Exhibit 10.35
SECOND AMENDED AND RESTATED
INDEMNITY AND
HOLD HARMLESS
AGREEMENT
PETRO, INC. -
INDEMNITOR
This Second Amended and Restated
Indemnity and Hold Harmless Agreement (the “Agreement”)
is entered into on February 9, 2004 by Petro, Inc. , a Texas
corporation (“Indemnitor”) for the benefit of Petro
Stopping Centers Holdings, L.P. , a Delaware limited
partnership (the “Petro Holdings”), Petro Stopping
Centers, L.P. , a Delaware limited partnership (“Petro
Operating”), Petro, Inc. , a Texas corporation
(“Petro”) in its capacity as a general partner of both
Petro Holdings and Petro Operating, Petro Holdings Financial
Corporation , a Delaware corporation and wholly owned
subsidiary of Petro Holdings (“Petro Holdings
Financial”), Petro Distributing, Inc. , a Delaware
corporation and wholly owned subsidiary of Petro Operating
(“Petro Distributing”), Petro Financial
Corporation , a Delaware corporation and wholly owned
subsidiary of Petro Operating (“Petro Financial”), and
any other party liable for the Debt Obligations (as defined below).
This Agreement amends, restates and continues that certain
Indemnity and Hold Harmless Agreement (the “Original Hold
Harmless Agreement”) dated January 30, 1997, which was
amended and restated by that certain Amended and Restated Indemnity
and Hold Harmless Agreement (the “First Restated Hold
Harmless Agreement”) dated July 23, 1999 by Petro, Inc. (the
Original Hold Harmless Agreement and the First Restated Hold
Harmless Agreement are collectively referred to as the
“Previous Hold Harmless Agreements”).
RECITALS
Indemnitor was a party to that
certain Participation Agreement (the “Participation
Agreement”) dated May 1, 1992 and that certain Amended and
Restated Limited Partnership Agreement of Petro PSC Properties,
L.P. (the “PSCP Partnership Agreement”) dated May 1,
1992. Pursuant to the Participation Agreement and the PSCP
Partnership Agreement, Indemnitor agreed to contribute and convey
to Petro Operating all of those rights and assets more specifically
described in exhibits to the Participation Agreement, subject to
such obligations and indebtedness as the parties to the PSCP
Partnership Agreement expressly agreed that Petro Operating would
assume as set forth in exhibits to the Participation Agreement and
the PSCP Partnership Agreement.
But for the operation of the
Previous Hold Harmless Agreements, Petro, Roadside, Inc., a
Delaware corporation (“Roadside”) (which up until and
including the effective date of the Original Hold Harmless
Agreement was a general partner of the Petro Operating), Petro
Operating GP Corp., a Delaware corporation (“Operating
GP”) (which up until and including the effective date of the
First Restated Hold Harmless Agreement was a general partner of the
Petro Operating), and Petro Financial would have been liable for
the obligations of indebtedness that are described in Exhibit
”A” attached to each of the Previous Hold Harmless
Agreements. Consequently, Petro, Roadside, Operating GP, and Petro
Financial would have borne the economic risk of loss (the
“Economic Risk of Loss”) under section 752 of the
Internal Revenue Code of 1986, as amended (the “Code”),
and the Treasury regulations thereunder, and would have been at
risk (“At Risk”) under section 465 of the Code for such
indebtedness. The Previous Hold Harmless Agreements were entered
into to ensure that Indemnitor would be solely liable for a
specific dollar amount (as adjusted under Paragraph 1.2 of each of
the Previous Harmless Agreements) of indebtedness (the “Old
Indemnified Amount”) so that the Indemnitor would bear the
Economic Risk of Loss and be At Risk for the Old Indemnified
Amount. By making the Indemnitor bear the Economic Risk of Loss and
be At Risk for the Old Indemnified Amount, the Indemnitor has been
able to: (i) avoid recognizing gain under section 731(a)(1) of the
Code as a result of a decrease in Indemnitor’s share of
liabilities under section 752(b) of the Code and the Treasury
regulations thereunder; (ii) receive an allocation of debts and
liabilities for tax purposes such that Indemnitor’s adjusted
tax basis in his interest in Petro Holdings allows him to utilize
deductions and losses, if any, allocated to him from Petro
Holdings; and (iii) receive an allocation of debts and liabilities
for tax purposes such that Indemnitor’s amount At Risk in
Petro Holdings allows him to utilize deductions and losses, if any,
allocated to him from Petro Holdings.
This Agreement is being entered into
in connection with the closing of a series of transactions (the
“Refinancing Transactions”) pursuant to which the Petro
Holdings and Petro Operating will refinance substantially all of
their indebtedness. The Refinancing Transactions are described in
an offering memorandum (the “Offering Memorandum”)
being issued in connection with the offering of new senior secured
notes that are due in 2012. As a result of the
Refinancing Transactions, Petro Holdings, Petro
Operating, Petro, Petro Holdings Financial, Petro Distributing,
and/or Petro Financial will be liable on various debt obligations
that are described on the attached Exhibit
”A” (defined collectively as the “Debt
Obligations”). The Debt Obligations are a continuation,
confirmation, extension, increase and/or additional issuance of
debt represented by the various debt obligations described in the
Previous Hold Harmless Agreements. To evidence the continuing
intent and legal obligation to continue the terms and provisions of
the Previous Hold Harmless Agreements with respect to the Debt
Obligations, as continued, increased, extended and/or amended,
Indemnitor is entering into this Agreement.
INDEMNITY
NOW, THEREFORE
, in consideration of the mutual
agreements and covenants set forth herein, including, but not
limited to, the events which were attendant to the formation and
operation of Petro Holdings and Petro Operating and the
confirmation, extension, increase creation and/or issuance of the
Debt Obligations, the parties agree as follows:
1. Indemnification
Provisions
1.1 Indemnitor shall indemnify and
hold harmless Petro Holdings, Petro Operating, Petro, Petro
Holdings Financial, Petro Distributing, Petro Financial, and any
other party liable for the Debt Obligations, and their respective
legal representatives, successors, assigns, subsidiaries and past
and present officers, directors, partners, agents and employees
(collectively, the “Indemnified Parties”), from and
against any and all claims, causes of action, liabilities,
obligations, losses, costs, damages and expenses (including
reasonable attorneys’ fees) suffered or incurred by any of
the Indemnified Parties, of whatever kind, nature or character,
whether arising before or after the date of this Agreement, and
whether known or unknown, liquidated or unliquidated, fixed or
contingent, arising from any loan, assumption, guaranty or other
agreement executed by any Indemnified Party or by reason of
operation of law, in connection with the Debt Obligations and the
liabilities thereunder, including, but not limited to, the
liability of any Indemnified Party who may be a subrogee with
respect to the Debt Obligations (defined collectively as the
“Indemnified Claims”), in an amount equal to
$3,050,000 , or such greater or lesser amount as specified
in Paragraph 1.2, below (with the foregoing amount hereinafter
referred to as the “Indemnified Amount”); provided,
however, the indemnity and hold harmless provided hereunder shall
not relieve the Indemnified Parties from making regular interest
and principal payments on and otherwise satisfying all obligations
with respect to the Debt Obligations until (i) an Event of Default
or Default (as defined in the instruments giving rise to and
governing the repayment of the applicable Debt Obligations) has
occurred in connection with one or more of the Debt Obligations
which remains uncured and/or is not otherwise waived, (ii) all
amounts owing on the Debt Obligations in default become immediately
due and payable, and (iii) all real and personal property, if any,
liable for or securing the Debt Obligations in default has been
exhausted or otherwise disposed of to satisfy the Debt Obligations.
The Indemnified Amount payable hereunder shall be paid to the
Indemnified Parties proportionately based on the Indemnified Claims
incurred by each of the Indemnified Parties over the total
Indemnified Claims incurred by all of the Indemnified
Parties.
1.2 Notwithstanding anything
contained herein to the contrary, the amount that Indemnitor shall
be required to indemnify and hold harmless the Indemnified Parties
in the manner specified in Paragraph 1.1, above, with respect to
the Debt Obligations shall be no less nor more than the amount
necessary to cause Indemnitor’s adjusted tax basis in his
interest in Petro Holdings (pursuant to both section 465 of the
Code and Subchapter K of Chapter 1 of Subtitle A of the Code) at
all times to equal no less than a minimum of One Dollar ($1.00),
determined after (i) taking into account all adjustments to
Indemnitor’s tax basis in his interest in Petro Holdings
resulting from partnership operations both before and after the
date of this Agreement, including, but not limited to, the
allocation to Indemnitor of his proportionate share of income,
gains, deductions, losses, credits and all other tax attributes
pursuant to the terms of the limited partnership agreement of Petro
Holdings, as amended from time to time (the “Partnership
Agreement”), (ii) allocating to Indemnitor pursuant to the
terms and provisions of section 752 of the Code and sections
1.752-3
