EXHIBIT 10.43

RETAIL SUPPLY AGREEMENT

between
 
JACKSON OIL, a division of JACKSONS FOOD STORES, INC.
 
and
 
Bowlin Travel Centers, Inc.
 
November 1, 2006
 

 

 

 

 

 

 

 

 

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RETAIL SUPPLY AGREEMENT
 
THIS RETAIL SUPPLY AGREEMENT (“Agreement”) is made effective November 1, 2006,
by and between Jackson Oil a division of Jacksons Food Stores, Inc., a Nevada
corporation, located at 3450 Commercial Court, Meridian, Idaho 83642 (“Seller”),
and Bowlin Travel Centers Inc., a Nevada corporation, 150 Louisiana Avenue N.E.,
Albuquerque, New Mexico 87108 (“Purchaser”).
 
A.  Purchaser currently operates retail fuel sales and retail store operations
on certain real property located at the location(s) listed on Exhibit A.
 
B.   A (collectively, the “Real Property”), together with all improvements,
fixtures, and equipment thereon (each a “Retail Outlet” and collectively the
“Retail Outlets” or “Premises”).
 
C.  Seller is engaged in the business of purchasing and distributing Chevron and
Texaco-branded petroleum products (the “Products”), which are supplied to Seller
by ChevronTexaco Products Company, a division of ChevronTexaco U.S.A., Inc.
(“ChevronTexaco”).
 
D.  Purchaser and Seller desire to enter into this Agreement, pursuant to the
terms and conditions of which Purchaser will purchase from Seller, and Seller
will sell to Purchaser, the Products for resale at the Retail Outlets.
 
E.  Purchaser operates various retail fuel sales and retail store operations
throughout New Mexico and Arizona and Purchaser and Seller acknowledge that this
Agreement will pertain only to the Purchaser’s operations specifically listed as
Premises on Exhibit A.
 
NOW, THEREFORE, in consideration of the above recitals which are incorporated
below, and other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto acknowledge, covenant,
represent, and agree as follows:
 
1.    Sale.  Subject to Purchaser’s compliance at all times with the terms and
conditions of this Agreement, and the terms and conditions of the System
Agreement attached hereto as Exhibit B, Seller shall provide the Products and
services as follows:
 
(a)  Amount.  Seller hereby agrees to sell, and Purchaser agrees to buy, such
quantities of ChevronTexaco-brand fuels (“Texaco Automotive Fuels”) as are
provided further herein, to serve customer demand at the Premises.
 

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Type of Texaco Automotive Fuels
 
Automotive Fuel Rating
 
Texaco or Chevron Power Premium Unleaded Gasoline
 
91 [Minimum Octane Rating]
 
Texaco or Chevron Power Plus Unleaded Gasoline
 
89 [Minimum Octane Rating]
 
Texaco or Chevron Unleaded Gasoline
 
87 [Minimum Octane Rating]
 
Diesel Fuel (Diesel Fuel is not used in the calculation of payments referred to
herein)
 

 
Purchaser is required to post, in a clear and conspicuous manner on the
dispensers, the automotive fuel ratings of the Texaco Automotive Fuels sold at
the Premises. If Seller supplies Purchaser with Texaco Automotive Fuels having a
lower automotive fuel rating than as shown above, Seller shall provide Purchaser
with such lower automotive fuel rating information and Purchaser shall post such
as provided herein.
 
(b)   Seller Provision.  Upon the commencement of the Term, or such earlier date
as the parties may establish by mutual agreement and memorialize in a writing
signed by both parties (“Supply Commencement Date”), and throughout the term of
this Agreement, Seller shall sell to Purchaser, and Purchaser shall purchase
from Seller, pay Seller for, and take delivery from Seller of, the following
Texaco Automotive Fuels, of the kind and quality from time to time marketed by
Seller, in quantities and at the time and place of delivery as specified from
time to time by Purchaser and agreed to by Seller. Purchaser, if an organized
entity and not a natural person, agrees to cause the principals of the Purchaser
to execute a Letter Of Credit, in the amount of Seventy-Five Thousand Dollars
($75,000), in favor of Seller (the “LOC”), guaranteeing payment and performance
of all of Purchaser’s debts and obligations arising under this Agreement,
including but not limited to all amounts owed pursuant to the Promissory Note.
 
(c)    Shortages in Supply; Reduction of Orders. There shall be no obligation to
sell or to buy the Texaco Automotive Fuels covered by this Agreement when and
while, and to the extent that, the receiving or using or manufacture or making
deliveries in the customary manner are prevented or hindered by an act of God,
fire, riot, labor disturbance (whether involving employees of the party affected
or of others and regardless of whether the disturbance could be settled by
acceding to the demands of a labor group), accident, war, or the act of any
government (whether foreign or domestic, federal, state, county, or municipal)
or any cause beyond the reasonable control of the party affected, whether or not
similar to any of the foregoing causes. In cases of partial or total
interruption or loss or shortage of transportation facilities or supplies, or
shortage of Texaco Automotive Fuels deliverable hereunder, Seller may allocate
for Seller’s own use, on any basis which in Seller’s sole judgment is fair and
reasonable, allowing for such priorities as Seller deems appropriate. No such
reduction need be made up.
 
(d)   Seller’s Documentation of Reductions.  In the event of reduction(s) of
Seller’s delivery of a Product to Purchaser pursuant to Subsection 1(c) above,
Seller shall provide to Purchaser reasonable evidence of the reduction imposed
upon Seller and the methodology utilized by Seller in determining such
reduction.
 
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(e)    No Purchases From Other Than Seller. Purchaser acknowledges that Seller
has invested, and shall invest money, time, resources, and training in the
establishment of the supply relationship and branding of Premises. In
consideration of the covenants and agreements contained herein, Purchaser agrees
to purchase all of its Texaco Automotive Fuels only from Seller, unless Seller
is unable or unwilling to provide sufficient quantity of Texaco Automotive
Fuels, even if such performance is governed by Subsection 1(b) or Subsection
1(c) above. In the event of a termination of this Agreement, other than at the
end of the Term, Purchaser agrees that for a period of two (2) years from the
earlier of such termination, not to purchase any Chevron Texaco Automotive Fuels
for resale at the Premises from any person other than Seller without Seller’s
prior written consent, unless such termination was a caused by or was the result
of a breach of this Agreement by Seller or Seller’s inability to properly
perform under the terms of this Agreement.
 
2.    Term. This Agreement is for a period of ten (10) years commencing on the
date hereof and ending on October 31, 2016 (the “Initial Term”), with an option
for renewal for another period of Five (5) years commencing on November 1, 2016
and ending on October 31, 2021 (the “Extended Term”), by giving to Seller notice
of Purchaser’s exercise of such option at least six (6) months prior to the
expiration of the Initial Term; provided, however, that if Purchaser is in
default hereunder on or about the date of giving such option notice, or is in
default on the date the Extended Term is to commence, such option notice shall
be totally ineffective and this Agreement shall expire at the end of the Initial
Term. The Initial Term and/or the Extended Term are sometimes referred to herein
as the “Term.”
 
3.    Product Prices and Terms of Payment. The prices for the Products to be
paid by Purchaser to Seller pursuant to this Agreement shall be as follows:
 
(a)    Product Prices. The prices Purchaser shall pay Seller for Texaco
Automotive Fuels shall be the posted ChevronTexaco terminal rack price plus the
markup of Three-Fourths (3/4) cents/gallon and freight for gasoline and diesel,
when delivered by Seller, and all appropriate State and Federal Taxes specified
for each Retail Outlet. Seller agrees to provide Purchaser the same percent or
fraction of Texaco Automotive Fuels as supplied to Seller by ChevronTexaco under
the Seller Agreement or as supplied to Seller by ChevronTexaco, the Department
of Energy, or other applicable government agency in the event of a supply
shortage. Seller acknowledges that suppliers often provide a discount for early
payment of invoices due (“Early Pay Discount”) and Seller and Purchaser agree
that whenever an Early Pay Discount program is made available to Seller, Seller
will offer the same Early Pay Discount to Purchaser, whereby Purchaser will be
credited the discount rate for any payments made by Purchaser within the
guidelines offered by the Early Pay Discount program, whether or not Seller
chooses to take advantage of the program for Seller’s payments to ChevronTexaco.
Purchaser’s total cost of Product for each order shall be: the number of gallons
of Texaco Automotive Fuels secured times the posted ChevronTexaco terminal rack
price; plus the markup of Three-Fourths (3/4) cents per gallon; plus the freight
costs for delivery of the Products to the Premises (“Lay-In Price”). Seller
guarantees the lowest possible Lay-In Price to Purchaser, therefore if Purchaser
has to secure Products from a secondary terminal because fuel is not available
from the terminal that would have afforded Purchaser the lowest Lay-In Price,
Seller will refund to Purchaser the difference between the lowest Lay-In Price
and the actual Lay-In Price for the specific orders.
 
(b)   Freight Charges. Buyer may, at its option, have Products delivered by
qualified freight companies other than Seller. If Seller is chosen to deliver
the Products, then the following provisions shall apply: Freight charges shall
be ________________cent(s) per gallon for gasoline, and
__________________cent(s) per gallon for diesel fuel (Texaco Automotive Fuels)
transported by Seller to the Retail Outlets. Seller may also assess split-load
fees on orders of less than a full load. Freight rates charged by Seller to
Purchaser are subject to change upon (10) days notice, in writing. Reasonable
freight rates changes may occur if economic conditions so warrant, or at the
discretion of the Seller. In addition, Seller may impose surcharges at any time
when the cost of fuel for Seller’s trucks exceeds historical averages. If Seller
has to go to other terminals besides Tucson Terminal, additional freight
charge(s) will be passed on to Purchaser unless such freight charges are paid by
ChevronTexaco.
 
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(c)    Terms of Payment. Costs of Products are, the sum of Product Prices
referenced in Subsection 3(a) above plus applicable freight charges, if any, as
referenced in Subsection 3(b) above. If delivered by Seller, or Seller’s agents,
prices are F.O.B. Purchaser’s place of business delivered by transport. All
payments under this Agreement shall be made by Purchaser in accordance with
Seller’s payment and credit terms in effect from time to time, any of which may
be altered or revoked by Seller with reasonable notification to Purchaser.
Seller’s current payment terms, as of the effective date of this Agreement,
require payment within seven (7) days from Purchaser’s receipt of the Products.
If Seller elects to extend credit to Purchaser, Purchaser shall comply with
Seller’s credit terms in effect from time to time, any of which may be altered
or revoked by Seller without prior notification to Purchaser. Purchaser shall
make all payments to Seller via Electronic Fund Transfer (“EFT”) unless Seller,
in its sole discretion requires Purchaser (i) to pay Seller via wire transfer
prior to time of delivery or at such time and place or method as Seller may
designate from time to time, (ii) to provide Seller a cash deposit, or (iii) to
provide Seller an irrevocable bank Letter of Credit sufficient to Seller in form
and amount. If Seller requires Purchaser to pay by cashier’s check, Seller may
assess a reasonable administration charge. Purchaser shall provide any written
authorizations required for EFT purposes. Upon Seller’s request, at any time and
from time to time, Purchaser shall provide Seller with information and documents
relating to the Purchaser’s financial condition and creditworthiness, including
but not limited to Purchaser’s CPA-reviewed annual financial statements; federal
and state tax returns and bank references. Purchaser hereby authorizes Seller to
perform credit checks and obtain credit reports and other information from
credit reporting agencies and other third parties. Purchaser shall provide all
requested information within ten (10) business days of Seller’s request.
 
(d)    Overdue Sums. All overdue sums owed to Seller will bear interest at the
maximum lawful rate per annum from the date due until paid, or twelve percent
(12%) per annum, whichever is less. Further, if Purchaser fails to make timely
payment of any amount due Seller, in addition to all other rights and remedies
available, Seller may take such action as Seller deems reasonable under the
circumstances. Without limiting the generality of the foregoing, Seller may
setoff or equitably recoup against any amount then due Purchaser, defer further
deliveries of the Products until payment of all outstanding indebtedness is
made, and demand advance cash payment for further deliveries. Purchaser shall
comply with the terms of any reclamation notice issued to Purchaser by Seller
under applicable law.
 
(e)    Security Interest. The LOC referenced in Subsection 1(b) above is
currently the sole method of guarantee regarding Purchaser performance specified
in this Agreement. If the LOC ceases to exist, then in the absence of the LOC,
as security for the prompt and complete payment of any and all amounts due to
Seller hereunder, and under the Guaranty, if any, and the Promissory Note, if
any, including all payments for supplying Purchaser’s inventory, Purchaser
hereby grants, conveys and transfers to Seller a security interest in the
Products, which includes all ChevronTexaco-brand fuels, now or hereafter
acquired, and any and all proceeds (including insurance proceeds) ,
substitutions and replacements of the Products, additions and accessions to and
documents covering the Products, any claims against third parties arising out of
damage, destruction, or decrease in value of the Products, rents revenues,
issues, profits, and proceeds arising from the sale, lease, license,
encumbrance, collection or any other temporary or permanent disposition, whether
voluntary or involuntary, of the Products (collectively the “Collateral”). In
addition, if the LOC ceases to exist, or becomes insufficient due to expansion
of the Agreement to include other locations, Purchaser hereby authorizes Seller
at any time and from time to time to file any initial financing statements,
amendments thereto and continuation statements, as applicable to the Collateral,
including initial financing statements and amendments which describe the
Collateral more broadly than the description of the Collateral set forth herein
or any security agreement made by Purchaser in favor of Seller.
 
4.    Taxes. Any tax, duty, toll, fee, impost, charge, or other exaction, or the
amount equivalent thereto, and any increase thereof now or hereafter imposed,
levied, or assessed by any governmental authority upon, measured by, incident
to, or as a result of the transactions herein provided for (other than local,
state, and federal net income taxes measured by the net income of Seller from
all sources), or the transportation, importation, production, manufacture, use,
or ownership of the goods the subject of this Agreement shall, if collectible or
payable by Seller, be paid by Purchaser on demand by Seller. Any such payment
shall be in addition to the prices otherwise provided for herein. Purchaser
shall, at Seller’s request, execute and deliver to Seller such certificates or
other documents as Seller may reasonably require in order to enable Seller to
secure any tax exemption which may be available in connection with sales or
deliveries hereunder.
 
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5.    Deliveries. If Purchaser requests Seller to deliver the Products, this
subsection 5. shall apply. Seller shall deliver or arrange for the delivery of
Texaco Automotive Fuels to Purchaser at the Premises. Orders for deliveries of
Texaco Automotive Fuels shall be placed by Purchaser with such advance notice
and in such manner as Seller may from time to time designate. Deliveries shall
be made (except at Seller’s option) in full bulk transport quantities in
Seller’s customary manner using equipment selected by Seller. Purchaser shall
provide Seller with unimpeded and adequate ingress to and egress from the
Premises twenty-four (24) hours per day. Purchaser shall comply with such
reasonable rules and regulations as Seller may from time to time establish
regarding deliveries by Seller at the Premises. If there is inadequate storage
capacity to accept any delivery of Texaco Automotive Fuels ordered by Purchaser
and the delivery vehicle must leave the Premises without delivering all of the
Texaco Automotive Fuels ordered, Purchaser shall reimburse Seller on demand for
any demurrage or other charges incurred by Seller by reason of Purchaser’s
inability to accept the Products or release the same within the time allowed
therefore without demurrage or other charge. Title and risk of loss shall pass
to Purchaser upon delivery.
 
6.    Use of Premises.
 
(a)    Texaco Automotive Fuels.  Purchaser acknowledges that there is a demand
for Texaco Automotive Fuels at the Premises, and agrees continuously to stock at
the Premises and to offer for sale such quantities of Texaco Automotive Fuels to
serve customer demand therefore throughout the Term. Purchaser acknowledges the
financial benefit to Purchaser of selling and prominently displaying Texaco
Automotive Fuels due to the high regard of the motoring public for retail
outlets selling under the ChevronTexaco trademarks and trade names, and
Purchaser agrees at all times to give the dispensing equipment, displays, and
advertisements for Texaco Automotive Fuels and brands prominent and convenient
positions and not to disparage or diminish in any way by act or omission the
good reputation of such trademarks, trade names, products, or retail outlets.
 
(b)    Operating Requirements. Purchaser agrees to devote sufficient time to the
personal management of the Premises so as to provide for the continued proper
operation thereof as a first-class automotive fuel retail outlet; to maintain
and operate the Premises in a clean, safe, and healthful manner with a neat and
uncluttered appearance that is inviting to the motoring public; to offer water
and windshield cleaning materials for use by and at no charge to motorists; to
render prompt professional and courteous service to customers by providing
personnel in numbers adequate to handle available business who are properly
trained and well-groomed; to operate and manage the Premises and cause customers
to be treated in a manner which engenders customer satisfaction and eliminates
customer complaints to the extent possible; to comply with all applicable
federal, state, and local laws and regulations relevant to the use and operation
of the Premises or the resale of all Texaco Automotive Fuels purchased by
Purchaser under this Agreement; and to supply Seller with all information which
Seller shall reasonably request to enable Seller to comply with all applicable
federal, state, and local laws and regulations. Seller and/or Seller’s
authorized representatives and/or ChevronTexaco and/or ChevronTexaco’s
authorized representatives shall have the right at any reasonable time to enter
upon the Premises to confirm the performance by Purchaser of Purchaser’s
obligations under this Agreement.
 
(c)    Price Signs. Except as may be otherwise specified by Seller, Purchaser
shall display Purchaser’s retail prices for all Texaco Automotive Fuels sold at
the Premises on one or more ChevronTexaco-approved price signs. If Purchaser
offers different levels of refueling service to motorists and charges different
Texaco Automotive Fuels prices depending upon the level of service provided,
Purchaser shall clearly indicate on such price signs the level of service
associated with the Texaco Automotive Fuels prices displayed.
 
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(d)    Restrooms. If there are any restroom facilities on the Premises,
Purchaser shall keep such restrooms open to the public without charge at all
times during which the Premises are open for business (except any times during
which Purchaser for security reason closes any building on the Premises through
which the public must pass to access the restroom facilities and conducts
business through a transaction drawer or similar security device). Purchaser
shall at all times keep any such restroom facilities clean, properly painted,
maintained free of cracked mirrors, tiles, and walls, properly supplied with
trash receptacles (which shall be emptied regularly), paper products, soaps, and
disinfectants, and otherwise maintained in a first-class manner.
 
(e)    Restricted Uses. The Premises shall not be used for the sale of
drug-related paraphernalia or equipment. Nor shall the Premises be used for the
sale or rental of adult magazines, movies, video tapes, or other similar items
featuring nudity.
 
(f)    Credit Cards; Debit Cards. ChevronTexaco may or has previously authorized
Purchaser to participate in ChevronTexaco’s credit card or debit card programs
(collectively, “Card Programs”) approved by ChevronTexaco for purchases at the
Premises of the types of products and services that ChevronTexaco and/or Seller
may from time to time designate, subject to the following terms and conditions:
 
(1)    The honoring of such Card Programs by Purchaser and the acceptance by
ChevronTexaco and/or Seller of authorized invoices and other evidence of debt
issued thereon for sale of products and services made by Purchaser to
cardholders shall be subject to terms and conditions established by
ChevronTexaco and/or Seller in connection with Card Programs, including a
requirement for payment of a service charge on such Card Program transactions
submitted to ChevronTexaco and/or Seller, and Purchaser shall be responsible for
the payment of all such service charges. ChevronTexaco and/or Seller may charge
back to Purchaser or refuse to accept any credit card invoice pursuant to such
terms and conditions as may now or in the future impose various service charges
under such Card Programs, and may refuse to process or may charge back to
Purchaser credit card or debit card transactions in accordance with the terms
and conditions of such Card Programs. ChevronTexaco and/or Seller reserves the
right at any time to change such terms and conditions, or to terminate such Card
Programs or any authorization to Purchaser or Purchaser’s customers to
participate in such Card Programs. In order to help Seller administer such Card
Programs, Purchaser shall keep complete and accurate records showing the dollar
amount of the Texaco Automotive Fuels purchased hereunder supplied by Seller
during the Term made under such Card Programs. Purchaser shall submit copies of
such records to Seller as Seller may request from time to time.
 
(2)    This authorization shall terminate: (i) at Purchaser’s option, any time
upon Purchaser giving written notice thereof to ChevronTexaco and Seller; or
(ii) at ChevronTexaco’s and/or Seller’s option, at any time upon ChevronTexaco
or Seller giving written notice thereof to Purchaser; or (iii) automatically
upon the expiration or termination of this Agreement. Upon such expiration or
termination, Purchaser shall promptly return to Seller all of the imprinters
referred to above, and Seller shall refund to Purchaser any unearned, prepaid
rental. If such imprinters are not so returned, ChevronTexaco and/or Seller
shall have the right to remove such imprinters, refunding to Purchaser all
unearned, prepaid rental.
 
(g)   Quick Service Restaurant. With regard to the operation of any quick
service restaurant (“QSR”), only QSR brands that ChevronTexaco and/or Seller
approves for co-branding with the ChevronTexaco brand shall be advertised by
exterior signage at the Premises (and only in accordance with ChevronTexaco’s
and/or Seller’s image standards for automotive fuel retail outlets).
ChevronTexaco and/or Seller may revoke co-branding approval for any particular
QSR brand if, because of marketplace changes affecting that QSR brand,
ChevronTexaco and/or Seller, in its or their sole discretion, determines that
association with the QSR brand may undermine the public’s perception or
acceptance of ChevronTexaco’s automotive fuel retail outlet network or the
ChevronTexaco brand.
 
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7.    Trademarks, Trade Names, Color Schemes, and Image Requirement.
 
(a)    ChevronTexaco Trademark Only. Purchaser shall cause the Premises at all
times to comply with ChevronTexaco’s and/or Seller’s image standards for
ChevronTexaco automotive fuel retail outlets. The Texaco Automotive Fuels
purchased by Purchaser under this Agreement shall be sold by Purchaser as Texaco
Automotive Fuels only under the trademarks and trade names authorized for Texaco
Automotive Fuels by ChevronTexaco. Purchaser shall not at any time offer for
sale under such trademarks and trade names any such Texaco Automotive Fuels not
authorized by Seller and/or ChevronTexaco to be sold thereunder. Purchaser shall
conduct Purchaser’s business so as to eliminate any likelihood of substitution
or commingling of the products of others as or with those of Texaco Automotive
Fuels. Purchaser agrees to abide by such regulations to this end as Seller
and/or ChevronTexaco may from time to time establish. Without limitation on the
foregoing, ChevronTexaco and/or Seller or it or their representative(s) shall
have the right at any time to take samples of Texaco Automotive Fuels from the
Premises for testing purposes, compensating Purchaser (at Purchaser’s cost,
which for this purpose shall be based on Seller’s prices to Purchaser hereunder
in effect at the time the Texaco Automotive Fuels taken, or, at Seller’s option,
in kind) for any Texaco Automotive Fuels so taken.
 
(b)    ChevronTexaco Insignias. Purchaser recognizes ChevronTexaco’s right to
use and authorize others to use all trademarks, service marks, trade names,
color schemes, and automotive fuel retail outlet designs (collectively
“Insignia”) utilized by ChevronTexaco to identify products and services, and
Purchaser agrees not to claim any right, title, or interest therein. Purchaser
acknowledges the need of Seller and/or ChevronTexaco to control Purchaser’s use
of such Insignia in order to maintain the validity thereof and to assure the
continued recognition of, acceptance by, and high regard of the motoring public
for products and services identified by such Insignia, and Purchaser
acknowledges ChevronTexaco shall have the right at any time during the Term to
change, alter, or amend any of the trademarks and trade names under which the
Texaco Automotive Fuels covered by this Agreement are now or may hereafter be
sold. Accordingly, Purchaser agrees to use Insignia only in such a manner as may
be approved by Seller and/or ChevronTexaco and acknowledges that Seller and/or
ChevronTexaco may from time to time change such Insignia and its promotional
materials as it sees fit. Purchaser shall not use or permit the use of any such
Insignia in Purchaser’s legal entity name or assumed business name, nor use or
permit the use of any such Insignia in the name or assumed name of any other
business and/or entity in which Purchaser has an interest. Purchaser
acknowledges that all signs advertising ChevronTexaco’s products and all signs
in the colors used by ChevronTexaco to identify its products or the places at
which its products are sold and all rights therein are and shall continue to be
the property of ChevronTexaco. Seller and/or ChevronTexaco may, during the term
of this Agreement, and within a reasonable period thereafter, remove or
obliterate such signs, and repaint so much of the Premises as it elects, in a
color or colors selected by it. If ChevronTexaco removes or obliterates any
signs or repaints any of the Premises, ChevronTexaco need not restore any
pre-existing signs on or paint schemes of the Premises. Purchaser may not use
other signs at the Premises to advertise Texaco Automotive Fuels purchased from
Seller without Seller’s and/or ChevronTexaco’s prior written consent. No other
signs (except Texaco Automotive Fuel price signs) shall be placed on a sign pole
containing a sign advertising a product manufactured or handled by
ChevronTexaco. Upon expiration or termination of this Agreement, Purchaser shall
immediately return to Seller all signs supplied to Purchaser by ChevronTexaco or
Seller and shall immediately discontinue any and all use of such Insignia and
shall obliterate such Insignia from all real or personal property utilized by
Purchaser. Purchaser likewise shall obliterate such Insignia from any real or
personal property of Purchaser before selling any such property to a third
party.
 
(c)    ChevronTexaco Image. Purchaser shall cause the Premises at all times to
comply with Seller’s and/or ChevronTexaco’s image standards for automotive fuel
retail outlets, as established by Seller and/or ChevronTexaco from time to time.
Purchaser shall enroll in ChevronTexaco’s mystery shopper program and adhere to
all guidelines. If Purchaser scores a 75% or below on 50% (one half) of the shop
during the program year, than Purchaser will be considered non-compliant which
may lead up to de-branding of the facility.
 
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(d)    Brands, Grades, and Quality. The Texaco Automotive Fuels covered by this
Agreement shall be Texaco’s brands, grades, and quality thereof, respectively,
as established by ChevronTexaco from time to time for its sellers at the time
and place of delivery. ChevronTexaco shall have the right at any time during the
term of this Agreement to change, alter, or amend any brands under which the
Texaco Automotive Fuels covered by this Agreement that are now or may hereafter
be sold. If ChevronTexaco shall at any time during the term of this Agreement
discontinue the marketing of any or all of the Texaco Automotive Fuels covered
by this Agreement, Seller shall be relieved of all obligation to sell or deliver
such discontinued Texaco Automotive Fuels to Purchaser and, if ChevronTexaco
shall market any other product in lieu of the discontinued Texaco Automotive
Fuels, this Agreement shall embrace the new product and all of the terms and
conditions hereof previously applicable to the discontinued Texaco Automotive
Fuels shall apply to the new product.
 
8.    Conduct of Purchaser’s Business.
 
(a)    Independent Business. Purchaser is engaged in an independent business,
and nothing herein contained shall be construed as granting to Seller any right
to control Purchaser’s business or operations or the manner in which the same
shall be conducted, Purchaser’s obligation to Seller hereunder being the
performance of the terms and conditions of this Agreement. Seller has no right
to hire or fire any employees of Purchaser or to exercise any control over any
of Purchaser’s employees, all of whom are entirely under the control and
direction of Purchaser, who shall be responsible for their acts and omissions.
Purchaser accepts exclusive liability for all contributions and payroll taxes
required under federal social security laws and state unemployment compensation
laws or other payments under any laws of similar character as to all persons
employed by or working for Purchaser.
 
(b)    Strict Compliance. Purchaser shall conduct all operations hereunder in
strict compliance with all applicable laws, ordinances, and regulations of all
governmental authorities, including, without limitation, all rules and
regulations of the U.S. Department of Transportation, the Federal Petroleum
Marketing Practices Act, and all applicable franchise laws and regulations.
Purchaser shall supply ChevronTexaco and/or Seller with all information, which
ChevronTexaco and/or Seller shall reasonably request to enable ChevronTexaco
and/or Seller to comply with all applicable laws, ordinances, and regulations of
all governmental authorities. Purchaser’s indemnity obligations under this
Agreement shall include, without limitation, any and all expenses, liabilities,
claims, fines, civil penalties, or demands which may arise or be assessed as a
result of any failure by Purchaser to comply with any of the foregoing
governmental requirements.
 
(c)    Goodwill. Purchaser shall diligently promote the sale at the Premises of
the Texaco Automotive Fuels purchased under this Agreement, and shall conduct
the operation of Purchaser’s business in such a manner as to promote goodwill
towards ChevronTexaco and/or Seller. Purchaser agrees to assist in the
administration of any promotional program ChevronTexaco and/or Seller may
establish for its purchasers or other customers. Purchaser agrees to distribute
to Purchaser’s customers such promotional materials supplied by ChevronTexaco
and/or Seller as ChevronTexaco and/or Seller may from time to time reasonably
request.
 
(d)    Hazardous Materials. Purchaser hereby covenants, represents, and warrants
to Seller that: (i) the Premises are not contaminated with any Hazardous
Material (as defined below); (ii) Purchaser has not caused and will not cause,
and to the best of Purchaser’s knowledge, after diligent investigation and
inquiry, there never has occurred, the release of any Hazardous Material on the
Premises in violation of Environmental Laws; (iii) the Premises are not subject
to any federal, state, or local “superfund” or other lien, proceeding, claim,
liability, or action, or the threat or likelihood thereof, for the cleanup,
removal, or remediation of any such Hazardous Material from the Premises; (iv)
there is no asbestos or asbestos containing materials on the Premises in
violation of Environmental Laws; and (v) Purchaser will indemnify, defend, and
hold Seller harmless from and against any and all claims, demands, liabilities,
damages, suits, actions, judgments, fines, penalties, losses, costs, and
expenses (including, without limitation, attorney’s fees) arising or resulting
from, or suffered, sustained, or incurred by, Seller as a result (direct or
indirect) of the untruth or inaccuracy of any of the foregoing matters
represented and warranted by Purchaser to Seller or the breach of any of the
foregoing covenants, representations, and warranties of Purchaser.
 
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“Hazardous Material” means asbestos, PCBs, and any hazardous, toxic, or special
substance, material, waste, or petroleum that is regulated by any governmental
authority, including the State of Arizona or the United States government and
includes, without limitation, any material, substance, or waste that is (i)
designated as such pursuant to Section 307 of the Federal Water Pollution
Control Act, 33 U.S.C. § 1251 et seq. (33 U.S.C. § 1317); (ii) defined as such
pursuant to Section 1004 of the Federal Resource Conservation and Recovery Act,
42 U.S.C. § 6901 et seq. (42 U.S.C. § 6903); (iii) defined as such pursuant to
Section 101 of the Comprehensive Environmental Response, Compensation and
Liability Act, 42 U.S.C. § 9601 et seq. (42 U.S.C. § 9601); or (iv) designated
or defined as such under any applicable federal or state statute or county or
municipal law, regulation, ordinance, order, or code, in each case as amended
(collectively, “Environmental Laws”).
 
(e)    Indemnification. Purchaser shall indemnify, defend, and hold harmless
Seller, ChevronTexaco, and their respective directors, officers, partners,
members, agents, and employees from and against all expenses (including
attorney’s fees), liabilities, and claims of whatsoever kind and nature
including, without limitation, those for damage to property (including
Purchaser’s property) or injury to or death of persons (including Purchaser),
directly or indirectly resulting, or alleged to result, from anything occurring
from any cause on or about or in connection with the maintenance, upkeep,
repair, replacement, operation, or use of the Premises, or anything located
thereon. The foregoing indemnity shall not apply where such expenses,
liabilities, or claims result from Seller’s sole negligence or willful
misconduct.
 
9.    Termination.
 
(a)    Termination By Purchaser. Purchaser may terminate this Agreement without
cause at any time during the Term provided Purchaser gives Seller ninety (90)
days’ written notice of such termination, and provided further that the Debt is
fully repaid to Seller as provided herein.
 
(b)    Termination By Seller. Seller may, in addition to such other remedies as
Seller may have (including, without limitation, the right to terminate this
Agreement as otherwise provided herein), terminate this Agreement upon giving
Purchaser ninety (90) days’ prior written notice of such termination or, if it
would not be reasonable for Seller to give ninety (90) days’ prior written
notice, at Seller’s election upon giving Purchaser prior written notice for such
lesser period as is reasonable in the circumstances, if any one of the following
occurs:
 
(1)    Purchaser by act or omission breaches or defaults on any covenant,
condition, or other provision of this Agreement, which breach or default can be
cured, and Purchaser fails to cure such breach or default within ten (10) days
after written notice from Seller which notice shall specify such breach of
default; or
 
(2)    Purchaser by act or omission breaches or defaults on any covenant,
condition, or other provision of this Agreement, which breach or default cannot
be cured, or in the event of any breach or default by Purchaser after notice of
two previous breaches or defaults of any kind has been given hereunder,
regardless of Purchaser’s curing of such previous breaches or defaults; or
 
(3)    Purchaser fails to pay to Seller in a timely manner when due all sums to
which Seller is legally entitled (whether or not such sums are owed to Seller
under this Agreement); or
 
(4)    Purchaser knowingly fails to comply with federal, state, or local laws or
regulations relevant to Purchaser’s performance of this Agreement and/or the use
and/or operation of the Premises; or
 
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(5)    Purchaser willfully adulterates, commingles, mislabels, or misbrands
Texaco Automotive Fuels or other violations by Purchaser of trademarks, trade
names, and/or insignia requirements of Seller and/or ChevronTexaco; or
 
(6)    This Agreement, or any interest therein, is assigned or otherwise
transferred contrary to the provisions hereof; or
 
(7)    Purchaser vacates, abandons, transfers, or is deprived of possession of
the Premises; or
 
(8)    Unlawful, fraudulent, or deceptive acts or practices or criminal
misconduct by Purchaser relevant to the Purchaser’s performance of this
Agreement and/or the use and/or operation of the Premises; or
 
(9)    Failure by Purchaser to operate the Premises as an automotive fuel retail
outlet for seven (7) consecutive days,; or
 
(10)   Conviction of Purchaser of any felony including moral turpitude; or
 
(11)   Purchaser’s death, if Purchaser is an individual (subject to any valid
requirements of any applicable statute); or
 
(12)   Purchaser knowingly induces the breach by a third party of a contract
between Seller and the third party; or
 
(13)   Purchaser declares bankruptcy or is judicially declared insolvent; or
 
(14)   Any other event which is relevant to the relationship between Seller
and/or ChevronTexaco and/or Purchaser and as a result of which termination of
the Agreement is reasonable.
 
Notwithstanding anything to the contrary herein, and without limitation on the
foregoing, it is agreed that upon the occurrence of any of the events specified
in clauses (1), (3) through (14) of this subsection (b), it shall not be
unreasonable for Seller to terminate this Agreement upon giving Purchaser ten
(10) days’ instead of ninety (90) days’ prior written notice of such
termination.
 
(c)    Payment By Purchaser Upon Default Or Termination. In the event of default
hereunder, or if this Agreement is terminated prior to the end of the Term,
Purchaser agrees to pay immediately to Seller the balance remaining due, but not
limited to, any delivered product to Purchaser’s facility, and (if applicable)
all remaining sums due on the Promissory Note, and all Incentive payments, made
by Seller and/or ChevronTexaco to Purchaser. The refund of Incentive Payments
shall not apply if Seller terminates this Agreement without cause, if the
Agreement terminates as a result of activities referenced in Subsection 9(d)
below, or if such termination was a caused by or was the result of a breach of
this Agreement by Seller or Seller’s inability to properly perform under the
terms of this Agreement.
 
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(d)    Seller Withdrawal. Notwithstanding anything to the contrary herein, if
during the Term Seller decides to withdraw from marketing Texaco Automotive
Fuels from Seller’s area of primary responsibility outlined and attached hereto
as Exhibit C and made a part hereof, and/or should the agreement between Seller
and ChevronTexaco terminate for any reason whatsoever, Seller may terminate this
Agreement by giving Purchaser reasonable prior written notice of such
termination and otherwise complying with any applicable requirements of law.
 
(e)    Waiver. Waiver by Seller or Purchaser of one or more breaches or defaults
hereunder shall not be deemed to be a waiver of any other or continuing breach
or default hereunder. No modification of this Agreement, and no waiver of any
provision hereof, shall be binding on Seller or Purchaser unless in writing and
signed by Seller and Purchaser and, if deemed reasonable by one or more of the
parties hereto, by ChevronTexaco. Termination of this Agreement shall not
relieve Seller or Purchaser of responsibility for obligations incurred prior to
termination. Upon termination of this Agreement, subject to any valid
requirements of any applicable statute, neither Seller nor ChevronTexaco shall
have any obligation to purchase from Purchaser any of Purchaser’s inventory,
tools, equipment, or supplies.
 
(f)    Day To Day Agreement. If Seller continues to accept orders from Purchaser
for Texaco Automotive Fuels following termination of this Agreement, such sales
shall be upon all of the terms and conditions hereof; provided that such sales
shall not be construed to evidence a renewal of this Agreement by operation of
law or otherwise, but shall imply only an agreement from day to day, which
Seller may (subject to any valid requirements of any applicable statute)
terminate without cause at any time upon giving Purchaser written notice of such
termination.
 
Purchaser’s obligations, duties, and responsibilities, including without
limitation any amounts owed to Seller by Purchaser pursuant to this Agreement or
that may accrue as a result of Purchaser’s breach of this Agreement, shall be
secured by an irrevocable Letter Of Credit in the amount of Seventy-Five
Thousand Dollars ($75,000) or by other guarantees that the parties, from time to
time, may agree reasonable.
 
10.    Assignment.
 
(a)    General. This Agreement is personal to Purchaser, and Purchaser shall
not, without Seller’s prior written consent, assign or encumber Purchaser’s
interest in this Agreement, or delegate any duties that Purchaser may have under
this Agreement, either voluntarily or by operation of law or otherwise by
assignment, encumbrance, sublease, or other arrangements having similar effect,
or become associated with any other person, directly or indirectly, as a partner
or otherwise in regard to Purchaser’s interest or operations under this
Agreement; provided, however, transfers of this Agreement for estate planning
purposes for the benefit of existing holders of an interest in Purchaser or in
any entity holding an interest in Purchaser or the immediate family members of
existing holders of such interests shall not be deemed an assignment hereunder.
Seller shall have the right at any time to assign its rights and delegate its
duties under this Agreement without Purchaser’s consent. Any such assignment or
other transfer by Purchaser or Seller shall not relieve Purchaser or Seller of
their obligations hereunder.
 
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(b)   Corporation. This paragraph (b) applies if Purchaser is a corporation or a
limited liability company. Any sale, conveyance, alienation, transfer, or other
change of interest in or title to or beneficial ownership of any voting stock or
membership interest of Purchaser (or securities convertible into voting stock of
Purchaser) which results in a change in the control of Purchaser, whether
voluntarily, involuntarily, by operation of law, merger, or other corporate
proceedings, or otherwise, shall be construed as an assignment of Purchaser’s
rights under this Agreement. A change in the control of Purchaser shall be
deemed to occur whenever a party gains the ability to materially influence the
business and affairs of Purchaser, directly or indirectly. A party who owns
fifty-one percent (51%) or more of the voting stock or membership interest of
Purchaser (or securities convertible into such voting stock) shall be deemed to
have such ability. Thus, for example, the following would constitute an
assignment of Purchaser’s rights hereunder and require Seller’s prior written
consent under paragraph (a) of this Section 10: (i) the transfer of 51% or more
of the voting stock of Purchaser or membership interest; (ii) the transfer of a
lesser percentage of such stock or membership interest to an existing
stockholder or member, as applicable, who did not previously own more than 51%,
but thereby would own 51% or more of Purchaser’s voting stock or membership
interest; or (iii) the transfer of a lesser percentage of such stock or
membership interest which as a practical matter results in a change in the
control of Purchaser.
 
(c)    Partnership. This paragraph (c) applies if Purchaser is a partnership.
Any sale, conveyance, alienation, transfer, or other change of interest in or
title to or beneficial ownership of any partnership interest in Purchaser which
results in a change in the control of Purchaser, whether voluntary, involuntary,
by operation of law, or otherwise, shall be construed as an assignment of
Purchaser’s rights under this Agreement. A change in the control of Purchaser
shall be deemed to occur whenever a party gains the ability to influence the
business and affairs of Purchaser, directly or indirectly. A party who owns
twenty-five percent (25%) or more of a partnership, (whether a general or
limited partnership), or 25% of the general partnership interests in a limited
partnership, shall be deemed to have such ability. Thus, for example, the
following would constitute an assignment of Purchaser’s rights hereunder and
require Seller’s prior written consent under paragraph (a) of this Section 10:
(i) the transfer of 25% or more of the beneficial interest in Purchaser; (ii)
the transfer of 25% or more of the general partnership interests in Purchaser;
(iii) the transfer of a lesser percentage of such interests in Purchaser to an
existing partner who would thereby own 25% or more of the total partnership of
25% or more of the general partnership interests in Premises; or (iv) the
transfer of a lesser percentage of such partnership interests which as a
practical matter results in a change in the control of Purchaser.
 
11.   Insurance.
 
(a)    Scope of Insurance. Without in any way limiting Purchaser’s indemnities
contained herein, Purchaser shall maintain, at Purchaser’s own expense during
the Term hereof, insurance with respect to Purchaser’s business, the Premises,
and all activities on or about or in connection with the Premises of the types
and in the minimum amounts described generally as follows:
 
(1)    Garage Liability Insurance or Commercial General Liability Insurance
(bodily injury and property damage) of not less than $1,000,000.00 combined
single limit per occurrence, including the following coverages: explosion
hazard, personal injury, Premises-operations, products and completed operations,
blanket contractual and independent contractors liability, contractual liability
insurance to cover liability assumed under this Agreement, and liquor liability
(if alcoholic beverages are sold from the Premises); and
 
(2)    Automobile Liability Insurance (bodily injury and property damage) of not
less than $1,000,000.00 combined single limit per occurrence on all automobiles,
all tow trucks and service vehicles which are owned, nonowned, hired, or leased
by Purchaser, and all vehicles bearing the hallmark or other Insignia used by
ChevronTexaco, which are owned, nonowned, hired, or leased by Purchaser; and
 
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(3)    If required by state or federal mandate, Environmental Impairment
Liability Insurance (bodily injury and property damage) of not less than
$1,000,000.00 combined single limit of liability, including gradual seepage,
pollution, and cleanup costs; and
 
(4)    Worker’s Compensation and Employer’s Liability Insurance as prescribed by
applicable law; and
 
(5)    Any other insurance or surety bonding that may be required under the
laws, ordinances, and regulations of any governmental authority, including the
Federal Motor Carrier Act of 1980, as amended from time to time, and all rules
and regulations of the U.S. Department of Transportation, as amended from time
to time, and any other applicable federal, state, or local laws and regulations;
and
 
(6)    Excess liability insurance of not less than $1,000,000.00 per occurrence
in excess of the insurance required under clauses (1), (2), (4) (except Worker’s
Compensation), and (5) above, affording not less than the same coverage and
including personal injury and property damage coverage.
 
(b)   The insurance required in subsection (a) above shall include Seller and
ChevronTexaco as additional insureds except with regard to occurrences that are
the result of their sole negligence and shall require the insurer to provide
ChevronTexaco and Seller with thirty (30) days’ prior written notice of any
cancellation or material change in such insurance.
 
(c)    Insurance Company Standards. The insurance required above shall be issued
by insurance companies which meet Seller’s financial standards for insurers (as
established by Seller from time to time) and shall provide that no cancellation
or material change in any policy shall become effective except upon thirty (30)
days’ prior written notice to Seller. The insurance companies shall have no
recourse against Seller, ChevronTexaco, or any other additional insured, for
payment of any premiums or assessments under any policy issued by a mutual
insurance company. Purchaser shall furnish certificates satisfactory to Seller
as evidence that the insurance required under this section is being maintained.
Purchaser shall be responsible for all deductibles in all of Purchaser’s
insurance policies. Purchaser’s indemnity and other obligations shall not be
limited by the foregoing insurance requirements.
 
12.   Corporate/LLC Dealer; Operator.
 
(a)   Personal Qualifications. The personal qualifications of Purchaser is of
material significance to Seller, other automotive fuel retail outlets displaying
ChevronTexaco’s Insignia, and the motoring public. Whether Purchaser does
business as a partnership, corporation, or limited liability company (“LLC”),
this Agreement is entered into by Seller with the understanding that this
Agreement is conditioned on the individual(s) remaining actively involved with
and responsible for the operation of the Premises and retaining control of the
partnership, corporation, or LLC. Accordingly, if Purchaser is a partnership,
corporation, or LLC and subject to any valid requirements of any applicable
statute, Purchaser agrees that the references to “Purchaser” in clauses (8),
(9), (11), and (12) of subsection 9(b) hereof are amended hereby to read
“Purchaser or any Operator” and that Purchaser’s rights under this Agreement are
subject to the following conditions being met throughout the term of this
Agreement, which Purchaser shall cause the following entity, (“Operator”), to
meet: Bowlin Travel Centers Inc.
 
(1)    Operator shall perform Purchaser’s obligations under this Agreement to
devote sufficient time to the supervision of operations at the Premises so as to
provide for the continued proper operation thereof as an automotive fuel retail
outlet.
 
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(2)    This clause (3) applies if Purchaser is an LLC or limited liability
partnership. Operator shall own all right, title, and interest, legal and
beneficial, in and to a majority voting interest, majority profit interest, and
majority capital interest in Purchaser. Operator shall not pledge or otherwise
hypothecate any such interests, or permit or suffer any lien or encumbrance to
be placed thereon, or grant proxies or enter into operating or other agreements
which limit in any manner Operator’s control of Purchaser, or otherwise create,
permit, or suffer legal, beneficial, or other rights or interests to exist in
others with regard to any such interests of Operator in Purchaser.
 
(3)    This clause (4) applies if Purchaser is a general or limited partnership.
Operator shall be a general partner and own all right, title, and interest,
legal and beneficial, in and to a majority voting interest, majority profit
interest, and majority capital interest in Purchaser. Operator shall not pledge
or otherwise hypothecate any such interests, or permit or suffer any lien or
encumbrance to be placed thereon, or grant proxies or enter into operating
agreements or other agreements which limit in any manner Operator’s control of
Purchaser, or otherwise create, permit, or suffer legal, beneficial, or other
rights or interests to exist in others with regard to any such interests of
Operator in Purchaser.
 
(4)    Operator shall oversee the performance of all of Purchaser’s obligations
under this Agreement.
 
(b)   Constructive Assignment. Automobile Fuel Regulations.
 
(c)   Laws and Regulations. The automotive fuels covered by this Agreement are
subject to federal air pollution laws and regulations controlling fuels and
fuels additives for use in motor vehicles and motor vehicle engines. Those laws
and regulations require, without limitation, automotive fuels to meet product
specifications designed to minimize harmful emissions, and impose directly on
Purchaser, Seller, any distributor, reseller, retailer, or wholesale
purchaser-consumer (as defined in such regulations) receiving regulated
automotive fuels from Purchaser (“Purchaser’s automotive fuel customers”) and
ChevronTexaco specific legal obligations in selling and distributing regulated
automotive fuels. ChevronTexaco has established certain programs and procedures
for handling regulated automotive fuels to achieve compliance with these
governmental requirements and reduce liability exposure for noncompliance.
Purchaser recognizes the importance to ChevronTexaco, Seller, Purchaser, the
public, and Purchaser’s automotive fuel customers of meeting fully all
governmental automotive fuel requirements. Accordingly, Purchaser shall comply
with, and Purchaser shall require Purchaser’s automotive fuel customers to
comply with, ChevronTexaco’s current and future programs and procedures for
handling regulated automotive fuels, as set forth in ChevronTexaco’s Retail
Facility Compliance Guide, ChevronTexaco’s Motor Fuel Quality Compliance Manual,
and in all other manuals and/or written communications that ChevronTexaco has
distributed or may in the future distribute to Purchaser. Neither ChevronTexaco
nor Seller represent or warrant that following ChevronTexaco’s programs and
procedures for handling regulated automotive fuels will ensure compliance with
all governmental automotive fuel requirements. Purchaser is independently
responsible for complying fully with all applicable federal, state, and local
laws and regulations pertaining to automotive fuels, and for causing, to the
best of its ability, Purchaser’s automotive fuel customers to so comply, and
Purchaser shall, without limitation:
 
(1)    prohibit the sale, dispensing, or offering for sale of gasoline
represented to be unleaded gasoline unless it meets the requirements for
unleaded gasoline defined in the Federal Regulations;
 
(2)    prohibit introduction, or causing or allowing the introduction of, leaded
gasoline into any motor vehicle which is labeled “unleaded gasoline only,” or
which is equipped with a gasoline tank filler inlet which is designed for the
introduction of unleaded gasoline;
 
(3)    require that all gasoline pumps from which leaded gasoline is introduced
into motor vehicles, be equipped with a nozzle spout having a terminal end with
an outside diameter of not less than 0.930 inch (2.363 centimeters);
 
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(4)    require that all gasoline pumps from which unleaded gasoline is
introduced into motor vehicles, be equipped with a nozzle spout which meets the
following specifications: (i) the outside diameter of the terminal end shall not
be greater than 0.840 inch (2.134 centimeters); (ii) the terminal end shall have
a straight section of at least 2.5 inches (6.34 centimeters) in length; and
(iii) the retaining spring shall terminate 3.0 inches (7.6 centimeters) from the
terminal end;
 
(5)    require that the following notice be displayed in the immediate area of
each pump island:
 
Federal Law Prohibits the Introduction of Any Gasoline
Containing Lead or Phosphorus Into Any Motor Vehicle
Labeled “UNLEADED GASOLINE ONLY”;
 
(6)    require that unleaded gasoline pumps have affixed a label stating:
“Unleaded Gasoline”;
 
(7)    require that leaded gasoline pumps have affixed a label stating:
“Contains lead antiknock compounds.”
 
(d)   Notice of Contamination. Purchaser shall advise ChevronTexaco and Seller
if Purchaser has any indication that contamination of Texaco Automotive Fuels at
the Premises may have occurred in order that ChevronTexaco and/or Seller may, at
its or their option, conduct a test of such Texaco Automotive Fuels.
ChevronTexaco’s and/or Seller’s representative shall have the right at any
reasonable time to enter upon the Premises and to take such quantities of Texaco
Automotive Fuels as ChevronTexaco and/or Seller deem necessary to check the
quality of the Texaco Automotive Fuels, compensating Purchaser (at Purchaser’s
cost, which for this purpose shall be based on Seller’s price to Purchaser
hereunder in effect at the time such Texaco Automotive Fuels is taken, or, at
ChevronTexaco’s and Seller’s option, in kind) for any Texaco Automotive Fuels so
taken.
 
(e)   Spills. If a Texaco Automotive Fuels spill occurs anywhere in connection
with Purchaser’s performance of this Agreement, Purchaser shall promptly notify
ChevronTexaco and Seller and the appropriate governmental authorities and shall
take immediate action to clean up the spill. Upon receipt of such notification,
ChevronTexaco and/or Seller shall have the right, at its or their election, to
provide, or cause to be provided, to Purchaser such additional manpower,
equipment, and material as, at Purchaser’s request, may be necessary to assist
Purchaser to complete the clean-up of such spill in a satisfactory manner.
Purchaser shall pay and be responsible for and Purchaser’s indemnity obligation
under this Agreement shall include but shall not be limited to, all costs and
expenses incurred in connection with such clean-up, including reimbursement to
ChevronTexaco and/or Seller for all of its or their costs and expenses, and all
fines, charges, fees, or judgments imposed or levied by any federal, state, or
local governmental agency as a result of such spill, except in the event the
spill resulted solely from the act or omission on the part of ChevronTexaco,
ChevronTexaco’s employees or agent, Seller, or Seller’s employees or agents.
 
(f)    Indemnity. Purchaser’s indemnity obligations under this Agreement,
including this Section, shall include, without limitation, any and all expenses
(including attorney’s fees), liabilities, claims, fines, civil penalties, or
demands which may arise or be assessed as a result of any act or omission of
Purchaser, or Purchaser’s agents or employees in handling Texaco Automotive
Fuels purchased hereunder, or as a result of failure by any of them to follow
Seller’s and/or ChevronTexaco’s programs and procedures for handling Texaco
Automotive Fuels and/or failure to comply with any and all applicable federal,
state, and local laws and regulations pertaining to automotive fuels.
 
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(g)   Termination. If Purchaser fails to comply with the requirements of this
section with regard to any particular Texaco Automotive Fuels, then Seller, in
addition to such other remedies as it may have, shall have the right to
terminate delivery to Purchaser of the Texaco Automotive Fuels in question or to
suspend such delivery until Seller is satisfied that Purchaser is again in
compliance herewith.
 
13.   Incentive and Promotional Programs. ChevronTexaco may offer to Seller
and/or Purchaser from time to time incentive, promotional, or other development
programs. Such incentive, promotional, and development programs may be amended,
modified, or terminated upon thirty (30) days’ prior written notice to Purchaser
by ChevronTexaco and/or Seller. The duties and obligations of ChevronTexaco
under such incentive, promotional, and development programs may be assigned to
Seller. If such assignment is made, the obligations, responsibilities, and
duties imposed on Purchaser pursuant to the incentive, promotional, or
development programs, including any reimbursement, credit, refund, or
adjustment, may be secured, in Seller’s sole discretion, The parties acknowledge
that ChevronTexaco and Purchaser have entered into those certain terms and
conditions of the particular incentive, promotional, and development program
known as Investment Incentive Program as specified in Exhibit D attached hereto.
The duties and obligations of ChevronTexaco there under have been or are being
assigned to Seller.
 
14.    Notice. All notices, demands, requests, and other communications under
this Agreement shall be in writing and shall be properly served or delivered if
delivered by hand to the party to whose attention it is directed, or when sent,
three (3) days after deposit in the U.S. mail, postage prepaid, certified mail,
return receipt requested, addressed as follows:
 
If to Purchaser:
 
Bowlin Travel Centers, Inc.
150 Louisiana Ave. N.E.
Albuquerque, NM 87108
 
If to Seller:
 
Jacksons Food Stores, Inc.
3450 Commercial Court
Meridian, ID 83642

 
or at such other address or to such other party which any party entitled to
receive notice hereunder designates to the other in writing as provided above.
 
15.   Mediation. In the event a disagreement arises between Seller and
Purchaser, either Purchaser or Seller may demand mediation and shall give
written notice to that effect to the other party specifying in such notice the
name, address, and professional qualifications of the person designated to act
as mediator on behalf of the party requesting mediation. Within ten (10) days
after delivery of such notice, the party receiving such notice shall give
written notice to the party desiring such mediation whether such mediator is
acceptable and, if not, specifying the name, address, and professional
qualifications of the person designated to act as mediator on behalf of that
party. The two mediators so selected shall, within five (5) days thereafter,
select a third mediator. The mediator so chosen shall meet with the parties
within ten (10) days after the appointment of such mediator in an attempt to
reach a resolution of the disagreement between the parties. Each party shall pay
one-half of the fees and expenses of the mediator appointed by or on behalf of
such party and the fees and expenses of the third mediator. If those receiving a
request for mediation fail to appoint a mediator within the time above
specified, or if the two mediators so selected cannot agree on the selection of
a third mediator within the time above specified, or if the result of such
mediation is unsatisfactory to one or both parties, then any party may avail
itself of any legal or equitable remedy available to it under Idaho law.
 
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16.    System. ChevronTexaco has furnished (or will furnish) to the Purchaser
for use at the Premises certain electronic software (the “System”) for
processing ChevronTexaco authorized card transactions through Chevron’s Retail
Technology System and other purposes. Purchaser hereby agrees to execute
concurrently herewith, and be bound by, the System Agreement in the form
attached hereto as Exhibit B.
 
17.   Prior Agreements. This Agreement shall not become effective if, prior to
the commencement of the Term, ChevronTexaco notifies Purchaser of
ChevronTexaco’s election to exercise any right ChevronTexaco may have to
terminate any prior supply contract with Purchaser covering the delivery of
Texaco Automotive Fuels to the Premises. In such event, this Agreement shall be
null and void. Subject to the foregoing, effective as of the commencement of the
Term, this Agreement supersedes and terminates all prior supply contracts
between ChevronTexaco and Purchaser covering the delivery of Texaco Automotive
Fuels to the Premises, provided that any outstanding breach by Purchaser of any
such prior supply contract shall be deemed to be a breach of this Agreement and
the occurrence of any event authorizing the termination of any such prior supply
contract shall authorize the termination of this Agreement.
 
18.   Dealer Application; Conflicts of Interest.
 
(a)    Purchaser represents and warrants that all information set forth in
Purchaser’s written application to become a Texaco dealer and all other written
information, including but not limited to financial statements, submitted by
Purchaser in connection with such application was at the time of submission
true, accurate, and complete, and did not omit any material fact necessary to
make the information submitted, in light of the circumstances under which it was
submitted, not misleading.
 
(b)    Except as otherwise expressly provided herein, neither Purchaser nor any
director, employee, or agent of Purchaser shall give to or receive from any
director, employee, or agent of ChevronTexaco and/or Seller any gift,
entertainment, or other favor of significant value, or any commission, fee, or
rebate, without ChevronTexaco’s and/or Seller’s prior written consent, enter
into or maintain any business arrangement with any director, employee, or agent
of ChevronTexaco and/or Seller unless such person is acting as a representative
of and on behalf of ChevronTexaco and/or Seller.
 
(c)    In the event of any breach of the representations and warranties set
forth in this Section 19 or any other violation of this Section 19, including
any violation occurring prior to the commencement of the Term which resulted
directly or indirectly in Seller entering into this Agreement, Seller shall have
the right to terminate this Agreement. Purchaser shall immediately notify Seller
upon acquiring knowledge of any violation of this Section 19.
 
19.   Indemnity. Purchaser shall indemnify, defend, and hold harmless
ChevronTexaco and/or Seller and their respective directors, employees, agents,
and representatives from and against any and all expenses (including attorney’s
fees), liabilities, and claims of whatsoever kind and nature including, without
limitation, those for damage to property (including property of Purchaser) or
for injury to or death of any person (including Purchaser), directly or
indirectly arising or alleged to arise out of or in any way connected with the
storage, handling, distribution, sale, or use of Texaco Automotive Fuels
purchased hereunder, or with the maintenance, upkeep, repair, replacement, or
operation of the Premises or anything located thereon, including any act or
omission of Purchaser or Purchaser’s agents, employees, or representatives in
the performance of this Agreement, or in the operation of any vehicle or
vehicles in connection with Purchaser’s business, except if such expenses.,
liabilities or claims were caused by the negligence or actions of Seller or it’s
representatives or agents.
 
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20.   Miscellaneous.
 
(a)    Wherever under the terms and provisions of this Agreement the time for
performance falls upon a Saturday, Sunday, or legal holiday, such time for
performance shall be extended to the next business day.
 
(b)    This Agreement embodies the entire agreement between the parties hereto
with respect to the subject matter hereof. No modification or amendment to or of
this Agreement of any kind whatsoever shall be made or claimed by Seller or
Purchaser or shall have any force or effect whatsoever unless the same shall be
endorsed in writing and signed by the party against which the enforcement of
such modification or amendment is sought, and then only to the extent set forth
in such instrument; provided, however, Purchaser agrees to execute any and all
documents, instruments, agreements, deeds, or other workings that may be
necessary to implement the terms and conditions of this Agreement.
 
(c)    All parties hereto have either been represented by separate legal counsel
or have had the opportunity to be so represented. Thus, in all cases, the
language herein shall be construed simply and in accordance with its fair
meaning and not strictly for or against a party, regardless of which party
prepared or caused the preparation of this Agreement.
 
(d)    In the event of any lawsuit between Seller and Purchaser arising out of
or relating to other transactions or relationships contemplated by this
Agreement (regardless of whether such action alleges breach of contract, tort,
violation of a statute, or any other cause of action), the substantially
prevailing party shall be entitled to recover its reasonable aspects of such
action but not others, the court may apportion any award of costs or attorneys’
fees in such manner as such court deems equitable.
 
(e)    The captions at the beginning of the several paragraphs, respectively,
are for convenience in locating the context, but are not part of the text.
 
(f)    This Agreement shall be governed by the laws of the state of Idaho.
 
(g)    This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
 
(h)    The terms, provisions, agreements, representations, covenants, and
indemnities shall survive the Term hereof and shall remain binding upon and for
the parties hereto until fully observed, kept, or performed.
 
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.

SELLER:   PURCHASER:           
JACKSONS OIL a division of JACKSON
FOOD STORES, a Nevada corporation 
  Bowlin Travel Centers, Inc.           By: /s/ Tony Stone   By: /s/ Michael L.
Bowlin  

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  Tony Stone, President     Michael L. Bowlin, President

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