exv10w18



 





EXHIBIT
10.18




HERITAGE-CRYSTAL CLEAN, L.L.C.

KEY EMPLOYEE MEMBERSHIP INTEREST TRUST AGREEMENT





 









 








TRUST AGREEMENT




     Introductory Clause. This Trust Agreement, which shall be known as the
HERITAGE-CRYSTAL CLEAN KEY EMPLOYEE MEMBERSHIP INTEREST TRUST, UNDER TRUST AGREEMENT dated February
1, 2002 (“Trust Agreement”), is between HERITAGE-CRYSTAL CLEAN, L.L.C., an Indiana limited
liability company, hereinafter referred to as the “Grantor”, and JOSEPH CHALHOUB, hereinafter
referred to as the “Trustee”.



ARTICLE I




     Description of Property Transferred. The Grantor has assigned, transferred and
delivered, and by this Trust Agreement does hereby assign, transfer and deliver unto the Trustee
three hundred (300) Common Units in the Grantor (“Units”). The Units and any income or proceeds
therefrom (hereinafter collectively referred to as the “Trust Estate”), shall be held, administered
and distributed by the Trustee as hereinafter set forth.



ARTICLE II




     Administration of Trust Estate. The Trustee shall hold and manage the Trust Estate
without bond as follows:



     (1) The Trustee may, from time to time, grant certain key employees of Grantor and affiliated
entities of Grantor (‘key Grantor employees”) a beneficial interest in a portion of the Units as
designated on Schedule A attached hereto and made a part hereof. Trustee will deliver a copy of
each grant hereunder to Grantor and The Heritage Group, an Indiana general partnership (“THG”).



     (2) The Trustee and the Units shall be subject to the Operating Agreement of Grantor as
amended (collectively, “Operating Agreement”) and said key Grantor employees’ sole interest in the
Units will be in accordance with Unit Redemption Agreements attached hereto as exhibits and made a
part hereof (collectively, “Unit Redemption Agreements”).



     (3) The Trustee shall distribute to each such key Grantor employee with a beneficial interest
in a portion of the Units, said key Grantor employees’ percentage of any income distributions or
distributions for tax liabilities received by the Trustee pursuant to Article 7 of the Operating
Agreement based on the total Unit Beneficial Interests designated on Schedule A, notwithstanding
the vesting status of any key Grantor employee under his or her Unit Redemption Agreement.



     (4) The Trustee shall have no rights under the Operating Agreement with regard to Units not
issued to said key Grantor employees.



     (5) Upon termination of this Trust Agreement, all Units not granted to said key Grantor
employees will be surrendered to the Grantor without receipt of any payment or other
consideration and any advancements by the Grantor related to said Units not granted shall be
forgiven.



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ARTICLE III




     Amendment or Revocation of the Trust Agreement. Except for any existing grants of
beneficial interests as described in Article II hereof and subject to the Unit Redemption
Agreements, Grantor can amend or revoke this Trust Agreement at any time with notice to THG.



ARTICLE IV




     Termination of Trust. This Trust Agreement will terminate upon the following:



     (1) Termination of the Operating Agreement, or



     (2) Distribution of the entire Trust Estate;



and may terminate, on the sole discretion of the Grantor, on the date when any Registration
Statement on Form S-1, S-2 or S-3 or successor forms (“Registration Statement”) covering the Units
(or the common equity interests in any business organization into which the Units are converted
upon a transfer of the Company’s business assets or reorganization) is declared effective by the
United State Securities and Exchange Commission (“SEC Effective Date”), it being the intent of the
parties, but subject to the sole discretion of Grantor to terminate this Trust Agreement if and
when the Company completes an “initial public offering”.



ARTICLE V




     Trustee Succession, Trustee’s Fees and Other Matters. The provisions for Trustee
succession and Trustee’s fees and other matters are set forth below:



     (1) Trustee Succession. In the event of Trustee’s death, termination of employment
for any reason with Grantor, resignation or Trustee for any reason should cease to act in such
capacity as Trustee, then the successor Trustee who shall also serve without bond shall be the next
person willing to serve from the list below in the order named:




	 	a.	 	Fred Fehsenfeld, Jr.;
	 
	 	b.	 	an individual or entity appointed by Grantor or if not so
appointed by Grantor within thirty (30) days of said above-referenced event, by
THG.




Upon the appointment of and acceptance by the successor Trustee, the original Trustee shall pay
over, deliver, assign, transfer or convey to such successor Trustee the Trust Estate and make a
full and proper accounting to the Grantor, whereupon its resignation shall become effective. The
substitute or successor Trustee upon acceptance of this Trust and the Trust Estate shall succeed
to and have all the rights, powers and duties, authority and responsibility conferred upon the
Trustee originally named herein.




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     (2) Fees and Expenses. For its services as Trustee, each Trustee shall not receive
compensation for the services rendered but shall receive reimbursement for reasonable expenses from
the Grantor or at Grantor’s election from said key Grantor employees.



     (3) Definition of Trustee. Whenever the word “Trustee” or any modifying or
substituted pronoun therefor is used in this Trust, such words and respective pronouns shall
include both the singular and the plural, the masculine, feminine and neuter gender thereof, and
shall apply equally to the Trustee named herein and to any successor or substitute Trustee acting
hereunder.



ARTICLE VI




     Powers for Trustee. The Trustee is authorized in its fiduciary discretion (which
shall be subject to the standard of reasonableness and good faith to all beneficiaries) with
respect to any property at any time held under any provision of this Trust Agreement and without
authorization by any court and in addition to any other rights, powers, authority and privileges
granted by any other provision of this Trust Agreement or by statute or general rules of law:



     (1) To retain in the form received any property or undivided interests in property, or
otherwise acquired as a part of the Trust Estate.



     (2) To comply with all terms and exercise all applicable rights under the Operating Agreement,
including without limitation all voting rights and Unit Redemption Agreements, without being
limited by any statute or rule of law concerning fiduciaries.



     (3) To act on behalf of said key Grantor employees as to their beneficial interests in the
Units.



     (4) To collect, receive, and receipt for all distributions, profits, and income of the Trust
Estate.



     (5) To compromise, adjust, arbitrate, sue on or defend, abandon, or otherwise deal with and
settle claims in favor of or against the Trust Estate as the Trustee shall deem best.



     (6) To employ and compensate agents, and other professional assistants and advisors deemed by
the Trustee needful for the proper administration of the Trust Estate, and to do so without
liability for any neglect, omission, misconduct, or default of any such agent or professional
representative, provided such person was selected and retained with reasonable care.



     (7) To hold and retain the principal of the Trust Estate undivided until actual division shall
become necessary in order to make distributions; to hold, manage, invest, and account for
the several shares or parts thereof by appropriate entries on the Trustee’s books of account;
and to allocate to each share or part of share its proportionate part of all receipts and expenses;
provided, however, the carrying of several trusts as one shall not defer the vesting in title or in
possession of any share or part of share thereof.



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     (8) To make payment in cash or in kind, or partly in cash and partly in kind upon any division
or distribution of the Trust Estate (including the satisfaction of any pecuniary distribution).



     (9) To execute all necessary receipts and releases to said key Grantor employees,
beneficiaries, personal representatives and other parties.



     (10) To take all other actions as permitted by any applicable law.



ARTICLE VII




     State Law to Govern. This Trust Agreement and the Trust created hereby shall be
construed, regulated and governed by and in accordance with the laws of the State of Indiana,
without regard to its choice of law provisions.



ARTICLE VIII




     Spendthrift Provision. Except as otherwise provided herein, all payments of principal
and income payable, or to become payable, to a key Grantor employee or other beneficiary hereunder
shall not be subject to anticipation, assignment, pledge, sale or transfer in any manner, nor shall
any key Grantor employee or other beneficiary have the power to anticipate or encumber such
interest, nor shall such interest, while in the possession of the fiduciary hereunder, be liable
for, or subject to, the debts, contracts, obligations, liabilities or torts of said key Grantor
employee or other beneficiary.



     Testimonium Clause. IN WITNESS WHEREOF, the Grantor and the Trustee have executed
this Trust Agreement on this 1st day of February, 2002.



	 	 	 	 	 	 	 
	 	 	GRANTOR

HERITAGE-CRYSTAL CLEAN, L.L.C.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Joseph Chalhoub	 	 
	 

	 	 	 	 

     JOSEPH CHALHOUB, President
	 	 
	 
	 	 	 	 	 	 
	 	 	/s/ Joseph Chalhoub	 	 
	 	 	 	 	 
	 	 	JOSEPH CHALHOUB, Trustee	 	 






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STATE OF ILLINOIS




ACKNOWLEDGMENTS          




COUNTY OF KANE




     I, a Notary Public, within and for the State and County aforesaid do hereby certify that
JOSEPH CHALHOUB, personally known to me to be the same person whose name is subscribed to the
foregoing Trust Agreement, appeared before me this day in person and acknowledged that such person
signed that Trust Agreement in such capacities and as such person’s free and voluntary act, for the
uses and purposes therein set forth.



     WITNESS my signature this 1st day of February, 2002.



	 	 	 	 	 
	 

	 	
/s/ JoAnne L. Rudinski
	 	 
	 

	 	 

Signature of Notary Public
	 	 






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SCHEDULE “A”




	 	 	 
	Beneficial Unit Holders	 	Unit Beneficial Interest
	Glenn Jones 

Ed Guglielmi 

Jeff Roche 

Marc Kroll 

Greg Bogner 

Steve Johnson 

Ray Hanna 

JoAnne Rudsinski 

Dan Handschu
	 	10 Units

10 Units

10 Units

10 Units

10 Units

10 Units

5 Units

5 Units

5 Units




[Amendments 1 through 6 have been omitted as duplicative.]



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SEVENTH AMENDMENT TO HERITAGE-CRYSTAL CLEAN KEY EMPLOYEE 

MEMBERSHIP INTEREST TRUST, UNDER TRUST AGREEMENT DATED 

FEBRUARY 1, 2002, AS AMENDED




     This Seventh Amendment (“Amendment”) executed on the date indicated hereinbelow but effective
February 22, 2007, to the Heritage-Crystal Clean Key Employee Membership Interest Trust, under
Trust Agreement dated February 1, 2002, as amended (“Agreement”) by and between Heritage-Crystal
Clean, L.L.C., an Indiana limited liability company (“Grantor”) and Joseph Chalhoub (“Trustee”).



WITNESSETH:




     WHEREAS, pursuant to Article III of the Agreement, Grantor can amend the Agreement at any time
with notice to The Heritage Group, an Indiana general partnership (“THG”).



     NOW, THEREFORE, Grantor hereby amends the Agreement as follows:



     1. Article I of the Agreement is hereby amended to increase the number of Common Units
referenced therein to four hundred fifty (450).



     2. Section (2) of Article II of the Agreement is hereby amended in its entirety to read as
follows:




“(2) The Trustee and the Units shall be subject to the
Restated Operating Agreement of Grantor dated October
26, 2004, as amended (collectively, “Operating
Agreement”) and said Grantor’s key employees’ sole
interest in the Units will be governed by the form of
Unit Redemption Agreement-General, attached hereto as
Exhibit 1 and made a part hereof, or Unit Redemption
Agreement-Oil Division, attached hereto as Exhibit 2 and
made a part hereof (collectively, “Unit Redemption
Agreements”).”



     3. Schedule A to the Agreement is hereby amended in its entirety in accordance with Amended
Schedule A attached hereto and made a part hereof, and Grantor will deliver a copy thereof to THG.



     4. In all other respects not inconsistent herewith, the Agreement remains in full force and
effect.



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     IN WITNESS WHEREOF, the parties hereto have executed this Amendment to the Agreement the year
and date first above written.



     Date:
February 22, 2007



GRANTOR

HERITAGE-CRYSTAL CLEAN, L.L.C.




	 	 	 	 	 	 	 
	By:
	 	     /s/ Joseph Chalhoub	 	 	 	/s/ Joseph Chalhoub
	 

	 	 
	 	 	 	 
	 

	 	    Joseph Chalhoub, President
	 	 	 	Joseph Chalhoub, Trustee






	 	 	 	 	 	 	 
	STATE OF ILLINOIS

	 	 	)	 	 	 
	 

	 	 	)	 	 	SS
	COUNTY OF KANE

	 	 	)	 	 	 






ACKNOWLEDGEMENTS




     I, a Notary Public, within and for the State and County aforesaid, do hereby certify that
JOSEPH CHALHOUB, personally known to me to be the same person whose name is subscribed to the
foregoing Seventh Amendment to Heritage-Crystal Clean Key Employee Membership Interest Trust, Under
Trust Agreement Dated February 1, 2002, as amended, appeared before me this day in person and
acknowledged that such person signed that Amendment to Trust Agreement in such capacities and as
such person’s free and voluntary act, for the uses and purposes therein set forth.



     WITNESS
my signature this 22nd day of February, 2007



	 	 	 
	 

Maureen L. Grisolia

	 	 
	 

Notary Public Signature

	 	 






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EXHIBIT 1

UNIT REDEMPTION AGREEMENT-GENERAL




[Joseph Chalhoub, as Trustee of the Heritage-Crystal Clean

Key Employee Membership Interest Trust Agreement

dated February 1, 2002, as amended (“Trust”)]

(                                        , beneficial interest holder)




     This UNIT REDEMPTION AGREEMENT (“Agreement”), made this ___ day of                     , 200___
(“Effective Date”), by and among Joseph Chalhoub, as Trustee (“Member”) of the Heritage-Crystal
Clean Key Employee Membership Interest Trust Agreement dated February 1, 2002, as amended
(“Trust”), c/o Heritage-Crystal Clean, L.L.C., 2175 Point Boulevard, Suite 375, Elgin, Illinois
60123,                     ,                     , as beneficial interest holder under the Trust
(“BIH”), and Heritage-Crystal Clean, LLC, an Indiana limited liability company (“Company”);



WITNESSETH THAT:




     WHEREAS, all members of the Company are parties to the Company’s Restated Operating Agreement
dated October 26, 2004, as amended (collectively, “Operating Agreement”); and



     WHEREAS, Member owns certain Common Units in the Company (“Units”) for which the Company has
received Ten Dollars ($10.00) per Unit; and



     WHEREAS, BIH has entered into an Employment Agreement with the Company dated                     ,
200___(“Employment Agreement”); and



     WHEREAS, pursuant to Section 7 of the Company’s Preorganization Agreement dated August 10,
1999, as amended, Member is entitled to identify certain key personnel of the Company to receive
the Units subject to the terms of said Section 7; and



     WHEREAS, the parties hereto have agreed that Member shall own                      (___) Common
Units for the benefit of BIH (“Employee Units”); and



     WHEREAS, Member, BIH and the Company desire to enter into certain agreements relative to the
repurchase of the Employee Units upon the termination of BIH’s employment with the Company for any
reason.



     NOW, THEREFORE, in consideration of the mutual promises set forth herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged by
both parties, the parties hereby agree as follows:



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SECTION 1

Vesting and Other Restrictions of Units




     As of the date hereof, BIH will be twenty percent (20%) vested in its beneficial interest in
the Units, said vesting to increase by twenty percent (20%) as of January 1 of each calendar year
commencing with the calendar year immediately after the completion of one full calendar year after
the date hereof during a continuous period of time prior to a “Triggering Event” hereunder as
hereinafter defined. The unvested portion of the beneficial interest in the Units will be
forfeited as of the Triggering Event, provided that in the event of an initial public offering by
the Company, BIH’s interest in the Units may become fully vested, at the sole discretion of the
Company.



SECTION 2

Redemption of Units




     2.1 Redemption; Redemption Price; and Closing. Upon the occurrence of a “Triggering
Event” as defined in Section 2.2 below, Member agrees to sell, transfer and convey to the Company,
and the Company agrees to purchase and redeem from Member at closing (“Closing”) as provided for in
Section 3 below, the fully vested Employee Units for a purchase price (“Redemption Price”) equal to
the product of (i) the Unit Price determined in the manner provided in Exhibit A attached as
applicable to the first Triggering Event to occur times (ii) the number of fully vested Employee
Units owned by Member, and upon receipt thereof, Member agrees to pay the Redemption Price to BIH.



     2.2 Triggering Events. The following occurrences are “Triggering Events” for purposes
of this Agreement having differing consequences on the Redemption Price depending upon when
occurring, all as provided in Exhibit A:




     (a) Death. The death of BIH;




     (b) Disability. The disability of BIH as hereinafter defined;




     (c) Termination With Class I or Class II Cause/Resignation Without Good Reason.
The termination of BIH’s employment with the Company with Class I or Class II cause or the
resignation of BIH from employment with the Company without good reason, as hereinafter
defined; and




     (d) Termination Without Class I or Class II Cause/Resignation with Good Reason.
The termination of BIH’s employment with the Company without Class I or Class II cause or
the resignation of BIH from employment with the Company with good reason, as hereinafter
defined.



     Solely for purposes of Exhibit A hereto, and in no way negating or amending Company’s rights
to terminate BIH or any other rights Company may have under the Employment Agreement, the following
definitions shall apply:



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     “Disability” shall mean the following: if a licensed physician reasonably
selected by the Company certifies in writing that BIH is physically or mentally incapable of
performing his or her duties of employment with the Company and such condition continues for
a continuous six (6) month period.




     “Termination by Company with Class I Cause” shall mean termination for the
continued willful or grossly negligent failure by BIH to substantially perform the duties of
employment under the Employment Agreement (other than failure resulting from BIH’s
incapacity due to physical or mental illness). Notwithstanding the foregoing, BIH shall not
be deemed to have been terminated with Class I cause without (1) delivery to BIH of thirty
(30) days’ advance written notice of termination for cause setting forth with particularity
the reasons for the Company’s intention to terminate for cause, and (2) the opportunity for
BIH to cure said asserted cause within thirty (30) days of receipt of notice of termination.




     “Termination by Company with Class II Cause” shall mean termination for the following:
(i) the breach by BIH of the provisions of the Employment Agreement; (ii) the commission by
BIH of any act of fraud, embezzlement or dishonesty with the Company’s assets; (iii) the
failure of BIH to adhere to the Company’s published policy regarding drug and substance
abuse; or (iv) the conviction of BIH of a felony offense involving moral turpitude,
controlled substances, securities laws violation, antitrust laws, tax or financial reporting
or physical violence.


“Class I and Class II Cause” shall not mean (1) bad judgment or negligence other than habitual
neglect of duty; (2) any act or omission believed by BIH in good faith to have been in, or not
opposed to, the interest of the Company (without intent to personally gain, directly or indirectly,
a profit or advantage to which BIH was not legally entitled); (3) any act or omission with respect
to which a determination could properly have been made by the Company that BIH met the applicable
standard of conduct for indemnification or reimbursement under the Company’s Operating Agreement or
applicable law in effect at the time of the act or omission; or (4) any act or omission with
respect to which notice of termination of employment of BIH is given more than twelve (12) months
after the earliest date a Director of the Company; not a party to the act or omission, knew of the
act or omission.





     “Voluntary Resignation by BIH for Good Reason” shall mean resignation for the
following: (i) the failure by the Company to cure a breach of the Employment Agreement,
provided BIH shall not be deemed to have voluntarily resigned with good reason without (a)
delivery to the Company of thirty (30) days’ advance written notice of termination with good
reason setting forth with particularity the reasons for BIH’s intention to terminate with
good reason, and (b) the opportunity for the Company to cure any breach within thirty (30)
days of receipt of notice of termination, or (ii) where BIH determines in good faith that
his or her status or responsibilities with the Company has or have diminished by action of
the employee of Company to which he or she reports, and further provided that
it shall not mean a resignation after or during which BIH has engaged in conduct described
as a Class II cause hereinabove..



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     2.3 Manner of Payment. The Redemption Price shall be payable at:




     (a) Death. The Redemption Price payable following the Death of BIH shall be
payable in cash at the Closing by the Company to the Member who will then pay BIH.




     (b) Other Triggering Events. The Redemption Price payable at Closing shall be
paid by Company to Member by delivery of a Single Payment Promissory Note in an amount equal
to the Redemption Price in the form attached as Exhibit B (“Note”). The Note shall have a
maturity date (“Maturity Date”) of the second anniversary of the Closing Date and shall bear
interest from the Closing Date to the Maturity Date at a rate equal to one (1) percentage
point less than the Prime Rate as published by The Wall Street Journal from time to time
during that period and at a rate five percent (5%) more than the Prime Rate after the
Maturity Date until paid in full. BIH shall receive payment from Member upon Member’s
receipt of payment from Company pursuant to the Note.



SECTION 3

Representations and Warranties




     3.1 Member’s Representations and Warranties. As a material inducement to the Company
and BIH to enter into this Agreement on the Effective Date, Member represents and warrants to the
Company and BIH as follows:




     (a) Title to Employee Units. Except for restrictions in the Operating
Agreement and BIH’s interest in the Employee Units under the Trust, Member has good and
marketable title to the Employee Units, free and clear of any and all liens, security
interests, restrictions, encumbrances, equities, options, claims, adverse claims, pledges
and other limitations on the ownership or voting of, or ability to sell, transfer and
convey, the Employee Units.




     (b) Member’s Authority and No Conflicts. Member has the capacity, right, power
and authority to enter into, execute and deliver this Agreement, to consummate the
transactions contemplated hereby and to comply with and fulfill the terms and conditions of
this Agreement. This Agreement constitutes a valid and binding obligation of Member,
enforceable against Member in accordance with its terms, except as the same may be limited
by bankruptcy, insolvency, moratorium or other similar laws affecting the enforcement of
creditor’s rights generally. Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will violate, conflict with or result
in a breach of any of the terms, conditions and provisions of, or constitute (with or
without the giving of notice or lapse of time, or both) a default under any agreement,
instrument, mortgage, judgment, order, decree or other restriction to which Member is a
party or by which any of Member’s property is bound.




     (c) Advice and Counsel. Member acknowledges that it has obtained the advice of
counsel, certified public accountants and/or other advisers in connection with this
Agreement, and no representations or warranties, oral or otherwise, except as provided in
this Agreement have been made to Member or to any such attorney, accountant or other



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adviser
as to the financial condition or prospects of the Company or the value of the Employee Units
on which Member has relied; rather, Member has relied entirely upon its own independent
investigation.




     (d) Consents. To Member’s knowledge, no consent (not obtained), approval,
order or authorization of, or registration, declaration or filing with, any federal, state
or local governmental or regulatory agency or authority is required to be made or obtained
by Member in order to execute this Agreement or to consummate the transaction contemplated
hereby.



     3.2 BIH’s Representations and Warranties. As a material inducement to the Member and
the Company to enter into this Agreement on the Effective Date, BIH represents and warrants to the
Member and the Company as follows:




     (a) Employee Units. BIH’s sole interest in the Employee Units, beneficial or
otherwise, is as a beneficiary under the Trust.




     (b) BIH’s Authority and No Conflicts. BIH has the capacity, right, power and
authority to enter into, execute and deliver this Agreement, to consummate the transactions
contemplated hereby and to comply with and fulfill the terms and conditions of this
Agreement. This Agreement constitutes a valid and binding obligation of BIH, enforceable
against BIH in accordance with its terms, except as the same may be limited by bankruptcy,
insolvency, moratorium or other similar laws affecting the enforcement of creditor’s rights
generally. Neither the execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will violate, conflict with or result in a breach of any of
the terms, conditions and provisions of, or constitute (with or without the giving of notice
or lapse of time, or both) a default under any agreement, instrument, mortgage, judgment,
order, decree or other restriction to which BIH is a party or by which any of BIH’s property
is bound.




     (c) Advice and Counsel. BIH acknowledges that he/she has obtained the advice
of counsel, certified public accountants and/or other advisers in connection with this
Agreement, and no representations or warranties, oral or otherwise, except as provided in
this Agreement have been made to BIH or to any such attorney, accountant or other adviser as
to the financial condition or prospects of the Company or the value of the Employee Units on
which BIH has relied; rather, BIH has relied entirely upon his/her own independent
investigation.




     (d) Consents. To BIH’s knowledge, no consent (not obtained), approval,
order or authorization of, or registration, declaration or filing with, any federal,
state or local governmental or regulatory agency or authority is required to be made or
obtained by BIH in order to execute this Agreement or to consummate the transaction
contemplated hereby.



     3.3 Company’s Representations and Warranties. As a material inducement to



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Member and
BIH to enter into this Agreement, the Company represents and warrants to Member and BIH as follows:




     (a) Organization and Power. The Company is a limited liability company duly
organized and validly existing under the laws of the State of Indiana, with all requisite
company power and authority to enter into and perform its obligations under this Agreement.




     (b) Company’s Authority and No Conflicts. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby have been duly
authorized by all necessary action of the Company. This Agreement constitutes a legal,
valid and binding obligation of the Company, enforceable against the Company in accordance
with its terms. Neither the execution of this Agreement nor the consummation of the
transactions contemplated hereby will violate, conflict with or result in a breach of any of
the terms, conditions or provisions of or constitute with or without giving of notice or
lapse of time, or both, a default under any agreement, instrument, mortgage, judgment,
order, decree or other restriction to which the Company is a party or by which any of its
property is bound.




     c) Consents. No consent (not obtained), approval, order or authorization of,
or registration, declaration or filing with, any federal, state or local governmental or
regulatory agency or authority is required to be made or obtained by the Company in order to
execute this Agreement or to consummate the transaction contemplated hereby.



SECTION 4

Closing




     4.1 Closing. The closing shall occur within thirty (30) days following the occurrence
of a Triggering Event and the determination of the Redemption Price.



     4.2 Deliveries by Member. At the Closing, Member and BIH shall deliver to the Company
an assignment of the Employee Units duly endorsed and other documents or instruments sufficient to
transfer all rights of Member and BIH in the Employee Units to the Company.



     4.3 Deliveries by the Company and Member. At the Closing, the Company shall deliver
to Member the Redemption Price in cash or the Note representing the Redemption Price,
as the case may be. The Member shall deliver to BIH the Redemption Price in cash as received
from the Company.



SECTION 5

Termination




     5.1 Termination by Consent. Member, BIH and Company may agree to terminate this
Agreement by their mutual written consent.



     5.2 Public Offering. At the sole discretion of the Company, this Agreement shall



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terminate on the date when any Registration Statement on Form S-1, S-2 or S-3 or successor forms
(“Registration Statement”) covering Common Units of the Company (or the common equity interests in
any business organization into which the Common Units are converted upon a transfer of the
Company’s business assets or reorganization) is declared effective by the United State Securities
and Exchange Commission (“SEC Effective Date”), it being the intent of the parties, but subject to
the sole discretion of the Company, to eliminate any redemption requirements relative to the
Employee Units if and when the Company completes an “initial public offering” of a common equity
interest. Any redemption pending but not Closed on the SEC Effective Date may be canceled by the
Company in the exercise of its sole discretion.



SECTION 6

Provisions of General Application




     6.1 Notices. All notices, requests, demands and other communications required or
permitted under this Agreement shall be in writing and shall be deemed to have been duly given on
the date of service if served personally on the party to whom notice is given, or on the third
(3rd) day after mailing to the party to whom notice is to be given by reputable courier
service and properly addressed to the intended recipient at the address herein set forth or to such
other address(es) as any party shall have specified by notice in writing to the other party.



     6.2 Further Assurances. The parties agree that, following the Closing, they will from
time to time, upon request of any other party hereto and without further consideration, execute,
acknowledge and deliver in proper form any further instruments and take such other action as such
other party may reasonably require in order to effectively carry out the intents and purposes of
this Agreement.



     6.3 Governing Law; Consent to Jurisdiction; Severability. This Agreement, and all
transactions contemplated hereby, shall be governed, construed and enforced in all respects in
accordance with the laws of the State of Indiana. The parties hereto agree that all disputes under
or with respect to this Agreement or the transaction contemplated hereby shall be resolved by
litigation in Marion County Circuit or Superior Court or the United States District Court for the
Southern District of Indiana, and each of the parties irrevocably submits to the jurisdiction of
such forums and irrevocably waives any objection the party may have based upon improper venue,
forum non conveniens or similar doctrines or rules.



     6.4 Successors and Assignees. Whenever used, the words “Member”, “BIH” and “Company”
shall be deemed to include the respective successors and assigns of such parties. All of the terms
and provisions of this Agreement shall be binding upon and inure to the benefit of each party and
their respective heirs, personal representatives, successors and assigns; provided,
however, that the benefits and obligations of any party hereto, except for the Company, may
not be assigned without the other parties’ prior written consent.



     6.5 Expenses. Each of the parties shall pay its own expenses incurred in connection
with the transactions provided for in this Agreement.



15









 





     6.6 Attorneys’ Fees. Should any action be brought to enforce the terms of this
Agreement, the prevailing party in any such action shall be entitled to recover reasonable
attorneys’ fees incurred in the action in addition to any remedies otherwise available.



     6.7 Modifications. This Agreement may not be changed, amended or modified orally.
This Agreement may be changed, amended or modified only by a written instrument executed by the
parties hereto.



     6.8 Non-Waiver. Neither the waiver of any breach nor the failure to enforce any term
or condition of, this Agreement shall operate as a waiver or release of any such term or condition,
nor constitute nor be deemed a waiver or release of any other rights, in law or at equity, or
claims which any party may have against any other party for any matter arising out of, connected
with or based upon this Agreement. No waiver shall be enforceable against any party hereto unless
set forth in a written instrument or agreement signed by such party.



     6.9 Captions. The captions of this Agreement are for convenience only and shall not
be deemed to affect the meaning or interpretation of any provision of this Agreement.



     6.10 Entire Agreement. This Agreement, together with the Operating Agreement for the
Company (as amended), and the Employment Agreement (collectively, the “Other Agreements”) contains
the entire understanding as to the subject matter hereof. There are no representations, promises,
warranties, covenants or undertakings relating hereto other than those expressly set forth or
provided for in the Closing documents and the Other Agreements. Except for the Other Agreements,
this Agreement supersedes all prior agreements and understandings of the parties hereto with
respect to the transactions contemplated hereby.



     6.11 Survival. The representations, warranties and covenants of the parties contained
in this Agreement shall survive the Closing.



     6.12 Trustee Exculpatory Clause. Except for its obligations under the Company’s
Operating Agreement, Member shall not incur any personal liability or be subjected to any claim,
judgment or decree for anything it or its agents or attorneys may do or omit to do in or about the
Employee Units or under the provisions of this Agreement or said Trust Agreement referenced
herein, or any amendment thereof, any and all such liability being hereby expressly waived and
released by the BIH.



     6.13 BIH Indemnity. BIH hereby agrees to defend, indemnify and hold harmless the
Member, the Trust and the Company from any liability, claim or expense, including without
limitation, attorneys’ and other consultants’ fees resulting from or in any way related to the
valuation of a beneficial interest in the Units, the Units themselves or any equity interests
referenced in Section 5.2 hereof, said indemnity to survive any termination of this Agreement.



     6.14 Unfunded Arrangement. BIH and any other person or persons having or claiming a
right to payments hereunder or to any interest in this Agreement shall rely solely on the unsecured
promise of the Company set forth herein, and nothing in this Agreement shall be construed to give



16









 







BIH or any other person or persons any right, title, interest or claim in or to any specific asset,
fund, reserve, account or property of any kind whatsoever owned by the Company or in which it may
have any right, title or interest now or in the future, but BIH shall have the right to enforce its
claim against the Company in the same manner as any unsecured creditor.



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



	 	 	 	 	 	 	 	 	 
	 	 	MEMBER
	 
	 	 	 	 	 	 	 	 
	 	 	 
	 	 	Joseph Chalhoub, as Trustee of the Heritage-Crystal
Clean Key Employee Membership Interest Trust
Agreement dated February 1, 2002, as amended
(“Trust”)
	 
	 	 	 	 	 	 	 	 
	 	 	BENEFICIAL INTEREST HOLDER
	 
	 	 	 	 	 	 	 	 
	 	 	 
	 	 	Name/Print:	 	 
	 

	 	 	 	 	 	 	 	 
	 	 	Title:	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	COMPANY
	 	 	HERITAGE-CRYSTAL CLEAN, LLC
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	Joseph Chalhoub, President







17









 








EXHIBIT A TO UNIT REDEMPTION AGREEMENT-GENERAL




Employee Unit Redemption Price Upon Certain Triggering Events




	 	 	 	 	 
	 	 	Date of	 	 
	Triggering Event	 	Occurrence	 	Redemption Price
	Death

	 	Any time
	 	5 times EBITDA Formula Per Unit
	 
	 	 	 	 
	Disability,
Resignation for
Good
Reason/Termination
by Company without
Class I or Class II
Cause

	 	Any time
	 	5 times EBITDA Formula Per Unit
	 
	 	 	 	 
	Resignation other
than for good
reason (without
Class II Cause) or
Termination by
Company with Class
I Cause

	 	Any time
	 	3 times EBITDA Formula Per Unit
	 
	 	 	 	 
	Resignation other than for good reason (with Class II Cause) or Termination by Company with Class II Cause

	 	Any time
	 	Up to 3 times EBITDA Formula
Per Unit, subject to the sole
discretion of the president of
the Company





“EBITDA Formula” refers to the average annual earnings before interest, taxes, depreciation and
amortization reflected on the income statement of the Company for the last 2 full fiscal years of
the Company occurring before the Triggering Event multiplied by the indicated multiple minus (i)
any debt on the Company’s balance sheet on the last day of the second year used to make the
calculation, and (ii) any outstanding Cumulative Preferred Return and unrecovered Capital
Contribution for Preferred Units on that same date.




18









 








EXHIBIT B TO UNIT REDEMPTION AGREEMENT-GENERAL

PROMISSORY NOTE




Maturity Date:      [2nd Anniversary of Closing] 

Indianapolis, Indiana




$                    




     FOR VALUE RECEIVED, on or before the second (2nd) anniversary date of the Closing,
as defined in a Unit Redemption Agreement between Joseph Chalhoub, as Trustee of the Heritage Key
Employee Membership Interest Trust Agreement, and Heritage-Crystal Clean, LLC, dated February 1,
2002, as amended (the “Maturity Date”), Heritage-Crystal Clean, LLC, an Indiana limited liability
company having its principal place of business at 5400 West 86th Street, Indianapolis,
Indiana 46268 (the “Maker”), hereby promises to pay to the order of Joseph Chalhoub, as Trustee of
the Heritage Key Employee Membership Interest Trust Agreement (“Holder”), or its assigns, at 2250
Point Boulevard, Suite 250, Elgin, Illinois 60123, or at such other place as the Holder hereof may
designate in writing, in lawful money of the United States of America, the principal sum of
                                         Dollars ($                    ), together with (i) interest on the
unpaid principal balance existing from time to time at a rate equal to one percent (1%) less than
the prime rate as published daily by The Wall Street Journal (“Prime Rate”), beginning as of the
Closing through the Maturity Date; and (ii) interest after the Maturity Date at a rate equal to
five percent (5%) more than the Prime Rate until paid in full.



     Interest shall be paid on actual daily balances of outstanding principal for the exact number
of days principal remains outstanding from and after the Closing, and shall be computed on the
basis of a three hundred sixty-five (365) day year.



     The entire unpaid principal balance of this Note shall be due and payable on the Maturity
Date. The principal balance of this Note may be prepaid, in whole or in part, at any time without
notice, premium or penalty.



     Upon the occurrence of any Default and at any time thereafter prior to the Default being
cured, the entire balance of this Note, irrespective of the Maturity Date, together with attorneys’
fees and other costs and expenses incurred in collecting and enforcing payment or performance
hereof, and with interest from the date of Default on the unpaid principal balance hereof at the
rate specified above, shall, at the election of the Holder, and without relief from valuation and
appraisement laws, become immediately due and payable.



     The occurrence of any of the following events shall be considered an event of “Default” under
this Note:




     (a) Maker shall fail to pay any installment of principal and/or interest under this
Note (or any extension, renewal, amendment, restatement or replacement of this Note) when
due; or




     (b) Maker shall (i) institute or consent to any proceedings in insolvency, bankruptcy,



19









 







moratorium or other similar laws affecting the enforcement of creditor’s rights generally,
or for the adjustment, liquidation, extension or composition or arrangement of debts or for
any other relief under any bankruptcy or insolvency law or laws relating to the relief or
reorganization of debtors, (ii) become the subject of an order for relief under the United
States Bankruptcy Code or in any manner is adjudged insolvent, or (iii) make an assignment
for the benefit of creditors or admit in writing an inability to pay debts as they become
due.



     All notices and other communications in connection with this Note shall be sent in writing to
Holder or to the Maker, as the case may be, at their respective addresses set forth in the
Agreement to which this Note is attached as an Exhibit.



     Maker irrevocably waives diligence in collection and prosecution, demand, presentment for
payment, notice of dishonor, protest, notice of protest, dishonor, and notice of nonpayment of this
Note and expressly agrees that this Note and any payment coming due hereunder may be extended or
otherwise modified from time to time without in any way affecting liability hereunder.



     If any provision of this Note is prohibited by or invalid under applicable law, that provision
will be ineffective to the extent of the prohibition or invalidity, without invalidating the rest
of that provision or the remaining provisions of this Note. This Note shall bind the Maker and the
Maker’s successors, legal representatives and assigns. No provision of this Note may be waived,
amended, released or otherwise changed, except by a writing signed by the party against which
enforcement is sought.



     The trustee executing this Note has full power and authority to enter into this Note and to
assume and perform all of its obligations hereunder. The execution and delivery of this Note and
the performance by Maker of its obligations hereunder have been duly authorized by Maker and no
further action or approval is required in order to constitute this Note as a binding and
enforceable obligation of Maker; and the execution and delivery of this Note and the consummation
of the transaction contemplated hereunder on the part of Maker do not and will not violate any
provisions of Maker’s partnership agreement or other agreement of Maker.



     This Note shall be construed according to and governed by the laws of the State of Indiana.



     IN WITNESS WHEREOF, Maker has executed this Note as of the day and year first hereinabove
written.



	 	 	 	 	 
	 	 	HERITAGE-CRYSTAL CLEAN, LLC
	 
	 	 	 	 
	 

	 	By	 	 
	 

	 	 	 	 
	 

	 	 	 	Joseph Chalhoub, President






20









 





EXHIBIT 2

UNIT REDEMPTION AGREEMENT-OIL DIVISION




[Joseph Chalhoub, as Trustee of the Heritage-Crystal Clean

Key Employee Membership Interest Trust Agreement

dated February 1, 2002, as amended (“Trust”)]

(                                        , beneficial interest holder)




     This UNIT REDEMPTION AGREEMENT (“Agreement”), made this ___ day of                     , 200___
(“Effective Date”), by and among Joseph Chalhoub, as Trustee (“Member”) of the Heritage-Crystal
Clean Key Employee Membership Interest Trust Agreement dated February 1, 2002, as amended
(“Trust”), c/o Heritage-Crystal Clean, L.L.C., 2175 Point Boulevard, Suite 375, Elgin, Illinois
60123,                     ,                     , as beneficial interest holder under the Trust
(“BIH”), and Heritage-Crystal Clean, LLC, an Indiana limited liability company (“Company”);



WITNESSETH THAT:




     WHEREAS, all members of the Company are parties to the Company’s Restated Operating Agreement
dated October 26, 2004, as amended (collectively, “Operating Agreement”); and



     WHEREAS, Member owns certain Common Units in the Company (“Units”) for which the Company has
received Ten Dollars ($10.00) per Unit; and



     WHEREAS, BIH has entered into an Employment Agreement with the Company dated                     ,
200___(“Employment Agreement”); and



     WHEREAS, pursuant to Section 7 of the Company’s Preorganization Agreement dated August 10,
1999, as amended, Member is entitled to identify certain key personnel of the Company to receive
the Units subject to the terms of said Section 7; and



     WHEREAS, the parties hereto have agreed that Member shall own                      (___) Common
Units for the benefit of BIH (“Employee Units”); and



     WHEREAS, the parties hereto agree that the attached Exhibit A describes the general plan to be
observed for the development of the Vacuum and Oil Division and also describes the arrangement to
be used to compute periodic Sales, General & Administrative charges to be booked in the accounts of
the Company’s Vacuum and Oil Division (the “Division”); and



     WHEREAS, Member, BIH and the Company desire to enter into certain agreements relative to the
repurchase of the Employee Units upon the termination of BIH’s employment with the Company for any
reason.



     NOW, THEREFORE, in consideration of the mutual promises set forth herein and other



21









 







good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged by both
parties, the parties hereby agree as follows:



SECTION 1

Forfeiture of Units




     All or a portion of the beneficial interests in the Units are subject to forfeiture based on
the financial performance of the Company’s Vacuum and Oil Division (the “Division”).



     For purposes of this Section 1, the following terms have the meaning set forth below:




     (a) “Performance Period Commencement Date” shall mean January 1, 2007.




     (b) “Performance Target Date” shall mean December 31, 2012.




     (c) “Performance Period” shall mean the period commencing on the Performance Period
Commencement Date and ending on the Performance Target Date.




     (d) “EBITDA” shall mean the Company’s average earnings for the last fiscal year of the
Company solely from the Division, before taking into account interest, income taxes,
depreciation or amortization expenses reflected on an income statement for the Division for
said period.




     (e) “Estimated Enterprise Value” shall mean EBITDA as of the Performance Target Date
multiplied by five (5), less one hundred percent (100%) of Debt.




     (f) “Debt” shall mean any debt of the Division as reflected on a balance sheet for the
Division as of the Performance Target Date, which shall include, in the Company’s sole
discretion, the amount in any fiscal quarter (i) when Division Cash Generation from
Operations is positive, that the Division’s Cash Use for Balance Sheet Items exceeds the
Division’s Cash Generation from Operations, and (ii) when Division Cash Generation from
Operations is negative, equal to said negative Division Cash Generation from Operations plus
the Division’s Cash Use for Balance Sheet Items; and for purposes of this Section, the
Division’s “Cash Generation from Operations” shall mean the Division’s after-tax income
(including deductions for assessed capital charges), adjusted to add back the charges for
depreciation and amortization, and the Division’s “Cash Use for Balance Sheet Items” shall
mean the Division’s increase in accounts receivable and other working capital, investment in
fixed assets, acquisitions, goodwill and all other balance sheet investments.




     (g) “Initial Value” shall mean the Estimated Enterprise Value of the Division of the
Company at the Performance Period Commencement Date, which the parties hereto
agree is Three Million Five Hundred Forty-One Thousand Five Hundred Dollars
($3,541,500.00).



     In the event, upon the Performance Target Date, the Estimated Enterprise Value has increased
during the Performance Period from the Initial Value by a minimum of Twenty Five



22









 







Million Dollars
($25,000,000.00) (“Value Increase Target”), no portion of the beneficial interest in the Units will
be forfeited. In the event, upon the Performance Target Date, the Estimated Enterprise Value has
increased during the Performance Period from the Initial Value by less than the Value Increase
Target, the portion of the beneficial interest in the Units for which the beneficial interest
thereof shall not be forfeited, will be determined by multiplying one hundred percent (1000%) by a
fraction, the numerator of which is the Estimated Enterprise Value as of the Performance Target
Date less the Initial Value, and the denominator of which is the Value Increase Target, with the
balance of Units for which there is a beneficial interest hereunder to be forfeited, provided that
no fraction of one Unit for which there is a beneficial interest hereunder may be forfeited
hereunder. In the event of a Triggering Event pursuant to Section 2.2(a), (b) or (d) hereof, prior
to the Performance Target Date, the Estimated Enterprise Value will be computed as of the most
recently completed full fiscal year. In the event of a Triggering Event pursuant to Section 2.2(c)
hereof, prior to the Performance Target Date, all of the beneficial interest in the Units will be
forfeited.



SECTION 2

Redemption of Units




     2.1 Redemption; Redemption Price; and Closing. Upon the occurrence of a “Triggering
Event” as defined in Section 2.2 below, Member agrees to sell, transfer and convey to the Company,
and the Company agrees to purchase and redeem from Member at closing (“Closing”) as provided for in
Section 3 below, the fully vested Employee Units for a purchase price (“Redemption Price”) equal to
the product of (i) the Unit Price determined in the manner provided in Exhibit B attached as
applicable to the first Triggering Event to occur times (ii) the number of fully vested Employee
Units owned by Member, and upon receipt thereof, Member agrees to pay the Redemption Price to BIH.



     2.2 Triggering Events. The following occurrences are “Triggering Events” for purposes
of this Agreement having differing consequences on the Redemption Price depending upon when
occurring, all as provided in Exhibit B:




     (a) Death. The death of BIH;




     (b) Disability. The disability of BIH as hereinafter defined;




     (c) Termination With Class I or Class II Cause/Resignation Without Good Reason.
The termination of BIH’s employment with the Company with Class I or Class II cause or the
resignation of BIH from employment with the Company without good reason, as hereinafter
defined; and




     (d) Termination Without Class I or Class II Cause/Resignation with Good Reason.
The termination of BIH’s employment with the Company without Class I or Class II cause or
the resignation of BIH from employment with the Company with good reason, as hereinafter
defined.



23









 





     Solely for purposes of Exhibit B hereto, and in no way negating or amending Company’s rights
to terminate BIH or any other rights Company may have under the Employment Agreement, the following
definitions shall apply:




     “Disability” shall mean the following: if a licensed physician reasonably
selected by the Company certifies in writing that BIH is physically or mentally incapable of
performing his or her duties of employment with the Company and such condition continues for
a continuous six (6) month period.




     “Termination by Company with Class I Cause” shall mean termination for the
continued willful or grossly negligent failure by BIH to substantially perform the duties of
employment under the Employment Agreement (other than failure resulting from BIH’s
incapacity due to physical or mental illness). Notwithstanding the foregoing, BIH shall not
be deemed to have been terminated with Class I cause without (1) delivery to BIH of thirty
(30) days’ advance written notice of termination for cause setting forth with particularity
the reasons for the Company’s intention to terminate for cause, and (2) the opportunity for
BIH to cure said asserted cause within thirty (30) days of receipt of notice of termination.




     “Termination by Company with Class II Cause” shall mean termination for the following:
(i) the breach by BIH of the provisions of the Employment Agreement; (ii) the commission by
BIH of any act of fraud, embezzlement or dishonesty with the Company’s assets; (iii) the
failure of BIH to adhere to the Company’s published policy regarding drug and substance
abuse; or (iv) the conviction of BIH of a felony offense involving moral turpitude,
controlled substances, securities laws violation, antitrust laws, tax or financial reporting
or physical violence.


“Class I and Class II Cause” shall not mean (1) bad judgment or negligence other than habitual
neglect of duty; (2) any act or omission believed by BIH in good faith to have been in, or not
opposed to, the interest of the Company (without intent to personally gain, directly or indirectly,
a profit or advantage to which BIH was not legally entitled); (3) any act or omission with respect
to which a determination could properly have been made by the Company that BIH met the applicable
standard of conduct for indemnification or reimbursement under the Company’s Operating Agreement or
applicable law in effect at the time of the act or omission; or (4) any act or omission with
respect to which notice of termination of employment of BIH is given more than twelve (12) months
after the earliest date a Director of the Company; not a party to the act or omission, knew of the
act or omission.





     “Voluntary Resignation by BIH for Good Reason” shall mean resignation for the
following: (i) the failure by the Company to cure a breach of the Employment Agreement,
provided BIH shall not be deemed to have voluntarily resigned with good reason without (a)
delivery to the Company of thirty (30) days’ advance written notice of termination with good
reason setting forth with particularity the reasons for BIH’s intention to terminate with
good reason, and (b) the opportunity for the Company to cure any breach within thirty (30)
days of receipt of notice of termination, or (ii) where BIH determines in good faith that
his or her status or responsibilities with the Company has or have diminished by action of
the



24









 







employee of Company to which he or she reports, and further provided that it shall not
mean a resignation after or during which BIH has engaged in conduct described as a Class II
cause hereinabove..



     2.3 Manner of Payment. The Redemption Price shall be payable at:




     (a) Death. The Redemption Price payable following the Death of BIH shall be
payable in cash at the Closing by the Company to the Member who will then pay BIH.




     (b) Other Triggering Events. The Redemption Price payable at Closing shall be
paid by Company to Member by delivery of a Single Payment Promissory Note in an amount equal
to the Redemption Price in the form attached as Exhibit C (“Note”). The Note shall have a
maturity date (“Maturity Date”) of the second anniversary of the Closing Date and shall bear
interest from the Closing Date to the Maturity Date at a rate equal to one (1) percentage
point less than the Prime Rate as published by The Wall Street Journal from time to time
during that period and at a rate five percent (5%) more than the Prime Rate after the
Maturity Date until paid in full. BIH shall receive payment from Member upon Member’s
receipt of payment from Company pursuant to the Note.



SECTION 3

Representations and Warranties




     3.1 Member’s Representations and Warranties. As a material inducement to the Company
and BIH to enter into this Agreement on the Effective Date, Member represents and warrants to the
Company and BIH as follows:




     (a) Title to Employee Units. Except for restrictions in the Operating
Agreement and BIH’s interest in the Employee Units under the Trust, Member has good and
marketable title to the Employee Units, free and clear of any and all liens, security
interests, restrictions, encumbrances, equities, options, claims, adverse claims, pledges
and other limitations on the ownership or voting of, or ability to sell, transfer and
convey, the Employee Units.




     (b) Member’s Authority and No Conflicts. Member has the capacity, right, power
and authority to enter into, execute and deliver this Agreement, to consummate the
transactions contemplated hereby and to comply with and fulfill the terms and conditions
of this Agreement. This Agreement constitutes a valid and binding obligation of
Member, enforceable against Member in accordance with its terms, except as the same may be
limited by bankruptcy, insolvency, moratorium or other similar laws affecting the
enforcement of creditor’s rights generally. Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby will violate,
conflict with or result in a breach of any of the terms, conditions and provisions of, or
constitute (with or without the giving of notice or lapse of time, or both) a default under
any agreement, instrument, mortgage, judgment, order, decree or other restriction to which
Member is a party or by which any of Member’s property is bound.



25









 






     (c) Advice and Counsel. Member acknowledges that it has obtained the advice of
counsel, certified public accountants and/or other advisers in connection with this
Agreement, and no representations or warranties, oral or otherwise, except as provided in
this Agreement have been made to Member or to any such attorney, accountant or other adviser
as to the financial condition or prospects of the Company or the value of the Employee Units
on which Member has relied; rather, Member has relied entirely upon its own independent
investigation.




     (d) Consents. To Member’s knowledge, no consent (not obtained), approval,
order or authorization of, or registration, declaration or filing with, any federal, state
or local governmental or regulatory agency or authority is required to be made or obtained
by Member in order to execute this Agreement or to consummate the transaction contemplated
hereby.



     3.2 BIH’s Representations and Warranties. As a material inducement to the Member and
the Company to enter into this Agreement on the Effective Date, BIH represents and warrants to the
Member and the Company as follows:




     (a) Employee Units. BIH’s sole interest in the Employee Units, beneficial or
otherwise, is as a beneficiary under the Trust.




     (b) BIH’s Authority and No Conflicts. BIH has the capacity, right, power and
authority to enter into, execute and deliver this Agreement, to consummate the transactions
contemplated hereby and to comply with and fulfill the terms and conditions of this
Agreement. This Agreement constitutes a valid and binding obligation of BIH, enforceable
against BIH in accordance with its terms, except as the same may be limited by bankruptcy,
insolvency, moratorium or other similar laws affecting the enforcement of creditor’s rights
generally. Neither the execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will violate, conflict with or result in a breach of any of
the terms, conditions and provisions of, or constitute (with or without the giving of notice
or lapse of time, or both) a default under any agreement, instrument, mortgage, judgment,
order, decree or other restriction to which BIH is a party or by which any of BIH’s property
is bound.




     (c) Advice and Counsel. BIH acknowledges that he/she has obtained the advice
of counsel, certified public accountants and/or other advisers in connection with this
Agreement, and no representations or warranties, oral or otherwise, except as provided in
this Agreement have been made to BIH or to any such attorney, accountant or other adviser as
to the financial condition or prospects of the Company or the value of the Employee Units on
which BIH has relied; rather, BIH has relied entirely upon his/her own independent
investigation.




     (d) Consents. To BIH’s knowledge, no consent (not obtained), approval, order
or authorization of, or registration, declaration or filing with, any federal, state or
local governmental or regulatory agency or authority is required to be made or obtained by



26









 







BIH in order to execute this Agreement or to consummate the transaction contemplated hereby.



     3.3 Company’s Representations and Warranties. As a material inducement to Member and
BIH to enter into this Agreement, the Company represents and warrants to Member and BIH as follows:




     (a) Organization and Power. The Company is a limited liability company duly
organized and validly existing under the laws of the State of Indiana, with all requisite
company power and authority to enter into and perform its obligations under this Agreement.




     (b) Company’s Authority and No Conflicts. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby have been duly
authorized by all necessary action of the Company. This Agreement constitutes a legal,
valid and binding obligation of the Company, enforceable against the Company in accordance
with its terms. Neither the execution of this Agreement nor the consummation of the
transactions contemplated hereby will violate, conflict with or result in a breach of any of
the terms, conditions or provisions of or constitute with or without giving of notice or
lapse of time, or both, a default under any agreement, instrument, mortgage, judgment,
order, decree or other restriction to which the Company is a party or by which any of its
property is bound.




     c) Consents. No consent (not obtained), approval, order or authorization of,
or registration, declaration or filing with, any federal, state or local governmental or
regulatory agency or authority is required to be made or obtained by the Company in order to
execute this Agreement or to consummate the transaction contemplated hereby.



SECTION 4

Closing




     4.1 Closing. The closing shall occur within thirty (30) days following the occurrence
of a Triggering Event and the determination of the Redemption Price.



     4.2 Deliveries by Member. At the Closing, Member and BIH shall deliver to the Company
an assignment of the Employee Units duly endorsed and other documents or instruments sufficient to
transfer all rights of Member and BIH in the Employee Units to the Company.



     4.3 Deliveries by the Company and Member. At the Closing, the Company shall deliver
to Member the Redemption Price in cash or the Note representing the Redemption Price, as the case
may be. The Member shall deliver to BIH the Redemption Price in cash as received from the Company.



27









 





SECTION 5

Termination




     5.1 Termination by Consent. Member, BIH and Company may agree to terminate this
Agreement by their mutual written consent.



     5.2 Public Offering. At the sole discretion of the Company, this Agreement shall
terminate on the date when any Registration Statement on Form S-1, S-2 or S-3 or successor forms
(“Registration Statement”) covering Common Units of the Company (or the common equity interests in
any business organization into which the Common Units are converted upon a transfer of the
Company’s business assets or reorganization) is declared effective by the United State Securities
and Exchange Commission (“SEC Effective Date”), it being the intent of the parties, but subject to
the sole discretion of the Company, to eliminate any redemption requirements relative to the
Employee Units if and when the Company completes an “initial public offering” of a common equity
interest (“IPO”). Any redemption pending but not Closed on the SEC Effective Date may be canceled
by the Company in the exercise of its sole discretion. In the event of an IPO, any equity interest
issued to BIH shall be subject to (i) forfeiture provisions as described in Section 1 hereof, and
(ii) a Pledge Agreement and related Escrow Agreement to be executed by BIH to secure the
possibility of forfeiture of any of said equity interest, said Agreements in form prepared and
approved by the Company.



SECTION 6

Provisions of General Application




     6.1 Notices. All notices, requests, demands and other communications required or
permitted under this Agreement shall be in writing and shall be deemed to have been duly given on
the date of service if served personally on the party to whom notice is given, or on the third
(3rd) day after mailing to the party to whom notice is to be given by reputable courier
service and properly addressed to the intended recipient at the address herein set forth or to such
other address(es) as any party shall have specified by notice in writing to the other party.



     6.2 Further Assurances. The parties agree that, following the Closing, they will from
time to time, upon request of any other party hereto and without further consideration, execute,
acknowledge and deliver in proper form any further instruments and take such other action as such
other party may reasonably require in order to effectively carry out the intents and purposes of
this Agreement.



     6.3 Governing Law; Consent to Jurisdiction; Severability. This Agreement, and all
transactions contemplated hereby, shall be governed, construed and enforced in all respects in
accordance with the laws of the State of Indiana. The parties hereto agree that all disputes under
or with respect to this Agreement or the transaction contemplated hereby shall be resolved by
litigation in Marion County Circuit or Superior Court or the United States District Court for the
Southern District of Indiana, and each of the parties irrevocably submits to the jurisdiction of
such forums and irrevocably waives any objection the party may have based upon improper venue,
forum non conveniens or similar doctrines or rules.



28









 





     6.4 Successors and Assignees. Whenever used, the words “Member”, “BIH” and “Company”
shall be deemed to include the respective successors and assigns of such parties. All of the terms
and provisions of this Agreement shall be binding upon and inure to the benefit of each party and
their respective heirs, personal representatives, successors and assigns; provided,
however, that the benefits and obligations of any party hereto, except for the Company, may
not be assigned without the other parties’ prior written consent.



     6.5 Expenses. Each of the parties shall pay its own expenses incurred in connection
with the transactions provided for in this Agreement.



     6.6 Attorneys’ Fees. Should any action be brought to enforce the terms of this
Agreement, the prevailing party in any such action shall be entitled to recover reasonable
attorneys’ fees incurred in the action in addition to any remedies otherwise available.



     6.7 Modifications. This Agreement may not be changed, amended or modified orally.
This Agreement may be changed, amended or modified only by a written instrument executed by the
parties hereto.



     6.8 Non-Waiver. Neither the waiver of any breach nor the failure to enforce any term
or condition of, this Agreement shall operate as a waiver or release of any such term or condition,
nor constitute nor be deemed a waiver or release of any other rights, in law or at equity, or
claims which any party may have against any other party for any matter arising out of, connected
with or based upon this Agreement. No waiver shall be enforceable against any party hereto unless
set forth in a written instrument or agreement signed by such party.



     6.9 Captions. The captions of this Agreement are for convenience only and shall not
be deemed to affect the meaning or interpretation of any provision of this Agreement.



     6.10 Entire Agreement. This Agreement, together with the Operating Agreement for the
Company (as amended), and the Employment Agreement (collectively, the “Other Agreements”) contains
the entire understanding as to the subject matter hereof. There are no representations, promises,
warranties, covenants or undertakings relating hereto other than those expressly set forth or
provided for in the Closing documents and the Other Agreements. Except for the Other Agreements,
this Agreement supersedes all prior agreements and understandings of the parties hereto with
respect to the transactions contemplated hereby.



     6.11 Survival. The representations, warranties and covenants of the parties contained
in this Agreement shall survive the Closing.



     6.12 Trustee Exculpatory Clause. Except for its obligations under the Company’s
Operating Agreement, Member shall not incur any personal liability or be subjected to any claim,
judgment or decree for anything it or its agents or attorneys may do or omit to do in or about the
Employee Units or under the provisions of this Agreement or said Trust Agreement referenced
herein, or any amendment thereof, any and all such liability being hereby expressly waived and



29









 







released by the BIH.



     6.13 BIH Indemnity. BIH hereby agrees to defend, indemnify and hold harmless the
Member, the Trust and the Company from any liability, claim or expense, including without
limitation, attorneys’ and other consultants’ fees resulting from or in any way related to the
valuation of a beneficial interest in the Units, the Units themselves or any equity interest
referenced in Section 5.2 hereof, said indemnity to survive any termination of this Agreement.



     6.14 Unfunded Arrangement. BIH and any other person or persons having or claiming a
right to payments hereunder or to any interest in this Agreement shall rely solely on the unsecured
promise of the Company set forth herein, and nothing in this Agreement shall be construed to give
BIH or any other person or persons any right, title, interest or claim in or to any specific asset,
fund, reserve, account or property of any kind whatsoever owned by the Company or in which it may
have any right, title or interest now or in the future, but BIH shall have the right to enforce its
claim against the Company in the same manner as any unsecured creditor.



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



	 	 	 	 	 	 	 	 	 
	 	 	MEMBER
	 
	 	 	 	 	 	 	 	 
	 	 	 
	 	 	Joseph Chalhoub, as Trustee of the Heritage-Crystal
Clean Key Employee Membership Interest Trust
Agreement dated February 1, 2002, as amended
(“Trust”)
	 
	 	 	 	 	 	 	 	 
	 	 	BENEFICIAL INTEREST HOLDER
	 
	 	 	 	 	 	 	 	 
	 	 	 
	 	 	Name/Print:	 	 
	 

	 	 	 	 	 	 	 	 
	 	 	Title:	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	COMPANY
	 	 	HERITAGE-CRYSTAL CLEAN, LLC
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	Joseph Chalhoub, President







30









 








EXHIBIT A TO UNIT REDEMPTION AGREEMENT — VACUUM AND OIL DIVISION




General Financial Plan for Vacuum and Oil Division

And

Sales, General & Administrative Cost Allocation Method




31









 





EXHIBIT B TO UNIT REDEMPTION AGREEMENT-OIL DIVISION




Employee Unit Redemption Price Upon Certain Triggering Events




	 	 	 	 	 
	 	 	Date of	 	 
	Triggering Event	 	Occurrence	 	Redemption Price
	Death

	 	Any time
	 	5 times EBITDA Formula Per Unit
	 
	 	 	 	 
	Disability,
Resignation for
Good
Reason/Termination
by Company without
Class I or Class II
Cause

	 	Any time
	 	5 times EBITDA Formula Per Unit
	 
	 	 	 	 
	Resignation other
than for good
reason (without
Class II Cause) or
Termination by
Company with Class
I Cause

	 	Any time
	 	3 times EBITDA Formula Per Unit
	 
	 	 	 	 
	Resignation other than for good reason (with Class II Cause) or Termination by Company with Class II Cause

	 	Any time
	 	Up to 3 times EBITDA Formula
Per Unit, subject to the sole
discretion of the president of
the Company





“EBITDA Formula” refers to the average annual earnings before interest, taxes, depreciation and
amortization reflected on the income statement of the Company for the last 2 full fiscal years of
the Company occurring before the Triggering Event multiplied by the indicated multiple minus (i)
any debt on the Company’s balance sheet on the last day of the second year used to make the
calculation, and (ii) any outstanding Cumulative Preferred Return and unrecovered Capital
Contribution for Preferred Units on that same date.




32









 








EXHIBIT C TO UNIT REDEMPTION AGREEMENT-OIL DIVISION

PROMISSORY NOTE




Maturity Date:      [2nd Anniversary of Closing] 

Indianapolis, Indiana




$                    




     FOR VALUE RECEIVED, on or before the second (2nd) anniversary date of the Closing,
as defined in a Unit Redemption Agreement between Joseph Chalhoub, as Trustee of the Heritage Key
Employee Membership Interest Trust Agreement, and Heritage-Crystal Clean, LLC, dated February 1,
2002, as amended (the “Maturity Date”), Heritage-Crystal Clean, LLC, an Indiana limited liability
company having its principal place of business at 5400 West 86th Street, Indianapolis,
Indiana 46268 (the “Maker”), hereby promises to pay to the order of Joseph Chalhoub, as Trustee of
the Heritage Key Employee Membership Interest Trust Agreement (“Holder”), or its assigns, at 2250
Point Boulevard, Suite 250, Elgin, Illinois 60123, or at such other place as the Holder hereof may
designate in writing, in lawful money of the United States of America, the principal sum of
                                         Dollars ($                    ), together with (i) interest on the
unpaid principal balance existing from time to time at a rate equal to one percent (1%) less than
the prime rate as published daily by The Wall Street Journal (“Prime Rate”), beginning as of the
Closing through the Maturity Date; and (ii) interest after the Maturity Date at a rate equal to
five percent (5%) more than the Prime Rate until paid in full.



     Interest shall be paid on actual daily balances of outstanding principal for the exact number
of days principal remains outstanding from and after the Closing, and shall be computed on the
basis of a three hundred sixty-five (365) day year.



     The entire unpaid principal balance of this Note shall be due and payable on the Maturity
Date. The principal balance of this Note may be prepaid, in whole or in part, at any time without
notice, premium or penalty.



     Upon the occurrence of any Default and at any time thereafter prior to the Default being
cured, the entire balance of this Note, irrespective of the Maturity Date, together with attorneys’
fees and other costs and expenses incurred in collecting and enforcing payment or performance
hereof, and with interest from the date of Default on the unpaid principal balance hereof at the
rate specified above, shall, at the election of the Holder, and without relief from valuation and
appraisement laws, become immediately due and payable.



     The occurrence of any of the following events shall be considered an event of “Default” under
this Note:




     (a) Maker shall fail to pay any installment of principal and/or interest under this
Note (or any extension, renewal, amendment, restatement or replacement of this Note) when
due; or




     (b) Maker shall (i) institute or consent to any proceedings in insolvency,



33









 







bankruptcy,
moratorium or other similar laws affecting the enforcement of creditor’s rights generally,
or for the adjustment, liquidation, extension or composition or arrangement of debts or for
any other relief under any bankruptcy or insolvency law or laws relating to the relief or
reorganization of debtors, (ii) become the subject of an order for relief under the United
States Bankruptcy Code or in any manner is adjudged insolvent, or (iii) make an assignment
for the benefit of creditors or admit in writing an inability to pay debts as they become
due.



     All notices and other communications in connection with this Note shall be sent in writing to
Holder or to the Maker, as the case may be, at their respective addresses set forth in the
Agreement to which this Note is attached as an Exhibit.



     Maker irrevocably waives diligence in collection and prosecution, demand, presentment for
payment, notice of dishonor, protest, notice of protest, dishonor, and notice of nonpayment of this
Note and expressly agrees that this Note and any payment coming due hereunder may be extended or
otherwise modified from time to time without in any way affecting liability hereunder.



     If any provision of this Note is prohibited by or invalid under applicable law, that provision
will be ineffective to the extent of the prohibition or invalidity, without invalidating the rest
of that provision or the remaining provisions of this Note. This Note shall bind the Maker and the
Maker’s successors, legal representatives and assigns. No provision of this Note may be waived,
amended, released or otherwise changed, except by a writing signed by the party against which
enforcement is sought.



     The trustee executing this Note has full power and authority to enter into this Note and to
assume and perform all of its obligations hereunder. The execution and delivery of this Note and
the performance by Maker of its obligations hereunder have been duly authorized by Maker and no
further action or approval is required in order to constitute this Note as a binding and
enforceable obligation of Maker; and the execution and delivery of this Note and the consummation
of the transaction contemplated hereunder on the part of Maker do not and will not violate any
provisions of Maker’s partnership agreement or other agreement of Maker.



     This Note shall be construed according to and governed by the laws of the State of Indiana.



     IN WITNESS WHEREOF, Maker has executed this Note as of the day and year first hereinabove
written.



	 	 	 	 	 
	 	 	HERITAGE-CRYSTAL CLEAN, LLC
	 
	 	 	 	 
	 

	 	By	 	 
	 

	 	 	 	 
	 

	 	 	 	Joseph Chalhoub, President








34









 








AMENDED SCHEDULE A



Unit Redemption Interests subject to Unit Redemption Agreements-General.




	 	 	 
	Beneficial Unit Holders	 	Unit Beneficial Interest
	John Lucks

	 	50 Units
	Thomas Hillstrom

	 	30 Units
	Glenn Jones

	 	25 Units
	Catherine McCord

	 	25 Units
	Ellie Chaves

	 	25 Units
	Greg Bogner

	 	15 Units
	Craig Rose

	 	15 Units
	JoAnne Rudsinski

	 	10 Units
	Ed Guglielmi

	 	10 Units
	Jeff Roche

	 	10 Units
	Marc KroIl

	 	10 Units
	Steve Johnson

	 	10 Units
	Jackie Mitchell

	 	10 Units
	Paul Reddington

	 	10 Units
	Billy Hurin

	 	10 Units
	Nick Kalanges

	 	10 Units
	Mike McGinn

	 	10 Units
	Tom Sands

	 	10 Units
	Ray Hanna

	 	5 Units
	Larry Fry

	 	5 Units
	Anita Pendry

	 	5 Units
	Ashok Lele

	 	5 Units
	Margo Block

	 	5 Units
	 

	 	 
	 

	 	Total 320 Units





Unit Redemption Interests subject to Unit Redemption Agreements-Vacuum and Oil Division.




	 	 	 
	Beneficial Unit Holders	 	Unit Beneficial Interest
	Gary Farrar

	 	100 Units
	Rich Gordon

	 	10 Units
	Joe Kriczky

	 	10 Units
	 

	 	 
	 

	 	Total 120 Units







35