest and principal of
this Note.
 
6. Maker may prepay this Note, in whole or in part, at any time without penalty.
 
7. This Note shall be construed in accordance with and governed by the internal
laws and decisions of Illinois, without giving effect to Illinois’ choice of law
principles.
 
8. The parties hereto intend and believe that each provision of this Note
comports with all applicable local, state and federal laws and judicial
decisions.  However, if any provision or provisions, or if any portion of any
provision or provisions, of this Note is found by a court of law to be in
violation of any applicable local, state or federal ordinance, statute, law,
administrative or judicial decision, or public policy, and if such court should
declare such portion, provision or provisions of this Note to be illegal,
invalid, unlawful, void or unenforceable as written, then it is the intent of
all parties hereto that such portion, provision or provisions shall be given
force to the fullest possible extent that it or they are legal, valid and
enforceable, that the remainder of this Note shall be construed as if such
illegal, invalid, unlawful, void or unenforceable portion, provision or
provisions were not contained herein, and that the rights, obligations and
interest of Maker and holder hereof under the remainder of this Note shall
continue in full force and effect.
 
9. No modification, waiver, amendment, discharge or change of this Note shall be
valid unless the same is in writing and signed by the party against which the
enforcement of such modification, waiver, amendment, discharge or change is
sought.
 
10. Time is hereby declared to be of the essence of this Note and of every part
hereof.
 
11. This Note shall inure to the benefit of and shall be binding on the parties
hereto and their respective successors and assigns.  All words used herein in
singular number shall extend to and include the plural, where the context so
requires.  All words used herein in the plural number shall extend to and
include the singular number, where the context so requires.  All words used
herein in any gender, whether male, female or neuter, shall extend to and
include all genders as may be applicable in any particular context.
 
12. Maker warrants and agrees that the Indebtedness constitutes an exempted
transaction under the Truth-In-Lending Act, 15 U.S.C.  Sec. 1601 et. seq.  and a
“business loan” within the meaning set forth in any state statute and is exempt
from any limitations or restrictions relating to the payment or imposition of
interest or other charges.
 
 
 
 
 
 

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IN WITNESS WHEREOF, Maker has caused this Note to be executed and delivered as
of the date first above written.
 
HERITAGE-CRYSTAL CLEAN, LLC, an Indiana limited liability company
 
By:
/s/ Joseph Chalhoub
 
Joseph Chalhoub
 
Its: CEO & President