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VENDING MACHINE AGREEMENT This AGREEMENT is entered into by and between The University of Texas Health Science Center at Houston and The University of Texas M.D. Anderson Cancer Center (“University”) and Compass Group USA, Inc., dib/a Canteen Vending Services ("Contractor’) to be effective as of September 1, 2000. RECITALS (A) The University desires that certain products and services be made available on the University campus {or the benefit and convenience of its students, faculty and staff by means of vending machines; and (B) Contractor represents that it has the knowledge, ability, equipment, and personnel properly to conduct vending machine operations on the campus of the University, and the University in rellance on such assurance is wiling to contract in such capacity on the terms and agreements expressed below. TERMS AND CONDITIONS. ‘THEREFORE, in consideration of the mutual benefits and the covenants herein the parties agree as follows: 1. Vending Operations. Contractor shall perform and conduct, in accordance with all requirements of this Agreement, the operation of vending machines dispensing food, drink or other products or services that ‘may lavdully be sold in accordance with Exhibit A to this Agreement, 2. Machines and Products. Contractor agrees that each machine installad will be of a size specified by the University and must be a new or relatively recent model. Each machine must, in the University’s judgment, compare favorably in appearance with the best machines available. All machines shall be Installed and ‘operated in conformity with all federal and state laws and regulations, local ordinances, Rules and Regulations of the Board of Regents of The University of Texas System and all institutional rules. of the University. All products and services vended shall conform in all respects to local, state, and federal laws and regulations relating to the standards of food and drink and shall be suitable for human consumption in all respects. Vending products and vending locations are set out in Exhibit B and C respocttully. 3. Liability, Contractor shall be liable for all damages to property or persons resulting from acts of negligence. on the part of its employees or agents including injuries to persons or property caused by its vending machines or by any unwholesome condition of the vending machine product. Contractor shall indemnify and hold the University harmless and {ree {rom any loss, cost, damage, claim or expense arising out the negligence or wilful misconduct of Contractor's employees -or agents or arising from the use or consumption of any product sold by Contactor, and from any damage or claims suffered by breach of this Agreement or of any express or implied warranty. 4, Insurance. Contractor shall maintain: Liability Insurance Coverage, including Bodily Injury, Property Damage and Product Liability, with limits of at least $500,000 per person and $1,000,000 for any single occurrence for bodily injury or death and at least $250,000 for-any single occurrence for injury to or destruction of property. Contractor will require the insurance cartier to: a. provide a Certificate of Insurance showing the fiabiity limits to the University; and b. give University thirty (30) days" written notice of cancellation of any required policy. In the event of notice of insurance cancellation, the Contractor shall obtain a policy of insurance with the same limitations and coverage from an insurance tarrier acceptable to tha University prior to-the effective date of cancellation. In the event the Contractor fails to obtain such an insurance policy, the University may 1 10. 1. consider the-Agreement breached and may terminate the Agreement, effective upon the cancellation of the insurance policy then in force and effect without waiver of any damage claim for Contractor's breach. ‘Termination without Cause, This Agreement may be terminated by University or Contractor without cause by giving at least ninety (90) days written notice of intention to terminate this Agreement. In the event, University terminates this Agreement before the end of the then current contract year, Contractor shall pay the Royalty to University through the last day of operations. Termination for Cause. if elther party falls to perform in accordancé with the terms and conditions of this ‘Agreement, tho party claiming injury from the alleged default shail give the allegedly defaulting party thiry (80) days! written notice to cure such default. In the event, the default fs not cured within such thirty-(30) day poriod, the party claiming injury may terminate this Agreement. If Contractor fails to cure any default hereunder within thirty (30) days after recoiving written notice of such default, University shall be entitled (but shall not be obligated) to cure any such default and shall have the right, at University's option, to collact any and all reasonable expenses incurred in connection with such curative actions from Contractor or to set off such expenses against any amounts due to Contractor hereunder, Royalty. As a part of the consideration of this Agreement, Contractor shall pay the University an annual guaranteed royalty and/or a percentage of net sales (after exclusion of sales tax) for each vended product and service, whichever Is greater. Vending royalties and payments are documented in Exhibit D. Payment, On or before the fifteenth (15") day following the close of the accounting period, Contractor Shall pay to University all payments due and owing under this Agreement, accompanied by a detailed statement, in duplicate, of the net volume and recelpts for each product or service vended by location thereof. University shall have the right to audit the records of Contractor at any reasonable time during business hours, and, University may from time to time check or inspect the equipment of the Contractor without assuming any of Contractor's responsibilities under this Agreement, installation and Service. Contractor shell pay all costs of installation and operation of its machines and University shall furnish Contractor with electrical energy and water for operation of Contractor's vending machines on campus free of cost. Contractor shall have the right to enter upon the premises. of the University at all reasonable times during normal business hours for the purpose of servicing and inspecting machines and for the removal of such machines upon the termination of this Agreement. All vending machines shall be serviced as often as is necessary to keep the machines properly supplied and in good working order. All machines shall be kept in a neat sanitary condition at all times, and Contractor shall cooperate with University to promptly remedy sanitary problems. Contractor shall absorb all money shortages that may develop due to theft, burglary, inoperable vending machines or other cause. Signs. Contractor will not post signs or posters In the vending machine areas, or elsewhere on campus land wil not conduct @ product promotion without full compliance with all focal, state and federal laws and advance written permission of the Assistant Vice President for Auxiliary Enterprises. Contractor further ‘agrees that it will within ten (10) working days of termination of this Agreement remove all machines placed on the premises and restore the property to a condition deemed satisfactory to the University. Term, The term of this Agreement shall commence on September 1, 2000 and shall terminate on August 31, 2005, It may be modified only by a written amendment signed by both parties. The Agreement may be terminated by either party at any time upon giving ninety (80) days’ writen'notice to the other party. This Agreement may be extended for one additional period, not exceeding two years, by writen agreement of the parties. 12. No_Assignment. All the rights and privileges hereby ‘granted to Contractor may not be transferred or assigned except after obtaining the written consent of University to such transfer or assignment; any attempt to transfer or assign this Agreement without having first obtained written consent shall be void and shall entitle the University to immediately cancel this Agreement at the University’s option. 13. Entire Agreement. This Agreement, Exhibits A,B,C,D and RFP No. 744-VEND1 constitute the entire Understanding between the parlies. 14, Texas Law. This Agreement is deemed by the parties to be performable in the State of Texas. The law of the State of Texas shall govern the interpretation of this Agreement in all matters. 15, Financial Statement. The Contractor must present to the University a financial statement prepared by a Ccrtified public accountant licensed in Texas within sixty (60) days of such request. 16. Payment Statements. The Contractor must provide payment statement monthly supported by quarterly ‘alos tax reports for each quarter. The payment reports must be certified on an annual basis by a certified public accountant licensed in Texas and must be provided each year by the Stst day of August as Tequired. by Government Gode, Chapter 2262, Subchapter C. 17. Franchise Tax Certification. By signing this Agreement, Contractor certifies that it is not currently delinquentin the payment of any Franchise Taxes due under Chapter 171 of the Texas Tax Code, or that ‘exempt from the payment of such taxes, or thet it is an out-of-state corporation that is not subject to the Texas Franchise Tax, whichever is applicable. Contractor acknowledges and agrees that If this cettification is false or inaccurate, at University’s option, the Agreement may be terminated and payment withheld, notwithstanding any provision in this Agreement to the contrary. 18, Sales Tax Certification. By signing this Agreement, the Contractor cortifies as follows: "Under Section 2155.004, Texas Government Code, the Contractor cerlifies that it is not ineligible to enter into this ‘Agreement and acknowledges that this Agreement may be terminated and payment withheld if this corlfication is inaccurate, notwithstanding any provision in this Agreement to the contrary." 19, Breach of Contract Claims. To the extent that Chapter 2260 of the Texas Goverment Code, as it may be ‘amended from time to time ("Chapter 2260"), is applicable to thus Agreement and is not preempted by ‘other applicable law, the dispute resolution process provided for in Chapter 2260 shall be used by University and Contractor to aitempt to resolve any claim by Contractor alleging a breach of contract by University that cannot be resolved in the ordinary course of business. The Assistant Vice President for ‘Auxiliary Enterprises shall examine Contractor's claim and any counterclaim and shall negotiate with Contractor in an effort to resolve such claims. The parties hereto specifically agree that (j) neither the occurrence of an event giving rise to a breach of contract claim nor the pendency of a claim constitute grounds for the suspension of performance by Contractor, (i) neither the execution of the Agreement by University nor any other conduct, action © 3