EXHIBIT
10.55
 
  COMMERCIAL
LEASE NO. 03-824
 
 ARIZONA
STATE LAND DEPARTMENT
  
 THIS COMMERCIAL LEASE is entered into
by and between the State of Arizona as “Lessor” by and through the Arizona State
Land Department and
  BOWLIN TRAVEL CENTERS, INC.
  As
“Lessee”.  In consideration of the payment of rent and the performance
by the parties of each of the provisions set forth herein, and intending to be
legally bound, the parties agree as follows:
 
 ARTICLE
1
 PARCEL
 
 1.1           Agreement.  
Lessor hereby leases to Lessee for the term, at the rent, and in accordance with
the provisions set for the herein, the Parcel described in Appendix “A” attached
hereto (the “Parcel”) for the uses and purposes specified below, subject to the
provisions of article 4 (Use of Premises).
 
 1.2           Use.   The
Parcel shall be sued solely and exclusively for:
  a convenience store, gift shop,
gas station, restaurant and employee housing (consisting of four mobile home
units)
 1.3           Parcel leased “as
is”.   Lessee makes use of the Parcel “as is” and Lessor
makes no express or implied warranties as to the physical condition of the
Parcel.
 
 1.4           Definition.   “Premises”
means the Parcel together with all rights appurtenant thereto expressly granted
by this Lease, including Improvements, Removable Improvements, and personal
property located on, below or above the Parcel.
 
 1.5           Definition.   “Rent”
means Annual Rent, base rent, percentage rent or any combination thereof,
including any and all payments required of Lessee to Lessor.
 
 ARTICLE
2
 TERM
 
 2.1           Commencement;
Expiration.   The term of this Lease commences on September 21, 2006,
and ends on September
20, 2016, unless terminated earlier as provided in this
Lease.
 
 ARTICLE
3
 RENT
  3.1           Annual
Rent.   Lessee shall pay rent to Lessor, without notice or
demand, on or before the commencement date of this Lease, and each year
thereafter, annually in advance, on or before the anniversary of the
commencement date, for the use and occupancy of the Parcel during the term of
this Lease, without offset or deduction except as provided
hereafter.  In the event that the Lessee appeals the initial rental
value set by the Land Commissioner for the Lease, and the Board of Appeals
determines a rental value different from the initial rental value set by the
Land Commissioner, either party may terminate this Lease within thirty days
after the decision of the Board of Appeals is final.   Lessee
agree to pay rent for this Lease due and payable as follows:
 
 Years 1 and 2:
              $32,000.00
 Years 3 and 4:
                $36,000.00
 Years 5 and 6:
                $38,000.00
 Years 7 and 8:
                $42,000.00
 Years 9 and 10:
                $45,000.00
 
 3.2           Lessee
shall pay as annual rental 2.5% of all gross receipts, except fuel sales, which
shall be one quarter of one cent ($0.0025) per gallon.
 
 3.3           Lessee
shall pay the annual base rent as defined in paragraph 3.1, or the percentage
rate defined in paragraph 3.2, whichever is greater.
 
 3.4           Gross
Receipts.   “Gross Receipts” shall mean the selling and
leasing price of all goods, wares and merchandise and receipts of all
transactions and the charges for all services performed at, within or from any
part of the demised Parcel, including all departments and concessions therein
and subtenancies, where permitted, pursuant to the provisions of the Lease, no
matter by whom operated, for cash or on credit, whether payment is actually made
or not, the risk of such payment being assumed by
lessee.  Concessionaires, demonstrators or vending machines, including
those owned by others, operating upon the demised Parcel shall be included
within Gross Receipts.
 
 3.5           Annual Statement &
Percentage Rent Payment.   On or before each anniversary
of the commencement date of this Lease, simultaneously with the payment of the
base rent, shall deliver to Lessor a statement signed by the Lessee or certified
by a Certified Public Accountant, setting forth Gross Receipts during the
preceding twelve (12) months, hereinafter known as the “Reporting Period,”
ending September
20.  The annual statement shall be accompanied by payment of
percentage rent, if any, due for the Reporting Period.  Within sixty
(60) days of the date of expiration, cancellation, or termination of this Lease,
Lessee shall submit a final annual statement accompanied by any percentage rent
due through the date of expiration, cancellation or
termination.  Percentage rent shall accrue from September 21 to September
20.  If any Reporting Period is less than twelve (12) months,
the percentage rent shall be calculated on a prorated basis.
 
 3.6           Penalty; Interest;
Lien.   Lessee shall pay a penalty of five percent (5%)
plus interest on any amount of delinquent rent.  Interest shall accrue
daily on the delinquent amount an on the penalty at the rate set by the Arizona
State Treasurer under A.R.S. § 37-241(D)(3) until paid.  The
delinquent rent, penalty and interest shall be a lien on the Improvements and
other property on the Parcel.
 2
 ARTICLE
4
 USE OF
PREMISES
 
 4.1           Use.   The
Premises shall be used solely and exclusively for the purpose described in
Article 1.2 (Use).  All others are prohibited.  The four (4)
mobile home units allowed under Article 1.2 shall be occupied only so long as
the convenience store, gift shop, gas station and restaurant, herein referred to
as the business, remain in operation.  There is no intent for their
use as home sites; rather they are intended as temporary employee housing and
must be vacated immediately if the “business” ceases
operation.
 4.2           Artifacts.
 
 (a)           Pursuant
to A.R.S §§ 41-841 and 41-842, Lessee, Lessee’s employees, and Lessee’s guests
shall not excavate or collect any prehistoric or historic archaeological
specimens on the Parcel without a permit from the Director of the Arizona State
Museum and written approval of Lessor pursuant to the terms of this
Lease.  Lessee shall immediately report any unpermitted excavation or
collection of archaeological specimens on the Parcel to the Arizona State Museum
and Lessor.
 
 (b)           Pursuant
to A.R.S § 41-844, Lessee shall report to the Director of the Arizona State
Museum and Lessor any prehistoric or historic archaeological site, or
paleontological site, that is discovered on the Parcel by Lessee, Lessee’s
employees, or Lessee’s guests, and shall, in consultation with the Director of
the Arizona State Museum and Lessor, immediately take all reasonable steps to
secure the preservation of the discovery.
 4.3            Waste.   Lessee
shall not conduct or permit to be conducted any public or private nuisance on
the Premises, not commit or permit to be committed any waste
thereon.  Lessee shall report to Lessor and appropriate law
enforcement authorities any known or suspected trespass or waste committed on
the Premises.
 
 4.4           Native
Plants.   Lessee shall not move, use, destroy, cut or
remove or permit to be moved, used, destroyed, cut or removed any timber,
cactus, protected native plants, standing trees or products of the land except
that which is necessary for the use of the Parcel, and then only with the prior
written approval of Lessor.  If the removal or destruction of plants
protected under the Arizona Native Plant Law is necessary to the use of the
Parcel, Lessee shall also obtain the prior written approval of the Arizona
Department of Agriculture.
 
 4.5           Conformity to
Law.   Lessee shall not use or permit the Premises to be
used in any manner that is not in conformity with all applicable Federal, State,
County and municipal laws, rules and regulations, unless Lessor determines and
advises Lessee in writing otherwise.
 4.6           Governmental
Approval.   Except as provided in Article 4.5 (Conformity
to Law), failure to obtain, or loss of any governmental approval that is
prerequisite to the use for which this lease is issued or that is necessary to
construct, maintain or operate any facilities on the site in connection with
that use, shall constitute a breach of this lease, subject to the provisions of
Article 17 (Lessee Defaults and Lessor’s Remedies).
 
 4.7           Reservations.   
Lessor excepts and reserves from the Parcel all oil, gases, geothermal
resources, coal, ores, limestone, minerals, fossils, and fertilizers of every
name and description that may be found in or upon the Parcel, and Lessor
reserves the right to enter upon the Parcel for the purpose of prospecting
therefore, or extracting any or all of the commodities
therefrom.  Lessor reserves the right to issue to other persons,
rights to use the Parcel in a manner not inconsistent with the purposes for
which this Lease was issued.  Lessor further excepts and reserves the
right to relinquish to the United States lands needed for irrigation works in
connection with a government reclamation project, and to grant or dispose of
rights-of-way and sites for canals, reservoirs, dams, power or irrigation plants
or works, railroads, tramways, transmission lines or any other purpose or use on
or over the Parcel.
 3
 4.8           No Water Rights
Conferred.    This Lease does not confer upon Lessee, its
assignees or sublessees, any express or implied rights to the use or removal of
surface or ground from the Parcel.  Any use or removal of water from
the Parcel shall be pursuant to an independent written agreement with the Lessor
and no claim thereto shall be made by Lessee.  Any water right
established shall attach and be appurtenant to the Parcel.
 
 4.9           Groundwater
Conditions.    Drilling of well(s) is PROHIBITED without
prior written permission from Lessor per Article 6.2 (Prior Approval
Required).  In the event permission is granted. Lessee must file
intent to drill with the Arizona Department of Water Resources
(ADWR).
 (a)           Lessee
shall meter the well(s) on the Premises, record water use on a monthly basis,
and report annually to Lessor the amount of water pumped on the form provided by
Lessor and within the time period specified therein.
 
 (b)           Lessee
shall pay an assessment to Lessor, assessed each year for the amount of
groundwater used I conjunction with this Lease.
 
 (c)           ADWR
requires an annual report of groundwater pumped from non-exempt well(s) within
both Active Management Areas and Irrigation Non-Expansion Areas.  If
applicable, the Annual Water Withdrawal and Use Report as well as the associated
fees shall be submitted to the ADWR within the time period specified
therein.
 
 (d)           If
Lessee desires to move groundwater from well(s) located on the Premises off
State Trust land, or to use groundwater for purpose(s) different from those
stated in this Lease, Lessee shall file an application with Lessor for a public
auction water sale.  Movement of groundwater from the Premises prior
to a public auction is prohibited.
 
 (e)           Lessor,
by issuing this Lease, makes no guarantee with respect to groundwater
availability or groundwater quality.
 
 (f)           Lessor’s
personnel will have access to well(s) on the Premises during reasonable
hours.
 
 4.10           Quiet
Enjoyment.    Lessee shall peaceable and quietly enjoy the
Parcel during the term of this Lease so long as Lessee is in compliance with all
the provisions of this Lease.
 
 4.11           Inspection.   
Lessor, its duly authorized agents, employees and representatives shall have the
right to enter upon and inspect the Parcel and all Improvements thereon at
reasonable time, and in a reasonable manner.
 
 4.12           Surrender.   
In the event this Lease is not renewed, Lessee shall surrender peaceable the
possession of the Parcel upon expiration of the term of this Lease.
 
 ARTICLE
5
 RECORDS
 
 5.1           Record Keeping;
Inspection.    Lessee shall make and keep for the term of
the Lease and either (i) five (5) years t hereafter; or (ii) until the
conclusion of any dispute concerning this Lease, whichever is later, appropriate
books and records concerning the operation of t his Lease, including but not
limited to Federal and State tax statements, receipts and other
records.  Lessor, its duly authorized agents, employees and
representatives shall have the right at all times during the term of this Lease
and for either (i) five (5) years thereafter; or (ii) until the conclusion of
any dispute, whichever is later, to make reasonable examination of those books,
records or other material in order to obtain information which Lessor deems
necessary to administer this Lease.  Further, Lessor, its duly
authorized agents, employees and representatives shall have the right at all
times during the term of any sublease or any extension thereof, and for either
(i) five (5) years thereafter, or (ii) until the conclusion of any dispute,
whichever is later, to make reasonable examination of any sublessee’s books,
records or other material which Lessor deems necessary in order to obtain
information to administer Article 4 (Rent) of this Lease.
 4
 ARTICLE
6
 CONSTRUCTION AND
IMPROVEMENTS
 
 6.1           Definitions.   
“Improvements” means anything permanent in character which is the result of
labor or capital expended by Lessee or his predecessors in interest on State
land in its reclamation or development, and which has enhanced the value of the
Parcel.  “Removable Improvements” means anything not permanent in
character which is the result of labor or capital expended by Lessee or his
predecessors in interest on State land.
 
 6.2           Prior Approval
Required.  Lessee shall not place or construct or permit to be
placed or constructed any Improvement or Removable Improvement on or to the
Parcel.  Prior to applying for a building permit from the local
government authority or prior to beginning of the construction if no permit is
required, Lessee shall submit a current Application To Place Improvement
(“Application”).  No construction shall begin until Lessor
approves in writing the Application.  The
Application shall
include plans and specification (including but not limited to grading,
construction and landscape plans) showing the nature, location, approximate
cost, and quality of the proposed Improvements.  Drainage, waste
water, and sewage plans must be submitted with the Application.  Plans
submitted must be stamped by an Arizona registered engineer or
architect.  The work shall be completed by an Arizona registered
contractor.  The location of completed Improvements, as-built
construction plans stamped by an Arizona registered engineer or architect, and
nay other information required by Lessor, shall be submitted to Lessor within
thirty (30) days following the completion of construction on Lessor’s form known
as a Report of Improvement
Placed With Prior Approval.  Any Improvements placed on the
Parcel shall conform to existing laws and ordinances applicable to the proposed
construction in the jurisdiction where the Premises are located, unless Lessor
determines and advises Lessee in writing that such conformity is not in the best
interest of the Trust.
 
 6.3           Utilities; New
Construction.    Gas, electric, power, telephone. Water,
sewer, cable television and other utility or service lines of every nature shall
be placed and kept underground unless Lessor grants prior written approval
otherwise.  All buildings and structures shall be of new construction
and no buildings or structures shall be moved from any other location onto the
Parcel without Lessor’s prior written approval.
 
 6.4           Annual
Statement.    Upon request, but not more frequently than
once a year, Lessee shall file with Lessor a sworn statement setting forth the
description of any Improvement(s) placed on the Parcel during the prior lease
year and the actual cash value of such Improvement(s).
 
 6.5           Ownership;
Removal.   All Improvements placed upon the Parcel by Lessee
shall be the property of the Lessee subject to the terms of this Lease, and
shall, unless they become the property of the Lessor, be subject to assessment
for taxes in the name of the Lessee, the same as other property of the
Lessee.  Not later than ninety (90) days following the expiration of
this Lease, or, subject to A.R.S § 37-289.B, sixty (60) days following the
cancellation of this Lease, Lessee may remove those Improvements which belong to
it, are free of any liens and can be removed without causing injury to the
Parcel.  At its option, Lessor may waive any of the above listed
prerequisites to Lessee’s removal of Improvements.  Lessee may, with
Lessor’s prior written approval and within the time allowed for removal, sell
its Improvements to the succeeding Lessee.
 
 6.6           Improvements Dedicated to
Public Use.    Lessee shall have no right to
reimbursement for Improvements that are (or required to be) dedicated or
otherwise committed or transferred to public use, regardless of acceptance by
the public jurisdiction.
 
 ARTICLE
7
 REPAIRS AND
MAINTENANCE
 
 7.1           Lessee’s
Obligations.   Lessor shall be under no obligation to
maintain, repair, rebuild or replace any Improvement on the
Parcel.  Lessee shall, subject to the provisions of Article 12
(Damage) and Article 15 (Eminent Domain) and at its own expense, keep and
maintain the Premises in good order, condition and repair in conformity with all
governmental requirements and if applicable, those of the insurance underwriting
board or insurance inspection bureau having jurisdiction over the Premises,
unless Lessor determines and advises Lessee in writing that such conformity is
not in the best interest of the Trust.
 5
 ARTICLE
8
 MECHANICS’
LIENS
 
 8.1           Payment;
Indemnity.   Lessee shall be responsible for all costs and
charges for any work done by or for it on the Premises or in connection with the
Lessee’s occupancy thereof, and Lessee shall keep the Premises free and clear of
all mechanics’ liens and other liens and encumbrances resulting from work done
for Lessee or persons claiming under it; provided, however, that Lessee may in
good faith, and with reasonable diligence, contest or dispute any such lien
claims in any appropriate forum so ling as this Lease or the Leased Parcel are
not actually in danger of levy or sale.  Lessee expressly agrees to
and shall indemnify and save Lessor harmless against liability, loss, damages,
costs, attorney’s fees and all other expenses on account of claims of lien or
other encumbrances of laborers or material men or others for work performed or
materials or supplies furnished to Lessee or Persons claiming under
it.  Further, any contracts between Lessee or sublessees and any
contractors and subcontractors shall expressly hold Lessor harmless against any
liability arising from such contracts, as described above.
 
 8.2           Notice.   Should
any such claims of lien or other encumbrances be filed against the Parcel or any
action affecting the title to the Parcel be commenced, the party receiving
notice of such lien or action shall immediately give the other party written
notice thereof.
 
 ARTICLE
9
 UTILITIES
 
 9.1           Lessee’s
Obligations.    Lessee shall be responsible for and
shall hold Lessor harmless from any liability for all charges for water, gas,
sewage, electricity, telephone and any other utility service.
 
 ARTICLE
10
 TAXES AND
ASSESSMENTS
 
 10.1           Lessee’s
Obligations.    In addition to the rent set herein, Lessee
shall timely pay and discharge, without deduction or abatement for any cause,
all duties, taxes, charges, assessments, impositions and payments, extraordinary
as well as ordinary, unforeseen as well as foreseen, of every kind and nature
(under or by virtue of any current or subsequently enacted law, ordinance,
regulation or order of any public or governmental authority), which during the
term are due, imposed upon, charged against, measured by or become a lien on (i)
the Premises; (ii) any Leasehold interest; (iii) the interest of any of the
parties to this Lease or in the proceeds received pursuant to this Lease; and
(iv) the rent paid pursuant to this Lease.
 
 ARTICLE
11
 INSURANCE AND
INDEMNITY
 
 11.1           Indemnity.   
Except to the extent occurring or existing prior to the Commencement Date
hereof, Lessee hereby expressly agrees to indemnify and hold Lessor harmless, or
cause Lessor to be indemnified and held harmless, from and against all
liabilities, obligations, damages, penalties, claims, causes of action, costs,
charges and expenses, including attorney’s fees and costs, which may be imposed
upon or incurred by or asserted against Lessor by reason of any: (i) accident,
injury or damage to any person or property occurring on or about the Premises or
any portion thereof; (ii) use, no-use or condition of the Premises or any
portion thereof; or (iii) failure on the part of Lessee to perform or comply
with any of the provisions of this Lease; except that none of the foregoing
shall apply to Lessor’s intentional conduct or active negligence nor to the
intentional conduct or active negligence of Lessor’s against, servants,
contractors or subcontractors.  If any action or proceeding is brought
against Lessor by reason of any such occurrence, Lessee, upon Lessor’s written
request and at Lessee’s expense, will resist and defend such action or
proceeding, or cause that same to be resisted either by counsel designated by
Lessee or where such occurrence is covered by liability insurance, by counsel
designated by the insurer.
 6
 11.2           Policies.   Lessee,
at its expense, shall at all times during the Term of this Lease, and any
extension thereof, maintain in full force a policy or policies of commercial
general liability insurance, including bodily injury, property damage, personal
injury and broad form contractual liability coverage, written by one or more
duly licensed (or approved non-admitted) insurers in the State of Arizona with
an “A.M. Best” rating of not less than A-VII, and each policy shall be written
on an occurrence basis, which insure Lessee and Lessor against liability for
injury to persons and property and death of any person or persons occurring in,
on or about the Premises, or arising out of Lessee’s maintenance, use and
occupancy thereof.  All commercial general liability and personal
property damage policies shall contain a provision that Lessor, named as an
additional insured, shall be entitled to recovery under the policies for any
loss occasion ed to it, its servants, agents and employees by reason of the
negligence or wrongdoing of Lessee, it servants, agents and employees or
sublessee.  Further, the policies shall provide that their coverage is
primary over nay other insurance coverage available to the Lessor, its servants,
agents and employees.  All policies of insurance must contain a
provision that the company writing the policy shall give to Lessor thirty (30)
days notice in writing in advance of any cancellation or lapse, or the effective
date of any reduction in the amounts of insurance.
 
 11.3           Amounts.   The
insurance as described in Paragraph 11.2 (Policies) herein shall afford
protection not less than:
  General Aggregate:
                    $2,000,000.00
 Personal Injury:
                $1,000,000.00
 Each Occurrence:
                $1,000,000.00
 Blanket Contractual Liability – Written and
      Oral:
                $1,000,000.00


Fire Damage (Any on fire):
                $   500,000.00


in
combined single limit and each liability policy or policies shall be written on
an occurrence basis; provided, however, that the minimum amount of coverage for
the above shall be adjusted upward on Lessor’s reasonable request to be made no
more frequently than once every two (2) years so that such respective minimum
amounts of coverage shall not be less than the amounts then required by statute
or generally carried on similarly improved real estate in the County herein
described, whichever is greater,  If at any time Lessee fails,
neglects or refuses to cause such insurance to be provided and maintained, then
Lessor may, at its election, procure or renew such insurance and any amounts
paid thereof by Lessor shall be an additional amount due at the next date Rent
is due and payable.




11.4           Blanket
Policy.   Notwithstanding anything to the contrary in this
Article, Lessee’s obligations to carry the insurance provided for herein may be
brought within the coverage of a so-called blanket policy or policies of
insurance maintained by Lessee, provided, however, that the coverage afforded
Lessor will not be reduced by reason of the use of such blanket policy of
insurance.




11.5           Copies.   Lessee
shall furnish Lessor with certificates of insurance (ACORD form or equivalent
approved by Lessor) and shall at all times during the term of this Lease
maintain with Lessor a current certificate of insurance.  The State of
Arizona, Arizona State Land Department, the lease number, and location
description of the subject parcel are to be noted on the certificate of
insurance.  Lessor reserves the right to require complete, certified
copies of all insurance policies and endorsements required by this Lease at any
time.





ARTICLE
12


DAMAGE




12.1           Lessee’s
Obligations.   If the Parcel or any building or other
Improvement located thereon are damaged or destroyed during the term of this
Lease, Lessee may arrange at its expense for the repair, restoration and
reconstruction of the same substantially to its former condition, but such
damage or destruction shall not terminate this Lease or relieve Lessee from its
duties and liabilities hereunder.


7


ARTICLE
13


TRADE FIXTURES AND PERSONAL
PROPERTY




13.1           Lessee’s
Property.    Any trade fixtures, signs, store
equipment, and other personal property installed in or on the Parcel by Lessee
or any sublessee shall remain its property subject to the provisions of this
Lease.  Lessee shall have the right, provided it is not then in breach
hereunder, at any time to remove any and all of the same, subject to the
restriction of Article 6.5 (Ownership; Removal).





ARTICLE
14


ASSIGNMENT, SUBLETTING AND
ENCUMBRANCE




14.1           Prior Approval
Required.   Lessee shall not assign this Lease or any
interest therein, nor shall Lessee sublease any portion or all of the Premises
without obtaining Lessor’s prior written approval.  In no event may
this Lease or nay interest therein be assigned or sublet unless Lessee is in
full compliance with this Lease.  Lessor may require additional rent
in consideration for approval of any sublease.  Lessee shall not enter
into a contract of sale, mortgage, lien or other encumbrance affecting this
Lease unless a copy is filed with Lessor.




14.2           Consent
Required.   As assignment of this Lease shall not be made
without the consent of all the parties.  Lessee may assign all or a
portion of the Premises as allowed by the terms of this Article provided Lessee
shall assign Lessee’s entire interest in that portion of the
Premises.




14.3           Purpose.   There
shall be no assignment or sublease made except to an assignee or sublessee that
will use the Premises for the purposes(s) described herein.




14.4           Lessee Primarily
Responsible.   Notwithstanding any sublease, Lessee shall
remain responsible to Lessor for the performance of the provisions of this
Lease.




14.5           Percentage Rent
Due.    Assignment shall not be approved unless all
accrued percentage rent has been paid as of the date of the application for
assignment.




14.6           Entire
Interest.    The assignment of Lessee’s entire
interest in a portion of the Premises shall not relive Lessee of its
responsibility to Lessor for the performance of the provisions of this Lease as
it relates to that portion of the Premises not transferred by the
assignment.





ARTICLE
15


EMINENT
DOMAIN




15.1           Expiration.   If
at any time during the duration of this Lease the whole or any part of the
Parcel is taken by direct sale, lease, institutional taking under A.R.S. §
37-441 or acquisition in any manner through condemnation proceedings or
otherwise, for any quasi-public or public purpose by any person, private or
public corporation, or any governmental agency having authority to exercise the
power of eminent domain or condemnation pursuant to any law, general, special or
otherwise, this Lease shall expire on the date when the Parcel is taken or
acquired except as otherwise provided.




15.2           Partial Taking; Damages;
Rent.   In the event of a partial taking and if Lessor
determines that it is in the best interest of the Trust, the Lease may continue
in full force and effect for that portion of the Parcel not taken.  As
against Lessor, Lessee and any sublessee shall not have a compensable right or
interest in the real property being taken and shall have no compensable right or
interest in the severance damages which may accrue to the remainder of the
Parcel not taken, nor shall lessee or any sublessee have any compensable right
or interest in the remaining term of this Leasehold or any
renewal.  Rent shall be apportioned as of the day of such
taking.  Lessor shall be entitled to and shall receive any awards,
including severance damage to remaining state lands, that my be made for any
taking concerning the Parcel.


8


15.3           Lessee’s Rights to
Award.   In the event of any taking, Lessee shall have the
right to receive any and all awards or payments made for nay building or other
Improvements on the lands fully placed on the Parcel by Lessee with Lessor’s
prior written approval.





ARTICLE
16


BANKRUPTCY AND
INSOLVENCY





16.1           Lessor’s
Rights.   If (i) all or substantially all of Lessee’s
assets are placed in the hands of a receiver, and such receivership continues
for a period of thirty (30) days; or (ii) should Lessee make an assignment for
the benefit of creditors; or (iii) should Lessee institute any proceedings under
any present or future provisions of the Bankruptcy Code or under a similar law
wherein Lessee seeks to be adjudicated as bankrupt, or to be discharged of its
debts. Or to effect a plan of liquidation, composition or reorganization; or
(iv) should any involuntary proceedings be filed against Lessee under such
bankruptcy laws not be dismissed or otherwise removed within ninety (90) days
after its filing, then this Lease shall not become an asset in any of such
proceeding or assignment.  In addition to all other rights and
remedies of Lessor provided hereunder or by law. Lessor shall have the right to
declare the term of this Lease at an end and to re-enter the Premises, take
possession and remove all persons, and Lessee shall have no further claim on the
Parcel under this Lease.





ARTICLE
17


LESSEE DEFAULTS AND LESSOR’S
REMEDIES





17.1           Conditions.   All
of the provisions of this Lease are conditions.  Breach of any one of
these conditions by Lessee or any sublessee shall be sufficient grounds for
cancellation of this Lease by Lessor, subject to the other provisions of t his
Article.




17.2           Cancellation.   If
Lessee fails to keep any provision of this Lease, Lessor may cancel this Lease
and declare Lessee’s interest forfeited, and if it appears that this Lease was
procured through fraud, deceit or willful misrepresentation, the Improvements
shall be forfeited to the State.  Lessor shall be forever wholly
absolved from liability for damages which might result to Lessee or any
sublessee on account of this Lease having been canceled or forfeited prior to
the expiration of the full term, subject to the other provisions of the
Article.




17.3           Breach.   In
the event of a breach of this Lease which is not curable or remains uncured
after thirty (30) days notice by Lessor of failure to pay rent, taxes or other
assessments, and forty-five (45) days from the receipt of the notice to cure any
other curable default, to Lessee of the breach, Lessor may, in addition to all
other remedies which may be available to Lessor in law or in equity, (i) enter
and repossess the Premises or any part thereof, expelling and removing therefrom
all persons and property (either holding such property pursuant to Lessor’s
landlord’s lien, or storing at Lessee’s risk and expense, or otherwise disposing
thereof), as to which Lessor shall not be liable to Lessee or any sublessee for
any claim for damage or loss which may thereby occur, and (ii) either (a)
terminate this Lease, holding Lessee liable for damages for its breach or (b)
treat the Lease as having been breached anticipatorily and the Premises
abandoned by Lessee without thereby altering Lessee’s continuing obligations for
the payment of rent and the performance of those Lease provisions to be
performed by Lessee during the Lease term.




17.4           Liquidated
Damages.   If Lessor terminates this Lease for Lessee’s
breach, Lessee shall be liable to Lessor, as liquidated damages and not as a
penalty, an mount, which at the time of such termination, represents the amount
equal to the rent due for the two (2) subsequent years.  The
liquidated damages will compensate the Lessor for the loss of rent from the
Parcel due to the default and costs incurred to re-lease the
Premises.




17.5           Expenses.   Lessee
shall pay to Lessor upon demand all costs, expenses and fees. Including
attorneys’ fees (or market value of attorney’s fees) which Lessor may incur in
connection with the exercise of any remedies on account of or in connection with
any breach by Lessee, plus interest on all amounts due from Lessee to Lessor at
the rate set by the Arizona State Treasurer, according to law.


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17.6           Remedies not
Exclusive.   The remedies herein granted to Lessor shall
not be exclusive or mutually exclusive and Lessor shall have such other
additional remedies against Lessee as may be permitted in law or in equity at
any time; provided, however, Lessor shall not be relieved of any obligation
imposed by law for mitigation of damages, nor shall Lessor recover any
duplicative damages, and Lessee shall be reimbursed by any subsequent Lessee or
purchaser of the Premises for any amount by which the value of Lessee’s
Improvements exceed Lessor’s damages, notwithstanding nay other provision in
this Lease to the contrary.  In particular, any exercise of a right of
termination by Lessor shall not be construed to end or discharge any right of
Lessor to damages on account of Lessee’s breach.




17.7           No
Waiver.   No waiver of breach of any provision of this
Lease shall be construed as a waiver of succeeding breach of the same or other
provisions.





ARTICLE
18


HOLDING
OVER




18.1           Prohibition.   There
shall not be any holding over by Lessee or any assignee or sublessee, upon the
expiration or cancellation of this Lease without Lessor’s prior written
consent.  If there be any holding over by Lessee or any assignee or
sublessee, the holding over shall give rise to a tenancy at the sufferance of
Lessor upon the same terms and conditions as are provided for herein with a rent
for the holdover period commensurate with, but in no even less than, the
previous year’s rent.




18.2           Renewal
Application.   An application to renew this Lease,
properly and timely filed, may give rise to a period of interim occupancy if the
term of this Lease expires prior to execution of a new lease or the denial of
the application to renew.




18.3           Interim Occupancy
Conditions.   Should interim occupancy occur, on or before
the expiration of this Lease, and annually thereafter, Lessee shall pay rent
established by Lessor (subject to A.R.S. § 37-216 (b)).  Unless
advised in writing by Lessor to the contrary, all other terms and conditions of
this Lease shall remain in full force and effect.




ARTICLE
19


ENCUMBRANCES




19.1           Rights.   Lessee,
and its successor and assigns, shall have the unrestricted right to mortgage and
pledge this Lease, subject, however, to the limitations of the
Sections.  Any such mortgage/deed of trust or pledge shall be subject
and subordinate to the rights of Lessor, and nothing in this Lease shall be
construed to impose upon Lessor any obligation or liability with respect to the
payment of any indebtedness to any holder of a mortgage/deed of trust or pledge
of this Lease.




19.2           Term.   The
term of any leasehold mortgage or deed of trust shall not be longer than the
remaining lease term.




19.3           Registration.   No
h older of a mortgage/deed of trust on this Lease shall have the rights or
benefits provided by this Article nor shall the provisions of this Article be
finding upon Lessor, unless and until the name and address of the holder of the
mortgage/deed of trust is registered with Lessor.




19.4           Of  Record.   If
Lessee, or Lessee’s successors or assigns, shall mortgage this Lease in
compliance with the provisions of the Article, then so long as any such
mortgage/deed of trust of record remains unsatisfied, the following provisions
shall apply:





(a)           Lessor,
upon giving Lessee any notice of default, or any other notice under the
provisions of or with respect to this Lease, shall also give a copy of such
notice to the registered holder of a mortgage/deed of trust on this
Lease.


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(b)           Any
holder of such mortgage/deed of trust, in case Lessee shall have a monetary
default hereunder, shall, within thirty (30) days from the receipt of notice
have the right to cure such default, or cause the same to be cured, and Lessor
shall accept such performance by or at the instance of such holder as if the
same had been made by Lessee, all as provided in A.R.S. § 37-289
(A)(2).




(c)           Nothing
herein contained shall preclude Lessor, subject to the provisions of this
Article, from exercising any rights or remedies under this Lease with respect to
any other default by Lessee during the pendency of any foreclosure or trustee’s
sale proceedings.




(d)           Any
holder of such mortgage/deed of trust, in case Lessee shall have a default other
than a default involving failure to pay rent, taxes or other assessments, shall
have fort-five (45) days from the receipt of notice to cure any curable
default.




(e)           No
failure on the part of Lessor to give the required notice of default to the
holder of a mortgage/deed of trust shall be deemed a waiver of Lessor’s
continuing right to give notice of the default.




(f)           Upon
foreclosure of the mortgage or deed of trust, Lessor shall assign this Lease to
the holder of the mortgage or deed or trust if all taxes, rent and assessment
payment are current.  Nothing herein contained shall be deemed to
obligate the Lessor to deliver physical possession of the demised Premises to
the assignee under any assignment entered into pursuant to this
paragraph.




(g)           No
agreement between Lessor and Lessee modifying, canceling or surrendering this
Lease shall be effective without the prior written consent of the registered
mortgagees and lienholders.




(h)           No
union of the interest of Lessor and Lessee shall result in a merger of this
Lease in the fee interest.




(i)           If
a default is not cured within the applicable time period, Lessor may issue an
order canceling the Lease.  If a cancellation order is issued, the
order shall not become final until any foreclosure action by a mortgagee or
other lienholder, registered with Lessor pursuant to the Article, is finally
resolved, if the mortgagee or lienholder does both of the
following:




(1)           Within
thirty (30) days of the date of issuance of a Notice of Default, files written
notice with Lessor of its intent to proceed with a foreclosure action,
and:




(2)           Within
one hundred twenty (120) days of the date of issuance of a Notice of Default,
has commenced either a foreclosure action in court or a nonjudicial foreclosure
of a deed of trust, and has provided Lessor with a certified copy of the
complaint or other document that officially commences the foreclosure process,
and thereafter prosecutes the foreclosure with reasonable
diligence.




19.5           Casualty
Loss.   A standard Mortgage Clause naming each leasehold
mortgagee may be added to any and all insurance policies required to be carried
by Lessee hereunder on condition that the insurance proceeds are to be applied
in the manner that is not in derogation of Lessor’s rights; except that the
leasehold mortgage may provide a manner for the disposition of such proceeds, if
any, otherwise payable directly to Lessee (but not such proceeds, if any,
payable jointly to Lessor and Lessee) pursuant to the provisions of this
Lease.


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ARTICLE
20


ENVIRONMENTAL
MATTERS




20.1           Definition of regulated
substances and Environmental Laws.   For purposes of this
Lease, the term “Environmental Laws” shall include but not be limited to any
relevant federal, state or local environmental laws, and the regulations, rules
and ordinances, relating to environmental matters, and publication promulgated
pursuant to the local, state, and federal laws and any rules or regulations
relating to environmental matters.  For the purpose of this Lease, the
term “regulated Substances” shall include but not be limited to substances
defined as  “regulated substance”, “solid waste”, “hazardous waste”,
“hazardous materials”, “hazardous
substances”, “toxic materials”, “toxic substances”, “inert materials”,
“pollutants”, “toxic pollutants”, “herbicides”, “environmental nuisance”,
“criminal littering”, or “petroleum products” as defined in Environmental
Laws.





20.2           Compliance with
Environmental Laws.   Lessee shall strictly comply with
all Environmental Laws, including, without limitation, water quality, air
quality; and handling, transportation, storage, treatment, or disposal of any
Regulated Substance on, under, or from the Premises.  Without limiting
the foregoing, compliance includes t hat Lessee shall: (1) comply with all
reporting obligations imposed under Environmental Laws; (2) obtain and maintain
all permits required by Environmental Laws, and provide a copy to Lessor within
ten (10) business days of receipt of the Lease; (3) provide copies of all
documentation required by Environmental Laws to Lessor within ten (10) business
days of Lessee’s submittal and/or receipt of the documentation; (4) during the
term of the Lease, provide copies of all information it receives or obtains
regarding any and all environmental matters relating to the Premises, including
but not limited to environmental audits relating to the Premises regardless of
the reason for which other information was obtained or whether or not the
information was required by Environmental Laws; (5) prevent treatments, storage,
disposal, handling or use of any Regulated Substances within the Premises
without prior written authorization  from Lessor.





20.3           Designated Compliance
Officer.   Lessee at all times shall employ or designate
an existing employee (the “Designated Compliance Officer”) who is responsible
for knowing all Environment Laws affecting Lessee and Lessee’s business and
monitoring Lessee’s continued compliance with applicable Environmental
Laws.  Upon request by Lessor, Lessee shall make the Designated
Compliance Officer available to discuss Lessee’s compliance, answer any
questions, and provide such reports and confirming information as Lessor may
reasonable request.





20.4           Audit.   At
any time, Lessor may request Lessee to provide an environmental audit of the
Premises performed by an Arizona registered professional engineer or an Arizona
registered geologist.  Lessee shall pay the entire cost of the
audit.




20.5           Environmental
Assessment.   At any time, during the term of the Lease,
Lessor may require Lessee to obtain one Phase I environmental assessment of the
Premises performed by an Arizona registered professional engineer or an Arizona
registered geologist.  If based upon the Phase I environment
assessment or its own independent investigation, Lessor identifies any possible
violation of Environmental Laws or the terms of this Lease, Lessor may require
Lessee to conduct additional environmental assessments as Lessor deems
appropriate for the purpose of ensuring that the Premises are in compliance with
Environmental Laws.  The Phase I assessment, or any other assessment
required by Lessor, shall be obtained for the benefit of both Lessee and
Lessor.  A copy of the Phase I report shall be provided both to Lessee
and Lessor.  Lessor, in its sole discretion, shall have the right to
require Lessee to perform additional assessments of any damage to the Premises
arising out of the removal, treatment, storage, disposition, mitigation, cleanup
or remedying of any Regulated Substance on, under, or from the Premises by
Lessee, its agents, contractors, or subcontractors.




20.6           Indemnity for Environmental
Damage.   Lessee shall defend, indemnify and hold Lessor
harmless from and against any and all liability, obligations, losses, damages,
penalties, claims, environmental response and cleanup costs and fines, and
actions, suits, costs, taxes, charges, expenses and disbursements, including
legal fees and expenses of whatever kind or nature (collectively, “claims” or
“damages”) imposed on, incurred by, or reserved against Lessor in any way
relating to or arising out of any non-compliance with any Environmental Laws,
the existence or presence of any Regulated Substance, on, under, or from the
Premises, and any claims or damages in any was relating to or arising out of the
removal, treatment, storage, disposition, mitigation, cleanup or remedying of
any Regulated Substance on, under, or from the Premises by Lessee, its agents,
contractors, or subcontractors.


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20.7           Scope of
Indemnity.   The indemnity shall include, without
limitation, claims or damages arising out of any and all violations of
Environmental Laws regardless of any real or alleged fault, negligence, willful
misconduct, gross negligence, breach of warrants, or strict liability on the
part of any of the indemnities.  This indemnity shall survive the
expiration or termination of this Lease and/or transfer of all or any portion of
the Premises and shall be governed by the laws of the State of
Arizona.




20.8           Lessee’s Participation in
the Defense.   In the event any action or claim is brought
or asserted against the Lessor which is or may be covered by this indemnity,
Lessee shall fully participate, at Lessee’s expense, in the defense of the
action or claim including but no limited to the following: (1) the conduct of
any required cleanup, removal or remedial actions and/or negotiations. (2) the
conduct of any proceedings, hearings, and/or litigation, and (3) the negotiation
and finalization of any agreement or settlement.  Lessor shall retain
the right to make all final decisions concerning the defense, Lessee’s
obligations to participate in the defense under this Section shall survive the
expiration or termination of the Lease.




20.9           Restoration.   Prior
to the termination of the Lease, Lessee shall restore the Premises by removing
any and all Regulated Substances.  In addition, the restoration shall
include, but not be limited to, removal of all waste and debris deposited by
Lessee.  If the Premises or any portions hereof are damaged or
destroyed from the existence or presence of any Regulated Substance of if the
Premises or any portions thereof are damaged or destroyed in any way relating to
or arising out of the removal, treatment, storage, disposition, mitigation,
cleanup or remedying of any Regulated Substance, Lessee shall arrange, at its
expense, for the repair, removal, remediation, restoration, and reconstruction
to the Premises to the original condition existing on the date the Lessee first
occupied the Parcel, to the satisfaction of Lessor.  In any event, any
damage, destruction, or restoration by Lessee shall not relieve Lessee from its
obligations and liabilities under this Lease.  Lessee’s restoration
obligations under this Section shall survive the expiration or the termination
of the Lease.




ARTICLE
21


MISCELLANEOUS




21.1           Reservation.   This
Lease grants Lessee only those rights expressly granted herein and Lessor
retains and reserves all other rights in the Premises.




21.2           Binding
Effect.   Each provision of this Lease shall extend to, be
binding on and inure to the benefit of not only Lessee but each of its
respective heirs, administrators, executors, successors, and
assigns.  When reference is made in this Lease to either “Lessor” or
“Lessee”, the reference shall be deemed to include, wherever applicable, the
heirs, administrators, executors, successors and assigns of the
parties.  This Lease shall be binding upon all subsequent owners of
the Premises, and of any interest or estate therein or lien or encumbrance
thereon.




21.3           No
Partnership.   The relationship of the parties is that of
Lessor and Lessee, and it is expressly understood and agreed that Lessor does
not in any way or for any purpose become a partner of Lessee or a joint venturer
with Lessee in the conduct of Lessee’s business or otherwise, and that the
provisions of nay agreement between Lessor and Lessee relating to rent are made
solely for the purpose of providing a method by which rental payments are to be
measured and ascertained.




21.4           Quitclaim upon
Termination.   After the expiration or termination of this
Lease, Lessee shall execute, acknowledge and deliver to Lessor within thirty
(30) days after written demand from Lessor to Lessee, and document requested by
Lessor quitclaiming any right, title or interest in the Leasehold to Lessor or
other document required by any reputable title company to remove the cloud of
this Lease from the Premises.




21.5           Title.   The
titles to the Article of this Lease are not a part of this Lease and shall have
no effect upon the construction or interpretation of any part of the
Lease.


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21.6           Fraud or
Misrepresentation.   If during the term of this Lease it
appears that here has been fraud or collusion on the part of Lessee to obtain or
hold this Lease at a rent less than its value, or through Lessee’s fraud or
collusion a former Lessee of the Premises has been allowed to escape payment of
the rent due for former Lessee’s use of the Premises, Lessor may cancel this
Lease and the Parcel shall immediately revert to Lessor.  If during
the term if this Lease it appears that Lessee has misrepresented, by
implication, willful concealment or otherwise, (i) the value of the Improvements
placed on the Parcel by a former Lessee or any other person; or (ii) Lessee not
being the owner of the Improvements placed on the Parcel by a former Lessee or
any other person at the commencement of the Lease term, Lessor may cancel this
Lease and the Parcel shall immediately revert to Lessor.




21.7           Notices.  Any
notice to be given or other document to be delivered to Lessee or Lessor
hereunder shall be in writing and delivered to Lessee or Lessor by depositing
same in the United States Mail, with prepaid postage thereon fully prepaid and
addressed as follows:


TO
      Lessor:
                  Arizona
      State Land Department
                    1616 West Adams Street – First
      Floor
                    Phoenix, Arizona
  85007
 TO Lessee:
                Address
      of Record


Lessee
must notify Lessor by written notice of any change in address within thirty (30)
days.  Lessor may, by written notice to Lessee, designate a different
address.




21.8           Lessor’s
Title.   If it is determined that Lessor has failed to
receive title to any of the Parcel, the Lease is null and void insofar as it
relates to that portion of the Parcel to which Lessor has failed to receive
title.  Lessor shall not be liable to Lessee or any assignee or
sublessee for any damages that result from Lessor’s failure to receive
title.




21.9           Lessor’s
Lien.   Lessee grants to Lessor a lien superior to all
others in Lessee’s interest in Improvements and valuable materials located on
the Parcel.  Lessor has the right to recover any rent arrearage and
outstanding liabilities of Lessee from Lessee’s interest in the Improvements or
valuable materials.




21.10         No Promise to
Sell.  Lessee acknowledges that it has not been induced to
enter into this Lease by any promise from Lessor or any of its agents, servants
or employees that the Parcel will be offered for sale at any time.




21.11        
Cancellation.   Pursuant
to A.R.S. § 38-511 this Lease may be canceled within three years after its
execution, if any person significantly involved in initiating, negotiating,
securing, drafting, or creating the contract on behalf of the state, its
political subdivisions or any of the departments or agencies of either is, at
any time while the contract or any extension of the contract is in effect, an
employee or agent of any other party to the contract in any capacity or a
consultant to any other party of the contract with respect to the subject matter
of the contract.




21.12         Applicable
Law.   This Lease is subject to all current and
subsequently enacted rules, regulations and laws applicable to State lands and
to the rights and obligations of Lessors and Lessees.  No provision of
the Lease shall create any vested right in Lessee except as otherwise
specifically provided in this Lease.




21.13         Amendment.   This
Lease may be amended only in writing and upon agreement by all
parties.


21.14         Attorneys’
Fees.   In any action arising out of this Lease, the
prevailing party is entitled to recover reasonable attorneys’ fees and costs in
addition to the amount of any judgment, costs and other expenses as determined
by the court.  In the case of Lessor, reasonable attorney’s fees shall
be calculated at the reasonable market value for such service when rendered by
private counsel, notwithstanding that it is represented by the Arizona Attorney
General’s Office or other salaried counsel.


14


21.15         Execution.   This
document is submitted for examination and shall have no binding effect on the
parties unless and until executed by Lessor (after execution by Lessee), and a
fully executed copy is delivered to Lessee.  Upon the execution
hereof, at the request of Lessee, the parties also shall execute, so that Lessee
may cause it to be recorded, a short form of this Lease.




21.16         Arbitration.   In
the event of a dispute between the parties to this Lease, it is agreed to use
arbitration to resolve the dispute but only to the extent required by A.R.S. §
12-1518; and in no event shall arbitration be employed to resolve a dispute
which is otherwise subject to administrative review by the
Department.




21.17         Survey.   At
the request of Lessor, Lessee shall submit a current survey prepared by an
Arizona registered land surveyor of the Parcel.  The survey shall be
prepared to Lessors satisfaction and the cost of the survey shall be borne by
Lessee.




21.18         Mutual
Cancellation.   This Lease may be terminated as to all or
part of the Parcel prior to the expiration date upon written agreement signed by
both Lessor and Lessee.  The agreement shall specify the terms and
conditions of such a cancellation.




21.19         Non-Availability of
Funds.   Every obligation of the State under this Lease is
conditioned upon the availability of funds appropriated or allocated for the
payment of such obligation.  If funds are not allocated and available
for the continuance of this Lease, this Lease may be terminated by the State at
the end of the period for which funds are available.  No liability
shall accrue to the State in the event this provision is exercised, and the
State shall not be obligated or liable for any future payments or any damages as
a result of termination under this paragraph.




21.20         Non-discrimination.   The
parties agree to be bound by applicable State and Federal rules governing Equal
Employment Opportunity, Non-discrimination and Disabilities, including Executive
Order No. 99-4.





IN
WITNESS HEREOF, the parties hereto have signed this Lease effective the day and
year set forth below.





BOWLIN
      TRAVEL CENTERS, INC.LesseeBy:
              /s/  William
      J. McCabe
              3/24/08Authorized
      Signature
              DateSenior
      Vice-President  –  MISTitle150
      Louisiana, NEAddressAlbuquerque,
      New Mexico  87108City                     State
              Zip


STATE
      OF ARIZONA, LESSORArizona
      State Land CommissionerBy:
                  /s/  
      Katalin Gordon
                  4/1/08Date




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