Document:

EXHIBIT 10.56

     

    EXHIBIT
10.56

     

     

     

    AGREEMENT
TO EXCHANGE LAND

    

    THIS
AGREEMENT is entered into by the Commissioner of Public Lands for the State of
New Mexico (the “Commissioner”), trustee for the State of New Mexico (the
“State”) under the Act of June 20, 1910, 36 stat. 557, ch. 310 (the “Enabling
Act”) (the “Trust”), and Bowlin Travel Centers, Inc., a Nevada corporation
(“Bowlin”), and is effective as of the date shown below that it is signed by the
Commissioner (the Commissioner and Bowlin are sometimes referred to in this
Agreement individually as a “Party” and collectively as the
“Parties”).

    

    I.               
RECITALS.

    

    A.          Pursuant
to law, the Commissioner has caused a public notice advertising the proposed
exchange of that State Trust Land described in Exhibit A hereto (the “subject
State Trust Land”) to be published in two newspapers of general circulation for
a ten-week period (the “public notice”).  The public notice solicited
proposals to exchange land with an appraised value equal to or greater than the
minimum bid set for the subject State Trust Land.

    

    B.           In
response to the public notice, Bowlin submitted a proposal to exchange the
subject State Trust Land for the land owned by Bowlin in Doña Ana County, New
Mexico that is described in Exhibit B hereto (the “Bowlin Land”).

    

    C.           In
accordance with the Enabling Act, the Commissioner has determined that the value
shown below for the subject State Trust Land reflects its true value and that
the Trust will receive that value if the exchange of the Parties’ respective
lands is completed as provided for in this Agreement.

    

    D.          The
Commissioner has further determined that completion of the proposed transaction
as provided for herein will be of substantial benefit to the Trust.

    

    E.          The
Commissioner desires to exchange the surface estate of the subject State Trust
Land for the Bowlin Land under the terms and conditions set forth
below.

    

    II.             
AGREEMENT.

    

    A.        
Exchange of Real
Property.  Pursuant to the terms and conditions of this
Agreement and subject to their satisfaction, the Commissioner and Bowlin agree
to exchange their respective lands as described below.

     

    1.         Conveyance
of State Trust Land; Reservation of Minerals, Geothermal and Certain Water
Rights.  The Commissioner agrees to convey to Bowlin the subject State
Trust Land described in Exhibit A (the “Exchange Patent”), to be conveyed in an
exchange patent substantially in the form of said Exhibit A, subject to the
reservations described below.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    a.           Reservation
of Minerals, Geothermal Resources, and Certain Water Rights.  The
Exchange Patent shall reserve to the State, acting by and through the
Commissioner, all geothermal resources and all minerals of whatsoever kind in,
under or upon the subject State Trust Land, including but not limited to oil and
natural gas, helium, carbon dioxide, coal and lignite, uranium, brine, copper,
iron, lead, talc, barite, gold and silver, precious and semi-precious stones and
jewels, caliche, building stones, shale, clay, sand, gravel and rock for
crushing, whether or not now known to exist or to have value, of whatever form
or type, at whatever depth, in whatever nature of deposit, whether solid,
semi-solid, liquid, or gaseous, whether similar or dissimilar to any of those
minerals enumerated, and regardless of the method of extraction, whether by
wells (including input wells), mining (including subterranean, open-pit, or
strip mines), surface or subsurface leaching, or any other means now or
hereafter known or employed, together with all rights of access and surface use
necessary for or reasonably incident to exploration for and extraction and
removal of the geothermal resources or minerals, the right to execute leases,
permits or other agreements for geothermal resource or mineral exploration,
development, and operation, the right to sell or dispose of the geothermal
resources or minerals, the right to grant rights-of-way or entry and easements
for geothermal resource or mineral purposes, the right to prospect for, mine,
produce and remove geothermal resources and minerals, and the right to perform
any and all acts necessary in connection therewith.  The Exchange
Patent shall further reserve to the State any and all water rights vested in the
State as of the date of sale or exchange which are located on or derived from
the subject State Trust Land, any and all water rights appurtenant to or
riparian to the subject State Trust Land as of the date of sale or exchange and
the right to renew and extend any water easements, water leases or water rights
existing as of the date of sale or exchange together with the right to receive
the rents and revenues therefrom, together with all rights of access and surface
use necessary for or reasonably incident to developing and utilizing such water
rights.  The Commissioner agrees to lease or otherwise permit Bowlin,
or any of its assignees, lessees, grantees, permittees, licensees, affiliates,
subsidiaries, or successors in right, title or interest, to the fullest extent
permitted by law, to develop such water rights under terms agreed upon by Bowlin
and the Commissioner, whose permission to lease or develop such rights shall not
be unreasonably withheld.  The Commissioner further agrees to provide
Bowlin at least ninety (90) days written notice before leasing, transferring,
conveying or selling said water rights to any other party.

    

    b.           State
Trust Land Taken Subject to Encumbrances.  Bowlin acknowledges that it
is taking the subject State Trust Land subject to existing leases, rights of
way, permits, agreements, or other encumbrances (collectively, “encumbrances”)
as shown on the records of the State Land Office, that affect the subject State
Trust Land.  Such encumbrances are listed on Exhibit C
hereto.

     

    2.           Conveyance
of Bowlin Land, Lease and Easements.  Bowlin agrees to convey to the
Commissioner all of its right, title and interest in and to the Bowlin Land
described in Exhibit B (the “Bowlin Warranty Deed”), to be conveyed in a general
warranty deed substantially in the form of said Exhibit B, subject to any valid
easements, rights of way, covenants and other conditions of record, including
but not limited to that certain Lease Agreement No. 5221 to Bowlin Outdoor
Advertising for the purpose of erecting and maintaining outdoor advertising
structure(s) on the Bowlin Land, which Lease Agreement will be assigned to the
Commissioner.

     

    Bowlin
warrants that there are no liabilities or litigation attached to or involving
the Bowlin Land.  Should any liabilities or litigation affecting the
Bowlin Land become known to Bowlin prior to Closing, Bowlin shall immediately
notify the Commissioner, his Deputy Commissioner and his General Counsel by fax
and overnight in the manner provided for in Paragraph III(G) (Notice; Contact
Persons).  Failure to release or resolve any liabilities or litigation
involving the Bowlin Land to the satisfaction of the Commissioner prior to
Closing shall be grounds for the Commissioner not to execute and deliver the
exchange patent. Subsequent discovery of such present or pending litigation will
entitle the Commissioner to revoke this exchange and/or seek compensatory
damages.

    
       

      
        
        

        
          2

          
            

          

        

        

      

    

    3.          
The Parties’ respective duties to execute and deliver the Exchange Patent and
the Bowlin Warranty Deed described above and to perform any other acts at
Closing necessary to effectuate the proposed transaction described herein, are
subject to satisfaction of the conditions set forth in this
Agreement.

    
       

    

    B.          Value of Lands to be
Exchanged.

    

    1.           Value
of Lands to be Exchanged.  After inspection, appraisal and auction of
the subject State Trust Land, the Commissioner has determined its value to be as
set forth below.  Bowlin offered the Bowlin Land at the value set
forth below, subject to inspection and evaluation by the Commissioner of the
appraisal of the Bowlin Land prepared at Bowlin’s request (the “Bowlin
Appraisal”).

     

    
      	 	
              STATE TRUST
      LAND:

            	 	 	 
	 	Total Acreage –
      30.077 acres, more or less, as described in Exhibit A	 	 	 
	 	Value - $7,500.00
      (rounded) per acre = $225,600.00 (rounded)	 	 	 
	 	 	 	 	 
	 	
              BOWLIN
      LAND:

            	 	 	 
	 	Total Acreage – 1.0
      acre, more or less, as described in Exhibit B	 	 	 
	 	
              Value
      - $5.50 per square foot at 43,560 sf = $240,000.00
    (rounded)

            	 	 	 
	 	 	 	 	 
	 	
              DIFFERENCE IN VALUE OF
      LANDS:

            	 	 	 
	 	
              Bowlin
      Land Value:

            	 	$	240,000.00	 
	 	
              State
      Trust Land Value:

            	 	$	225,600.00	 
	 	Difference in Land
      Value resulting in benefit to the Trust: 	 	$	14,400.00	 

    

     

    C.          Relinquishment of Business
Lease BL-0514, Billboard Permits, Improvements on State
Land.  By a separate document entitled “General Relinquishment,
Release, and Quitclaim Deed” Bowlin has committed to relinquish at closing its
leasehold interest, as to the state land to be conveyed to Bowlin in this
exchange, in the lease with the State Land Office No. BL-0514.  Such
relinquishment is a condition precedent to the Commissioner’s duty to deliver
the Patent to Bowlin. Additionally,
the 6 Billboard Permits, nos. BB-42 thru BB-47 issued to Bowlin Travel Centers,
Inc. that are on the subject State Trust Lands will be cancelled. The State Land
has improvements which are valued at Eight Hundred and Four Thousand Dollars
($804,000.00). Title to the State Land Improvements is already held by Bowlin
Travel Centers, Inc.

    

    D.          Costs Associated with
Transaction and Closing.  Bowlin shall pay all costs associated
with the proposed transaction described herein, including without limitation:
(1) the costs of recording the Exchange Patent, the Bowlin Warranty Deed, and
any other documents necessary to effectuate the transaction in the appropriate
county real property records; (2) the issuance of the owner’s policy or
policies, including any amounts charged by the title insurance company for
deletion of the standard exceptions described below; (3) the Bowlin Surveys
(defined below); and (4) appraisals.  The Commissioner will record the
Exchange Patent and the Bowlin Warranty Deed in State Land Office records at no
charge.

    
       

      
        
        

        
          3

          
            

          

        

        

      

    

    E.          Closing; Closing
Instructions.

    

    1.           Closing.  Subject
to satisfaction of the conditions set forth in this Agreement, the closing of
the proposed transaction (the “Closing”) shall occur on August 29, 2008 (the
“Closing Date”), provided however, that the parties may postpone the Closing
Date up to one hundred and twenty (120) days by written
agreement.  The Closing shall occur at the NM State Land Office, 310
Old Santa Fe Trail, Santa Fe, NM 87501, or at such other location as the Parties
may agree.  The President of Bowlin and/or such other officers and
directors of Bowlin Travel Centers, Inc. as may be required pursuant to Bowlin’s
Articles of Incorporation and Bylaws and representatives of the State Land
Office shall be present at the Closing.  Bowlin shall provide such
documents, including resolutions, as may be required by the Commissioner and the
title company to evidence the authority of its representatives to execute all
documents necessary to effectuate the transaction contemplated by this
Agreement.  The President, or its authorized representative, of Bowlin
Travel Centers, Inc, shall sign the Warranty Deed and the Commissioner shall
sign the Exchange Patent, but may do so prior to Closing and need not be
personally present at the Closing.

    
       

    

    2.           Closing
Instructions.  The Parties shall formulate joint instructions (the
“Closing Instructions”) and deliver to Las Cruces Abstract & Title Co., 119
S. Campo, P.O. Drawer 1778, Las Cruces, N.M. 88004 (the “title company”)
regarding the time and place of Closing, representation of the Parties,
recording of the Exchange Patent and the Bowlin Warranty Deed, and such other
matters as the Parties deem necessary for inclusion in Closing
Instructions.

     

    F.          Title Insurance; Title
Search; Survey.

     

    1.           Title
Insurance.  The Commissioner acknowledges receipt from Bowlin and
Bowlin acknowledges receipt from the Commissioner of commitments for a standard
owner’s title insurance policy for the Bowlin Land and the State Trust Lands
(the “title insurance commitments”) in a form and from an issuer acceptable to
the Commissioner and Bowlin.  The Commissioner also acknowledges
receipt from Bowlin and Bowlin acknowledges receipt from the Commissioner of
legible copies of all documents creating reservations, servitudes or conditions,
upon such Land, referred to in the exceptions to the title insurance
commitments.  The Commissioner and Bowlin shall communicate to the
title company and such representatives of Bowlin as it may designate in
Paragraph III (G) (Notices; Contact Persons) to deal with any issues with
respect to the title insurance commitments they require to be resolved prior to
Closing.

     

    2.           Title
Insurance Policies.  At Closing, or as soon thereafter as reasonably
available, Bowlin shall provide a standard owner’s title insurance policy for
the Bowlin Land in accordance with the title insurance policy
commitment.  As a condition precedent to the Commissioner’s obligation
to convey the subject State Trust Land and accept conveyance of the Bowlin Land,
the title insurance commitment for the Bowlin Land shall be updated through the
Closing Date showing no liens, encumbrances or other defects in title for such
Land.  Owner’s Title Policy standard exceptions 1, 2, 3, 4, 5, 6, 8
and 9 will be deleted and standard exception 7 will be deleted as to all matters
other than water rights and claims or title to water.

    

    At
Closing, or as soon thereafter as reasonably available, the Commissioner shall
provide a standard owner’s title insurance policy for the State Trust in
accordance with the title insurance policy commitment.  As a condition
precedent to Bowlin’s obligation to convey the subject Bowlin Land and accept
conveyance of the State Trust Land, the title insurance commitment for the State
Trust Land shall be updated through the Closing Date showing no liens,
encumbrances or other defects in title for such Land.  Owner’s Title
Policy standard exceptions 1, 2, 3, 4, 5, 6, 8 and 9 will be deleted and
standard exception 7 will be deleted as to all matters other than water rights
and claims or title to water.

    
       

      
        
        

        
          4

          
            

          

        

        
        

         

      

    

    3.           Title
Search.  The Commissioner shall provide a title search of the New
Mexico State Land Office’s records for the subject State Trust Land (the “SLO
title search”) together with legible copies of all documents referenced in such
search and relevant to the subject State Trust Land being conveyed sufficiently
in advance of the Closing Date to permit thorough review.  Bowlin
shall be solely responsible for obtaining, at its cost, any title insurance of
the subject State Trust Land that Bowlin desires.

     

    4.           Survey
of Bowlin Land.  The Commissioner acknowledges receipt from Bowlin of
a boundary survey of all full and partial quarter quarter sections of the Bowlin
Land by a licensed New Mexico Land Surveyor (the “Bowlin Survey”).

     

    5.           Review
and Approval of Title Insurance Commitments, Title Search, Survey, and Legal
Descriptions.  Each Party shall be responsible for reviewing the title
insurance commitments, the SLO title search, the Bowlin Survey, and legal
descriptions derived from the Bowlin Survey and/or title commitments or the SLO
Land survey and/or title search to determine their acceptability for that
Party’s purposes.  The Parties shall cooperate to resolve any issues
or deficiencies noted in the title insurance commitments, the SLO title search,
the Bowlin Survey, the SLO Land Survey and/or the legal
descriptions.

    
       

    

    G.          Taxes and Levies on Bowlin
Land.  Bowlin will pay all property taxes and other levies
(collectively, “taxes”) due on the Bowlin Land through 2008, and will pay such
taxes for 2008 by either (1) paying the full amount of such taxes directly to
the taxing authority(ies) before Closing and presenting evidence of such payment
at Closing, or, (2) at or before Closing, depositing with the title company, as
escrow agent, a sum sufficient to pay such taxes, which taxes the title company
shall thereafter pay to the taxing authority(ies) once statements for the 2008
tax year have been tendered.

     

    H.         Cultural
Properties.  Each Party is aware of the possible existence of
cultural properties, as defined in NMSA § 18-6-3(B), on their respective
lands.  The Commissioner is willing to accept the Bowlin Land, and
Bowlin is willing to accept the subject State Trust Land, with knowledge that
thorough inspections may reveal such cultural properties. To the best of each
Party’s knowledge and belief, there have been no known violations of the
Cultural Properties Act (NMSA 1978, §§ 18-6-1 through 18-6-23) or any other
state, federal, or local government statute, regulation, or ordinance applicable
to their respective lands related to the protection of cultural or historic
properties with respect to any sites, objects, artifacts or human burials
(collectively the “cultural properties laws”) located on their respective
lands.  Upon completion of Closing, each Party agrees to assume full
responsibility for complying with all applicable provisions of the Cultural
Properties Act and other cultural properties laws that may affect the use of the
land it receives pursuant to this Agreement.  Each Party will not hold
the other responsible for compliance with such cultural properties laws, or for
any violation of such laws, with respect to post-closing activities conducted on
the land that it will receive.

     

    I.          Environmental
Hazards.  For the purpose of illustration, and without limiting
the scope of its meaning, the term “environmental hazards” includes the presence
of any hazardous materials as defined below on the Parties respective
land.  Hazardous materials include without limitation any oil,
petroleum products, explosives, PCBs, asbestos, formaldehyde, radioactive
materials or waste, or other hazardous, toxic, or contaminated materials,
substances or wastes, including any substance, waste or material which is
defined or listed as a “hazardous substance,” “hazardous waste,” “hazardous
material,” “toxic substance,” “medical waste,” “regulated substance,” or which
is otherwise controlled or regulated because of its toxicity, infectiousness,
radioactivity, explosiveness, ignitability, corrosiveness or reactivity, under
any federal, state, or local government statute, regulations, or ordinances,
including but not limited to the federal Clean Water Act, the federal Solid
Waste Act, the federal Clean Air Act, the federal Comprehensive Environmental
Response, Compensation and Liability Act (“CERCLA”) and the New Mexico
Environmental Protection Act (collectively, “environmental laws”), relating to
landfills, medical waste, industrial hygiene, environmental protection or the
manufacture, use, generation, presence, analysis, transportation, handling,
storage, treatment or disposal of any such material, substance, or
waste.

    
       

      
        
        

        
          5

          
            

          

        

        
        

         

      

    

    While
Bowlin has been subject to a “Minimum Site Assessment Preliminary Investigation
for Bowlin Old West Trading PST” review and report, dated December 13, 2006,
regarding the gasoline storage tanks on the site, the New Mexico Environment
Department reviewed the report and issued Release Number 4491, a copy of which
is attached hereto as Exhibit D, stating that the site does not pose an
immediate threat to public health or the environment.

     

    Bowlin
(the Indemnitor) will indemnify and hold harmless the Commissioner, the State
Land Office, the State of New Mexico and any of their officials, officers,
employees and/or agents (the Indemnitee) from any and all liabilities, losses,
damages, injuries, suits, claims, judgments, costs, expenses and counsel fees
relating to or resulting from any violation or alleged violation of any
environmental law or regulation, whether local, state or federal, whether
statutory law, common law, or regulatory law, relating to any actual or alleged
release, deposit, placement, leaching, or dumping at any time of any hazardous
material or substance upon, in, from, onto or under the State Land to be
conveyed to Bowlin pursuant to this Exchange Agreement, and regardless of
whether such hazardous material or substance is alleged to affect the surface,
soil, groundwater or other attribute of the State Land.  This
indemnification and hold harmless provision covers, but is not limited to, any
liability, loss, damages, injury. suit, claim, judgment, cost, expense or
counsel fee that may be asserted against the Indemnitee under the federal
Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C.
9601-9675 (CERCLA); the federal Resource Conservation and Recovery Act, 42 USC
2601-2671 (RCRA); and the New Mexico Environmental Improvement Act (Chapter 74,
NMSA 1978), as well as any regulation promulgated pursuant to any of these
statutes or any other environmental statute.   This Paragraph
shall survive the closing of the real estate transaction contemplated by this
Agreement and shall be binding upon the successors, heirs and assigns of the
Indemnitor.

    
       

    

    Each of
the Parties represents to the other Party that it has no current knowledge of,
or cause to believe there is, any pollutant or toxic or hazardous material or
substance as defined in, or covered by, any environmental law in, on or under
that Party’s land, nor is that Party aware of any potential environmental
liability concerning, or in any way related to, their respective
lands.

    

    J.          Bowlin Warranty Regarding
Land Use, Subdivision and Zoning Compliance.  Bowlin warrants
to the best of it knowledge that a subdivision of the Bowlin Land has not been
proposed or completed under any applicable law, including without limitation,
the New Mexico Subdivision Act (NMSA 1978, Chapter 47, Article 6) and that it
has not received any notice that it is not in compliance with any state or local
planning, zoning, or subdivision requirements affecting the Bowlin Land or the
exchange contemplated by this Agreement.

     

    K.          Possession of the Exchanged
Lands.  The Commissioner and Bowlin shall be entitled to and
shall have possession of the exchanged Bowlin Land and the subject State Trust
Land, respectively, upon recording of the Exchange Patent and the Bowlin
Warranty Deed.

     

    III.           
ADDITIONAL PROVISIONS.

     

    A.          Further
Representations.  Each Party makes the following additional
representations relative to this Agreement to the other Party:

     

    1.           Such
Party is duly authorized to enter into and perform this Agreement and to make
the representations and warranties contained in this Agreement and any related
documents that it may sign.

    
       

      
        
        

        
          6

          
            

          

        

        
        

         

      

    

    2.           Such
Party has no knowledge of (a) any existing violations of applicable law with
respect to its Land and, (b) any existing, pending, or threatened litigation
which could affect title to, or the present or future use of, its Land, or (c)
any existing, pending, or threatened litigation that does or would challenge or
affect its authority to perform under this Agreement, including its authority to
execute any documents necessary to effectuate the proposed exchange, or that
would affect the validity of any such documents once executed, including the
Exchange Patent or the Bowlin Warranty Deed.

    
       

    

    B.         
Execution in
Counterparts.  This Agreement may be executed in one or more
identical counterparts which, when assembled together, shall constitute one
Agreement which shall be binding on both of the Parties and their respective
successors and assigns.

    

    C.          Governing Law;
Venue.  This Agreement is subject to, and shall be interpreted
in accordance with, the laws of the State of New Mexico, without giving affect
to their choice of law provisions.  Venue for any litigation that
might arise in connection with this Agreement shall be in Santa Fe County in the
District Court for the First Judicial District.  Any dispute arising
from this Agreement shall first be determined through an administrative
proceeding under Land Office Rule 15, 19.2.15 NMAC.

     

    D.          Entire Agreement, Merger,
Amendment, Waiver.  This Agreement incorporates all the
agreements, covenants and understandings between the Parties concerning the
subject matter hereof, and all such covenants, agreements and understandings
have been merged into this written Agreement.  No prior agreement or
understanding, oral or otherwise, of the Parties or their agents shall be valid
or enforceable unless embodied in this Agreement.  This Agreement
shall not be altered, changed or amended except by instrument in writing
executed by the Parties.  Neither Party’s delay or omission in
exercising or enforcing any right or power hereof shall impair, or be construed
to be a waiver of, such right or power.  No custom or practice that
evolves between the Parties shall be construed to lessen one Party’s right to
require the other to perform in strict accordance with the terms of this
Agreement.  One Party’s waiver of the other’s failure to comply with
any of the terms of this Agreement shall not be construed to be a waiver of any
subsequent or other failure to comply.

    
       

    

    E.          Interpretation.  The
captions and paragraph headings used herein are for descriptive purposes only
and do not limit, define, or enlarge the terms of this
Agreement.  Unless otherwise indicated by context, use of singular,
plural, or a gender shall include the other, and the use of the words “include”
or “including” shall be construed as if “without limitation” or “but not [be]
limited to” were annexed thereafter.  The Parties were, or had ample
opportunity to be represented by counsel, and this Agreement shall not be
interpreted for or against either Party based on authorship.

     

    F.         
Calculation of
Time.  Any time period herein calculated by reference to “days”
means calendar days unless expressly otherwise stated; provided, however, that
if the last day for a given act falls on a Saturday, Sunday, or a holiday as
observed by the State, the day for such act shall be first day following that is
not a Saturday, Sunday, or such observed holiday.  The term “business
day” shall mean any day other than a Saturday, Sunday, or a holiday as observed
by the State.

     

    G.         
Notices; Contact
Persons.

     

    1.           Required
Notices.  Any notice required to be given to either Party by this
Agreement or necessary for its performance shall be in writing and shall be
delivered in person, by courier service, or by certified U.S. Mail, return
receipt requested.  Such notice shall be deemed to be delivered when
delivered to the designated representatives of the other Party and signature of
a delivery receipt.  All notices shall be addressed as
follows:

    
       

      
        
        

        
          7

          
            

          

        

        
        

         

      

    

    
      
        
          	
                   

                	
                  
                    To the
      Commissioner:

                  

                
	 	
                  Patrick
      H. Lyons, Commissioner of Public Lands

                
	 	State Land Office
	 	Mail: P. O. Box 1148, Santa Fe, NM 87504-1148
	 	Courier: 310 Old Santa Fe Trail, Santa Fe, NM 87501
	 	 
	 	
                  With
      additional copies separately addressed and delivered to the attention of:
      Surface Resources Management – Attn: Commercial Division and to the Office
      of the General Counsel at the above address.

                
	 	 
	 	
                  To
      Bowlin:

                
	 	Michael L. Bowlin, President
	 	
                  Bowlin
      Travel Centers, Inc.

                
	 	Mail and Courier: 150 Louisiana Blvd. NE, Albuquerque, NM
      87108

        

         

      

    

    2.           Contact
Persons.  Each Party may designate a contact person to coordinate
communication for ordinary activities carried out to complete the transaction
contemplated by this Agreement.  The contact persons shall
be:

    
      
        
           

          
            	
                     

                  	
                    
                      For
      the Commissioner:

                    

                  
	 	Name:	Stephen
      G. Hughes, Associate Counsel
	 	Phone: 	505-827-1261
	 	Fax: 	505-827-4262 
	 	E-mail:	SHughes@slo.state.nm.us
	 	 	 
	 	
                    For
      Bowlin:

                  
	 	Name:	Kit
      Johnson, Director of Operations
	 	Phone:	505-266-5985
	 	Fax:	505-266-7821
	 	E-mail:	KitJ@bowlintc.com

          

           

        

      

    

    H.         Survival.  Those
provisions of this Agreement necessary to effectuate its intent and purposes
shall survive Closing and such provisions shall remain binding on and inure to
the benefit of the Parties and their respective successors and
assigns.  Excepting those paragraphs that expressly survive under this
paragraph, this Agreement shall terminate on the recording of the Exchange
Patent and Bowlin Warranty Deed.

    
       

      
        
        

        
          8

          
            

          

        

        

      

    

    I.           Authority.  The
individual(s) signing this Agreement on behalf of Bowlin represent and warrant
that he or she has the power and authority to bind Bowlin, and that no further
action, resolution, or approval from Bowlin is necessary to enter into a binding
contract.

     

    IN
WITNESS WHEREOF, the Parties have executed this Agreement as of the date of
signature by the Commissioner, below.

     

    
      
        	
                Bowlin
      Travel Centers, Inc.

              	 	 	 	 
	 	 	 	 	 	 
	By: 	
                /s/ 
      Michael L. Bowlin

              	 	Date:	
                8/27/2008

              	 
	 	
                Michael
      L. Bowlin, President

              	 	 	
                 

              	 

      

       

    

    

    STATE OF
NEW
MEXICO                )

    ) ss.

    COUNTY
OF        
Bernalillo               )

    

    This instrument was acknowledged before
me this   27  day
of    August
  , 2008 by Michael L. Bowlin, president of Bowlin Travel
Centers, Inc., a Nevada corporation.

    
       

      
        	 	 	 	 	 
	
                 

              	 	 	
                /s/ 
      Heather J. Nutter

              	 
	
                 

              	 	 	
                Notary
      Public 

              	 
	
                My
      Commission Expires:

              	 	 	
                 

              	 
	 	 	 	 	 
	
                10/25/2008

              	 	 	 	 

      

    This
document has been reviewed and approved by General Counsel.

     

    
      
        
          	 	 	 	 	 
	
                  /s/ 
      Stephen G. Hughes

                	 	Date:	
                  8/25/2008

                	 
	
                  General
      Counsel

                	 	 	
                   

                	 

        

         

      

    

    
      
         

        
          
            
              	
                      COMMISSIONER
      OF PUBLIC LANDS

                      FOR
      THE STATE OF NEW MEXICO 

                    	 	 	 	 
	 	 	 	 	 
	
                      /s/  Patrick
      H. Lyons

                    	 	Date:	
                      8/29/2008

                    	 
	
                      Patrick
      H. Lyons

                    	 	 	
                       

                    	 

            

             

          

        

      

    

    
      
      

      
        9

        
          

        

      

       

      
        EXHIBIT
A

        FORM
OF EXCHANGE PATENT

        AND
LEGAL DESCRIPTION FOR

        STATE
TRUST LAND TO BE EXCHANGED

        

        COMMISSIONER
OF PUBLIC LANDS FOR THE

        STATE OF
NEW MEXICO

        EXCHANGE
PATENT

        

        No:  4354

        

        For
consideration paid, the receipt and sufficiency of which is hereby acknowledged,
the State of New Mexico, acting by and through the Commissioner of Public Lands,
trustee under the Act of June 20, 1910, 36 Stat. 557, Ch. 310, (“State”), grants
to Bowlin Travel Centers, Inc., a Nevada corporation, subject to the conditions
and reservations set forth or referred to in this Exchange Patent, the land in
Doña Ana County, New Mexico described as follows:

         

        
          	 	
                  Pt. SW1/4NW1/4
      (6.212 acres), Pt. SE1/4NW1/4 (6.724 acres), Pt NW1/4SW1/4 (7.541 acres),
      Pt. NE1/4SW1/4 (2.319 acres), Pt. SW1/4NE1/4 (6.425 acres), Pt. SE1/4NE1/4
      (0.712 acres), Pt. NW1/4SE1/4 (0.144 acres), Section 36, Township 23
      South, Range 2 West N.M.P.M., Doña Ana County, New Mexico containing
      30.077 ± acres.

                	 

        

         

        SUBJECT TO all valid and existing
rights, restrictions, reservations, covenants, conditions, rights-of-way, leases
and easements of record affecting the granted lands, including but not limited
to matters on file in the records of the New Mexico State Land
Office.

        AND
FURTHER SUBJECT TO a reservation by the State of New Mexico of all geothermal
resources and all minerals of whatsoever kind in, under or upon said land,
including but not limited to oil and natural gas, helium, carbon dioxide, coal
and lignite, uranium, brine, copper, iron, lead, talc, barite, gold and silver,
precious and semi-precious stones and jewels, caliche, building stones, shale,
clay, sand, gravel and rock for crushing, whether or not now known to exist or
to have value, of whatever form or type, at whatever depth, in whatever nature
of deposit, whether solid, semi-solid, liquid, or gaseous, whether similar or
dissimilar to any of those minerals enumerated, and regardless of the method of
extraction whether by wells (including input wells), mining by subterranean,
open-pit, or strip mines, surface or subsurface leaching, or any other means now
or hereafter known or employed, together with all rights of access and surface
use necessary for or reasonably incident to exploration for and extraction and
removal of the minerals or geothermal resources, the right to execute leases for
mineral or geothermal development and operation, the right to sell or dispose of
the minerals or geothermal resources, the right to grant rights-of-way and
easements for mineral or geothermal purposes, the right to prospect for, mine,
produce and remove minerals and geothermal resources and the right to perform
any and all acts necessary in connection therewith.

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

           

        

        AND YET
FURTHER SUBJECT TO a reservation by the State of New Mexico any and all water
rights vested in the State of New Mexico as of the date of sale or exchange
which are located on or derived from the subject land, any and all water rights
appurtenant to or riparian to the subject land as of the date of sale or
exchange and the right to renew and extend any water easements, water leases or
water rights existing as of the date of sale or exchange together with the right
to receive the rents and revenues therefrom, together with all rights of access
and surface use necessary for or reasonably incident to developing and utilizing
such water rights.  Said reservation is subject to the following
conditions:  1) the Commissioner has agreed to lease or otherwise
permit Bowlin, or any of its assignees, lessees, grantees, permittees,
licensees, affiliates, subsidiaries, or successors in right, title or interest,
to the fullest extent permitted by law, to develop such water rights under terms
agreed upon by Bowlin and the Commissioner, whose permission to lease or develop
such rights shall not be unreasonably withheld; and 2) the Commissioner has
further agreed to provide Bowlin at least ninety (90) days written notice before
leasing, transferring, conveying or selling said water rights to any other
party.

        Executed
in duplicate under seal this   29  
day of   August  ,
2008.

         

        
          
            
              	 	 	 	STATE
      OF NEW MEXICO	 
	 	 	 	 	 
	 	 	 	 	 
	
                       

                    	 	 	
                      /s/ 
      Patrick H. Lyons

                    	 
	
                       

                    	 	 	
                      
                        PATRICK
      H. LYONS

                        COMMISSIONER
      OF PUBLIC LANDS

                      

                    	 

            

        

        
          
            
            

          

          
            A-2

            
              

            

          

          
            
            

          

           

        

        EXHIBIT
B

        FORM
OF WARRANTY DEED

        AND
LEGAL DESCRIPTION FOR

        BOWLIN
LAND

        WARRANTY
DEED

        

        BOWLIN
TRAVEL CENTERS, INC., a Nevada corporation (“Bowlin”), for consideration paid,
grants to the COMMISSIONER OF PUBLIC LANDS FOR THE STATE OF NEW MEXICO AS
TRUSTEE FOR THE STATE OF NEW MEXICO under the Act of June 20, 1910, 36 Stat.
557, Ch. 310 (the “Commissioner”), whose address is 310 Old Santa Fe Trail,
Santa Fe, New Mexico 87501, the following described real estate in Doña Ana
County, New Mexico (the “Land”) with warranty covenants, subject to all valid
and existing rights, easements, covenants, reservations and restrictions of
record:

         

        
          
            	 	
                    Lot
      1, HACIENDA DE MESILLA SUBDIVISION NO. 2, in the County of Doña Ana, New
      Mexico, as the same is shown and designated on Plat No. 3061, thereof
      filed for record in the office of the County Clerk of said county on
      January 21, 1998, and recorded in Book 19, Pages 44, Plat Records, Doña
      Ana County, New Mexico,

                  	 

          

           

        

        
          
            	 	
                    
                      The
      immediately above-described property being and intended to be the same
      property as described in that certain survey by Justin W. Miller, NMPS No.
      17572 dated June 26, 2008 as follows:

                    

                  	 

          

           

        

        
          
            	 	Plat of Survey Lot #1,
      Hacienda De Mesilla, Subdivision No. 2 as recorded January 21, 1998 in
      Plat Book 21, Page 44 of the Doña Ana County records, located in the SE1/4
      of the SE1/4 of projected section 24 and the NE1/4 of the NE1/4 of
      projected section 25, T23S, R1E, N.M.P.M. of the U.S.R.S. surveys, City of
      Las Cruces, Doña Ana County, New Mexico	 

          

           

        

        Including
all of the oil, gas and other minerals of any kind whatsoever in, on and under
the above described land.

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

           

        

        WITNESS
my hand and seal this   27  
day of   August  ,
2008.

        
           

          
            
              	
                      BOWLIN
      TRAVEL CENTERS, INC., a Nevada corporation

                    	 	 	 	 
	 	 	 	 	 	 
	By: 	
                      /s/ 
      Michael L. Bowlin

                    	 	 	
                    	 
	 	
                      Michael
      L. Bowlin, President

                    	 	 	
                       

                    	 
	 	 	 	 	 	 
	Attest:	/s/
      William J. McCabe	 	 	 	 
	 	William
      J. McCabe, Secretary	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 

            

             

          

        ACKNOWLEDGEMENT

         

        
          State of
New Mexico           
               )

          ) ss.

          County
of        
Bernalillo               
    )

        

        

        This instrument was acknowledged before
me this   27  day
of   August  ,
2008, by Michael L. Bowlin, president of Bowlin Travel Centers, Inc., a Nevada
corporation.

         

        
          
            
              	 	 	 	 	 
	
                       

                    	 	 	
                      /s/ 
      Heather J. Nutter

                    	 
	
                       

                    	 	 	
                      Notary
      Public 

                    	 
	
                      My
      Commission Expires:

                    	 	 	
                       

                    	 
	 	 	 	 	 
	
                      10/25/2008

                    	 	 	 	 

            

          
            
              
              

            

            
              B-2

              
                

              

            

            
              
              

            

          

        

         

        EXHIBIT
C

        LIST OF
ENCUMBRANCES ON STATE TRUST LAND

        

        The
attached encumbrance list was obtained from a title search report for certain
land (“Land”) located in Doña Ana County, New Mexico, which was prepared by the
New Mexico State Land Office Records Management Division based on a search of
the Surface, Oil and Gas, and Mineral Departmental Tract Books, and the Master
Title Tract Books, of the New Mexico State Land Office.

        

        The title
search report does not warrant or guaranty title to the Land, nor is it in any
way an opinion of title to the Land.  Further, the title search report
does not warrant or guarantee the existence or sufficiency of any instruments on
file or of record with respect to the Land.  The title search does not
warrant or guarantee the existence or accuracy of any leases, rights of way,
reservations, restrictions or encumbrances listed; nor does it warrant or
guarantee that the leases, rights of way, reservations, restrictions or
encumbrances listed (if any) are the only such that exist with respect to the
land.

        

        No search
has been made of the real property records or the Uniform Commercial Code
records of the office of the County Clerk of any county.  Nor has any
search been made of any property tax records, including any property tax records
in the office of the any County Treasurer.   No search has been
made of any records of any city, or of any local, state or federal agency except
the title records of the New Mexico State Land Office referenced
above.

        

        EACH
APPLICANT OR OTHER INTERESTED PERSONS MUST PERFORM THEIR OWN DUE DILIGENCE AND
BECOME FULLY FAMILIAR WITH THE LAND, ITS STATUS AND
CONDITION.  STATEMENTS ABOUT THE LAND CONTAINED IN THE TITLE SEARCH
REPORT AND OTHER DOCUMENTS PROVIDED BY THE COMMISSIONER OF PUBLIC LANDS OR THE
NEW MEXICO STATE LAND OFFICE ARE PROVIDED FOR GENERAL INFORMATION ONLY AND MAY
NOT BE CONSTRUED AS CONSTITUTING A REPRESENTATION OR WARRANTY AS TO THE TITLE,
STATUS OR CONDITION OF THE LAND.  THE COMMISSIONER OF PUBLIC LANDS AND
THE NEW MEXICO STATE LAND OFFICE MAKE NO REPRESENTATION OR WARRANTY, EXPRESS OR
IMPLIED, WRITTEN OR ORAL, WITH RESPECT TO THE LAND, ITS TITLE, STATUS OR
CONDITION, OR ITS FITNESS OR SUITABILITY FOR ANY PARTICULAR USE.

        

        

        PROPERTY
DESCRIPTION:

         

        
          
            
              	 	 	
                      
                        
                          Pt.
      SW1/4NW1/4 (6.212 acres), Pt. SE1/4NW1/4 (6.724 acres), Pt NW1/4SW1/4
      (7.541 acres), Pt. NE1/4SW1/4 (2.319 acres), Pt. SW1/4NE1/4 (6.425 acres),
      Pt. SE1/4NE1/4 (0.712 acres), Pt. NW1/4SE1/4 (0.144 acres), Section 36,
      Township 23 South, Range 2 West N.M.P.M., Doña Ana County, New Mexico
      containing 30.077 ± acres.

                        

                      

                    	 

            

             

             

            
              
                
                

              

              
                
                

                
                  

                

              

              
                
                

              

            

          

        

        

        ENCUMBRANCES:

         

        
          
            
              
                	Business
      Lease 	 	
                        
                          
                            BL-0514

                          

                        

                      	 
	Holder:  	 	Bowlin Travel
      Centers, Inc. 	 
	 	 	
                        150
      Louisiana NE, Albuquerque NM 87108 

                      	 
	Legal
      Desc: 	 	Pt.NW1/4SW1/4 	 
	Purpose: 	 	Trading
      Post 	 
	Expires: 	 	September 30, 2011
      (to be relinquished at closing of the exchange
transaction) 	 

              

            

          

        

        

        ACTIVE BILL BOARD
PERMITS:

         

        
          
            
              
                
                  	Billboard
      No. 	 	
                          
                            
                              BB-42

                            

                          

                        	 
	Holder:  	 	Bowlin Travel
      Centers, Inc. of Albuquerque, NM	 
	Legal
      Desc: 	 	Pt.SW1/4NE1/4, no
      acreage	 
	Expires: 	 	09/30/2010 (to be
      cancelled at closing of exchange transaction)	 

                

              

            

          

          
            
               

              
                
                  
                    	Billboard
      No. 	 	
                            
                              
                                BB-43

                              

                            

                          	 
	Holder:  	 	Bowlin Travel
      Centers, Inc. of Albuquerque, NM	 
	Legal
      Desc: 	 	Pt.SW1/4NE1/4, no
      acreage	 
	Expires: 	 	09/30/2010 (to be
      cancelled at closing of exchange transaction)	 

                  

                

              

            

            
              
                 

                
                  
                    
                      	Billboard
      No. 	 	
                              
                                
                                  BB-44

                                

                              

                            	 
	Holder:  	 	Bowlin Travel
      Centers, Inc. of Albuquerque, NM	 
	Legal
      Desc: 	 	Pt.SW1/4NE1/4, no
      acreage	 
	Expires: 	 	09/30/2010 (to be
      cancelled at closing of exchange transaction)	 

                    

                  

                

              

              
                
                   

                  
                    
                      
                        	Billboard
      No. 	 	
                                
                                  
                                    BB-45

                                  

                                

                              	 
	Holder:  	 	Bowlin Travel
      Centers, Inc. of Albuquerque, NM	 
	Legal
      Desc: 	 	Pt.SW1/4NE1/4, no
      acreage	 
	Expires: 	 	09/30/2010 (to be
      cancelled at closing of exchange transaction)	 

                      

                    

                  

                

                
                  
                     

                    
                      
                        
                          	Billboard
      No. 	 	
                                  
                                    
                                      BB-46

                                    

                                  

                                	 
	Holder:  	 	Bowlin Travel
      Centers, Inc. of Albuquerque, NM	 
	Legal
      Desc: 	 	Pt.SW1/4NE1/4, no
      acreage	 
	Expires: 	 	09/30/2010 (to be
      cancelled at closing of exchange transaction)	 

                        

                      

                    

                  

                  
                    
                       

                      
                        
                          
                            	Billboard
      No. 	 	
                                    
                                      
                                        BB-47

                                      

                                    

                                  	 
	Holder:  	 	Bowlin Travel
      Centers, Inc. of Albuquerque, NM	 
	Legal
      Desc: 	 	Pt.SW1/4NE1/4, no
      acreage	 
	Expires: 	 	09/30/2010 (to be
      cancelled at closing of exchange transaction)	 

                          

                        

                      

                    

                    

                    
                      
                        
                        

                      

                      
                        C-2

                        
                          

                        

                      

                      
                        
                        

                      

                    

                  

                

              

            

          

        

        

        ACTIVE
RIGHTS-OF-WAY/EASEMENTS

        
          
             

            
              
                
                  	Right–of–Way 	 	
                          
                            
                              M-7504

                            

                          

                        	 
	Holder:  	 	
                          El Paso
      Electric Company of El Paso

                          
                            
      

                        	 
	Legal
      Desc: 	 	
                          Pt.
      S1/2NE1/4, Pt. SE1/4NW1/4, Pt.N1/2SW1/4

                          Containing 3.460 acres, more or less

                        	 
	Purpose: 	 	Electric
      Distribution Lines 	 
	Expires: 	 	For so long as used
      for said purpose	 

                

              

            

          

          
             

            
              
                
                  	Right–of–Way 	 	
                          
                            
                              M-7535

                            

                          

                        	 
	Holder:  	 	
                          The
      Mountain States Telephone & Telegraph Company of Denver,
      CO 

                            
      

                        	 
	Legal
      Desc: 	 	
                          Pt.
      S1/2NE1/4, Pt.SE1/4NW1/4, Pt.N1/2SW1/4

                          Containing 3.442 acres, more or less

                        	 
	Purpose: 	 	Telephone &
      Telegraph Lines 	 
	Expires: 	 	For so long as used
      for said purpose	 

                

                 

                
                  
                     

                    
                      
                        
                          	Right–of–Way 	 	
                                  
                                    
                                      RW-20174

                                    

                                  

                                	 
	Holder:  	 	
                                  Mountain
      States Telephone & Telegraph Co.

                                  
                                    
      

                                	 
	Legal
      Desc: 	 	
                                  Pt.S1/2NE1/4,
      Pt.N1/2SW1/4, Pt.NW1/4SE1/4

                                  Containing 3.32 acres, more or less

                                	 
	Purpose: 	 	Communication
      Facilities in the Las Cruces Airport area 	 
	Expires: 	 	For so long as used
      for said purpose	 

                        

                      

                    

                  

                

              

            

          

        

         

         

        
          
            
            

          

          
            C-3

            
              

            

          

          
            
            

          

        

        

        EXHIBIT
D

        LETTER
FROM STATE OF NEW MEXICO ENVIRONMENT DEPARTMENT

        RELEASE
NO. 4491

        

        

        
          	 
      	
                  State
      of New Mexico

                	 
      
	 
      	
                  ENVIRONMENT
      DEPARTMENT

                	 
      
	 
      	
                  Petroleum
      Storage Tank Bureau

                	 
      
	 
      	
                  2044
      Galisteo Street

                	
                  RON
      CURRY

                
	 
      	
                  Santa
      Fe, New Mexico  87505

                	
                  Secretary

                
	
                  BILL
      RICHARDSON

                	
                  Telephone
      (505) 984-1741

                	 
      
	
                  Governor

                	
                  Fax
      (505) 984-1738

                	
                  CINDY
      PADILLA

                
	 
      	 
      	
                  Deputy
      Secretary

                
	 
      	 
      	 
      
	 
      	 
      	
                  JIM
      NORTON

                
	 
      	 
      	
                  Director

                

        

        

        March 13,
2007

        

        Ms.
Cyndee Biggers

        Assistant
to Senior Vice President

        Retail
Operations

        Bowlins
Incorporated

        150
Louisiana Boulevard NE

        Albuquerque,
New Mexico  87108

        

        
          	
                  Re:

                	
                  No
      Further Action at Old West Trading Post, 13530 Frontage Road, Las Cruces,
      New Mexico

                

        

         

        
          	Facility Number
      (new):  1558	
                  Release
      Number:  4491

                

        

         

        Dear Ms.
Biggers:

        

        The New
Mexico Environment Department (Department) has reviewed the report titled
“Minimum Site Assessment Preliminary Investigation for Bowlin Old West Trading
PST” dated December 13, 2006.  The Department concurs that this site
does not pose an immediate threat to public health or the environment based upon
the following current site-specific conditions:

        

        
          	
                  1.
        

                	
                  Soil
      at the release was excavated from an area 20 feet X 20 feet to a depth of
      10 feet.

                

        

        

        
          	
                  2.
        

                	
                  A
      soil boring was advanced near the release to a depth of 95
      feet.  A hydrocarbon odor was noted from soil samples collected
      from 10 to 35 feet deep in the
boring.

                

        

        

        
          	
                  3.
        

                	
                  Gasoline
      and diesel constituents were not detected at appropriated detection limits
      by laboratory analysis of soil samples collected from 10 to 15 feet and 25
      to 35 feet in the boring.

                

        

        

        
          	
                  4.
        

                	
                  The
      only gasoline or diesel constituents detected by laboratory analysis were
      benzo(a)pyrene and benzo(k)fluoranthene.  A soil sample
      collected from 55 to 60 feet deep contained a concentration of
      benzo(s)pyrene of 0.0012 milligrams per kilogram (mg/kg).  A
      risk based screening level for leaching to groundwater is not applicable
      because of low solubility of the detected compounds.  Other risk
      based screen levels are not applicable because of the depth of the
      sample.

                

        

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        Ms.
Cyndee Biggers

        March 13,
2007

        Page
2

        

        

        
          	
                  5.
        

                	
                  Soil
      samples were field screened by the heated headspace method.  The
      highest heated headspace measurement was 14.8 parts per million instrument
      response units (ppm).  The action level for soil to be
      considered petroleum contaminated is 100
ppm.

                

        

         

        
          	
                  6.
        

                	
                  A
      layer containing clay was observed approximately 40 feet
      deep.  The highest headspace measurement for a soil sample
      collected from below the layer containing clay was 0.3
  ppm.

                

        

        

        Therefore,
the Department is not requiring additional work at this
time.  However, the Department does reserve the right to require
additional work in the future, should information become available which
indicates that a threat to public health or the environment exists.

        

        If you
have questions call me at (505) 984-1902.  The Department appreciates
your voluntary cooperation and prompt attention to this matter.

        

        Sincerely,

         

        
          
            
              
                	 	 	 	 	 
	
                        /s/ 
      Christopher Holmes

                      	 	 	
                         

                      	 
	
                        
                          Christopher
      Holmes

                          Geoscientist

                          Remedial
      Action Program

                        

                      	 	 	
                         

                      	 

              

            

          

        

         

         

        
          
            	
                    Cc:

                  	
                    David
      Ennis, Senior Geoscientist, Miller Souder & Associates, Las Cruces,
      New Mexico

                  
	
                     
      

                  	
                    Ken
      White, District Resource Manager, State Land Office, 1130 East University
      Avenue, O’Loughlin House, Room B, Las Cruces, NM 88003

                  
	 	
                    Ken
      Smith, Manager District III, New Mexico Environment
      Department 

                  
	 	
                    Joe
      Godwin, Inspector, Prevention and Inspector Program, Petroleum Storage
      Tank Bureau 

                  
	 	
                    Joyce
      Shearer, Manager, Remedial Action Program, Petroleum Storage Tank
      Bureau 

                  
	 	
                    Jeffrey
      Mills, Team Leader, Remedial Action Program, Petroleum Storage Tank
      Bureau 

                  
	 	
                    Tina,
      Duran, Petroleum Storage Tank
BureauTHE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT"), AND ARE PROPOSED TO BE ISSUED IN RELIANCE UPON AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT PROVIDED BY REGULATION S PROMULGATED UNDER THE

THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT"), AND ARE PROPOSED TO BE ISSUED IN RELIANCE UPON AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT PROVIDED BY REGULATION S PROMULGATED UNDER THE ACT.   UPON ANY SALE, SUCH SECURITIES MAY NOT BE REOFFERED FOR SALE OR RESOLD OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S, PURSUANT TO AN EFFECTIVE REGISTRATION UNDER THE ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE ACT.  HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE ACT. 

SUBSCRIPTION AGREEMENT

CLARIDGE VENTURES, INC.

SUBSCRIPTION AGREEMENT made as of this _____ day of ______________, 2008 between CLARIDGE VENTURES, INC., a Nevada corporation with its registered office at 50 WEST LIBERTY STREET SUITE 880 RENO NEVADA, 89105 (the "Company") and the undersigned (the "Subscriber").

WHEREAS:

A. 

The Company desires to issue a maximum of 4,000,000 shares of common stock of the Company at a price of $0.02 US per share (the "Offering") pursuant to Regulation S of the United States Securities Act of 1933 (the “Act”).

B.

The Subscriber desires to acquire the number of shares of the Offering set forth on the signature page hereof (the "Shares") on the terms and subject to the conditions of this Subscription Agreement.

NOW, THEREFORE, for and in consideration of the premises and the mutual covenants hereinafter set forth, the parties hereto do hereby agree as follows:

1.     SUBSCRIPTION FOR SHARES

1.1 Subject to the terms and conditions hereinafter set forth, the Subscriber hereby subscribes for and agrees to purchase from the Company such number of Shares as is set forth upon the signature page hereof at a price equal to $0.02 US per Share.  Upon execution, the subscription by the Subscriber will be irrevocable.

1.2 The purchase price is payable by the Subscriber contemporaneously with the execution and delivery of this Subscription Agreement.

1.3 Upon execution by the Company, the Company agrees to sell such Shares to the Subscriber for said purchase price subject to the Company's right to sell to the Subscriber such lesser number of Shares as it may, in its sole discretion, deem necessary or desirable.

1.4 Any acceptance by the Company of the Subscriber is conditional upon compliance with all securities laws and other applicable laws of the jurisdiction in which the Subscriber is resident.  Each Subscriber will deliver to the Company all other documentation, agreements, representations and requisite government forms required by the lawyers for the Company as required to comply with all securities laws and other applicable laws of the jurisdiction of the Subscriber.  The Company will not grant any registration or other qualification rights to any Subscriber.

2

 REGULATION S AGREEMENTS OF THE SUBSCRIBER

2.1 The Subscriber agrees to resell the Shares only in accordance with the provisions of Regulation S of the Act pursuant to registration under the Act, or pursuant to an available exemption from registration pursuant to the Act.

2.2 The Subscriber agrees not to engage in hedging transactions with regard to the Shares unless in compliance with the Act.

2.3 The Subscriber acknowledges and agrees that all certificates representing the Shares will be endorsed with the following legend in accordance with Regulation S of the Act:

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT"), AND HAVE BEEN ISSUED IN RELIANCE UPON AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT PROVIDED BY REGULATION S PROMULGATED UNDER THE ACT.   SUCH SECURITIES MAY NOT BE REOFFERED FOR SALE OR RESOLD OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S, PURSUANT TO AN EFFECTIVE REGISTRATION UNDER THE ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE ACT.  HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE ACT”

2.4 The Subscriber and the Company agree that the Company will refuse to register any transfer of the Shares not made in accordance with the provisions of Regulation S of the Act, pursuant to registration under the Act, or pursuant to an available exemption from registration.

3

REPRESENTATIONS AND WARRANTIES BY SUBSCRIBER

3.1 The Subscriber represents and warrants to the Company and acknowledges that the Company is relying upon the Subscriber’s representations and warranties in agreeing to sell the Shares to the Subscriber that:

(A)

The Subscriber is not a “U.S. Person” as defined by Regulation S of the Act and is not acquiring the Shares for the account or benefit of a U.S. Person.

 A “U.S. Person” is defined by Regulation S of the Act to be any person who is:

any natural person resident in the United States;

any partnership or corporation organized or incorporated under the laws of the United

States;

any estate of which any executor or administrator is a U.S. person;

any trust of which any trustee is a U.S. person;

any agency or branch of a foreign entity located in the United States;

any non-discretionary account or similar account (other than an estate or trust) held

by a dealer or other fiduciary organized, incorporate, or (if an individual) resident in

                        the United States; and any partnership or corporation if:

                                  

1.

organized or incorporated under the laws of any foreign jurisdiction; and

2.

formed by a U.S. person principally for the purpose of investing in securities not registered under the Act, unless it is organized or incorporated, and owned, by accredited investors [as defined in Section 230.501(a) of the Act] who are not natural persons, estates or trusts.

The Subscriber recognizes that the purchase of Shares involves a high degree of risk in that

the Company has only recently commenced its proposed business and may require

substantial funds in addition to the proceeds of this private placement; 

An investment in the Company is highly speculative and only investors who can afford the

loss of their entire investment should consider investing in the Company and the Shares;

The Subscriber has had full opportunity to review information regarding the business and

financial condition of the Company with the Subscriber’s legal and financial advisers prior to

execution of this Subscription Agreement;

The Subscriber has such knowledge and experience in finance, securities, investments,

including investment in non-listed and non registered securities, and other business matters

so as to be able to protect its interests in connection with this transaction.

The Subscriber acknowledges that no market for the Shares presently exists and none may

develop in the future and accordingly the Subscriber may not be able to liquidate its

investment.

The Subscriber hereby acknowledges that this offering of Shares has not been reviewed by

the United States Securities and Exchange Commission (the "SEC") and that the Shares are

being issued by the Company pursuant to an exemption from registration provided by

Regulation S pursuant to the United States Securities Act. 

The Subscriber is acquiring the Shares as principal for the Subscriber's own benefit;

The Subscriber is not aware of any advertisement of the Shares.

The Subscriber is acquiring the Shares subscribed to hereunder as an investment for the

Subscriber's own account, not as a nominee or agent, and not with a view toward the resale

or distribution of any part thereof, and the Subscriber has no present intention of selling,

granting any participation in, or otherwise distributing the same;

            The Subscriber does not have any contract, undertaking, agreement or arrangement with any person  to sell, transfer or grant participation  to such person, or to any third person, with respect to any of the Shares sold hereby;

            The Subscriber has full power and authority to enter into this Agreement which constitutes a valid and legally binding obligation, enforceable in accordance with its terms;

           Subscriber can bear the economic risk of this investment, and was not organized for the purpose of acquiring the Shares;

           The Subscriber has satisfied himself or herself as to the full observance of the laws of his or her jurisdiction in connection with any invitation to subscribe for the Shares and/or any use of this Agreement, including (i) the legal requirements within his/her jurisdiction for the purchase of the Shares, (ii) any foreign exchange restrictions applicable to such purchase, (iii) any governmental or other consents that may need to be obtained, and (iv) the income tax and other tax consequences, if any, that may be relevant to the purchase, holding, redemption, sale, or transfer of the Shares.

2

REPRESENTATIONS BY THE COMPANY

4.1 

The Company represents and warrants to the Subscriber that:

(A)

The Company is a corporation duly organized, existing and in good standing under the laws of the State of Nevada and has the corporate power to conduct the business which it conducts and proposes to conduct.

(B)

Upon issue, the Shares will be duly and validly issued, fully paid and non-assessable common shares in the capital of the Company.

(C)

The issued and outstanding shares of the Company consists of 5,000,000 shares of the Company’s common stock prior to the completion of the issue of any shares of the Company’s common stock pursuant to this Offering.

3

TERMS OF SUBSCRIPTION

5.1 Pending acceptance of this subscription by the Company, all funds paid hereunder shall be deposited by the Company and immediately available to the Company for the purposes set forth in the disclosure statement.  In the event the subscription is not accepted, the subscription funds will constitute a non-interest bearing demand loan of the Subscriber to the Company.

5.2  The Subscriber hereby authorizes and directs the Company to deliver the securities to be issued to such Subscriber pursuant to this Subscription Agreement to the Subscriber’s address indicated herein.

5.3 The Subscriber acknowledges and agrees that the subscription for the Shares and the Company's acceptance of the subscription is not subject to any minimum subscription for the Offering.

6. MISCELLANEOUS

6.1 Any notice or other communication given hereunder shall be deemed sufficient if in writing and sent by registered or certified mail, return receipt requested, addressed to the Company, at its registered office, at 50 West Liberty Street Suite 880 Reno Nevada 89501, Attention: Mr. Kenneth Edmundson President, and to the Subscriber at his address indicated on the last page of this Subscription Agreement. Notices shall be deemed to have been given on the date of mailing, except notices of change of address, which shall be deemed to have been given when received.

6.2 Notwithstanding the place where this Subscription Agreement may be executed by any of the parties hereto, the parties expressly agree that all the terms and provisions hereof shall be construed in accordance with and governed by the laws of the State of Nevada.          

6.3 The parties agree to execute and deliver all such further documents, agreements and instruments and take such other and further action as may be necessary or appropriate to carry out the purposes and intent of this Subscription Agreement.

7.      REPRESENTATIONS BY ALBERTA, BRITISH COLUMBIA, ONTARIO AND QUEBEC

         RESIDENTS

7.1

If the Subscriber is a resident of Canada, the Subscriber represents to the Company that the Subscriber is a resident of the Province of Alberta, British Columbia, Ontario or Quebec and the Subscriber is  (Residents of Alberta, British Columbia, Manitoba, Ontario or Quebec must circle one, as appropriate, and add the name of the senior officer or director of the Company):

(i)

a spouse, parent, brother, sister or child of _______________________, a senior officer or director of the Company ;

(ii)

a close friend or business associate of _________________________, a senior officer or director of the Company , or

(iii)

a company, all of the voting securities of which are beneficially owned by one or more of a spouse, parent, brother, sister, child or close personal friend or business associate of ____________________, a senior officer or director of the Company.

IN WITNESS WHEREOF, this Subscription Agreement is executed as of the day and year first written above.

		
	

Number of Shares Subscribed For: 

	

            common shares

	

	

	

Signature of Subscriber:

	

	

Name of Subscriber:

	

	

Address of Subscriber:

	

	

	

ACCEPTED BY:

CLARIDGE VENTURES, INC.

Signature of Authorized Signatory:

Name of Authorized Signatory: 

Position of Authorized Signatory:

Date of Acceptance:

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