VENDING MACHINE AGREEMENT This VENDING MACHINE AGREEMENT (‘Agreement’) ‘s entered into by and between THE UNIVERSITY OF TEXAS HEALTH SCIENCE CENTER AT HOUSTON (‘University’) and COMPASS GROUP USA, Inc. a Delaware corporation, by and through its CANTEEN VENDING SERVICES DIVISION (*Contractor’) to be effective as of December 1, 2007 RECITALS (A) University desires that certain products and services be made available on the Unversity campus (as defined in Section 112) for 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, and Unwersity in feliance on such assurance 1s willing 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 Section 1 ‘TERM AND EXTENSION The term of this Agreement (the "Termn”) commences on December 1, 2007 and expires on November 30. 2012 unless earlier terminated as provided in Section 10 The Agreement may be extended for one additional penod, not exceeding two years, by written agreement of University and Contractor Section CONTRACTOR'S OBLIGATIONS 21 Commencement _of Vending Sermces As of the effective date of this Agreement, Contractor shall commence vending machine operations on Campus under the terms and conditions hereof Contractor shall perform and conduct, in accordance with all requirements of this Agreement, the mstallation and operation of vending machines dispensing those products listed in Exhibit “B" (the “Products") at the locations on the Campus listed in Exhibit "A" Three of the designated vending locations shall have special facade fronts, which shall be provided by Contractor University must approve these fronts before installation The three locations that require special facade fronts are at the Dental Branch basement, School of Public Health — 1" floor, and Medical School Building - 1" floor The Contractor may change the locations at which it 18 authorized to operate vending machines no sooner than 30 days after obtaining written authorization from Unwersity Contractor shail instali and operate its vending machines and conduct all ts operations on Campus in conformity with all applicable federal and state laws, rules and regulations, local ordinances, and University Rules For purposes of this Agreement, "University Rules” means both (i) the Rules and Reguletions of the Board of Regents of The University of Texas System, (1) the Admmnistrative Rules of The Page 1 of 1722 23 University of Texas System, and (i) the institutional rules and regulations and policies of the University Royalty to University In consideration for the vending nghts granted to Contractor under this Agreement, Contractor shall pay to University, as a royalty, the percentages of gross receipts (before exclusion of sales tax) of the amount per unit sold or other basis as indicated in Exhibit “D” (the “Royalty”) Contractor shall submit its Royalty payments and related reports for vending machine operations in accordance with the requirements stated in Section 3 of this Agreement If it becomes desirable to add other lines of Products to be vended by Contractor during the Term of this Agreement, then the location and type of the vending machines, kinds and sales prices of such Beverages and royalty rates thereon shall be negotiated between Contractor and the chief business. officer for University or his or her delegate ~ the Vice President and Chief Auxiliary Enterpnses Officer Vending Machines and Related Equioment 231 Vending Machine Specifications The vending machines operated on ‘Campus by Contractor must be new or ike-new models (less than 3 years old) or reconstructed (three years or newer), compatible in appearance and with the Campus environment, and certified by the Automatic Merchandising Industry Health Code Contractor shall ensure that ils machines operated on Campus will be equipped with technology comparable to "Sure Vend'" or "Eagle Eye" in which the money is returned if the product does not vend after an extra turn University shall have the night to accept or reject any machine or equipment proposed by Contractor based on the condition and service 232 Com/Bil Changers Contractor shall ensure that each vending machine shall be equipped with an electronic coin changer, dollar bill readerichanger, and a tamper-proof recording meter in higher volume vending areas, Contractor will add creditidebit card readers to the machines, in consultation with and after approval by University Contractor's change making equipment must have the capability of customer selection of changing coms, currency or both, as agreed by University and Contractor The changer model, capacity, and arrangements for security shall be approved by University and Contractor Contractor must provide and service the changers with amounts of change at frequent intervals to assure change is continually available Contractor shall ensure that all changers in vending machines equipment and all locations where auxiliary change machines are required must have the capacty of returning change in the amounts of $0.05, $0 10, $0 25, and $1 00, and have adequate ‘change inventory for required retu_ In the event that Contractor desires to install new ‘oF replacement vending machines after the installation of the onginal machines, and the ‘electronic coin changer 1s outdated, then Contractor may substitute the latest state-of- the-art coin changing equipment, after University approval 233. Machine Locations and Recordkeeping Contractor shall number each vending machine and other items of Contractor's equipment located on Campus for accounting purposes Contractor shall install vending machines having an adequate capacity suitable to the needs and requirements of each vending location Contractor shall identify the mstallation of all intial and subsequently-installed equipment located on ‘Campus by equipment senal number, manufacturer, meter reading and location for the permanent fies of the University The location of each item of Contractor's equipment on. Page 2 of 1724 25 Campus must be approved the Vice President and Chief Auxiliary Enterpnses Officer or hs or her successoridesignee All changes in the initial inventory of Contractor's equipment on Campus, and any relocation of equipment, must be approved and confirmed in writing by University and Contractor Changes in Contractor's equipment ‘on Campus must be approved in advance in wnting by the Vice President and Chief ‘Auxiliary Enterprises Officer or his or her successor/designee University expects Contractor to propose in wnting any additions, deletions or changes needed in Contractor's existing vending locations or vending equipment to ensure adequate availabilty of ali vended items on Campus, insofar as the sales volume makes such additions, deletions or changes economically advisable Contractor must install vending machines in additional locations or buildings on Campus as requested by the University, however, if a mutually acceptable of level of sales 1s not achieved at a new vending location, then the machine or machines may be removed by Contractor upon agreement by the Vice President and Chief Auxilary Enterprises Officer or his or her successor/designee Contractor shall remove or relocate Contractor's vending machines. and other equipment on Campus as reasonably requested by University Products Vended Contractor will maintain fresh Products in its vending machines and will ensure that ali food and drinks Products vended shall conform i 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 Contractor will identify its packaged perishable items by means of coded markings and will deliver to University in wnting, from time-to-time as they may be revised, the most current explanatory "keys" required to read Contractor's coding system for penshables Contractor must have or must acquire within six (6) months from effective date of this Agreement a certification in a healthy program (for example, “Heart Smart’ or “Balance Choice” program) or an equivalent program Contractor must supply “Heart Smart” or equivalent health-related food and drink Products at each of is vending locations on Campus Contractors shall ensure that its health-related Products must be easily identifiable for customers Contractor's health-related Products should meet the criteria of 7 net grams of fat or less, 250 mg of sodium or less, and 30 grams or less of carbohydrates Contractor wall provide the University a list of Contractor's health-related Products,, and shall consult and coordinate with University concerning the selection and number of such Products to be made available on Campus by Contractor under this Agreement Contractor shall keep apprised of changing vending trends and changing diet pattems, and 1s expected to propose appropriate new ideas for vaned methods of vending service on Campus for consideration by University and possible implementation under this Agreement or an amendment hereto Prices for Products Except as specified in this Agreement, Contractor will not increase the prices charged for Products sold in its vending machines on Campus above the sales prices for the corresponding Products specified for each year during the Term, as, set forth in Exhibit “G.”" University and Contractor may, by mutual wntten agreement, adust the sales pnces for any Product or Products sold on Contractor's vending machines on Campus No price increases, changes, deletions, and/or modifications to this vending contract will be accepted without the approval of the Vice President and ‘Chief Auxiliary Enterprises Officer or his or her successor/designee Contractor's selling pce on all Products must include the State of Texas and City of Houston sales tax Where applicable, and must be supported by manufacturer's documented list prices ‘excluding promotions Contractor's prices for Products must remain firm for a twelve (12) month period beginning from the date of this Agreement After this date, prices may be Page 3 of 17