exv10w38



 




Exhibit 10.38




AGREEMENT AND

AMENDMENT NO. 7 TO RESTATED OPERATING AGREEMENT




     This Agreement and Amendment No. 7 (this “Amendment No. 7”) to the Restated Operating
Agreement dated October 26, 2004, as amended October 26, 2004, December 10, 2004, February 16,
2006, February 28, 2006, February 14, 2007 and December 28, 2007 (the “Operating
Agreement”), of HERITAGE-CRYSTAL CLEAN, LLC, a limited liability company organized pursuant to
the Indiana Business Flexibility Act, I.C. §23-18-1, et seq. (the “Company”) is effective
as of the ___th day of March, 2008 (the “Amendment No. 7 Effective Date”).



RECITALS:




     WHEREAS, in accordance with Section 13.01 of the Operating Agreement, the Operating Agreement
may be amended with the unanimous approval of the Board of Directors of the Company (the
“Board”), which unanimous approval of this Amendment No. 7 by the Board has been obtained;



     WHEREAS, the Company has arranged to borrow approximately $11.0 million (the “Loan
Proceeds”) to fund cash distributions to the Preferred Members (as defined in the Operating
Agreement); and



     WHEREAS, the Company and each of the Members (as defined in the Operating Agreement) hereby
wish to adopt this Amendment No. 7 to simplify the capital structure of the Company and to
authorize certain other changes and actions described herein.



     NOW, THEREFORE, in consideration of the foregoing and the promises contained herein, the
Company and each of the Members hereby agree and unanimously adopt the following agreements and
amendments to the Operating Agreement:


1. Special Debt Financed Distribution. Effective as of and contingent upon the occurrence
of the Amendment No. 7 Effective Date and the Company’s receipt of the Loan Proceeds, the Company
shall make cash distributions to the Preferred Members in the amounts set forth next to their
respective names on Schedule A attached hereto (collectively, the “Debt Financed
Distributions”).



2. Conversion of Preferred Units. Following the Debt Financed Distributions, the remaining
Preferred Units shall convert into 2,434.78 Common Units issued in the amounts set forth on
Schedule B attached hereto. Following this conversion the Company shall have no
outstanding Preferred Units.



3. Amendments to the Operating Agreement. Effective as of and contingent upon the
occurrence of the payment by the Company of the Debt Financed Distributions and the conversion of
the Preferred Units in accordance with Sections 1 and 2 of this Amendment No. 7:





     3.1 Schedule I of the Operating Agreement shall be amended and restated in the form attached
hereto as Schedule I, and as a result thereof, to reflect the resulting effect on the
Sharing Ratios (as defined in the Operating Agreement) and the cancellation of all Preferred Units
of the Company; and




     3.2 The first sentence of Section 6.01 of the Operating Agreement shall be amended and
restated in its entirety to read as follows:




“The Company has authorized capital of no Preferred Units and Fifteen Thousand
(15,000) Common Units, which amounts are subject to increase as provided for in
Section 6.06 below.”




     3.3 Section 7.07 of the Operating Agreement shall be amended and restated in its entirety to
read as follows:



 









 






“To the extent it may legally do so, the Board shall cause the Company to
distribute each quarter (or at such time prior to the end of a quarter as
approved by the Board in connection with the Company’s initial public offering)
to each Member an amount sufficient to pay the federal, state, provincial, and
local income tax liability of such Member (or, in the event a Member is an S
corporation or a partnership, the tax liability of its shareholders or
partners) in respect of any Profits allocated to such Member, determined in
accordance with the maximum marginal federal income tax rate applicable to
individuals and the maximum marginal state income tax rate applicable to
individuals for the state in which any Member is domiciled for state tax
purposes which has the highest such maximum marginal rate.”


4. Definitions. Any capitalized term not otherwise defined in this Amendment No. 7 to the
Operating Agreement shall have the meaning described in the Operating Agreement.




     In all other respects not inconsistent herewith, the Operating Agreement as previously amended
through Amendment No. 5 remains in full force and effect.



[Remainder of this Page Intentionally Left Blank]





2









 







     IN WITNESS WHEREOF, this Agreement and Amendment No. 7 to the Operating Agreement, has been
adopted and executed by the Company as of the Amendment No. 7 Effective Date.



	 	 	 	 	 
	 	HERITAGE-CRYSTAL CLEAN, LLC

 	 
	 	By:  	 	 
	 	 	Joseph Chalhoub, President 	 
	 	 	 	 
	 




 












 






SCHEDULE A

Debt Financed Distributions




	 	 	 	 	 
	Preferred
Members	 	Amount of Debt	 
	 	 	Financed Distribution	 
	The Heritage Group
	 	$	4,147,545.49	 
	J. Chalhoub Holdings, Ltd.
	 	$	1,748,130.55	 
	Gregory Paul Ray Trust
	 	$	157,821.05	 
	Fred M. Fehsenfeld, Jr.
	 	$	1,299,283.08	 
	Maggie Fehsenfeld Trust
	 	$	81,209.53	 
	Frank S. Fehsenfeld Trust
	 	$	81,209.53	 
	BRS-HCC Investment Co., Inc.
	 	$	1,041,677.38	 
	Ken Price
	 	$	64,327.06	 
	D. Brinckman Trust
	 	$	2,265,622.19	 
	TOTAL
	 	$	10,886,825.86	 
	 
	 	 	 













 







SCHEDULE B

Converted Preferred Units




	 	 	 	 	 
	Preferred
Members	 	Number of Converted	 
	 	 	Preferred Units Issued	 
	The Heritage Group
	 	 	1,171.350	 
	J. Chalhoub Holdings, Ltd.
	 	 	493.700	 
	Gregory Paul Ray Trust
	 	 	44.570	 
	Fred M. Fehsenfeld, Jr.
	 	 	366.940	 
	Maggie Fehsenfeld Trust
	 	 	22.930	 
	Frank S. Fehsenfeld Trust
	 	 	22.930	 
	BRS-HCC Investment Co., Inc.
	 	 	294.190	 
	Ken Price
	 	 	18.170	 
	D. Brinckman Trust
	 	 	—	 
	TOTAL
	 	 	2,434.78