Request for Proposals

Campus Store Leasing & Operations

Request For Proposal Schedule Dates Proposal Documents Made Available September 4, 2013

Mandatory Pre-Proposal Meeting and Campus Site Visit/Job Walk Directions to Campus: http://www.ucr.edu/about/directions.html Park in Lot #1- Obtain parking permit from Kiosk on West Campus Dr. http://campusmap.ucr.edu/imap/index.html?loc=KIOSKWCD Highlander Union Building (HUB)* http://campusmap.ucr.edu/imap/index.html?loc=HUB *Room # will be provided upon scheduling the meeting.

Send email to rfpcampusstore@ucr.edu to schedule one of the dates below:

10:00 am (PST) on September 13, 2013 10:00 am (PST) on September 16, 2013

Request for Information Due ucrcampusstorerfp@ucr.edu 2:00 pm (PST) on September 27, 2013

Request for Information Response October 4, 2013

Proposal Due Date 2:00 pm (PST) on October 16, 2013

Proposals must be delivered to:

University of California, Riverside Capital Resource Management 1223 University Ave., Suite 240

Riverside, CA 92521

Attn: Bill Lee

Phone: 951-827-5263

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Table of Contents

1. Introduction and Project Overview Page 3

2. Purpose Page 4

3. Proposal Documents Page 4

4. Contact Information for Questions Page 4

5. Submittal and Selection Process Page 5

6. General Information and Proposal Requirements Page 6 7. Evaluation Page 13

8. Award Page 14

9. RFP Proposal Schedule Page 14

10. Financial and Operating Requirements Page 15

11. Specific Services Page 15 12. Facilities and Equipment Page 18 13. Personnel and Merchandise Page 19 14. References Page 21

15. General Conditions, Laws, Regulations, and Liability Page 21 16. Accounting, Records, Reports, and Methods of Payment Page 24 17. Contract Term, Renewals, Extensions, Cancellation, Page 24

Termination, Requirements, Additions, Adjustments & Assignments 18. Miscellaneous Page 25 19. PCI and Data Security Page 26

Exhibits Site Map/Floor Plan Exhibit A Sample UC as a Landlord Lease Exhibit B Sales by Category or Department Exhibit C Current Textbook Pricing Policy Exhibit D Academic Calendar Exhibit E MBS Retail POS System Exhibit F UC PCI Appendix Exhibit G UC Data Security DS Appendix Exhibit H

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REQUEST FOR PROPOSALS

University of California, Riverside Campus Store Leasing & Operations

1. INTRODUCTION AND PROJECT OVERVIEW

The University of California, Riverside (UCR), is a public research university and one of the ten general campuses of the University of California system. The main campus sits on 1,200 acres (486 ha) in a suburban district of Riverside, California, with a branch campus of 20 acres (8 ha) in Palm Desert. Founded in 1907 as the UC Citrus Experiment Station, UCR pioneered research in biological pest control and the use of growth regulators responsible for extending the citrus growing season in California from four to nine months. Some of the world's most important research collections on citrus diversity and entomology, as well as science fiction and photography, are located at Riverside. The UCR Campus Store, was established in 1954 (then named the UCR Bookstore) when UC Riverside became a general full service campus of the University of California. The UCR Campus Store is a nonprofit Auxiliary Service owned by the Regents of University of California. The Campus Store is a self-supporting auxiliary and receives no state funding of any kind.

Today, there is very little information available about the early years of the operation. The first permanent location was open in 1962. The store was part of the new UCR Commons. The store was located in an 11,500 sq. ft. space at the west end of the Commons which today is Costo Hall. Due to the increasing student enrollment and the demands for more student service space a new 30,500 sq. ft. store was opened in March of 1992. In 2005 the name was changed to the UCR Campus Store in order to reflect the broader scope of products and services offered at the store.

The UCR Campus Store provides the campus customer with all textbook books and course required supplies for classes, as well as general school and office supplies. In addition, the store stocks a full line of gift items, back packs, greeting cards, art supplies and a variety of UCR imprinted clothing, sportswear, mugs, class rings, graduation announcements, cap and gown sales/rentals and a host of other merchandise.

The CompUCR Computer Store is a full service computer store selling name brand computer hardware, software, tablets, printer’s accessories and supplies. CompUCR also provides repair service for all major brands of computers. The Proposer will also operate the CompUCR as part of the Campus Store.

Current sales volume in FY12-13 was approximately $6.3M (includes CompUCR). The store employees 15 career, 6 part-time and 8 student employees. The pricing policy of the Campus Store is set to generate sufficient revenues to cover all operating costs in a given fiscal year. Any operating surplus is retained by the Campus Store to establish operational and major maintenance reserves. UCR requests proposals from Campus Store operators (Proposers) that can provide Campus Store Management Services for students, faculty and staff. UCR intends to select and award a contract to a highly qualified Proposer to begin operations on July 1, 2014. The current campus store will begin remodel construction on July 1, 2014. This will require the successful Proposer to install a temporary modular building on a location to be determined at a later date on campus for the first two year period of Agreement and then lease and operate the renovated Campus Store on campus (See Exhibit A). The successful Proposer will be required to finance, design, install the temporary modular

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store and provide for tenant improvements, operate and maintain the renovated Campus Store. UCR reserves the right to review and approve the design of the renovated Campus Store (e.g. maintaining the existing path of travel). This Request for Proposals (RFP) establishes the requirements for Proposal submission by interested Campus Store management services Proposers.

2. PURPOSE

UCR’s primary objective of this RFP is to select a cooperative, highly qualified Proposer with expertise and experience in Campus Store management services, and who can provide the temporary modular building, the moving and set up of new temporary space, the on-going operation and maintenance of the Campus Store operations. UCR desires to select a Proposer that fully meets UCR’s established needs of program, budget, and on-going operations.

3. PROPOSAL DOCUMENTS

This RFP includes the following Proposal Documents, as may be modified by addenda, for use by the Proposers in the preparation of their proposals. The proposals must comply with the specific requirements herein as well as in the Proposal Documents. By submitting its proposal, the Proposer agrees to all of the terms and conditions contained herein and in the Proposal documents, and further agrees to execute, if selected for award, agreements including such terms and conditions.

UCR makes the electronic copies of the Proposal Documents available, for the sole purpose of obtaining Proposals for the Work and does not confer a license or grant permission for any other use of the Proposal Documents.

Proposal Documents: Site Map/Floor Plan Exhibit A Sample UC as a Landlord Lease Exhibit B Sales by Category or Department Exhibit C Current Textbook Pricing Policy Exhibit D Academic Calendar Exhibit E MBS Retail POS System Exhibit F UC PCI Appendix Exhibit G UC Data Security (DS) Appendix Exhibit H Proposal submitted to University must remain in effect for a minimum of 120 days from the date of proposal submission.

4. CONTACT INFORMATION FOR QUESTIONS

This RFP and the Proposal Documents are available electronically to interested providers. Proposers are invited to review the information and to submit their proposals in accordance with the requirements of this RFP to the address noted in Section 5 and on the date specified in the Proposal Schedule (Section 9).

Proposers who request clarification of the RFP requirements may submit written questions via email no later than September 27, 2013. UCR will only accept questions in writing, via email.

As the majority of the communications relating to this RFP will be conducted electronically, Proposers will need to ensure that the provided email addresses and UCR’s website are appropriately monitored. Proposers are urged to check the RFP

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website and their email on a regular basis. UCR reserves the right, but is not obligated, to issue updates concerning this RFP to participating proposers by email. UCR will post all updates regarding this RFP on the RFP website: http://matmgmt.ucr.edu/rfb.html The Proposer is responsible to notify University should contact information changes be necessary. UCR accepts no responsibility for failure of a Proposer to receive communications sent via email due to inaccurate information provided by the Proposers.

Mandatory Pre- Proposal Meeting and Site Visit/Job Walk have been scheduled on the date and time specified in the Proposal Schedule (Section 9). Questions can be asked at the meeting prior to the start of the Job Walk. A UCR representative will be available to provide access only during the Job Walk, no questions or issues will be addressed. Participation in the Pre-Proposal Meeting and Job Walk will be mandatory. Existing site information, e.g. CAD drawings, are available to Proposers for review upon request to the UCR email listed above. All questions shall be addressed in writing to

rfpcampusstore@ucr.edu. 5. SUBMITTAL AND SELECTION PROCESS

5.1 Proposal Due Date and Time: On or before 2:00 pm (PST) on October 16, 2013.

1. Original and Copies. Proposers must submit one (1) signed original and five (5) identical copies. Each submittal must be bound appropriately (3-ring binder, etc.) with a Table of Contents and Tabs. Please use recycled paper and use double-sided printing if possible.

2. Electronic submission. In addition to the printed copies of the proposal,

Proposers shall submit one (1) copy on CD ROM or USB flash drive in PDF format. Brochures and collateral materials may also be submitted as PDF files. . No electronic submittals other than the CD ROM or USB flash drive with the original and hard copies will be accepted.

3. Proposals are requested to be deposited at the designated location for receipt of

proposals on or before the Proposal Deadline. PROPOSALS RECEIVED AFTER THE PROPOSAL DUE DATE AND TIME WILL NOT BE ACCEPTED.

4. The submission of a signed proposal will confirm understanding and acceptance

of all requirements, terms, and conditions of the RFP unless specific exceptions are taken and alternative language or provisions are offered. Acceptance of any change is at the discretion of UCR.

5.2 Proposals must be delivered to:

University of California, Riverside Capital Resource Management 1223 University Ave., Suite 240

Riverside, CA 92521

Attn: Bill Lee Phone: 951-827-5263

Note: UC Riverside’s internal mail is not delivered daily so it is recommended

that the proposal be delivered directly to the above location to insure meeting the deadline.

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5.3 Responsive Submittals: The Proposal shall be dated and signed by an Officer or employee authorized to legally bind the Proposer submitting. Failure to sign the Proposal will cause the Proposal to be rejected. Proposals shall be complete and submitted in the prescribed format or on forms provided. All information furnished on the signed original shall be typewritten and the cover clearly marked “ORIGINAL.” FAXED OR EMAILED PROPOSALS WILL BE REJECTED AS WILL LATE PROPOSALS.

5.4 RFP Submittal Costs. UCR is not liable for any costs incurred by the Proposer in

responding to this RFP. Proposer is responsible for all costs associated with directly or indirectly related, including site visits, orientation training, and personnel utilized in complying with this RFP. All submittal documents become the property of UCR and shall not be returned.

5.5 Proposal Process. Selection shall be based upon a “best value” approach. Each

Proposer will submit their Proposal in one envelope covering qualifications and financial information. Each Proposer must submit its proposal in a sealed “envelope” or boxes, clearly labeled on the outside as:

Envelope: Qualifications and Financial Proposal of (insert Proposer name)

6. GENERAL INFORMATION AND PROPOSAL REQUIREMENTS

6.1 Program Objectives 1. UCR is seeking a qualified Proposer’s to furnish management, labor, equipment,

goods and supplies necessary to manage and operate a Campus Store that will provide the highest caliber of services to the UCR community. UCR’s overall goal in soliciting a Proposer to provide Campus Store management services is to enhance and improve upon the level of financial effectiveness, services and satisfaction currently being provided on campus.

2. It is essential that the Campus Store be managed with maximum sensitivity to the

needs and concerns of our students, faculty and staff. Products, prices, and services must promote confidence that the UCR community is obtaining the best possible combination of quality, customer service and price.

6.2 Scope of Work

1. During the term, the selected Proposer shall operate the UCR Campus Store, in accordance with the requirements, terms, specifications, conditions, and provisions hereinafter contained.

2. The selected Proposer shall provide UCR with the services usually expected of a

top quality University of California Campus Store.

6.3 Term

1. The Contract shall commence on July 1, 2014 and continue for a period of 7 years ending June 30, 2021, with the option to extend for 3 additional one year periods. Extension years are based on mutual agreement. If it is deemed to be of mutual benefit to both parties, UCR and the selected Proposer can mutually agree to renew the Contract beyond the original 7 year period.

6.4 Minimum Qualifications

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1. Management services of University or College Campus Store, or major retail

operations. 2. Experience with a diverse student population. 3. Financially solvent with an excellent track record for the past 10 years. 4. Ability to leverage purchasing power to provide low costs of merchandise and

services to universities or college campuses. 5. Provide university or college campuses with a full range of merchandise and

services expected from a quality Campus Store. 6. Have sufficient quantities of textbooks and related supplies and materials, as

required or recommended by the faculty for academic courses, available for purchase by students at the specific times the items are needed.

7. Ensure that the specific requested editions of textbooks are available for sale. 8. Minimize out-of-stock situations on textbooks. 9. Offer a significant selection of “soft goods” such as office supplies, incidental

household goods for the resident student, personal care items, universities or college campus emblematic apparel, memorabilia, and other miscellaneous items.

10. Provide timely response to customers requiring special order literature and other such materials.

11. Provide textbooks and academic materials in accordance with mutually agreed upon pricing structure of agreement.

12. Provide other quality merchandise to universities or college campuses under pricing policies that are both fair and competitive for like or similar quality, as compared to other college and University of California Campus Stores and also with retail establishments in the surrounding area.

13. Keep apprised of new merchandise of interest to the universities or college campuses.

14. Provide for efficient customer traffic flow during rush periods and minimize time spent by customers in waiting lines.

15. Meet the needs of disabled persons. ADA requirements shall be adhered to in all aspects of the management and operation of the Campus Store.

16. Provide employment opportunities for UCR students. 17. Employ equal opportunity practices which conform to both the spirit and the letter

of all laws against discrimination and is committed to non-discrimination because of race, creed, color, sex, age, national origin, or religion.

18. Ability to purchase existing Campus Store Inventory. 19. Ability to contract for a temporary modular building for two year period. 20. Compliance with the UC Code of Conduct. 21. Have memberships with WRC and FLA. 22. Compliance with UC PCI and Data Security as outlined in Exhibit G & H.

6.5 Requirements of the Proposals

In order to be considered responsive to UCR’s RFP, the Proposer must include and acknowledge all of the following in their proposal.

1. RFP Cover Sheet Return of the RFP cover sheet, signed and filled out as required.

2. Equal Opportunity Statement UCR believes in equal opportunity practices which conform to both the spirit and

the letter of all laws against discrimination and is committed to non-discrimination because of race, creed, color, sex, age, national origin, or religion. To be considered for inclusion as a supplier under this agreement, the bidder must

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include a statement of the Proposer’s commitment to Equal Opportunity Employment.

3. Exceptions Summary of any specifications, requirements, terms, conditions, and provisions

in UCR’s RFP that the Proposer will not conform to. 4. Authorization Signature of authorized officer of the Proposer, with names of each person

signing typed or printed below the signature. 5. Complete Client List A list of stores where the Proposer is currently operating a college or university

Campus Store. For each location on a college or university campus, indicate the length of time the Proposer’s has held the contract for the operation of the Campus Store, and provide the name, address, and telephone number of a college or university official with the authority over the Campus Store operation who can be contacted concerning the operation of the Campus Store while under the management of the Proposer’s.

6. Financial Statement A certified financial statement of the Proposer’s last three fiscal years. 7. Internal Systems A description of internal systems of the Proposer’s for:

a. Inventory controls for textbooks, trade books, and general merchandise. b. Recording, checking and reporting sales. c. Control of cash and refunds. d. Internal audit.

8. Used Textbooks A description of the Proposer’s access to wholesale used books and used

textbook program. 9. Management Structure An organizational chart showing the management structure of the Proposer’s

with a description of the qualifications and credentials and the location of both upper level management and regional management support staff.

10. Corporate Support Description of corporate support services and programs that will be included by

the Proposer. 11. Personnel Policies and Training Description of Proposer’s personnel policies and educational or training

programs for managers, supervisors, and employees. 12. Customer Service

Methods the Proposer’s will utilize to insure customer satisfaction with the Campus Store services provided.

13. Obligation UCR currently has a contract with MBS Systems Equipment which provides computer equipment and software product licensing charges to the UCR Campus. The selected Proposer would be required to either purchase this

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inventory (see Exhibit F) or payoff the remaining balance of the existing contract (approximately $120,000).

14. Policies / Programs / Procedures Indicate the policies / programs / procedures proposed for use in the operation of

the Campus Store in the areas listed below: a. Buy-back of books b. Refunds c. Faculty/staff discounts d. Special orders – e.g., caps/gowns; rings; commencement invitations e. Maintenance of all required course books in stock f. Methods for securing titles, publishers, and quantities from UCR’s faculty g. New categories of merchandise, if any, to be added for sale h. Pricing i. General book selections j. Inventory purchase terms k. Supplies supporting UCR academic programs (e.g., School of Medicine).

15. Licenses, Permits, and Taxes a. The Proposer shall secure and pay for all federal, state, and local

licenses and permits required for the UCR Campus Store operations provided for herein. UCR will cooperate with the Proposer in obtaining all licenses and permits and will execute such documents as shall be reasonably necessary or appropriate for such purposes. The Proposer shall pay for any and all taxes and assessments attributable to the operation of the UCR Campus Store provided herein including but not limited to sales taxes, excise taxes, payroll taxes, and federal, state, and local income taxes.

b. The Proposer will be granted the right to use UCR’s name, logo and seal for reproducing and imprinting stationary, soft goods, notebooks, pens, pencils, jewelry and similar items acceptable to UCR, provided that UCR’s name is not used for product endorsement.

16. Financial Structure

Proposer shall submit a financial proposal to the University in the form of: a. A guaranteed monthly payment or an applicable percentage of net sales at

the Campus Store, whichever is greater. b. Signing Bonus

17. Net Sales

Net Sales shall be defined as all collected sales at the Campus Store and all Proposer’s UCR brand websites less voids, refunds, and sales tax.

18. Five (5) Employee Transition Plan Assume 5 FTE existing positions as determined by the University. The total annual cost in salaries and benefits of these 5 FTE positions will not exceed is $325,000. These costs are subject to University cost escalations in accordance with policies. These 5 FTE positions will remain as UCR employees assigned to the Proposer.

19. Computer Store The Proposer will operate a computer store. The Proposer will submit a complete listing of Computer Manufacturers that they carry and will sell at the UCR Campus Store.

20. Inventory

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a. The Proposer will purchase remaining UCR Campus Store inventory at invoice cost (e.g., textbooks, general merchandise, school supplies, etc.).

b. Purchase of all remaining publisher credit memo balances (at credit memo face value).

21. MBS POS Buyout Clause

a. The Proposer will satisfy the MBS POS buyout clause in accordance with the schedule established between the Campus Store and MBS. For example, the buyout cost effective June 1, 2014, is estimated at $120,000.

22. UCR Service Award Program a. The Proposer will offer the UCR Service Award Program. This program

provides service awards to UCR employees. Income from this program will be included in the Net Sales calculation for determining UCR commission.

23. Annual Audit

a. The Proposer will comply with annual audit of financial records by UCR related to Net Sales and commission calculations.

24. Online Store and Website Administrative Requirements

a. Provide a UCR Branded website for customer ordering with unique URL for textbooks and general merchandise.

b. Provide textbook information interface to UCR Registration System c. Provide an online administrative portal for (UCR) account information. d. Provide an online textbook adoption application for faculty or departmental

textbook coordinators. e. Provide a customer messaging application that provides up-to-date

information on important textbook related topics and action items (rental return dates, buy-back dates, etc.)

f. Provide online textbook resource/information center for faculty. g. Provide an online customer satisfaction survey tool.

25. Marketing Requirements a. Work with UCR to develop and implement all start-up and ongoing marketing

and advertising campaigns and programs. b. Provide printed, e-mail, social media and online advertising material as

needed to maximize adverting potential. c. Provide specific marketing/adverting programs (on a continual bases)

targeting campus faculty to ensure timely receipt of textbook adoption information.

26. Customer Service Requirements

a. Provide a Customer Service Center staffed at least five days a week (seven days preferred) that can be contacted via e-mail, toll free phone or fax.

b. Provide Customer Service hours of operation. c. Provide standard, same day, next day or two day shipping options. d. Accept multiple payment options - all major credit cards, campus debit card,

PayPal and personal checks. e. Provide Blackboard (BB1) transaction integration agent for Campus Debit

Card (Bear Bucks) f. Provide special payment/billing options for student financial aid (if needed),

scholarships, VA students, disabled students and special circumstance needs.

g. Provide Refund Policy information. h. Provide one week buyback service at the beginning and end of each quarter

and two days at the end of each (2) summer sessions.

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i. Provide multiple options for returning textbooks due to refunds and end of use (end of quarter).

j. Provide registration integration – provides student with all textbook information and purchase option at time of registration.

k. Provide an online customer satisfaction survey tool.

27. Retail Management System Requirements a. Proposer will provide and install at no cost to the UCRCS in a “hosted

environment” a complete Retail Management/Inventory Control System and Point-of-Sale Cash Register System.

b. Provide appropriate number of cash register units required for point-of-sale. c. Retail Management System must have a complete Course Materials

procurement system and General Merchandise (school/office supply, clothing, and insignia/gift) procurement system.

d. Provide system application for off-sight sales needs. e. Point-of- Sale System must be PCI compliant and meet all university system

security requirements. See Attached Exhibit G. f. Provide system security certification documents as required. g. Provide at no cost to UCRCS, system installation, training and initial system

data input.

28. Commission & Payment Requirements a. Provide commission structure and payment schedule for online textbook

purchases. b. Provide commission and payment schedule for online and in-store textbook

buyback purchases. c. Provide any growth (commission increases) incentive requirements.

29. Proposals shall also contain the following information below. 1) Provide a company profile - revenues, assets, number of employees, number

of years in business, and company principals. 2) Provide a summary of your experience in servicing campus-based programs

by way of online student ordering. Include the number of years you have served campus-based programs and the number of client schools you serve.

3) Outline your processes for the acquisition of textbook and related course materials. Be sure to fully describe all of the following in your response:

4) For each quarter when will textbooks be available for purchase by students? 5) Whether you commit to having inventory available for purchase the entire

length of a term. 6) Your communication procedures with academic departments regarding

adoptions. 7) The Campus Store requires that the provider also provide retail solutions to

manage selling non-textbook merchandise in the physical store. The system must be a software asset owned by the provider.

8) Any system worthy of consideration must be currently in compliance with industry standard minimums regarding the security of credit card information. Please provide a link to the Visa CISP/ PCI compliance website listing that shows your product listed. If this is not available - please excuse yourself from submitting a bid and advise us accordingly.

9) Describe any resources you have for faculty and staff for assistance in making textbook adoptions. If your resource (s) provides access to your title database, how large is the database, how frequently is it updated, and does it include prices of title? Describe the search functionality of the database.

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10) Describe your online Campus Store ordering system. Describe the Campus Store website and ordering process, including, but not limited to, the following elements: ease of ordering, ability to embed customized messages, real-time advisement of stock availability, estimated delivery time, customer support information, order acknowledgement, and order tracking. With regard ease of ordering, describe your course selection process. Describe whether students can select all courses at one time or if students are required to toggle back and forth when they are ordering for multiple courses.

11) Describe the technologies and related infrastructure you have available to successfully operate an online Campus Store. What is the online Campus Store’s capacity, and how do you protect the security of student/customer information?

12) Describe your system to accept financial aid data, accept payment for student orders with financial aid, and the invoice reconciliation process including the timing of billing. What system do you have for school financial aid administrators to adjust financial aid allotments?

13) Outline your delivery methods to customers, available carriers, shipping options, and costs.

14) Describe the order fulfillment process in your distribution facility to ensure timely and accurate fulfillment.

15) Describe your returns and refunds policies. 16) Describe your distribution center, order fulfillment infrastructure and the

timeliness and accuracy with which you process orders for shipping. Provide metrics on your performance in regard timely and accurate shipping.

17) Describe your customer service capabilities for students, faculty and staff, including available modes of contact (i.e. phone, email, chat). If applicable, describe your call center / customer service operation, including phone call handling capacity, staffing, agent training, language capabilities, and hours of operation. Do you offer 24x7customer service? Describe your quality control measures for customer service. As your telephone system record all calls and other customer interactions via e-mail and chat? If so what is the review process of those recorded interactions to ensure quality? If you outsource customer service, describe the outsource company and its location.

18) Explain how you calculate the selling price of all textbook formats you make available including the following: new print, used print, eBook, and rental.

19) Describe your buyback policy and program to purchase used books from students. Outline the mechanics of the buyback process including any return shipping cost incurred by students. Describe how much you pay students as a percent of new selling price. Do you purchase remaining store stock? If so describe that process and prices you pay.

20) Provide information on your processes to distribute ancillary materials such as photocopied "Course Packs" syllabi, etc. including your capability to obtain copyright clearance and duplicate these types of items. Do you support the digital delivery of course packs? Describe how you calculate a price for both print and digital items.

21) Provide details on your capabilities and experience to deliver eBooks, eContent, digitized content, and/or provide an eLearning platform. Describe how a student would access an eBook from your company. Is a student required to purchase an additional hardware or software in order to access the eBook? On what devices can a student access your eBooks/eContent? Is the reading experience the same regardless of the type of device? Include information on how you priced digital items.

22) Provide information on whether you distribute nontraditional course materials such as CD’s, and/or DVD’s.

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23) Provide details on how you handle a program when course material fees are bundles within tuition. Describe how the program office or institution would place orders for students. Describe the pricing model for these types of programs.

24) Provide details on your textbook rental program to include length of use to customer, pricing and penalties.

25) Describe any resources you may have for students to access additional web-based services, tools, or materials relevant to their courses or area of study.

26) Detail the implementation process you employ to assist an institution in transitioning to your service. Outline the implementation process and include a proposed timeline of events.

27) Provide details on the student marketing plan you envision to ensure student ordering from your online Campus Store.

28) Provide details on how you will purchase existing inventory. Outline the prices you will pay and the guidelines involved.

29) Describe your relationship with publishers relative to your ability to acquire our adopted textbooks. Describe the reports you provide both the publishers and the school to assist in the acquisition of desk copies.

30) Describe the reports you provide an institution and the frequency with which the institution will receive these reports. Specifically include information on the following types of reports: student ordering data, ordering history, performance reports on matters such as number of used books sold, number of e-books sold, and backorders. If reports are available online, describe the site. Include examples or sample pages of these reports.

31) Provide references from four client institutions currently using your service. The references should be of similar size and scope to the requesting institution.

32) Describe the financial terms and conditions of an agreement to use your services with attention to the following: commission structure, schedule of payments, and method of accounting for and reporting sales.

33) Provide details on any additional distinctive qualities, products, or services your company would provide. Describe the benefits to the institution of these qualities, products or services.

34) Provide details to relocate the store to temporary modular, and plan for tenant improvements in accordance with UC prevailing wage, LEED Silver Commercial Interior requirements.

7. EVALUATION

UCR will consider a number of factors in combination in evaluating the proposals submitted. These factors will include the following which are not listed in order of importance:

a. Proposer’s record of performance and service in higher education Campus Store

operations. b. Proposer’s conformance to RFP’s specifications, requirements, terms,

conditions, and provision. c. Proposer’s response to UCR’s objectives. d. Proposer’s pricing and refund policies. e. Service aspects of Proposer’s proposal. f. Financial Guarantee, Signing Bonus, Scholarships, and Donations proposed to

UCR. g. Customer relations in existing Proposers operated Campus Stores. h. Personnel aspects of Proposer’s proposal. i. Proposer’s ability to render satisfactory services.

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j. Review of recommendations from and with respect to Proposer’s Campus Store operations at other similar universities and colleges.

k. Extent of Proposer’s size, credit standing, financial record, stability, and management.

l. Proposer’s proposal for providing temporary modular store for 2 years and plan for tenant improvements for renovated Campus Store.

8. AWARD UCR reserves the right to accept or reject any or all Proposals, make more than one award, or no award, as in the best interests of UCR. UCR intends to select and to notify the winning Proposer, on University’s form, within 60 days after the Proposal due date. Within thirty (30) days after receipt of notice of selection as the successful Proposal, Proposer shall submit to UCR Qualifications and Price proposal, and Certificates of Insurance.

At the option of the UCR some or all of the contents of the selected Proposer’s proposal shall be incorporated into, and shall be an integral part of the operating and lease agreements. After the legal and technical review of the draft Agreements by UCR, changes may be incorporated into the draft Agreements in order to comply with the RFP requirements and UCR contract procurement policy.

Following the selection of one or more Proposers UCR will award to winning Proposer by signing the revised Agreements and returning a signed copy of the revised Agreements to Proposer.

If UCR consents to the withdrawal of a Proposal of successful Proposer, or the successful Proposer fails or refuses to sign the Agreements or submit to UCR all of the items required by the Proposal Documents within 10 days after receipt of notice of selection or Proposer is not financially or otherwise qualified to perform the Contract, UCR may reject such Proposer’s Proposal and select the next best value Proposal.

9. RFP Proposal Schedule The following Proposal submittal schedule and deadlines will be strictly adhered to by UCR:

Request For Proposal Schedule Dates Proposal Documents Made Available September 4, 2013

Mandatory Pre-Proposal Meeting and Campus Site Visit/Job Walk Directions to Campus: http://www.ucr.edu/about/directions.html Park in Lot #1- Obtain parking permit from Kiosk on West Campus Dr. http://campusmap.ucr.edu/imap/index.html?loc=KIOSKWCD Highlander Union Building (HUB)* http://campusmap.ucr.edu/imap/index.html?loc=HUB *Room # will be provided upon scheduling the meeting.

Send email to rfpcampusstore@ucr.edu to schedule one of the dates below:

10:00 am (PST) on September 13, 2013 10:00 am (PST) on September 16, 2013

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Request for Information Due ucrcampusstorerfp@ucr.edu 2:00 pm (PST) on September 27, 2013

Request for Information Response October 4, 2013

Proposal Due Date 2:00 pm (PST) on October 16, 2013

Note: Qualifications and Financial Proposal must be in separate envelopes

LATE PROPOSALS WILL NOT BE ACCEPTED.

10. FINANCIAL AND OPERATING REQUIREMENTS

10.1 Financial Responsibility. The Proposer shall have complete responsibility for the financial administration of the Campus Store facility. Such responsibilities include, but are not limited to, contracting for and renting temporary modular building for two years, ordering books and merchandise, billings and collections from third parties, processing payments for all goods, acceptance and deposit of all funds, reconciliation of accounts, preparation of annual financial reports, compliance of UC PCI and Data Security as outlined in Exhibit G & H, and all other such activities that may apply.

10.2 Operating Schedule. The Proposer will be required to operate the Campus Store in

a temporary modular building for the first two years of the agreement and then a remodeled existing UCR Campus Store located on the main campus on a 12-month basis, based on the UCRs academic calendar. The UCR reserves the right, upon consultation with the Proposer, to establish or change the service hours, plans or other methods of operation of the Campus Store. Open on weekends during special events as requested by UCR.

10.3 Merchandising. UCR reserves the right to recommend merchandise to be sold in

the Campus Store and to request the removal of merchandise for sale in the Campus Store which the UCR considers offensive or inappropriate.

10.4 Operating Material. The Proposer shall provide all office machines, equipment, and supplies required for the efficient conduct of business. The Proposer may elect to utilize equipment already in place in the Campus Store, but shall accept the equipment in “as is” condition and be responsible for future maintenance of such equipment. Any equipment so utilized will remain the property of the UCR upon termination of the contract in the same condition as when accepted for use, normal wear and tear expected.

10.5 Merchandising Rights. The Proposer shall have exclusive rights to operate the full service Campus Store located at the UCR, offering all goods and services normally found in UCR Campus Stores and any such additional services as may be required by the UCR during the term of the contract. The UCR shall grant the Proposer the right to sell UCR licensed products.

11. SPECIFIC SERVICES TO BE PROVIDED BY THE CAMPUS STORE OPERATION 11.1 The Proposer shall stock in sufficient quantity, display, and offer for sale:

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a. All required, recommended, and suggested text and course books, whether

new or used, in editions specified by the faculty or other designated departmental representatives;

b. Other educational materials and supplies used by the UCR’s students; c. Speculative merchandise such as books, magazines, soft goods,

stationery, desk and room accessories and other items normally sold in a UCR Campus Store, to the extent that the sale of such items is compatible with the educational mission of the UCR and Campus Store’s purpose;

d. Food items and other items not normally sold in a UCR Campus Store upon specific prior approval by the UCR’s designated representative.

11.2 The Proposer shall provide for charge sales of books, supplies, and all other

merchandise to students, faculty, and staff through Master Card, Visa, Discover, American Express and provide for charge sales to the UCR where appropriate on its own accounts. The Proposer shall accept personal checks from students, faculty and staff in a reasonable amount in payment for purchases, subject to appropriate identification.

11.3 The Proposer shall provide special order service and other such sale services, such as class ring, cap and gown, diploma frames, sashes and award metals commencement announcements, as are requested by UCR.

11.4 In its provision of books, supplies, and materials, the Proposer will prepare (in a form acceptable to UCR and distribute electronically to faculty members requisitions for such books, supplies, and materials for each quarter. UCR will make reasonable efforts to see that each Proposer’s Campus Store management is given timely notice by faculty members or authorized designees of the books, supplies, and materials requested for all courses offered, as follows: a. For the Spring quarter, beginning in January, on or before October 10th; b. For the Summer sessions, on or before March 6th; and c. For the Fall quarter, beginning in late August or early September, on or

before March 20th.

11.5 Proposer shall provide timely reports to faculty members of the status of their orders for books, supplies, and other materials for their respective courses, including items discovered to be unavailable, delayed in delivery, new editions, etc. The Proposer shall not be responsible for books or other items not being ready for sale to students due to failure of faculty members to submit timely order requests. However, the Proposer shall make every reasonable effort to supply items requested even when requests are not timely.

11.6 Proposer shall specifically address in the Proposal how the order processing and delivery of emergency late textbook adoptions shall be handled.

11.7 The Proposer shall operate according to the following pricing policies: a. All new paperbacks and trade books shall be sold at prices no higher

than the publisher’s suggested retail prices. b. Textbook Pricing Policy shall be clearly stated. Refer to the

attachment of UCR’s current Campus Store Textbook Pricing Policy. c. All other merchandise shall be marked up to reflect a normal gross

profit margin for the UCR Campus Store industry or as pre-priced.

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11.8 UCR may request and shall receive from the Proposer proof that the above pricing policies are being followed. Information shall be provided by the Proposer at the earliest possible time following its receipt of the UCR request.

11.9 In exceptional cases only involving changes in university and college Campus Store market conditions that are outside of the Proposer’s control, the Proposer may request a mutual review and decision with respect to pricing policies at any time during the year. UCR shall determine the effective date of any such changes in policies.

11.10 The Proposer shall purchase used books from the students, faculty and others at the UCR based on a schedule that is practical and convenient to both the Campus Store and the UCR community according to the following policy: a. If the Proposer has a faculty order indicating that a book will be a

course adoption for a following quarter, it will pay no less than fifty percent (50%) of the purchase price. A lesser amount may be paid only if copies required for faculty orders are filled or if a book is in unusually poor condition.

b. If the Proposer does not have information as to the future use of a book or if the book will not be used a following quarter, or will shortly be replaced by a revision announced by the publisher, the Proposer shall pay the price listed for the book in a textbook guide which the UCR and the Proposer agree to use for this purpose.

11.11 The Proposer shall make every possible effort to increase used book sales at the

UCR by retaining used books purchased at UCR, if required for the following quarter, and by purchasing or acquiring used books from other Campus Stores and companies if necessary.

11.12 The Proposer shall post, in conspicuous places, Campus Store policies concerning refunds, buybacks, exchanges, and discounts. New textbooks shall be in new condition, and as a minimum, policies will provide that defective textbooks will be replaced at no cost. The Proposer shall provide for a refund of purchases according to the UCR’s current refund policy or according to an alternative policy, approved by UCR.

11.13 The Proposer shall operate the Campus Store on a schedule that will be convenient to students, faculty, and the UCR community. As a minimum, operating hours are to be from, Monday through Friday 8am to 6pm during regular academic sessions; Monday through Friday 8am to 5pm during summer sessions, and on Saturdays from 9am to 3pm during regular academic sessions. Other operating hours will be required by UCR to accommodate special events, especially Saturday and Sundays. Changes in the operating hours described above shall be approved by UCR.

11.14 In its provision of books, supplies, and materials, the Proposer will prepare (in a

form acceptable to UCR and distribute electronically to faculty members requisitions for such books, supplies, and materials for each quarter. UCR will make reasonable efforts to see that each Proposer’s Campus Store management is given timely notice by faculty members or authorized designees of the books, supplies, and materials requested for all courses offered, as follows:

a. For the Winter Quarter – beginning in first week of January, Textbook Requisitions due middle of October.

b. For the Spring Quarter – beginning last week of March or first week of April, Textbook Requisitions due middle of January.

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c. For Summer Sessions – beginning last week of June, Textbook Requisitions due middle of March.

d. For the Fall Quarter – beginning last week of September, Textbook Requisition due middle of May.

11.15 The Proposer shall provide for sales of textbooks and other educational materials

required for off-campus courses at off-campus instructional centers, if so requested by UCR.

11.16 The Proposer shall withdraw from display or sale in the Campus Store any item

which the UCR should reasonably request not to be displayed or sold.

11.17 The Proposer shall submit to the UCR for its prior approval, all advertising to be done off the UCR campus or in other than UCR media. The Proposer shall withdraw any advertising from any location or media if the UCR should request that such advertising be withdrawn.

11.18 The Proposer shall prosecute individuals for acts of property damage, theft of merchandise or money, or fraudulent acts as the UCR should reasonably request and, if the UCR should so request, shall cooperate with the UCR in the prosecution of such individuals. The Proposer shall not have UCR students arrested by public authorities or prosecuted without prior consultation with the UCR police.

11.19 In order to determine that superior customer service is being provided to UCR, a method to assess customer service shall be agreed upon by the UCR and the Proposer.

11.20 The Proposer shall promote book signings and other academic and scholarly events as appropriate.

11.21 The Proposer shall provide in the Proposal a list of the promotions that will be provided during the academic year.

11.22 Proposer may propose other additional services.

11.23 Proposer shall provide additional UCR Campus Store services as are reasonably requested by UCR.

11.24 Any changes in services, charges, and discounts must be approved by UCR. 11.25 Compliance with the requirements of the Higher Education Act.

11.26 A Coffee operation is not allowed for this Campus Store operation.

12. FACILITIES AND EQUIPMENT

The Campus Store operated by the Proposer shall be operated in temporary modular building and then to the remodeled existing Campus Store space. Any additions to or deletions from the existing space, or relocation of the Campus Store, may be made but must be agreed upon in writing by the Proposer and UCR’s Director of Materiel Management. 12.1 The Proposer shall be responsible for providing such additional equipment and

fixtures as may be necessary for the successful operation of the Campus Store. All renovations and finishing out, including color selections is subject to prior written approval by the UCR’s Director of Materiel Management..

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12.2 The UCR will be responsible for major structural repairs to the space used by the

Proposer, provided that such repairs are not required as a result of the actions of the Proposer, its agents or employees.

12.3 Current maintenance contracts on the UCR equipment, which is made available for use by the Proposer, will remain in force until their normal expiration dates, unless otherwise provided in the maintenance contracts. The Proposer will have the benefit of such contracts until their expiration dates, and thereafter shall provide for preventive maintenance and repairs of equipment at the Proposer’s own cost and expense. A listing of such agreements and dates are provided in [Insert as an Attachment].

12.4 UCR will provide all utilities to the space used by the Proposer including: Heat,

light, utilities, and air conditioning as is reasonably required for operation of the Campus Store.

12.5 Office equipment (including computer equipment, cash registers and safes), furniture and fixtures, file cabinets, telephones and telephone service (including campus telephones and campus telephone service), and office machines currently available for Campus Store use. The Proposer shall pay for long-distance telephone service and any additional services.

12.6 The Proposer will be responsible for UCR’s current rate for the cost of trash removal and extermination services for the Campus Store.

12.7 To the best of its knowledge, the UCR is not aware of any health or environmental problems which currently exist or are likely to develop in the physical facility which houses the Campus Store. The UCR shall be responsible for remedying promptly any health or environmental problems at the Campus Store, other than those caused by the Proposer, and notifying the Proposer accordingly.

12.8 Agents and employees of the Proposer working in the Campus Store will be provided access to parking lots utilized by UCR employees under the policies of Parking Services.

12.9 The Proposer shall provide property and casualty insurance covering the Proposer’s equipment and other personal property in the Campus Store. The UCR will provide property and casualty insurance, under UCR’s policy, covering Campus Store space and fixtures and equipment owned by UCR.

12.10 The Proposer shall cooperate with the UCR Police and with other UCR officials in the provision of security for the Campus Store. The Proposer shall be responsible for maintaining intrusion alarms and other security systems deemed necessary for the space used by the Campus Store operation.

13. PERSONNEL AND MERCHANDISE

13.1 Adequacy. Proposer is to provide sufficient personnel to ensure efficient and courteous service to patrons and must have adequately trained relief personnel available to substitute in the absence of regular employees. All staff shall be employees of the Proposer, whom shall be solely responsible for the payment of their wages and benefits.

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13.2 Current Employees. The Proposer will assume 5 FTE existing Campus Store full time employees as described in 6.5.18 (page 9). The Proposer will supervise, manage, and train these employees.

13.3 Employee Supervision. The Proposer will be responsible for day-to-day supervision of the UCR employees as identified in 13.2. However, implementing any significant personnel actions will be done consultations with the University. The Proposer will use UCR performance evaluation forms as well as adhere to University Human Resources policies related to performance evaluations.

13.4 Student Employees. Existing student employees are to be provided interviews and preference for continued employment with the Campus Store. Current and future student employees of the Proposer will be paid in accordance with University pay scale. The Proposer is allowed to utilize work-study students in the Campus Store when they are available.

13.5 Employee Policies. Proposer employment policies shall meet the requirements of the Fair Labor Standards Act and all other regulations required by Federal or State Law. All material relating to personnel policies and procedures of the Campus Store must be available for review by UCR.

13.6 Equal Opportunity and Affirmative Action. UCR is committed to Equal Opportunity and Affirmative Action. The successful Proposer must pledge to comply with Equal Opportunity Laws and that it will not discriminate against any employee or applicant for employment because of race, color, creed, religion, national origin, sex, age, physical ability, or marital status.

13.7 Manager Selection. The Campus Store Manager and Departmental Managers assigned to the Campus Store by the Proposer must be approved by UCR. Subsequent changes in these assignments are to be made by the Proposer only after prior consultation with and approval from UCR. The person selected by the Proposer to manage the Campus Store is to have extensive experience in the management of campus store. This person must be a good communicator, a proven leader and must exhibit the ability to deal effectively with UCR students, faculty and staff.

13.8 Manager Replacement. Replacement of the store manager will be done only after consultation with UCR. The UCR reserves the right to request replacement of the Campus Store Manager for good cause as determined by UCR, or for actions considered to be not in the best interests of UCR.

13.9 Training. The Proposer is to describe the training program(s) that it intends to use for the employees of the Campus Store, which will ensure that ongoing staff developmental needs are met.

13.10 Conduct. Proposer employees must strictly adhere to campus regulations regarding personal behavior and all other rules and regulations of UCR.

13.11 Upon commencement of this Contract, the Proposer shall purchase Campus

Store inventory then currently on hand on the following terms: New Textbooks a. All new textbooks (in quantities not exceeding normal course requirements)

formally adopted for the following term and on hand at the time of inventory will be purchased by the Proposer at UCR’s cost.

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b. All excess textbooks not accepted for return will be purchased by the Proposer at the current wholesale price.

Used Textbooks a. At the time of inventory, all used textbooks on hand that are formally

adopted for the following term (in quantities not exceeding normal course requirements) will be purchased at UCR’s cost.

b. All excess adopted used textbooks will be purchased by the Proposer at the current wholesale price.

Trade, Paperbacks, Technical and Reference Books a. All trade, paperback, technical and reference books in clean and saleable

condition, less than six (6) months old, will be purchased by the Proposer at UCR’s cost.

b. Books not in clean and saleable condition will be set aside and purchased by the Proposer at a mutually agreeable price.

School Supplies and General Merchandise a. This category includes all items not previously mentioned, including art, office and general supplies, stationary and greeting cards, etc. All of the above supplies and merchandise in clean and saleable condition, will be purchased by the Proposer at UCR’s cost.

13.12 Items not in clean and saleable condition will be set aside and purchased by the Proposer at a mutually agreeable price.

13.13 Payment for Inventory: The Proposer will pay the UCR for all inventories in two equal payments: 50% within sixty (60) days after the completion of a physical inventory, and 50% with one hundred and twenty (120) days after the completion of that inventory.

13.14 Upon the commencement of the Contract, the Proposer and the UCR will

perform an inventory of UCR’s equipment, which will be used by the Proposer in the Campus Store. The inventory will note the condition of the equipment, as agreed upon by the UCR and the Proposer.

13.15 Upon the termination of the Contract, UCR will purchase, or require the replacement Proposer to purchase, Campus Store inventory then on hand from the Proposer upon the same terms as described above.

14. REFERENCES

Proposer shall include client reference information - including name of client contact, company name, title, address, phone number, email address.

15. GENERAL CONDITIONS & LIMITATIONS

15.1 This RFP does not represent an offer or commitment by UCR to enter into an agreement with a Proposer or to pay any costs incurred in the preparation of a Proposal unless otherwise stated.

15.2 The intent of this RFP introduction is to provide an overview of the proposal

process, the subsequent award and the work required of the successful Proposer. The provisions herein are a SUMMARY ONLY and the Proposers should in all cases review the provisions of the Agreements for the specific requirements. If the Proposer believes there are conflicts between this document

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and any other document, the Proposer should immediately, and in writing, bring it to the attention of UCR and request written clarification.

15.3 Proposer shall assume full responsibility for timely delivery at the location designated for receipt of Proposals. Oral, telephonic, facsimile, email, or telegraphic Proposals are invalid and shall not be accepted.

15.4 Prior to the applicable Proposal Deadline, a submitted Price Proposal may be modified or withdrawn by notice to UCR at the location designated for receipt of Proposals. Such notice shall be in writing over the signature of Proposer and in order to be effective, must be received on or before the applicable Proposal Deadline. A withdrawn Proposal may be resubmitted up to the applicable Proposal Deadline, provided that it then fully complies with the requirements of this RFP.

15.5 The submission and any information provided as part of the submission will not be returned to submitters/Proposers. This RFP and the selected firm’s submission, as well as any subsequent information provided, may, by reference, become a part of any formal agreement between the submitter and UCR resulting from this solicitation.

15.6 Neither UCR, nor any of its officers, agents or employees, shall be responsible for the accuracy of any information provided to any Proposer as part of this RFP. All Proposers are encouraged to independently verify the accuracy of any information provided. The use of any of this information in the preparation of a submission is at the sole risk of the Proposer.

15.7 The Proposer shall not collude in any manner or engage in any practices with any other Proposer (s) which may restrict or eliminate competition or otherwise restrain trade. Violation of this instruction will cause the Proposer’s submittal to be rejected by UCR. This prohibition is not intended to preclude joint ventures or subcontracts.

15.8 UCR has sole discretion and reserves the right to reject any and all submissions received with respect to this RFP and to cancel the RFP at any time prior to proceeding to the next phases of the project. UCR also reserves the right to request additional information or clarification of data included in submissions without changing the terms of the RFP.

15.9 Notice to Proposers regarding the Public Records Act - All materials submitted in response to this solicitation and any contract that may be awarded become a matter of public record and shall be regarded as public records. Designation of Confidential Information - UCR will recognize as confidential only those elements in each response which are trade secrets as that term is defined in the law of California and which are clearly marked as “TRADE SECRET”, “CONFIDENTIAL”, or “PROPRIETARY”. Vague designations and blanket statements regarding entire pages or documents are insufficient and shall not bind UCR to protect the designated matter from disclosure.

15.10 The California Public Records Act limits UCR’s ability to withhold qualification and proposal data to trade secrets or records, the disclosure of which is exempt or prohibited pursuant to federal or state law. If a submittal contains any trade secrets that a Proposer does not want disclosed to the public or used by UCR for any purpose other than evaluation of the Proposer team’s eligibility, each sheet of such information must be marked with the designation “Confidential.” UCR will notify the submitter of data so classified of any request to inspect such data so

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that the submitter will have an opportunity to establish that such information is exempt from inspection in any proceeding to compel inspection.

15.11 UCR is Not Liable for Required Disclosure - UCR shall not in any way be liable or responsible for the disclosure of any records if they are not plainly marked “TRADE SECRET”, “CONFIDENTIAL”, or “PROPRIETARY”, or if disclosure is required by law or by an order of the court.

15.12 Except as otherwise specifically provided, definitions set forth in the Agreements are applicable to all Proposal Documents.

15.13 The term “Addenda” means written or graphic instruments issued by UCR prior to a Proposal Deadline which modify or interpret the Proposal Documents by additions, deletions, clarifications, or corrections. Addenda will be issued only by UCR and only in writing and posted at its Web site. Addenda will be identified as such and an email sent notifying Proposers of Addenda posting. At its sole discretion, UCR may elect to deliver Addenda via facsimile to Proposers who have provided a facsimile number for receipt of Addenda or send Addenda via U.S. Mail or courier. Copies of Addenda will be made available for inspection wherever Proposal Documents are on file for inspection. Addenda withdrawing the Request for Proposals or postponing a Proposal Deadline may be issued any time prior to the Proposal Deadline.

15.14 The term “Proposal Documents” means the documents prepared and issued with the Request for Proposals including all Addenda and Exhibits thereto.

15.15 The term “Proposer” means a person or entity that submits a Proposal.

15.16 Proposer has read, understood, and made the Proposal in accordance with the provisions of the Proposal Documents.

15.17 The person signing and executing the Proposal is duly authorized and empowered to execute the Proposal on behalf of Proposer and legally authorized to bind Proposer to a contract. Failure to sign the Proposal will cause the Proposal to be rejected.

15.18 Proposer shall, before submitting its Proposal, carefully study and compare the components of the Proposal Documents and compare them with the Work for which the Proposal is submitted; shall examine the Project site, the conditions under which the Work is to be performed, and the local conditions; and shall at once report to the University errors, inconsistencies, or ambiguities discovered. If Proposer is awarded the Contract, Proposer waives any claim arising from any errors, inconsistencies or ambiguities, that Proposer, its sub’s or suppliers, or any person or entity under Proposer on the Contract became aware of, or reasonably should have become aware of, prior to Proposer’s submission of its Proposal.

15.19 Requests for clarification or interpretation of the Proposal Documents shall be addressed only to the contact person designated in Section 4 of this RFP.

15.20 Clarifications, interpretations, corrections, and changes to the Proposal Documents will be made by Addenda issued as provided herein. Clarifications, interpretations, corrections, and changes to the Proposal Documents made in any other manner shall not be binding and Proposers shall not rely upon them.

15.21 Each Proposer shall be responsible for ascertaining, prior to submitting a Proposal, that it has received all issued Addenda.

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15.22 Notice to Proposers Regarding Equal Opportunity - It is the policy of The

University of California that race, religion, sex, color, ethnicity, and national origin will not be used as criteria in its business contracting practices. Every effort will be made to ensure that all persons, regardless of race, religion, sex, color, ethnicity, and national origin have equal access to contracts and other business opportunities with the University.

16. ACCOUNTING, RECORDS, REPORTS, AND METHODS OF PAYMENT

A. The Proposer’s shall pay to the Regents of the University of California (UCR) the Financial commitments specified in the Proposer’s proposal, which is attached hereto and made a part hereof.

B. Applicable payments as set in the Proposer’s proposal shall be made [Monthly] by

the Proposer’s to the Regents of the University of California (UCR) and shall be paid within [15 Days] after the close of the [Month] in which they were earned. The final payment for any year shall be made within Fifteen (15) days after the end of the applicable contract year, and will include any adjustments required by the percentage of gross sales formula set forth in the Proposer’s proposal.

C. Each payment shall be accompanied by a detailed statement of its computation and

the Proposer’s shall furnish supporting documentation to the UCR upon request.

D. The UCR shall have full access at all times to the Campus Store accounting records, including all cash registers at the Campus Store being used by the Proposer’s, with or without notice. Cash register control totals will be used to verify the cash sales reported. All cash registers or point of sale equipment utilized by the Proposer’s in the UCR Campus Store shall have non-changeable grand totals.

E. The Proposer’s shall maintain complete and accurate accounts and records, in

accordance with nationally accepted Campus Store industry standards, of all revenues, cost of goods, salaries and benefits, and all other expenses in connection with the UCR Campus Store operation provided under the terms of the Contract. All such accounts and records shall be retained by the operation and may be inspected and reviewed by UCR.

F. On termination of the Contract, commissions will be paid to the Regents of the

University of California (UCR) on sales up to the final day the Campus Store is operated under the Contract. The commission due the UCR for any portion of a Contract year shall be calculated on a percentage basis.

17. CONTRACT TERM, RENEWALS, EXTENSIONS, CANCELLATION, TERMINATION, REQUIREMENTS, ADDITIONS, ADJUSTMENTS, AND ASSIGNMENTS

A. The initial contract shall commence on July 1, 2014 and continue for a period of 7

years ending on June 30, 2021, with the option to extend for 3 additional one year periods. Extension years are based on mutual agreement. If it is deemed to be of mutual benefit to both the UCR and the Proposer’s, both parties can mutually agree to renew the Contract beyond the original 7 year period.

B. In the event that the Proposer’s breaches any of the terms and provisions of the Contract, UCR reserves the right to accurately and specifically describe the unsatisfactory performance or condition in a written notice by registered or certified

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mail to the Proposer’s and expect that this be corrected within a thirty (30) day period from the date the notice is received by the Proposer’s. If the described performance or condition is not corrected satisfactorily within this time period, a thirty (30) day notice of cancellation of the Contract may be given to the Proposer’s, by registered or certified mail. Upon providing such written notice, UCR may procure the services described herein from other sources, and may hold the Proposer’s responsible for any and all excess costs or for any and all losses occasioned thereby.

In the event that the UCR breaches any of the terms and provisions of the Contract, the Proposer’s reserves the right to accurately and specifically describe the alleged breach in a written notice by registered or certified mail to UCR and expect that this breach be corrected within a thirty (30) day period from the date the notice is received by UCR. If the described breach is not corrected satisfactorily within this time period, a one hundred eighty (180) day notice of cancellation of this Contract may be given by registered or certified mail to UCR.

C. The failure of either the Proposer’s or the UCR to insist upon strict performance of any of the terms or conditions of this Contract shall not be construed as a waiver or relinquishment for the future of any such term or condition, and shall be and shall remain in full force and effect.

D. Either party to the Contract may make a written request for a review of its provisions

and terms at any time and may agree to amend or revise any or all provisions and terms. All such mutually agreed upon adjustments must be in writing, signed by the authorized representatives of both parties, and the Contract amended to include same.

E. Neither party shall assign nor transfer the Contract or any part of same nor enter into

any subcontract for services under this Contract without the prior written approval of the other party.

F. The Proposer’s is providing the services described herein as an independent

Proposer’s of UCR, not as UCR’s agent or representative. The Proposer’s shall not, in any manner, use the credit or the name of UCR in connection with its business or affairs except as specifically authorized in the Contract or as approved prior to such use by UCR. Further, the Proposer’s shall purchase merchandise and sign contracts in its own name and sole credit and shall not promptly make full payment thereon, in accordance with the terms of purchase.

G. Headings used in the Contract are for reference purposes only and shall not be

considered to be a substantive part of the Contract.

18. MISCELLANEOUS

A. The Proposer’s shall be knowledgeable about changing college and university Campus Store trends, new marketing ideas, new merchandise items, and changes evolving throughout the general Campus Store industry. The Proposer’s shall incorporate programs of action in response to these changes and trends into the UCR Campus Store operation and services, as deemed applicable to the college and university Campus Store market segment.

B. Subject to the prior approval of UCR, the Proposer’s may utilize some specific UCR services, at the same cost that UCR departments are billed for such services. The Proposer’s is subject to all applicable state sales taxes.

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C. UCR is only responsible for the costs specified as UCR costs and contained herein. All other costs, relative to the Proposer’s operation of the UCR Campus Store and Proposer’s performance under the terms contained herein shall be the Proposer’s responsibility.

D. SMOKE AND TOBACCO-FREE: UCR is committed to a healthy campus culture and

environment. Effective January 2, 2014, UCR is Smoke and Tobacco-Free. Smoking, the use of smokeless tobacco products, the use of unregulated nicotine products, and the use of e-cigarettes is strictly prohibited on all University controlled properties owned or leased, regardless of location. This policy is intended to provide a healthier, safe and productive work and learning environment for the entire campus community.

E. SUBSTANCE ABUSE: The University strives to maintain a work place free from

illegal use, possession, or distribution of controlled substances, and complies with all laws, rules, and regulations as they apply to substance use and abuse in the work place. Unlawful distribution, dispensation, possession, or use of controlled substances in the work place or on University business is prohibited.

19. PCI and DATA SECURITY (Exhibits G and H incorporate herein by reference)

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Typewritten Text

Exhibit A Campus Store Floor Plan- Lower Level

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Typewritten Text

Exhibit A Campus Store Floor Plan- Upper Level

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go Av

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La Conte Ave

CarillonTower

BotanicalGardens

USDA SalinityLaboratory

Gage Canal

Valen

cia Hi

ll Rd

P19 Bookstore

Glen Mor 2Construction Zone

Student Rec CenterConstruction Zone

Utah S

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Cany

on Cr

est Dr

Aberd

een Dr

Avocado St

Big Springs Rd

Citrus

Dr

Everton Pl

Linden St

Grape St

E Cam

pus D

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Cany

on Cr

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Kentu

cky St

Eucalyptus Dr

Idaho

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Florida StRu

stin A

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Plum St

Cherry St

Pentl

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ay

Martin Luther King Blvd

Peach St

W Campus Dr

W Campus Dr

Cany

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S Campus Dr

Iowa A

ve

Blaine St

Watkins Dr

N Campus Dr

Frost Ct

Picach

o Dr

Knox Ct

University Ave

Watkins Dr

Sources: Esri, DeLorme, NAVTEQ, TomTom, Intermap, increment P Corp.,GEBCO, USGS, FAO, NPS, NRCAN, GeoBase, IGN, Kadaster NL, OrdnanceSurvey, Esri Japan, METI, Esri China (Hong Kong), swisstopo, and the GIS UserCommunity

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V:\map_docs\mxd\KJordan\Campus_Store\Regional_Location.mxd (07/31/13)

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PROJECT SITE

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INSET

University of California RiversideExhibit A

Campus Store Site Map

DRAFT

*Temporary Modular Location, to be verified by TAPS.

Exhibit B

Sample UC as a Landlord Lease

THE REGENTS OF THE UNIVERSITY OF CALIFORNIA

STANDARD LEASE FORM

THE REGENTS AS LANDLORD

SAMPLE

Lease covers Premises located at: UCR Bookstore

University of California, Riverside

900 University Avenue

Riverside, CA 92521

Campus from which the space is leased: Riverside

Tenant's Name, Address

& Telephone Number: XXXXXX

SAMPLE ii

TABLE OF CONTENTS

1. PARTIES ………………………………………………………………………………................ 6

2. PREMISES …………………………………………………………………………………... 6

2.1 Non-Exclusive Use Areas ………………………………………………………………. 6

2.2 Parking …………………………………………………………………………............. 6

2.3 Non-Liability of Landlord ………………………………………………………………. 6

3. TERM …………………………………………………………………………………………….. 6

3.1 Term ………………………………………………………………………........... ............. 6

3.2 Options …………………………………………………………………………………… 6

3.3 Delay in Possession ………………………………………………………………………. 7

3.4 Early Possession .................................................................................................................. 7

3.5 Early Termination .............................................................................................................. 7

4. RENT ………………………………………………………………………………………………. 7

4.1 Definition of Base Rent …………………………………………………………………. 7

4.2 Adjustments to Base Rent ………………………………………………………………. 7

4.3 Percentage Rent……………………………………………………………….................. 7

4.4 Payment of Rent ................................................................................................................. 9

4.5 One Time Payment ............................................................................................................. 9

4.6 Additional Rent................................................................................................................... 9

5. SECURITY DEPOSIT .................................................................................................................... 9

6. NOTICES ......................................................................................................................................... 9

7. TENANT CONTRUCTED IMPROVEMENTS ......................................................................... 10

7.1 Tenant Improvements ...................................................................................................... 10

7.2 Cost of Tenant Improvement-Tenant ............................................................................. 10

7.3 Tenant Improvement Warranties ................................................................................... 10

7.4 Notice of Completion ........................................................................................................ 10

8. USE ............................................................................................................................................ 11

8.1 Use ...................................................................................................................................... 11

8.2 Compliance with Law ...................................................................................................... 11

8.3 Condition of Premises ...................................................................................................... 12

8.4 Adequacy of Service ......................................................................................................... 12

9. MAINTENANCE AND REPAIRS .............................................................................................. 12

9.1 Landlord’s Obligation ...................................................................................................... 12

9.2 Tenant's Obligation .......................................................................................................... 13

9.3 Surrender .......................................................................................................................... 14

9.4 Landlord's Rights ............................................................................................................. 14

10. ALTERATIONS AND ADDITIONS ........................................................................................... 14

11. RENOVATIONS ........................................................................................................................... 15

12. INDEMNIFICATION ................................................................................................................... 15

SAMPLE iii

12.1 Landlord's Obligation ...................................................................................................... 15

12.2 Tenant's Obligation .......................................................................................................... 15

13. INSURANCE REQUIREMENTS................................................................................................ 15

13.1 Tenant's Insurance ........................................................................................................... 15

13.2 Waiver's of Subrogation ............................................................................................... 156

13.3 Exemption of Landlord from Liability ........................................................................... 16

14. DAMAGE OR DESTRUCTION .................................................................................................. 16

14.1 Definitions ......................................................................................................................... 16

14.2 Partial Damage--Insured Loss ......................................................................................... 17

14.3 Partial Damage--Uninsured Loss .................................................................................... 17

14.4 Total Destruction .............................................................................................................. 17

14.5 Damage Near End of Term ............................................................................................. 17

14.6 Abatement of Rent; Tenant's Remedies ......................................................................... 18

14.7 Termination--Advance Payments ................................................................................... 18

14.8 Waiver ............................................................................................................................... 18

15. TAXES ............................................................................................................................................ 18

15.1 Payment of Taxes ............................................................................................................. 18

15.2 Personal Property Taxes .................................................................................................. 18

16. DIRECT EXPENSES ................................................................................................................... .18

16.1 Direct Expenses Included ................................................................................................. 18

16.2 Exclusion from Direct Expenses ...................................................................................... 18

16.3 Payment of Direct Expenses ............................................................................................ 19

17. UTILITIES..................................................................................................................................... 19

18. ASSIGNMENT AND SUBLETTING .......................................................................................... 19

18.1 Landlord's Consent Required ......................................................................................... 19

18.2 Landlord’s Consent Not Required .................................................................................. 21

18.3 No Release of Tenant ........................................................................................................ 21

18.4 Excess of Consideration ................................................................................................... 21

18.5 Administrative Fees .......................................................................................................... 21

18.6 Requirements ................................................................................................................... 21

18.7 Election .............................................................................................................................. 22

18.8 Limitations on Remedies .................................................................................................. 22

19. DEFAULTS; REMEDIES ............................................................................................................ 22

19.1 Defaults by Tenant ........................................................................................................... 22

19.2 Remedies ........................................................................................................................... 23

19.3 Default by Landlord ......................................................................................................... 23

19.4 Late Charges ..................................................................................................................... 23

19.5 Impounds .......................................................................................................................... 24

20. CONDEMNATION ....................................................................................................................... 24

21. BROKER'S FEE............................................................................................................................ 24

22. ESTOPPEL CERTIFICATE ....................................................................................................... 24

SAMPLE iv

23. SEVERABILITY ........................................................................................................................... 25

24. INTEREST ON PAST-DUE OBLIGATIONS. ........................................................................... 25

25. TIME OF ESSENCE ..................................................................................................................... 25

26. ADDITIONAL RENT ................................................................................................................... 25

27. INCORPORATION OF PRIOR AGREEMENTS; AMENDMENTS ..................................... 25

28. WAIVERS ...................................................................................................................................... 25

29. HOLDING OVER ....................................................................................................................... 255

30. CUMULATIVE REMEDIES ....................................................................................................... 25

31. COVENANTS AND CONDITIONS ............................................................................................ 25

32. BINDING EFFECT; CHOICE OF LAW ................................................................................... 25

33. SUBORDINATION ....................................................................................................................... 25

34. ATTORNEYS' FEES .................................................................................................................... 26

35. LANDLORD'S ACCESS .............................................................................................................. 26

36. SIGNS ............................................................................................................................................ 26

37. MERGER ....................................................................................................................................... 26

38. QUIET POSSESSION .................................................................................................................. 26

39. MULTIPLE TENANT BUILDING ............................................................................................. 26

40. SECURITY MEASURES ............................................................................................................. 26

41. EASEMENTS ................................................................................................................................ 27

42. PERFORMANCE UNDER PROTEST ....................................................................................... 27

43. AUTHORITY ................................................................................................................................ 27

44. CONFLICT .................................................................................................................................... 27

45. EMISSIONS; STORAGE, USE AND DISPOSAL OF MATTER .......................................... 277

45.1 Definitions ....................................................................................................................... 277

45.2 Compliance and Response ............................................................................................. 287

45.3 Other Emissions ................................................................................................................ 28

45.4 Indemnification ............................................................................................................... 298

SAMPLE v

45.5 Survival ............................................................................................................................. 29

45.6 Disposal of Other Matter ................................................................................................. 29

46. ADDENDUM ................................................................................................................................. 29

47. NO RIGHT TO RELOCATION BENEFITS…………………………………………………….29

48. SMOKE AND TOBACCO-FREE…………………………………………………………………30

49. SUBSTANCE ABUSE………………………………………………………………………….......30

Exhibit A ............................................................................................................................................ 31

Exhibit B …………………………………………………………………………………………….. 32

Exhibit C ……………………………………………………………………………………………. 33

Exhibit D ……………………………………………………………………………………………. 34

Exhibit E ……………………………………………………………………………………………...37

ADDENDUM 1 ........................................................................................................................................... 40

ADDENDUM 2 ........................................................................................................................................... 41

ADDENDUM 3 ........................................................................................................................................... 42

ADDENDUM 4 ........................................................................................................................................... 46

ADDENDUM 5 ........................................................................................................................................... 47

ADDENDUM 6 ........................................................................................................................................... 48

ADDENDUM 7………………………………………………………………………………………………49

SAMPLE 6

THE REGENTS OF THE UNIVERSITY OF CALIFORNIA

STANDARD LEASE FORM

THE REGENTS AS LANDLORD

1. PARTIES. This "Lease" is made as of __________________________, 2013, by and between XXXXX

("Tenant") and THE REGENTS OF THE UNIVERSITY OF CALIFORNIA, a California corporation ("Landlord

or University").

2. PREMISES. Landlord hereby leases to Tenant and Tenant leases from Landlord for the term, in exchange for

the rent, and upon all of the conditions set forth herein, certain real property situated on the University of

California, Riverside campus (“UCR”) in the County of Riverside, State of California commonly known as the

Campus Bookstore (“BUILDING”) located at 900 University Avenue, Riverside, California 92521, as depicted in

Exhibit A. Said real property including the common areas and all improvements therein, is herein called "the

Premises". Tenant’s retail services activity may take place in the lounge, patio and banquet halls of the Building.

Such areas shall remain the property of Landlord and shall not be considered Premises or common areas supporting

the leased Premises. The current campus store will begin remodel construction on July 1, 2014. This will require

the successful Tenant to install a temporary modular building on a location to be determined at a later date for the

first two year period of this Lease and then lease and operate the renovated BUILDING on campus.

2.1 Non-Exclusive Use Areas. Tenant shall also have the non-exclusive right to use, in common with

other tenants or occupants in the Building, any and all of the following areas which may be appurtenant to the

Premises: common entrances, lobbies, elevators, stairways and access ways, loading and unloading areas, visitor

parking areas, ramps, drives, platforms, public restrooms, and common walkways and sidewalks necessary for

access to the Premises.

2.2 Parking. Tenant, its officers, agents and contractors shall be required to display a general or high

level parking permit (“Permit”) at all times when parking at the BUILDING and surface lots particularly described

in the attached Exhibit A, which is incorporated by reference herein. Tenant, its officers, agents and contractors

shall be required to purchase said Permits from Landlord priced as directed from time to time by Landlord. Permit

holders may park in spaces at the Premises as depicted on Exhibit A twenty-four (24) hours a day Monday through

Friday and during weekends. In the event that an issued Permit is lost or stolen, a “Replacement Permit” may be

obtained directly from BUILDING at the then prevailing Permit cost. All payments shall be made payable to The

Regents of the University of California and mailed via U.S. mail or hand delivered to:

The Regents of the University of California

University of California, Riverside

Transportation and Parking Services

683 Linden Street

Riverside, CA 92521

2.3 Non-Liability of Landlord. Landlord assumes no responsibility for any vehicle or its contents while

being operated or parked on University property.

3. TERM.

3.1 Term. The term of this Lease (the "Lease Term") shall be for eighty-four (84) months, commencing

July 1, 2014 ("Lease Commencement Date") and ending June 30, 2021 ("Lease Expiration Date"), unless sooner

terminated pursuant to any provision hereof.

3.2 Options. Three (3), one-year options. The entire Term and Option period shall not to exceed more

than ten (10) years. This option is based on mutual agreement by Landlord and Tenant.

SAMPLE 7

3.3. Delay in Possession. If for any reason Tenant cannot deliver possession of the Premises to Tenant on the Lease Commencement Date, Landlord shall not be subject to any liability therefore, nor shall such failure affect the validity of this Lease or the obligations of Tenant hereunder or extend the term hereof, but in such case, Tenant shall not be obligated to pay rent until possession of the Premises is tendered to Tenant; provided further, however, that if Tenant shall not have delivered possession of the Premises within twenty four (24) months from said Lease Commencement Date, Landlord may, at Landlord's option, by notice in writing to Tenant within ten (10) days thereafter, cancel this Lease, in which event the parties shall be discharged from all obligations hereunder; provided, however, that if such written notice of Landlord is not received by Tenant within said ten (10) day period, Landlord’s right to cancel this Lease hereunder shall terminate and be of no further force or effect.

3.4 Early Possession. If Tenant occupies the Premises prior to the Lease Commencement Date, such

occupancy shall be subject to all provisions hereof, such occupancy shall not advance the termination date, and

Tenant shall pay rent for such period at the initial monthly rates set forth below.

3.5 Early Termination. Tenant and Landlord shall each have the right to terminate this Lease if Tenant’s

contract for the Senior Nutrition Meals program is terminated. This right shall be exercised by either party's

delivery of written notice of termination to the other, with the termination being effective sixty (60) days following

receipt of such notice.

4. RENT.

4.1 Definition of Base Rent. The term "Base Rent" as used in this Lease shall equal the sum of 800,000

dollars ($800,000) per year.

4.2 Adjustments to Base Rent. On the first day of the month following each yearly anniversary of the

Rent Commencement Date as defined in paragraph 4.4(b), the Base Rent for the Premises shall increase by four

percent (4%) over the amount of Base Rent payable for the immediately preceding month. If the Rent

Commencement Date is other than the first day of a calendar month, then the Base Rent for the month shall be

prorated on a daily basis, based on a thirty (30) day month.

4.3 Percentage Rent.

(a) Definition of Percentage Rent. The term "Percentage Rent" as used in this Lease shall mean the

amount of Tenant’s Accounting Period Net Sales (as defined in Article 4.3(e) below) multiplied by the Percentage

Rent Rate (as defined below).

(b) Definition of Percentage Rent Rate. The term "Percentage Rent Rate" as used in this Lease shall

mean the following Net Sales (as defined in Section 4.3 (e) below):

13% of Net Sales up to $6,250,000, and

13.5% of any part of Net Sales from $6,250,001 to $8,000,000, and

14% of any part of Net Sales from $8,000,001 to $10,000,000, and

14.5% of any part of Net Sales in excess of $10,000,000

(c) Definition of Fiscal Year. The term "Fiscal Year" as used in this Lease shall mean each such

successive twelve calendar month period beginning July first (1st) and ending June thirtieth (30

th).

(d) Definition of Month. The term "Month" as used in this lease shall mean a calendar month.

(e) Definition of Net Sales. Net Sales shall be defined as all collected sales at the BUILDING and all

Tenant’s UCR brand websites less voids, refunds, and sales tax.

SAMPLE 8

(f) Exclusion from Gross Sales. Intentionally Omitted.

(g) Definition of Accounting Period Sales Report. The term "Accounting Period Sales Report" as used

in this Lease shall mean a monthly written statement of the Tenant's Accounting Period Gross Sales net of any

permitted exclusions and/or deductions. The Accounting Period Sales Report is to be signed by an authorized

employee of the Tenant, and certified by an officer of Tenant or accountant as being true, complete and correct.

Accounting Period shall be defined as follows: July 1 through June 30 of the calendar year.

(h) Statements of Gross Sales. Intentionally Omitted.

(i) Failure to Submit Reports or Statements. Failure of Tenant to submit any Accounting Period Sales

Report or Annual Statement as required hereunder shall be deemed a default under this Lease. In the event the

Tenant shall fail or refuse to submit the Accounting Period Sales Report within ten (10) days after the end of each

Accounting Period of the Lease Term or the Annual Statement within forty-five (45) days after the end of the

Fiscal Year, then (despite anything contained in this Lease to the contrary, and without limiting any of the

Landlord’s other rights and remedies available under this Lease or at law), Tenant shall pay as liquidated damages

one hundred dollars ($100) for each day that the Accounting Period Sales Report or Annual Statement is late. The

parties agree that this is a reasonable estimate of Landlord's actual damages. Payment of such liquidated damages

shall be in addition to any other remedies described in this lease.

In addition to all other remedies, Landlord may conduct (by an accountant of its selection) an audit of Tenant's

Books for such period or periods for which Tenant has failed to furnish such statements. Such audit (or attempted

audit if Landlord's accountant is unable to perform an audit due to Tenant's failure to keep records as required

hereunder) shall be at Tenant's expense and Tenant shall promptly pay, as Additional Rent, the cost of such audit to

Landlord. If such audit reveals that Tenant's accounting records and procedures were not sufficient to permit a

determination of Gross Sales for any period in question, Landlord may thereafter deliver to Tenant an estimate

made by Landlord of Gross Sales for any such period and the amount of any underpayment of Percentage Rent. In

such an instance, Tenant shall forthwith pay to Landlord any amount therein set out as an underpayment of

Percentage Rent. Every such estimate shall be binding upon Tenant until and except to the extent that Tenant

proves it inaccurate and shall not be contestable by Tenant after one year.

(j) Tenant's Records. Tenant shall keep full, complete, and proper books, records and accounts (the

"Books") of its daily Gross Sales (both for cash and on credit) of each separate department and concessionaire

operating at any time in the Premises. The Books shall be kept on the Premises or at Tenant's Head/Corporate

Office for at least thirty-six (36) months after expiration of each Fiscal Year. The Books shall be full, true and

accurate and conform to generally accepted accounting principles showing Gross Sales for each Fiscal Year and

each month, including all tax reports, dated cash register tapes, sales slips, sales checks, sales books, bank check

and deposit records, purchase records, invoices, cash receipt and disbursement records and other supporting data.

(k) Financial Statements. Within fifteen (15) days after Landlord's written request, but not more frequently

than once each Fiscal Year, Tenant shall furnish Landlord with financial statements, prepared by an independent,

certified public accountant and certified by an officer of Tenant as being true, complete and correct, including, but not

limited to, balance sheets, profit and loss statements, income statements and changes to financial condition, which

reflect Tenant's current financial condition as it relates to the Tenant’s operation at the Premises. Any information

obtained from Tenant's financial statements shall be confidential and shall not be disclosed to any third party, other

than to carry out the purposes of this Lease; provided, however, Landlord shall incur no liability for the inadvertent

disclosure of any such information, and Landlord may divulge the contents of any financial statements of Tenant in

connection with any financing arrangement or assignment of Landlord's interest in the Premises or in connection with

any administrative or judicial proceedings.

(l) Audit by Landlord. Notwithstanding the foregoing, Landlord shall have the right from time to time, during

SAMPLE 9

normal business hours through accountants or representatives to audit Tenant's Accounting Period Sales Reports and,

in connection with such audits, to examine all of Tenant's Books relating to its operation at the Premises (including all

supporting data and any other records from which Gross Sales and gross profits may be tested or determined). Tenant

shall make the Books readily available for such examination. The costs of an audit shall be paid by Landlord, unless

the audit discloses that the Gross Sales transacted by Tenant exceeds those reported by Tenant by more than two

percent (2%), in which case Tenant shall pay to Landlord within five (5) days after written request all costs of such

audit. In the event of an underpayment of Percentage Rent, Tenant shall immediately pay to Landlord the amount of

such underpayment, together with interest in accordance with Article 24. If such audit discloses any willful or

material inaccuracy by Tenant, or any understatement of Gross Sales by more than two percent (2%), this Lease may,

at the option of Landlord, be immediately canceled and terminated. Any information obtained by Landlord pursuant

to the provisions of this paragraph 4.3(k) shall be treated as confidential, except in any litigation or arbitration

proceedings between the parties or except for the disclosure of such information to prospective buyers and lenders.

4.4 Payment of Rent.

(a) Tenant shall pay to Landlord the greater of Base Rent as defined in Article 4.1 of the Lease or

Percentage Rent as defined in Article 4.3 of the Lease within fifteen (15) days following the close of the

Accounting Period in which the Net Sales were generated. Tenant shall prepare an Accounting Period Sales Report

for each Accounting Period and shall submit such statement with any payment due to Landlord for such

Accounting Period. Base Rent for any period during the term hereof which is for less than one month shall be a pro

rata portion of the monthly installment, based on a thirty (30) day month. Rent shall be payable to Landlord at the

address stated herein or at such other address as Landlord may from time to time designate in writing.

(b) Tenant shall pay Landlord a late charge as set forth in Article 19.4 as applicable.

4.5 One-Time Payment. On the Lease Commencement Date, Tenant shall pay to Landlord a one-time

lump sum payment of $2,000,000 (One-Time Payment). If Landlord shall terminate this Lease under Section

14.7 below, Landlord will pay to Tenant the amortized (amortized straight line over ten years) portion of the

One-Time Payment within thirty (30) days after written notice of Landlord’s termination of Lease.

(a) In addition to the One-Time Payment, Tenant shall contribute $XXXX for temporary modular space.

4.6 Additional Rent. Tenant shall pay, as additional rent, the amounts described as Direct Expenses in

Section 16.1, below.

5. SECURITY DEPOSIT. To Be Determined at a later date.

6. NOTICES.

All notices or correspondence provided for herein shall be effective only if made in writing, personally delivered

with an executed acknowledgment of receipt or deposited in the United States mail, certified, postage prepaid, and

addressed as follows:

To Landlord: Russ Lewis, Director

University of California, Riverside

Materiel Management

3401 Watkins Dr.

Riverside, CA 92521

(951) 827-3009

SAMPLE 10

and a copy to: Danny Kim, Associate Vice Chancellor,Student Affairs

University of California, Riverside

900 University Avenue

Riverside, CA 92507

(951) 827-4641

and a copy to: Bill Lee, Executive Director, Capital Finance and Real Estate

University of California, Riverside

1223 University Avenue, suite 200

Riverside, CA 92521

To Tenant: XXXXXXX

and a copy to: XXXXXXX

Estoppel Certificates shall be sent to:

XXXXXXX

Rent payments shall be sent to (need not be sent certified):

The Regents of the University of California

University of California, Riverside

UCR Main Cashiers Office

900 University Avenue

Student Services Building, Room 1111

Riverside, CA 92521

Any notice shall be deemed delivered five (5) days after notice is mailed or, if personally delivered, when

acknowledgment of receipt is signed, as provided above. By written notice to the other, either party may change its

own mailing address.

7. TENANT CONSTRUCTED TENANT IMPROVEMENTS.

7.1 Tenant Improvements. Landlord and Tenant acknowledge that improvements in the area of the

Premises were initially constructed and installed by Landlord at Landlord’s sole cost and expense. Pursuant to the

schedule attached to Addendum X, Tenant shall construct Tenant Improvements and make installations in the

Premises in accordance with plans and specifications approved by Tenant and Landlord (“Plans and

Specifications”) and in accordance with those provisions of the attached Addendum X, which describe

construction. The work described in the preceding sentences and the resulting installations are referred to herein as

the “Work Agreement.”

7.2 Cost of Tenant Improvements – Tenant. Tenant shall provide at its sole cost and expense the Tenant

Improvements on the terms and conditions provided in Addendum X. Tenant shall devote not less than $XX and

not more than $XX to such Tenant Improvements, including but not limited to fixtures, design, and build-out of the

permanent BUILDING.

7.3 Tenant Improvement Warranties. Tenant warrants to Landlord that all materials and equipment

furnished by Tenant in its improvement of the Premises shall be new unless otherwise specified in the Work

Agreement, and that all of Tenant’s work to be performed under the Work Agreement shall be of good and

workmanlike quality, free from faults and defects, and in accordance with the final Plans and Specifications and the

SAMPLE 11

requirements of the Work Agreement. Any of Tenant’s work not conforming to the above standards shall be

considered defective.

7.4 Notice of Completion_ Tenant shall complete construction of the Tenant Improvements within

sixty (60) days after the Plans and Specifications have been approved by Landlord and Tenant, but in no event later than July 1, 2016. Tenant shall immediately upon completion of construction give written notice to Landlord of such completion. If Tenant’s ability to complete construction by the date as set forth in this provision is delayed as a result of any of the following causes, the date for completion shall be postponed without penalty to Tenant for a period of time equivalent to the period caused by such delay:

(a) acts of Landlord, its agents, or employees;

(b) acts of God which Tenant could not reasonably have foreseen or guarded against;

(c) any strikes, boycotts or like obstructive actions by employees or labor organizations and which are beyond the control of Tenant and which cannot be reasonably overcome; or

(d) restrictive regulations by the Federal Government which are enforced in connection with a national emergency.

8. USE.

8.1 Use. The Premises shall be used and occupied only for a campus bookstore, to be named the “Campus

Store”, as described in the Operating Agreement together with any support activities reasonably implied therein or

any other use which, in Landlord’s sole opinion, is reasonably comparable and for no other purpose. Tenant shall

operate the Campus Store from at all times during the calendar year, except for those scheduled holidays in the UC

Riverside Academic Calendar. Additional terms and conditions are set forth in Addendum 4, “Operating

Agreement”.

8.2 Compliance with Law.

(a) Landlord warrants to Tenant that the Premises, in its state existing on the date that the Lease term

commences, but without regard to the use for which Tenant will use the Premises, does not violate any covenants

or restrictions of record, or any applicable building code, regulation or ordinance in effect on such Lease term

commencement date. If this warranty has been violated, then Landlord shall, after written notice from Tenant,

promptly, at Landlord's sole cost and expense, rectify any such violation. If Tenant does not give to Landlord

written notice of violation of this warranty within six (6) months from the Lease Commencement Date, the

correction of same shall be the obligation of the Tenant at Tenant's sole cost. The warranty contained in this

paragraph shall be of no force or effect if, prior to the date of this Lease, Tenant was the owner or occupant of the

Premises, and, in such event, Tenant shall correct any such violation at Tenant's sole cost.

(b) Except as provided in this paragraph, Tenant shall, at Tenant's expense, comply promptly with all

applicable statutes, ordinances, rules, regulations, orders, covenants and restrictions of record, and requirements,

including federal, state and local environmental regulations, in effect during the term or any part of the term hereof,

regulating the use by Tenant of the Premises. Tenant shall not use nor permit the use of the Premises in any

manner that will tend to create waste or a nuisance or, if there shall be more than one tenant in the Building

containing the Premises, shall tend to disturb such other tenants.

(c) Tenant hereby acknowledges that the UCR Office of Environmental Health and Safety is the authority

having jurisdiction over environmental, health and safety matters related to the UCR campus. Tenant further

acknowledges that the UCR Fire Marshall is the authority having jurisdiction over matters related to fire protection

at the UCR campus.

SAMPLE 12

8.3 Condition of Premises.

(a) Landlord shall deliver the Premises to Tenant clean and free of debris on Lease Commencement Date

(unless Tenant is already in possession) and Landlord further warrants to Tenant that the plumbing, electrical and

roof systems, in the Premises shall be in good operating condition on the Lease Commencement Date. If this

warranty has been violated, then Landlord shall, after receipt of written notice from Tenant setting forth with

specificity the nature of the violation, promptly, at Landlord's sole cost, rectify such violation. Tenant's failure to

give such written notice to Landlord within thirty (30) days after the Lease Commencement Date shall cause the

conclusive presumption that Landlord has complied with all of Landlord's obligations hereunder. The warranty

contained in this paragraph shall be of no force or effect if prior to the date of this Lease, Tenant was the owner or

occupant of the Premises.

(b) Except as otherwise provided in this Lease, Tenant hereby accepts the Premises in the condition

existing as of the Lease Commencement Date or the date that Tenant takes possession of the Premises, whichever

is earlier, subject to all applicable zoning, municipal, county and state laws, ordinances and regulations governing

and regulating the use of the Premises, and any covenants or restrictions of record, and accepts this Lease subject

thereto and to all matters disclosed thereby and by any exhibits attached hereto. Tenant acknowledges that neither

Landlord nor any agent of Landlord has made any representation or warranty as to the present or future suitability

of the Premises for the conduct of Tenant's business.

8.4 Adequacy of Service. Tenant shall at all times when open for business, in the reasonable opinion of

Landlord, (a) keep adequate supplies in stock; (b) maintain an adequate sales force to serve all customers; (c)

operate Tenant's business in an efficient and diligent manner and (d) operate one hundred percent (100%) of the

Premises so as to maximize the sales produced by the business and shall maintain an adequate staff of employees

and carry in the Premises at all times sufficient levels of retail product to produce the maximum return to Tenant

and Landlord and assure to Landlord a return of the greatest possible amount of percentage rental. Landlord shall

exercise its judgment towards Tenant with respect to the foregoing factors, in a uniform and non-discriminatory

manner with respect to other businesses on the Landlord's Riverside campus. In the event Landlord determines that

there is a deficiency in Tenant's adequacy of service as defined in a - d, above, Landlord shall notify Tenant in

writing of Tenant's failure to maintain adequacy of service. Tenant shall thereafter have five (5) business days to

cure any deficiencies to Landlord's satisfaction. In the event that Tenant fails to maintain this adequacy of service

on more than three (3) separate occasions in any Fiscal Year period of the Term, Landlord shall have the right to

terminate this Lease upon thirty (30) days' written notice to Tenant. Landlord's right to terminate under this Article

8.4 shall extend for a period of six (6) months following the date of the third notice by Landlord to Tenant of a

deficiency in service.

Tenant shall continuously during the Term conduct its business activity in the Premises during the business hours

that are used for Tenant’s type of business, but in any event those hours established in Addendum X, Operating

Agreement, unless Tenant is prevented from doing so by strike, fire or other cause beyond Tenant’s control, and

except during reasonable periods for repairing, cleaning, and decorating the Premises.

9. MAINTENANCE AND REPAIRS.

9.1 Landlord’s Obligation.

(a) Landlord's Repair and Maintenance. Except as provided in Article 9.2(b) below, Landlord will

maintain the Premises and common areas in reasonably good order and condition as set forth in Exhibit E,

Summary of Repair and Maintenance Responsibilities, incorporated by reference herein except Tenant shall

reimburse Landlord for any repair or maintenance of any damage occasioned by: (a) the negligent or willful acts or

omissions of Tenant, Tenant's agents, employees or invitees; (b) the failure of Tenant to perform or comply with

any terms, conditions or covenants in this Lease; and (c) any structural alterations or improvements required by

SAMPLE 13

Tenant's use and occupancy of the Premises.

Landlord will not be in default under this Lease or be liable for any damages directly or indirectly resulting from,

nor will the rent be abated by reason of: (i) the installation, use or interruption of use of any equipment in

connection with the furnishing of any of such repair and maintenance; (ii) failure to furnish or delay in furnishing

any such repair and maintenance, when such failure or delay is caused by accident or any condition beyond the

reasonable control of Landlord or by the making of necessary repairs or improvements to the Premises or to the

Building; or (iii) the limitation, curtailment, rationing, or restrictions on use of water, electricity, gas or any other

form of energy serving the Premises or the Building. Landlord will use reasonable efforts to remedy diligently any

interruption in the providing of such repair and maintenance, but shall have no liability for a failure to do so. If

Landlord fails to perform its repair and maintenance responsibilities for any reason (not caused by Tenant’s

negligence or willful misconduct) within three (3) days after notice from Tenant and as a result of this failure at

least twenty five percent (25%) of the Premises cannot be accessed or used by Tenant for its business, then, starting

with the fourth (4th) day after Tenant’s notice and continuing until the maintenance or repair is made by Landlord

and the Premises are usable for Tenant to conduct its business therein, then Base Rent and Additional Rent shall be

abated, in proportion to and to the same extent that the Premises cannot be accessed or used by Tenant for its

business.

(b) Limitations on Liability. Landlord will not be liable to Tenant or any other person for direct or

consequential damage or otherwise for any failure to supply any heat, air conditioning, elevator, cleaning, lighting,

security, or other service Landlord has agreed to supply during any period when Landlord uses reasonable

diligence to supply such services. Landlord reserves the right to discontinue temporarily such services, or any of

them, at such times as may be necessary by reason of accident; unavailability of employees; repairs, alteration, or

improvements; strikes; lockouts, riots; acts of God; governmental preemption in connection with a national or local

emergency; any rule, order, or regulation of any governmental agency; conditions of supply and demand that make

any product unavailable; Landlord's compliance with any mandatory governmental energy conservation program at

the request of or with consent or acquiescence of Tenant or any other person or entity for direct or consequential

damages resulting from the admission to or exclusion from the Building of any person. In the event of invasion,

mob, riot, public excitement, or other circumstances rendering such action advisable in Landlord's sole opinion,

Landlord will have the right to prevent access to or from the Building during the continuance of the same by such

means as Landlord, in its sole discretion, may deem appropriate, including without limitation locking doors and

closing parking areas and other common areas. Landlord will not be liable for damages to person or property or for

injury to, or interruption of, business for any discontinuance permitted under this Article 9, nor will such

discontinuance in any way be construed as an eviction of Tenant or cause an abatement of rent or operate to release

Tenant from any of Tenant's obligations under this Lease.

9.2 Tenant’s Obligation.

(a) Notwithstanding the provisions of Article 9.1 above, Tenant shall maintain the Premises as set forth in

Exhibit E, Summary of Repair and Maintenance Responsibilities. Tenant shall keep all drains free flowing within

the Premises.

(b) Except as provided elsewhere herein, Tenant shall, at Tenant’s sole cost and expense, be responsible

for the repair and maintenance required to keep and maintain in good order, all improvements, fixtures, and

equipment in the BUILDING. Said costs and expense shall not exceed $XXXXX per year.

(c) Prior to contracting with any repair or maintenance contractor, Tenant must obtain prior written

consent from the Building Maintenance Manager to use the contractor.

(d) All repair and maintenance work must be in compliance with applicable laws and Landlord

requirements.

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(e) Subject to the provisions of paragraph 9.2(b) above, Tenant, at Tenant’s sole cost and expense, shall

be responsible for maintenance and service of the cooking hood fire suppression system for the Premises and shall

provide to Landlord copies of receipts and/or contracts documenting regularly scheduled performance of such

services on a quarterly basis.

(f) Subject to the provisions of paragraph 9.2(b) above, Tenant, at Tenant’s sole cost and expense, shall

be responsible for the grease trap pumping and grease pick up.

9.3 Surrender. On the last day of the term hereof, or on any sooner termination, Tenant shall surrender

the Premises to Landlord in the same condition as when received, ordinary wear and tear excepted, clean, and free

of debris. Tenant shall repair any damage to the Premises occasioned by the installation or removal of Tenant's

trade fixtures, furnishings and equipment.

9.4 Landlord's Rights. If Tenant fails to perform Tenant's obligations under this paragraph, or under any

other paragraph of this Lease, Landlord may at its option (but shall not be required to) enter upon the Premises

after ten (10) days' prior written notice to Tenant (except in the case of an emergency, in which case no notice shall

be required), perform such obligations on Tenant's behalf and put the same in good order, condition and repair, and

the cost thereof together with interest thereon at the maximum rate then allowable by law shall become due and

payable as Additional Rent to Landlord together with Tenant's next rental installment.

10. ALTERATIONS AND ADDITIONS.

(a) Tenant shall not, without Landlord's prior written consent make any alterations, improvements,

additions, or Utility Installations in, on or about the Premises. In any event, Tenant shall make no change or

alteration to the exterior of the Building without Landlord's prior written consent. As used in this paragraph, the

term "Utility Installation" shall mean floor coverings, window coverings, air lines, electrical distribution systems,

lighting fixtures, space heaters, air conditioning, HVAC equipment systems, plumbing, and fencing. Landlord may

require that Tenant remove any or all of said alterations, improvements, additions, or Utility Installations at the

expiration of the term, and restore the Premises to their prior condition. Landlord may require Tenant to provide

Landlord, at Tenant's sole cost and expense, a lien and completion bond in an amount equal to one and one-half

times the estimated cost of such improvements, to insure Landlord against any liability for mechanics' and

materialmen's liens and to insure completion of the work. Should Tenant make any alterations, improvements,

additions, or Utility Installations without the prior approval of Landlord, Landlord may require that Tenant remove

any or all of the same.

(b) Any alterations, improvements, additions or Utility Installations in, on, or about the Premises that

Tenant shall desire to make and which requires the consent of the Landlord shall be presented to Landlord in

written form, with proposed detailed plans. Before commencing with the work, Tenant must obtain the consent

from the Building Maintenance Manager to use the contractor or individual doing the work. Contractors or

individuals doing the work must have licenses, permits, and insurance as required by law and Landlord's

regulations. All alterations, additions, improvements, and installations must be in compliance with applicable laws

and Landlord's requirements. If Landlord shall give its consent, the consent shall be deemed conditioned upon

Tenant acquiring a permit to do so from appropriate governmental agencies, the furnishing of a copy thereof to

Landlord prior to the commencement of the work and the compliance by Tenant of all conditions of said permit in

a prompt and expeditious manner.

(c) Tenant shall pay, when due, all claims for labor or materials furnished or alleged to have been

furnished to or for Tenant at or for use in the Premises, which claims are or may be secured by any mechanics' or

materialmen's liens against the Premises or any interest therein. Tenant shall give Landlord not less than ten (10)

days' notice prior to the commencement of any work in the Premises, and Landlord shall have the right to post

notices of nonresponsibility in or on the Premises as provided by law. If Tenant shall, in good faith, contest the

validity of any such lien, claim or demand, then Tenant shall, at its sole expense defend itself and Landlord against

SAMPLE 15

the same and shall pay and satisfy any such adverse judgment that may be rendered thereon before the enforcement

thereof against the Landlord or the Premises, upon the condition that if Landlord shall require, Tenant shall furnish

to Landlord a surety bond satisfactory to Landlord in an amount equal to such contested lien claim or demand

indemnifying Landlord against liability for the same and holding the Premises free from the effect of such lien or

claim. In addition, Landlord may require Tenant to pay Landlord's attorneys' fees and costs in participating in such

action if Landlord shall decide it is in its best interest to do so.

(d) Unless Landlord requires their removal, as set forth in paragraph 10(a), all alterations, improvements,

additions and Utility Installations (whether or not such Utility Installations constitute trade fixtures of Tenant),

which may be made on the Premises, shall become the property of Landlord and remain upon and be surrendered

with the Premises at the expiration of the term. Notwithstanding the provisions of this paragraph, Tenant's

machinery and equipment, other than that which is affixed to the Premises so that it cannot be removed without

material damage to the Premises, shall remain the property of Tenant and may be removed by Tenant subject to the

provisions of Article 9.3.

11. RENOVATIONS. It is acknowledged by both Landlord and Tenant that the Building will be scheduled for

potential renovation by Landlord prior to the end of the Lease Term. Landlord will provide Tenant at least thirty-

(30) days' advance notice prior to commencement of construction.

During construction, Landlord shall use its best efforts to provide Tenant with at least forty-eight (48) hours

advance notice concerning any scheduled interruption in utility services due to said renovation. In the event

Landlord fails to provide such notice and said interruption exceeds a period of four (4) hours in any twenty-four

(24) hour period, the Base Rent for the month in which such interruption occurs shall be reduced by one-thirtieth

(1/30) of the amount due pursuant to Article 4.1, multiplied by the number of days such interruption continues.

12. INDEMNIFICATION.

12.1 Landlord's Obligation. Landlord shall indemnify, defend and hold harmless Tenant, its officers,

partners, agents, and employees from and against any claims, damages, costs, expenses or liabilities (collectively

“Claims”) arising out of or in any way connected with this Lease including, without limitation, Claims for loss or

damage to any property, or for death or injury to any person or persons, but only in proportion to and to the extent

that such Claims arise from the negligent or wrongful acts or omissions of Landlord, its officers, agents, or

employees.

12.2 Tenant's Obligation. Tenant shall indemnify, defend and hold harmless Landlord, its officers, agents,

and employees from and against any Claims arising out of or in any way connected with this Lease including,

without limitation, Claims for loss or damage to any property or for death or injury to any person or persons, but

only in proportion to and to the extent that such Claims arise from the negligent or wrongful acts or omissions of

Tenant, its officers, partners, agents, or employees.

13. INSURANCE REQUIREMENTS.

13.1 Tenant's Insurance. Tenant, at its sole cost and expense, shall insure its activities in connection with

this Lease and obtain, keep in force and maintain insurance as follows:

(a) Commercial Form General Liability Insurance (contractual liability included) with minimum limits as

follows:

1. Each Occurrence $X,000,000

2. Products/Completed Operations Aggregate $X,000,000

3. Personal and Advertising Injury $X,000,000

SAMPLE 16

4. General Aggregate $XX,000,000

If the above insurance is written on a claims-made form, it shall continue for three (3) years following termination

of this Lease. The insurance shall have a retroactive date of placement prior to or coinciding with the Lease

Commencement Date.

(b) Business Automobile Liability Insurance for owned, scheduled, non-owned, or hired automobiles with

a combined single limit of not less than XXX Million dollars ($X,000,000) per occurrence.

(c) Property, Fire and Extended Coverage Insurance in an amount sufficient to reimburse Tenant for all of

its equipment, trade fixtures, inventory, fixtures and other personal property located on or in the Premises including

leasehold improvements hereinafter constructed or installed.

(d) Workers' Compensation as required by California law.

(e) Such other insurance in such amounts which from time to time may be reasonably required by the

mutual consent of Tenant and Landlord against other insurable risks relating to performance.

The coverages referred to under (a) and (b) of this paragraph shall include Landlord as an additional insured. Such

a provision shall apply only in proportion to and to the extent of the negligent acts or omissions of Tenant, its

officers, partners, agents, and employees. Tenant, upon the execution of this Lease, shall furnish Landlord with

certificates of insurance evidencing compliance with all requirements. Certificates shall provide for thirty (30)

days (ten (10) days for non-payment of premium) advance written notice to Landlord of any material modification,

change or cancellation of any of the above insurance coverages.

The coverages required herein shall not limit the liability of Tenant.

13.2 Waivers of Subrogation. Notwithstanding the provisions of Article 12, with respect to property

damage, for which the parties maintain a system of coverage on their respective property, each party hereto waives

its rights, and the rights of its subsidiaries and affiliates, to recover from the other party hereto and its subsidiaries

and affiliates for loss or damage to such party’s building, equipment, improvements and other property of every

kind and description resulting from fire, explosion or other cause normally covered in standard broad form property

insurance policies.

13.3 Exemption of Landlord from Liability. Tenant hereby agrees that Landlord shall not be liable for

injury to Tenant's business or any loss of income therefrom or for damage to the goods, wares, merchandise or

other property of Tenant, Tenant's employees, invitees, customers, or any other person in or about the Premises, nor

shall Landlord be liable for injury to the person of Tenant, Tenant's employees, agents or contractors, as a result of

any condition of the Premises or the Building, whether such damage or injury is caused by or results from fire,

steam, electricity, gas, water or rain, or from the breakage, leakage, obstruction or other defects of pipes, sprinklers,

wires, appliances, plumbing, air conditioning or lighting fixtures, or from any other cause in or about the Premises,

whether the said damage or injury results from conditions arising in the Premises or in other portions of the

Building of which the Premises are a part, or from other sources or places and regardless of whether the cause of

such damage or injury or the means of repairing the same is inaccessible to Tenant. Landlord shall not be liable for

any damages arising from any act or neglect of any other tenant, if any, of the Building in which the Premises are

located.

14. DAMAGE OR DESTRUCTION.

14.1 Definitions.

(a) "Premises Partial Damage" shall herein mean damage or destruction, when and as determined by

SAMPLE 17

Landlord, to the Premises to the extent that the cost of repair is less than 10% of the then replacement cost of the

Premises. "Premises Building Partial Damage" shall herein mean damage or destruction to the Building of which

the Premises are a part to the extent that the cost of repair is less than 10% of the then replacement cost of such

Building as a whole.

(b) "Premises Total Destruction" shall herein mean damage or destruction, when and as determined by

Landlord, to the Premises to the extent that the cost of repair is 10% or more of the then replacement cost of the

Premises. "Premises Building Total Destruction" shall herein mean damage or destruction to the Building of which

the Premises are a part to the extent that the cost of repair is 10% or more of the then replacement cost of such

Building as a whole.

(c) "Insured Loss" shall herein mean damage or destruction, which was caused by an event, required to be

covered by the insurance described in this paragraph.

14.2 Partial Damage--Insured Loss. Subject to the provisions of Articles 14.4, 14.5 and 14.6, if at any

time during the term of this Lease there is damage which is an Insured Loss and which falls into the classification

of Premises Partial Damage or Premises Building Partial Damage, then Landlord shall, at Landlord's expense,

repair such damage, but not Tenant's fixtures, equipment or tenant improvements unless the same have become a

part of the Premises pursuant to Article 10 hereof, as soon as reasonably possible, and this Lease shall continue in

full force and effect.

14.3 Partial Damage--Uninsured Loss. Subject to the provisions of Articles 14.4 and 14.5 and 14.6, if at

any time during the term of this Lease there is damage which is not an Insured Loss and which falls within the

classification of Premises Partial Damage or Premises Building Partial Damage, unless caused by a negligent or

willful act of Tenant (in which event Tenant shall make the repairs at Tenant's expense), Landlord may at

Landlord's option either (i) repair such damage as soon as reasonably possible at Landlord's expense in which event

this Lease shall continue in full force and effect, or (ii) give written notice to Tenant within thirty (30) days after

the date of the occurrence of such damage of Landlord's intention to cancel and terminate this Lease, as of the date

of the occurrence of such damage. In the event Landlord elects to give such notice of Landlord's intention to

cancel and terminate this Lease, Tenant shall have the right within ten (10) days after the receipt of such notice to

give written notice to Landlord of Tenant's intention to repair such damage at Tenant's expense, without

reimbursement from Landlord, in which event this Lease shall continue in full force and effect, and Tenant shall

proceed to make such repairs as soon as reasonably possible. If Tenant does not give such notice within such ten

(10) day period this Lease shall be canceled and terminated as of the date of the occurrence of such damage.

14.4 Total Destruction. If at any time during the term of this Lease there is damage, whether or not an

Insured Loss, (including destruction required by any authorized public authority), which falls into the classification

of Premises Total Destruction or Premises Building Total Destruction, this Lease shall automatically terminate as

of the date of such total destruction.

14.5 Damage Near End of Term.

(a) If at any time during the last twelve (12) months of the term of this Lease there is damage, whether or

not an Insured Loss, which falls within the classification of Premises Partial Damage, Landlord may at Landlord's

option cancel and terminate this Lease as of the date of occurrence of such damage by giving written notice to

Tenant of Landlord's election to do so within thirty (30) days after the date of occurrence of such damage.

(b) Notwithstanding paragraph 14.5(a), in the event that Tenant has an option to extend or renew this

Lease, and the time within which said option may be exercised has not yet expired, Tenant shall exercise such

option, if it is to be exercised at all, no later than twenty (20) days after the occurrence of an Insured Loss falling

within the classification of Premises Partial Damage during the last six months of the term of this Lease. If Tenant

SAMPLE 18

duly exercises such option during said twenty (20) day period, Landlord shall at Landlord's expense, repair such

damage as soon as reasonably possible and this Lease shall continue in full force and effect. If Tenant fails to

exercise such option during said twenty (20) day period, then Landlord may at Landlord's option terminate and

cancel this Lease as of the expiration of said twenty (20) day period by giving written notice to Tenant of

Landlord's election to do so within ten (10) days after the expiration of said twenty (20) day period,

notwithstanding any term or provision in the grant of option to the contrary.

14.6 Abatement of Rent; Tenant's Remedies.

(a) In the event of damage described in Articles 14.2 or 14.3, and Landlord or Tenant repairs or restores

the Premises pursuant to the provisions of this paragraph, the rent payable hereunder for the period during which

such damage, repair or restoration continues shall be abated in proportion to the degree to which Tenant's use of the

Premises is impaired. Except for abatement of rent, if any, Tenant shall have no claim against Landlord to any

damage suffered by reason of any such damage, destruction, repair, or restoration.

(b) If Landlord shall be obligated to repair or restore the Premises under the provisions of this paragraph

and shall not commence such repair or restoration within ninety (90) days after such obligations shall accrue,

Tenant may at Tenant's option cancel and terminate this Lease by giving Landlord written notice of Tenant's

election to do so at any time prior to the commencement of such repair or restoration. In such event this Lease

shall terminate as of the date of such notice.

14.7 Termination--Advance Payments. Upon termination of this Lease pursuant to this paragraph, an

equitable adjustment shall be made concerning advance rent and any advance payments made by Tenant to

Landlord. Notwithstanding the foregoing, all unused funds paid by Tenant to Landlord pursuant to Article 4.5 of

the Lease as Equipment Replacement Reserve shall remain with Landlord upon termination of the Lease.

14.8 Waiver. Tenant waives the provisions of any statutes, which relate to termination of leases when

leased property is destroyed and agree that such event shall be governed by the terms of this Lease.

15. TAXES.

15.1 Payment of Taxes. Landlord specifically calls to Tenant's attention the fact that this Lease may create

a possessory interest subject to property taxation, and Tenant may be subject to property tax levied on such interest.

Tenant alone shall pay such tax. If the right is given to pay any of the taxes, assessments or other impositions,

which Tenant is herein obligated to pay either in one sum or in installments, Tenant may elect either mode of

payment.

15.2 Personal Property Taxes. Tenant shall pay prior to delinquency all taxes assessed against and levied

upon trade fixtures, furnishings, equipment, and all other personal property of Tenant contained in the Premises or

elsewhere. Tenant shall cause said trade fixtures, furnishings, equipment and all other personal property to be

assessed and billed separately from the real property of Landlord.

16. DIRECT EXPENSES.

16.1 Direct Expenses Included. Direct Expenses shall be deemed to be composed of the following amounts which have been paid or incurred by Landlord:

(a) The cost of (i) utilities delivered by Landlord to the Premises, and (ii) services provided to the

Premises by Landlord which are designated in Exhibit C, Summary of Services and Utilities, and Summary

of Repair and Maintenance Responsibilities as being Tenant's responsibility.

(b) The cost of supplies delivered by Landlord to the Premises including, but not limited to, light bulbs, fluorescent lights and tubes, starters, light switches, electricaroutlets, ballasts, transformers for

SAMPLE 19

fluorescent lights, light switches, paper supplies, dispensers and waste containers.

If any such utilities or services are not separately metered to Tenant, Tenant shall pay a

reasonable proportion to be determined by Landlord of all charges jointly metered with other portions of the Building.

16.2 Exclusions from Direct Expenses.

(a) Maintenance and repair of foundations, exterior and bearing walls, roof, window and window frames, gutters drains and downspouts, and floor slabs of the Building;

(b) Depreciation, interest, or amortization related to the Building;

(c) Earthquake insurance premiums for the Building;

(d) Management or legal fees related to operation of the Building;

(e) Landlord's bad debt losses or rent losses;

(f) Capital improvements, capital replacements, or related costs; or

(g) Entertainment or gifts provided by Landlord to any person.

16.3 Payment of Direct Expenses. Pursuant to Section 4.6 above, Tenant shall pay the cost of Direct Expenses to Landlord in accordance with the following procedures. On the Lease Commencement Date, and prior to commencement of each Lease year thereafter, Landlord shall provide Tenant with an estimate of the Direct Expenses for the coming year. Tenant shall pay as additional monthly rent an amount equal to one-twelfth (1/12) of Tenant's Percentage of the estimated Direct Expenses. As soon as possible after the end of the Lease year, Landlord shall provide Tenant with a written statement of actual Direct Expenses. Any overpayments shall be credited against subsequent additional rent payments, and any underpayments shall be paid by Tenant in a lump sum within thirty (30) days of receipt of said statement. Such overpayments or underpayments shall be deemed to have accrued during the prior Lease year and shall be credited to Tenant or become due and payable from Tenant, as the case may be, even though the Term of this Lease may have expired or this Lease may have been terminated prior to Tenant's receipt of the statement. Landlord further reserves the right to bill Tenant for emergency or extraordinary expenses, even if in ex.cess of the monthly projected Direct Expenses, which sum Tenant shall promptly pay.

17. UTILITIES. The Tenant shall pay the following utility cost as pass through charges. If any utilities are not

separately metered to Tenant, Tenant shall pay a reasonably proportion to be determined by Landlord of all charges

jointly metered with other portions of the Building and/or the Campus. Tenant shall be responsible for the

payment of electricity and chilled water (past average $30,000 per year; this amount does not indicate future actual

cost).

18. ASSIGNMENT AND SUBLETTING.

18.1 Landlord's Consent Required. Tenant may not sell, assign, transfer, or mortgage this Lease or

any interest herein (either voluntarily or by operation of law, including, if Tenant is a corporation, the sale or

transfer of a controlling interest in Tenant) or sublet the Premises or any part thereof without the prior written

consent of Landlord, except as hereinafter provided. If Tenant should desire to assign this Lease or sublet the

Premises (or any part thereof) and provided that Tenant is not then in default hereunder, Tenant shall give Landlord

written notice (“Tenant’s Notice”) no more than ninety (90) days in advance of the date on which Tenant desires to

make such assignment or sublease. Tenant’s Notice shall include the current financial statements of the proposed

assignee or subtenant certified by an authorized officer of the proposed assignee or subtenant, the date of the

proposed assignment or subletting, the identity of the proposed assignee or subtenant, including the proposed

SAMPLE 20

assignee’s or subtenant’s exact legal name and the identity of its shareholders (unless publicly held), officers and

directors, and any other additional information which Landlord may reasonably request. Tenant’s Notice shall also

include, in the case of a proposed subletting, the size, location and configuration of the space to be sublet, the

proposed length of time that Tenant desires to sublet such space, and the proposed rent to be paid by the proposed

subtenant. Landlord shall then have a period of thirty (30) days following receipt of Tenant’s Notice within which

to notify Tenant in writing that Landlord elects either (a) in the case of an assignment or a sublease for all or

substantially all of the Building expired Term (exclusive of any Building exercised renewal options), to terminate

this Lease as to the space so affected as of the date specified by Tenant in its notice, in which event Tenant, subject

to the provisions of Articles 18.3 and 19 and such other provisions of this Lease which expressly survive the

termination hereof, shall be relieved of all further obligations hereunder as to such space; (b) in the case of a

sublease for less than substantially all of the Building expired Term (exclusive of any Building exercised renewal

options), to sublet from Tenant the space so affected at the per square foot Rental payment hereunder; (c) to permit

Tenant to assign or sublet such space in accordance with Tenant’s Notice, provided, however, that if the rental rate

agreed upon between Tenant and its proposed subtenant under any proposed sublease of the Premises (or any part

thereof) is greater than the rental rate that Tenant must pay Landlord hereunder for that portion of the Premises that

is subject to such proposed sublease, or if any consideration shall be received by Tenant in connection with such

proposed assignment or sublease (in addition to rental as provided in such proposed sublease), then any such

amount may be Excess Consideration as defined in Article 18.4 and shall be payable by Tenant to Landlord, as

required by Article 18.4, in the same manner that Tenant pays Base Rent; or (d) to refuse, in Landlord’s sole and

absolute discretion, to consent to Tenant’s assignment or subletting of such space and to continue this Lease in full

force and effect as to the entire Premises if any of the conditions set forth in the next paragraph shall be present. If

Landlord should fail to notify Tenant in writing of such election within such thirty (30) day period, Landlord shall

be deemed to have elected option (d) above. For purposes of this Article 18.1, the term of a sublease shall be

considered “substantially all of the Building expired Term” if the term of such sublease expires less than twelve

(12) months prior to the expiration of the Term of this Lease.

Landlord shall have the absolute right, in its sole discretion, to refuse consent to any such assignment or sublease

if, at the time of either Tenant's notice of the proposed assignment or sublease or the proposed commencement date

thereof (i) there shall exist any uncured default of Tenant or matter which will become a default of Tenant with

passage of time unless cured; (ii) the proposed assignee or sublessee is an entity (aa) with which Landlord is

already in negotiation as evidenced by the issuance of a written proposal; (bb) which is already an occupant of the

Building; (cc) which is incompatible with the character or occupancy of the Building; (dd) which would subject

the Premises to a use which would (1) involve increased insurance, personnel or wear upon the Building, (2)

violate any exclusive right or restriction granted to another tenant or other occupant of the Building, or contained

in another lease or occupancy agreement of the Building, (3) require any addition to or modification of the

Premises, or the Building in order to comply with building code or other governmental requirement, (4) which is

different from the Permitted Use and/or incompatible with the tenant mix; (iii) the proposed transferee's financial

condition is less than Tenant's net worth and is or may become insufficient to support all of the financial and other

obligations of the Lease; (iv) the nature of the proposed transferee's proposed or likely use of the Premises would

involve any increase risk of the use, release or mishandling of Hazardous Material; (v) the business reputation or

character of the proposed transferee or the business reputation or character of any of its affiliates is not reasonably

acceptable to Landlord; (vi) Landlord has not received assurances acceptable to Landlord in its sole discretion that

all past due amounts owing from Tenant to Landlord (if any) will be cured prior to the effectiveness of the

proposed transfer; (vii) Landlord is not satisfied that the proposed transferee's assets, business and occupancy of the

Premises would generate substantially the same percentage rent as Tenant has been generating, on an average basis,

during the two years prior to the date of the proposed transfer. Tenant expressly agrees that Landlord shall have

the absolute right to refuse consent to any such assignment or sublease and that for the purposes of any statutory or

other requirement of reasonableness on the part of Landlord such refusal shall be reasonable.

Consent by Landlord to any assignment or subletting shall not include consent to a subsequent assignment or

subletting of the Premises by Tenant or its assignee or sublessee or the consent to the assignment or transferring of

any Lease renewal option rights (and such privileges shall be personal to the original Tenant under this Lease, shall

SAMPLE 21

not be assignable and shall terminate upon such assignment), unless Landlord specifically grants in writing such

options, rights or privileges to the assignee or subtenant. Any sale, assignment, mortgage, or other transfer of this

Lease or subletting which does not comply with the provisions of this paragraph shall be void.

18.2 Landlord’s Consent Not Required.

(a) Corporate Transfers. Notwithstanding anything contrary contained herein, Tenant may assign its entire

interest under this Lease or sublet the Premises to a wholly owned corporation or controlled subsidiary or parent of

Tenant or to any successor to Tenant by purchase, merger, consolidation, or reorganization (hereinafter collectively

referred to as "Corporate Transfer") without the consent of Landlord, provided: (i) Tenant is not in default under

this Lease; (ii) if such proposed transferee is a successor to Tenant by purchase, said proposed transferee shall

acquire all or substantially all of the stock or assets of Tenant's business or, if such proposed transferee is a

successor to Tenant by merger, consolidation, or reorganization, the continuing or surviving corporation shall own

all or substantially all of the assets of Tenant; (iii) such proposed transferee shall have a net worth which is at least

equal to the greater of Tenant's net worth at the date of this Lease or Tenant's net worth at the date of the transfer;

(iv) such proposed transferee operates the business in the Premises for the Permitted Use and no other purpose; and

(v) in no event shall any transfer release or relieve Tenant from any of its obligations under this Lease. Tenant

shall give Landlord written notice at least thirty (30) days prior to the effective date of such Corporate Transfer. As

used herein, the terms "controlled" or "subsidiary" shall mean a corporate entity, wholly owned by Tenant or at

least fifty-one (51%) percent of whose voting stock is owned by Tenant.

(b) Tenant Must Comply with All Other Sublet/Assignment Terms. Except as provided in Article 18.2,

the assignment of this Lease or sublease of the Premises pursuant to Article 18.2 shall be subject to all terms and

conditions of this Lease that are applicable to an assignment or sublease made with Landlord’s consent.

18.3 No Release of Tenant. Regardless of Landlord's consent, no subletting or assignment shall release

Tenant of Tenant's obligation or alter the primary liability of Tenant to pay the rent and to perform all other

obligations to be performed by Tenant hereunder. The acceptance of rent by Landlord from any other person shall

not be deemed to be a waiver by Landlord of any provision hereof. Consent to one assignment or subletting shall

not be deemed consent to any subsequent assignment or subletting. In the event of default by any assignee of

Tenant or any successor of Tenant, in the performance of any of the terms hereof, Landlord may proceed directly

against Tenant without the necessity of exhausting remedies against said assignee. Landlord may consent to

subsequent assignments or subletting of this Lease or amendments or modifications to this Lease with assignees of

Tenant, without notifying Tenant, or any successor of Tenant, and without obtaining its or their consent thereto and

such action shall not relieve Tenant of liability under this Lease.

18.4 Excess of Consideration. If the value of the consideration to be received by Tenant for such

assignment or sublease (after deducting leasing commissions, rental paid during any period in which the Premises

were vacant, the unamortized part of Tenant's contribution to tenant improvements, if any, and any other

reasonable out-of-pocket expenses of Tenant incurred in connection with such subleasing or assignment of the

Premises) will exceed the sum of the Base Rent and the Additional Rent, or prorated portion thereof as the case

may be, Tenant shall pay to Landlord, as additional Base Rent, one hundred percent (100%) of the excess of the

consideration paid in connection with or pursuant to the assignment or sublease, over the sum of the Base Rent and

the Additional Rent then due applicable to the assigned or subleased space.

18.5 Administrative Fees. In the event Tenant shall assign or sublet the Premises or request the consent of

Landlord to any assignment or subletting or if Tenant shall request the consent of Landlord for any act Tenant

proposes to do, then Tenant shall pay Landlord's reasonable administrative fees (including attorneys' fee) incurred

in connection therewith, such fees not to exceed $350.00 for each such request.

18.6 Requirements. If Tenant desires at any time to assign this Lease or to sublet the Premises or any

portion thereof, and such assignment or sublease requires Landlord's prior consent hereunder, Tenant shall give

SAMPLE 22

Landlord written notice of such desire, which notice shall contain (1) the name and address of the proposed

assignee or sublessee and its form of organization, (2) the nature of the proposed business, (3) the material terms

and conditions of the proposed sublease or assignment (including, without limitation, the financial terms of such

proposed assignment or sublease), (4) financial statements for the three (3) most recently completed fiscal years of

the proposed assignee or sublessee and such other financial information as Landlord shall reasonably request (or if

the proposed assignee or sublessee has not been extant for at least three (3) years, such financial statements as are

available), and (5) such other information, financial or otherwise, as Landlord may request concerning the

proposed subtenant, or assignee. In addition, if such subletting or assignment is approved by Landlord, then such

proposed subtenant or assignee shall post a Security Deposit, equal to the Base Monthly Rent rounded to the

nearest hundred dollars and the first month's Base and Additional Rent (as estimated by Landlord) with Landlord.

18.7 Election. At any time within thirty (30) days after Landlord's receipt of the information specified in

Article 18.6 above, Landlord may by written notice to Tenant elect to either (a) accept the assignment or sublease

to the Premises or the portion thereof as shall be specified in said notice upon the same terms as those offered to

the proposed subtenant or assignee, as the case may be; or (b) reject the proposed subletting or assignment, and

Tenant shall remain in possession under the terms of this Lease. If Landlord does not accept or reject the

assignment or sublease set forth in this Article 18.7 within said thirty (30) day period, then the proposed subletting

or assignment shall be deemed disapproved.

18.8 Limitations on Remedies. Tenant will not be entitled to make any claim for any relief or damages

and Tenant by this Article 18.8 waives, any claim, for relief or damages based upon or assertion by Tenant that

Landlord has unreasonably withheld or unreasonably delayed its consent or approval to a proposed assignment or

subletting of this Lease.

19. DEFAULTS; REMEDIES.

19.1 Defaults by Tenant. The occurrence of any one or more of the following events shall constitute a

material default and breach of this Lease by Tenant:

(a) The vacating or abandonment of the Premises by Tenant.

(b) The failure by Tenant to make any payment of rent or any other payment required to be made by

Tenant hereunder, as and when due, where such failure shall continue for a period of three (3) days after written

notice thereof from Landlord to Tenant. In the event that Landlord serves Tenant with a Notice to Pay Rent or Quit

pursuant to applicable Unlawful Detainer statutes such Notice to Pay Rent or Quit shall also constitute the notice

required by this subparagraph.

(c) The failure by Tenant to observe or perform any of the covenants, conditions or provisions of this

Lease to be observed or performed by Tenant, other than described in paragraph (b) above, where such failure shall

continue for a period of thirty (30) days after written notice thereof from Landlord to Tenant; provided, however,

that if the nature of Tenant's default is such that more than thirty (30) days are reasonably required for its cure, then

Tenant shall not be deemed to be in default if Tenant commenced such cure within said 30-day period and

thereafter diligently prosecutes such cure to completion.

(d) The making by Tenant of (i) any general arrangement or assignment for the benefit of creditors;

(ii) Tenant becomes a "debtor" as defined in 11 U.S.C. ' 101 or any successor statute thereto (unless, in the case of

a petition filed against Tenant, the same is dismissed within sixty (60) days); (iii) the appointment of a trustee or

receiver to take possession of substantially all of Tenant's assets located at the Premises or of Tenant's interest in

this Lease, where possession is not restored to Tenant within thirty (30) days; or (iv) the attachment, execution or

other judicial seizure of substantially all of Tenant's assets located at the Premises or of Tenant's interest in this

Lease, where such seizure is not discharged within thirty (30) days. Provided, however, in the event that any

provision of this paragraph is contrary to any applicable law, such provision shall be of no force or effect.

SAMPLE 23

(e) The failure by Tenant to provide statements of Gross Sales.

(f) The discovery by Landlord that any statement of Gross Sales or financial statement given to Landlord

by Tenant, any assignee of Tenant, any subtenant of Tenant, any successor in interest of Tenant or any guarantor of

Tenant's obligation hereunder, and any of them, was materially false.

(g) The failure by Tenant to observe or perform any of the requirements of the Operating Agreement,

attached hereto as Addendum 4.

19.2 Remedies. In the event of any such material default or breach by Tenant, Landlord may at any time

thereafter, with or without notice or demand and without limiting Landlord in the exercise of any right or remedy

which Landlord may have by reason of such default or breach;

(a) Terminate Tenant's right to possession of the Premises by any lawful means, in which case this Lease

shall terminate and Tenant shall immediately surrender possession of the Premises to Landlord. In such event

Landlord shall be entitled to recover from Tenant all damages incurred by Landlord by reason of Tenant's default

including, but not limited to, the cost of recovering possession of the Premises; expenses of reletting, including

necessary renovation and alteration of the Premises, and reasonable attorneys' fees; the worth at the time of award

by the court having jurisdiction thereof of the amount by which the unpaid rent for the balance of the term after the

time of such award exceeds the amount of such rental loss for the same period that Tenant proves could be

reasonably avoided.

(b) Maintain Tenant's right to possession in which case this Lease shall continue in effect whether or not

Tenant shall have abandoned the Premises. In such event Landlord shall be entitled to enforce all of Landlord's

rights and remedies under this Lease, including the right to recover the rent as it becomes due hereunder.

(c) Pursue any other remedy now or hereafter available to Landlord under the laws or judicial decisions of

the state wherein the Premises are located. Unpaid installments of rent and other unpaid monetary obligations of

Tenant under the terms of this Lease shall bear interest from the date due at the maximum rate then allowable by

law.

(d) Landlord shall have all rights provided under California law with respect to personal property

abandoned by Tenant.

19.3 Default by Landlord. Landlord shall not be in default unless Landlord fails to perform obligations

required of Landlord within a reasonable time, but in no event later than thirty (30) days after written notice by

Tenant to Landlord and to the holder of any first mortgage or deed of trust covering the Premises whose name and

address shall have theretofore been furnished to Tenant in writing, specifying wherein Landlord has failed to

perform such obligation; provided, however, that if the nature of Landlord's obligation is such that more than thirty

(30) days are required for performance then Landlord shall not be in default if Landlord commences performance

within such 30-day period and thereafter diligently prosecutes the same to completion.

19.4 Late Charges. Tenant hereby acknowledges that late payment by Tenant to Landlord of rent and

other sums due hereunder will cause Landlord to incur costs not contemplated by this Lease, the exact amount of

which will be extremely difficult to ascertain. Such costs include, but are not limited to, processing and accounting

charges, and late charges which may be imposed on Landlord by the terms of any mortgage or trust deed covering

the Premises. Accordingly, if any installment of rent or any other sum due from Tenant shall not be received by

Landlord or Landlord's designee within five (5) days after such amount shall be due, then, without any requirement

for notice to Tenant, Tenant shall pay to Landlord a late charge equal to one hundred dollars ($100) for each day

that payment is late. The parties hereby agree that such late charge represents a fair and reasonable estimate of the

costs Landlord will incur by reason of late payment by Tenant. Acceptance of such late charge by Landlord shall

in no event constitute a waiver of Tenant's default with respect to such overdue amount, nor prevent Landlord from

SAMPLE 24

exercising any of the other rights and remedies granted hereunder. In the event that a late charge is payable

hereunder, whether or not collected, for three (3) consecutive installments of rent, then rent shall automatically

become due and payable quarterly in advance, rather than monthly, notwithstanding Article 4 or any other

provision of this Lease to the contrary.

19.5 Impounds. In the event that a late charge is payable hereunder, whether or not collected, for three (3)

installments of rent or any other monetary obligation of Tenant under the terms of this Lease, Tenant shall pay to

Landlord, if Landlord shall so request, in addition to any other payments required under this Lease, a monthly

advance installment, payable at the same time as the monthly rent, as estimated by Landlord, for any expenses on

the Premises which are payable by Tenant under the terms of this Lease. Such fund shall be established to insure

payment when due, before delinquency, of any or all such obligations. If the amounts paid to Landlord by Tenant

under the provisions of this paragraph are insufficient to discharge the obligations of Tenant to pay such expenses

as the same become due, Tenant shall pay to Landlord, upon Landlord's demand, such additional sums necessary to

pay such obligations. All the moneys paid to Landlord under this paragraph may be intermingled with other

moneys of Landlord and shall not bear interest. In the event of a default in the obligations of Tenant to perform

under this Lease, then any balance remaining from funds paid to Landlord under the provisions of this paragraph,

at the option of Landlord, in lieu of being applied to the payment of such expenses, may be applied to the payment

of any monetary default of Tenant.

20. CONDEMNATION. If the Premises or any portion thereof are taken under the power of eminent domain, or

sold under the threat of the exercise of said power (all of which are herein called "condemnation"), this Lease shall

terminate as to the part so taken as of the date the condemning authority takes title or possession, whichever first

occurs. If more than 10% of the floor area of the Building on the Premises, or more than 25% of the land area of

the Premises which is not occupied by any building, is taken by condemnation, Tenant may, at Tenant's option, to

be exercised in writing only within ten (10) days after Landlord shall have given Tenant written notice of such

taking (or in the absence of such notice, within ten (10) days after the condemning authority shall have taken

possession) terminate this Lease as of the date the condemning authority takes such possession. If Tenant does not

terminate this Lease in accordance with the foregoing, this Lease shall remain in full force and effect as to the

portion of the Premises remaining, except that the rent shall be reduced in the proportion that the floor area of the

Building taken bears to the total floor area of the Building situated on the Premises. No reduction of rent shall

occur if the only area taken is that which does not have a building located thereon. Any award for the taking of all

or any part of the Premises under the power of eminent domain or any payment made under threat of the exercise

of such power shall be the property of Landlord, whether such award shall be made as compensation for

diminution in value of the leasehold or for the taking of the fee, or as severance damages; provided, however, that

Tenant shall be entitled to any award for loss of or damage to Tenant's trade fixtures and removable personal

property. In the event that this Lease is not terminated by reason of such condemnation, Landlord shall to the

extent of severance damages received by Landlord in connection with such condemnation, repair any damage to

the Premises caused by such condemnation except to the extent that Tenant has been reimbursed therefor by the

condemning authority. Tenant shall pay any amount in excess of such severance damages required to complete

such repair.

21. BROKER'S FEE. Tenant represents and warrants to Landlord that it has not engaged any broker, finder or

other person who would be entitled to any commission or fees in respect of the negotiation, execution or delivery

of this Lease and shall indemnify and hold harmless Landlord against any loss, cost, liability or expense incurred

by Landlord as a result of any claim asserted by any such broker, finder or other person on the basis of any

arrangements or agreements made or alleged to have been made by or on behalf of Tenant. The provisions of this

paragraph shall not apply to brokers with whom Landlord has an express written brokerage agreement.

22. ESTOPPEL CERTIFICATE.

(a) Tenant shall at any time upon not less than fifteen (15) days' prior written notice from Landlord

SAMPLE 25

execute, acknowledge and deliver to Landlord a statement written on Landlord's estoppel certificate form (i)

certifying that this Lease is unmodified and in full force and effect (or, if modified, stating the nature of such

modification and certifying that this Lease, as so modified, is in full force and effect) and the date to which the rent

and other charges are paid in advance, if any, and (ii) acknowledging that there are not, to Tenant's knowledge, any

uncured defaults on the part of Landlord hereunder, or specifying such defaults if any are claimed, provided that a

copy of such request is also sent to Gregory M. Trusso at Equis Corporation. Any such statement may be

conclusively relied upon by any prospective purchaser or encumbrancer of the Premises.

23. SEVERABILITY. The invalidity of any provision of this Lease as determined by a court of competent

jurisdiction, shall in no way affect the validity of any other provision hereof.

24. INTEREST ON PAST-DUE OBLIGATIONS. Except as expressly herein provided, any amount due to

Landlord not paid when due shall bear interest at the maximum rate then allowable by law from the date due.

Payment of such interest shall not excuse or cure any default by Tenant under this Lease, provided, however, that

interest shall not be payable on late charges incurred by Tenant.

25. TIME OF ESSENCE. Time is of the essence.

26. ADDITIONAL RENT. Any monetary obligations of Tenant to Landlord under the terms of this Lease shall

be deemed to be rent.

27. INCORPORATION OF PRIOR AGREEMENTS; AMENDMENTS. This Lease contains all agreements

of the parties with respect to any matter mentioned herein. No prior agreement or understanding pertaining to any

such matter shall be effective. This Lease may be modified in writing only, signed by the parties in interest at the

time of the modification. Except as otherwise stated in this Lease, Tenant hereby acknowledges that neither the

Landlord or any employees or agents of the Landlord have made any oral or written warranties or representations to

Tenant relative to the condition or use by Tenant of said Premises and Tenant acknowledges that Tenant assumes

all responsibility regarding the Occupational Safety Health Act, the legal use and adaptability of the Premises and

the compliance thereof with all applicable laws and regulations in effect during the terms of the Lease except as

otherwise specifically stated in this Lease.

28. WAIVERS. No waiver by either party of any provision hereof shall be deemed a waiver of any other

provision hereof or of any subsequent breach by the other party for the same or any other provision. One party's

consent to, or approval of, any act shall not be deemed to render unnecessary the obtaining the other party's consent

to or approval of any subsequent act. The acceptance of rent hereunder by Landlord shall not be a waiver of any

preceding breach by Tenant of any provision hereof, other than the failure of Tenant to pay the particular rent so

accepted, regardless of Landlord's knowledge of such preceding breach at the time of acceptance of such rent.

29. HOLDING OVER. If Tenant, with Landlord’s consent and provided that Tenant is in good standing with all

terms and conditions of this Lease, remains in possession of the Premises after the Lease Term or any Extended

Term, this Lease shall, following written notice from Landlord, be extended on a month-to-month basis at the

monthly Base Rent and Percentage Rent Rates as were in effect in the last month of the Lease Term or Extended

Term, subject to termination and/or change in any term or condition upon thirty (30) days’ written notice by either

party. All other unaffected terms and conditions shall remain in full force and effect. If Tenant, with Landlord's

consent but without such written notice from Landlord as described above in this Article 29, remains in possession

of the Premises or any part thereof after the expiration of the term hereof, such occupancy shall be a tenancy from

month to month upon all the provisions of this Lease pertaining to the obligations of Tenant, with the exception of

rent which shall be at One Hundred Twenty Five Percent (125%) of the then current Base Rent and Percentage

Rent Rates, but all options and rights of first refusal, if any, granted upon the terms of this Lease shall be deemed

terminated and be of no further effect during said month to month tenancy.

SAMPLE 26

30. CUMULATIVE REMEDIES. No remedy or election hereunder shall be deemed exclusive but shall,

wherever possible, be cumulative with all other remedies at law or in equity.

31. COVENANTS AND CONDITIONS. Each provision of this Lease performable by Tenant shall be deemed

both a covenant and a condition.

32. BINDING EFFECT; CHOICE OF LAW. Subject to any provisions hereof restricting assignment or

subletting by Tenant and subject to the provisions of Article 22, this Lease shall bind the parties, their personal

representatives, successors and assigns. This Lease shall be governed by the laws of the State wherein the

Premises are located.

33. SUBORDINATION.

(a) This Lease, at Landlord's option, shall be subordinate to any ground lease, mortgage, deed of trust, or any

other hypothecation or security now or hereafter placed upon the real property of which the Premises are a part and

to any and all advances made on the security thereof and to all renewals, modifications, consolidations,

replacements and extensions thereof. Notwithstanding such subordination, Tenant's right to quiet possession of the

Premises shall not be disturbed if Tenant is not in default and so long as Tenant shall pay the rent and observe and

perform all of the provisions of this Lease, unless this Lease is otherwise terminated pursuant to its terms. If any

mortgagee, trustee or ground lessor shall elect to have this Lease prior to the lien of its mortgage, deed of trust or

ground lease, and shall give written notice thereof to Tenant, this Lease shall be deemed prior to such mortgage,

deed of trust, or ground lease, whether this Lease is dated prior or subsequent to the date of said mortgage, deed of

trust, or ground lease, or the date of recording thereof.

(b) Tenant and Landlord agree to execute any documents required to effectuate an attornment, a subordination

and a non-disturbance in favor of Tenant, or to make this Lease prior to the lien of any mortgage, deed of trust or

ground lease, as the case may be.

34. ATTORNEYS' FEES. If either party brings an action to enforce the terms hereof or declare rights hereunder,

the prevailing party in any such action, on trial or appeal, shall be entitled to reasonable attorneys' fees to be paid

by the losing party as fixed by the court.

35. LANDLORD'S ACCESS. Landlord and Landlord's agents shall have the right to enter the Premises at

reasonable times for the purpose of inspecting the same, showing the same to prospective purchasers, lenders, or

lessees, and making such alterations, repairs, improvements or additions to the Premises or to the Building of

which they are a part as Landlord may deem necessary or desirable. Landlord may at any time place on or about

the Premises any ordinary "For Lease" signs, all without rebate of rent or liability to Tenant.

36. SIGNS. Tenant shall not place any sign upon the Premises without Landlord's prior written consent. Tenant

shall submit to Landlord for its consent and review for conformance with Landlord’s signage policy, a written

description of the proposed design and materials to construct such sign. Tenant shall not be permitted to post

materials on automobiles. Tenant shall not be allowed to post sandwich boards or easels outside its Premises

without Landlord's prior written consent. All signs posted to windows of the Premises must be in conformance

with Landlord's signage policy.

37. MERGER. The voluntary or other surrender of this Lease by Tenant, or a mutual cancellation thereof, or a

termination by Landlord, shall not work a merger, and shall, at the option of Landlord, terminate all or any existing

subtenancies or may, at the option of Landlord, operate as an assignment to Landlord of any or all of such

subtenancies.

38. QUIET POSSESSION. Upon Tenant paying the rent for the Premises and observing and performing all of

SAMPLE 27

the covenants, conditions and provisions on Tenant's part to be observed and performed hereunder, Tenant shall

have quiet possession of the Premises for the entire term hereof subject to all of the provisions of this Lease. The

individuals executing this Lease on behalf of Landlord represent and warrant to Tenant that they are fully

authorized and legally capable of executing this Lease on behalf of Landlord and that such execution is binding

upon all parties holding an ownership interest in the Premises.

39. MULTIPLE TENANT BUILDING. In the event that the Premises are part of a larger Building or group of

buildings then Tenant agrees that it will abide by, keep and observe all reasonable rules and regulations, as

designated in Exhibit C which Landlord may make from time to time for the management, safety, care, and

cleanliness of the Building and ground, the parking of vehicles and the preservation of good order therein as well

as for the convenience of other occupants and tenants of the Building. The violations of any such rules and

regulations shall be deemed a material breach of this Lease by Tenant.

40. SECURITY MEASURES. Tenant hereby acknowledges that the rental payable to Landlord hereunder does

not include the cost of guard service or other security measures, and that Landlord shall have no obligation

whatsoever to provide same. Tenant assumes all responsibility for the protection of Tenant, its agents, and invitees

from acts of third parties.

41. EASEMENTS. Landlord reserves to itself the right, from time to time, to grant such easements, rights and

dedications that Landlord deems necessary or desirable, and to cause the recordation of Parcel Maps and

restrictions, so long as such easements, rights, dedications, Maps and restrictions do not unreasonably interfere

with the use of the Premises by Tenant. Tenant shall sign any of the aforementioned documents upon request of

Landlord and failure to do so shall constitute a material breach of this Lease.

42. PERFORMANCE UNDER PROTEST. If at any time a dispute shall arise as to any amount or sum of

money to be paid by one party to the other under the provisions hereof, the party against whom the obligation to

pay the money is asserted shall have the right to make payment "under protest" and such payment shall not be

regarded as a voluntary payment, and there shall survive the right on the part of said party to institute suit for

recovery of such sum. If it shall be adjudged that there was no legal obligation on the part of said party to pay such

sum of any part thereof, said party shall be entitled to recover such sum or so much thereof as it was not legally

required to pay under the provisions of this Lease.

43. AUTHORITY. If Tenant is a corporation, trust, or general or limited partnership, each individual executing

this Lease on behalf of such entity represents and warrants that he or she is duly authorized to execute and deliver

this Lease on behalf of said entity. If Tenant is a corporation, trust, or partnership, Tenant shall, within thirty (30)

days after execution of this Lease, deliver to Landlord evidence of such authority satisfactory to Landlord.

44. CONFLICT. Any conflict between the printed provisions of this Lease and the typewritten or handwritten

provisions shall be controlled by the typewritten or handwritten provisions.

45. EMISSIONS; STORAGE, USE AND DISPOSAL OF MATTER.

45.1 Definitions. For purposes of this paragraph, the following terms shall be defined as set forth herein:

(a) The term "Hazardous Material" shall mean include, but shall not be limited to (i) any material,

substance or waste which is or hereafter shall be listed, regulated or defined by Applicable Law to be hazardous,

acutely hazardous, extremely hazardous, radioactive toxic, or dangerous; (ii) asbestos or asbestos-containing

materials; (iii) polychlorinated biphenyls (PCBs); (iv) radon gas; (v) laboratory wastes; (vi) experimental products,

including genetically engineered microbes; (vii) petroleum, natural gas, or other petroleum product; and (viii)

medical waste as defined in the Medical Waste Management Act, div. 20, chap. 6.1 of the California Health and

SAMPLE 28

Safety Code.

(b) The term "Applicable Law" shall include federal, state, and local statutes, regulations, rules,

ordinances, and all other governmental requirements.

45.2 Compliance and Response. During the term of this Lease:

(a) Tenant shall comply with Applicable Law in all respects, including, but not limited to, (i) acquisition

of and compliance with all permits, licenses, orders, requirements, approvals, plans and authorizations which are or

may become necessary for conduct of Tenant's operations on the Premises; (ii) compliance with all regulatory

requirements relating to such operations or the substances and equipment used therein or the emissions, emanations

and wastes generated thereby; and (iii) reporting, investigation, and remediation of, or other response to the

exposure or potential exposure, of any person to, or the emission, discharge or other release of any Hazardous

Material into the Premises or the environment.

(b) Tenant shall promptly respond to and remedy (by removal and proper disposal or such other methods

as shall be reasonably required) to the satisfaction of applicable governmental agencies any release or discharge of

any Hazardous Material connected with Tenant's operation or Tenant's presence on the Premises. All such action

shall be done in Tenant's name, and at Tenant's sole cost and expense. For purposes of this paragraph (b), the term

"respond" shall include, but not be limited to, the investigation of environmental conditions, the preparation of

feasibility reports or remedial plans, and the performance of any cleanup, remediation, containment, maintenance,

monitoring or restoration work. Any such actions shall be performed in a good, safe, workmanlike manner and

shall minimize any impact on the businesses or operations conducted at the Premises. In its discretion, Landlord

may, but shall not be required to, enter the Premises personally or through its agents, consultants or contractors and

perform all or any part of the response activity or remedial action which it feels is reasonably necessary to comply

with the terms of this Lease, and shall be reimbursed for its costs thereof and for any liabilities resulting therefrom.

(c) Tenant will promptly notify Landlord of Tenant's receipt of any notice, request, demand, inquiry or

order, whether oral or written, from any government agency or any other individual or entity relating in any way to

the presence or possible presence of any Hazardous Material on, in, under or near the Premises or the Tenant's

compliance with, or failure to comply with, Applicable Law. Receipt of such notice shall not be deemed to create

any obligation on the part of Landlord to defend or otherwise respond to any such notification.

(d) Promptly upon discovery thereof, Tenant will notify Landlord of the discovery of any release,

discharge, or emission of any Hazardous Material or of the existence of any other condition or occurrence which

may constitute or pose a significant presence or potential hazard to human health and safety or to the environment,

whether or not such event or discovery necessitates any report to any other person or government agency.

45.3 Other Emissions. Tenant shall not:

(a) Permit any vehicle on the Premises to emit exhaust, which is in violation of any Applicable Law;

(b) Create, or permit to be created, any sound pressure level which will interfere with the quiet enjoyment

of any real property adjacent to the Premises, or which will create a nuisance or violate any Applicable Law;

(c) Transmit, receive, or permit to be transmitted or received, any electromagnetic, microwave or other

radiation which is harmful or hazardous to any person or property in, on or about the Premises, or anywhere else, or

which interferes with the operation of any electrical, electronic, telephonic or other equipment wherever located,

whether on the Premises or anywhere else;

(d) Create, or permit to be created, any ground or building vibration that is discernible outside the

SAMPLE 29

Premises; and

(d) Produce, or permit to be produced, any intense glare, light or heat except within an enclosed or

screened area and then only in such manner that the glare, light or heat shall not be discernible outside the

Premises.

45.4 Indemnification. Tenant shall pay for all costs associated with, and defend (with attorneys reasonably

satisfactory to Landlord), indemnify and hold harmless Landlord from, claims, damages, expenses, encumbrances,

fees, fines, penalties or costs (including, but not limited to, legal fees; the costs of notice to any other person; the

costs of environmental or technical risk assessment; any cleanup or remedial costs; the costs of any monitoring,

sampling or analysis; and any diminution in property value or losses due to non-rentability arising out of or in any

way connected with the presence of any Hazardous Material on the Premises or Tenant's alleged violation of

Applicable Law). This obligation shall not apply, if and to the extent that (a) such claims, damages, expenses,

encumbrances, fees, fines, penalties, or costs arose solely out of conditions existing on the Premises prior to the

commencement of Tenant's first possession of the Premises or conditions created on the Premises after Tenant has

quit the Premises; and (b) Tenant did not violate any Applicable Law or act negligently with respect to, or

otherwise contribute to, the condition or the hazard posed by the condition.

45.5 Survival. The duties set forth in this paragraph shall survive the termination of this Lease.

45.6 Disposal of Other Matter.

(a) Refuse Disposal. Tenant shall not keep any trash, garbage, waste or other refuse on the Premises

except in sanitary containers and shall regularly and frequently remove and dispose of the same from the Premises.

Tenant shall keep all incinerators, containers or other equipment used for storage or disposal of such matter in a

clean and sanitary condition, and shall promptly dispose of all other waste.

(b) Sewage Disposal. Tenant shall properly dispose of all sanitary sewage and shall not use the sewage

disposal system (i) for the disposal of anything except sanitary sewage, or (ii) in excess of the lesser of the amount

allowed by the sewage treatment works, or permitted by any governmental entity. Tenant shall keep the sewage

disposal system free of all obstructions and in good operating condition.

(c) Oil and Grease Disposal. Tenant shall use all due diligence in disposing of oil and grease generated

within the Premises.

46. ADDENDUM. Attached hereto is Addendum X through X, which constitutes a part of this Lease.

47. NO RIGHT TO RELOCATION BENEFITS. Landlord is a public entity. Landlord acquired the

Premises with the intent of eventually using the Premises for a public purpose. Tenant is taking occupancy of the

Premises following such acquisition. Landlord may, at the expiration of the Lease Term or extension thereof,

decide to utilize the Premises for its own purposes inconsistent with continued occupancy by Tenant. In the event

that Landlord decides to use the Premises for its own purposes upon the expiration of the Lease Term or extensions

thereof, Landlord may decide not to negotiate with Tenant for Tenant's continued occupancy of the

Premises. Tenant's occupancy during the Lease Term or extensions thereof is an interim use of the Premises,

pending potential use of the Premises by Landlord for public uses consistent with the educational mission of

Landlord. Nothing in this Lease creates any implied or express expectation that Landlord will re-lease the

Premises to Tenant at the expiration of the Lease term, or that Landlord will offer any extensions of the Lease Term

to Tenant, except as expressly provided in this Lease. Tenant acknowledges the foregoing, and understands that in

the event that Landlord declines to negotiate for renewal or extension of this Lease upon expiration of the Lease

Term or extension thereof, Tenant shall not be eligible to receive relocation assistance or relocation benefits

pursuant to any Federal law, State law, or University policy, including without limitation Government Code section

SAMPLE 30

7260 and the following sections. Tenant hereby waives any right to receive relocation assistance or relocation

benefits from Landlord pursuant to any Federal law, State law, or University of California policy, including without

limitation Government Code section 7260 and the following sections, so long as Landlord permits Tenant to

remain in possession of the Premises during the Lease Term or extensions thereof, subject to Tenant's compliance

with all terms and conditions of this Lease.

48. SMOKE AND TOBACCO-FREE: The Landlord is committed to a healthy campus culture and

environment. Effective January 2, 2014, the University of California, Riverside is Smoke and Tobacco-Free.

Smoking, the use of smokeless tobacco products, the use of unregulated nicotine products, and the use of e-

cigarettes is strictly prohibited on all Landlord controlled properties owned or leased, regardless of location. This

policy is intended to provide a healthier, safe and productive work and learning environment for the entire campus

community.

49. SUBSTANCE ABUSE: The University strives to maintain a work place free from illegal use,

possession, or distribution of controlled substances, and complies with all laws, rules, and regulations as

they apply to substance use and abuse in the work place. Unlawful distribution, dispensation,

possession, or use of controlled substances in the work place or on University business is prohibited.

The parties hereto have executed this Lease on the dates specified immediately adjacent to their respective

signatures.

LANDLORD

THE REGENTS OF THE UNIVERSITY OF CALIFORNIA

By:

Name (Print): Charles J. Rowley

Title: Interim Vice Chancellor of Business & Administrative Services

Date:

TENANT

XXXXXXXX

By:

Name (Print):

Title: ________________________________________________

Date:

SAMPLE 31

EXHIBIT A

DESCRIPTION OF PREMISES

SAMPLE 32

SAMPLE 33

SAMPLE 34

EXHIBIT B

Accounting Period Sales Report

SAMPLE 35

EXHIBIT C

LANDLORD'S RULES AND REGULATIONS

1. Sidewalks, doorways, vestibules, halls, stairways and similar areas shall not be obstructed by tenants or used for any

purpose other than ingress and egress to and from the leased Premises and for going from one to another part of the

Building.

2. Plumbing fixtures and appliances shall be used only for purposes for which constructed, and no sweepings, rubbish,

rags or other unsuitable material shall be thrown or placed therein. Damage resulting to any such fixtures or appliances

from misuse by Tenant shall be paid by Tenant, and Landlord shall not in any case be responsible therefor.

3. No signs, advertisements or notices shall be painted or affixed on or to any windows or doors, or other part of the

Building, except of such color, size and style and in such places as shall be first approved in writing by Landlord.

4. Directories will be placed by Landlord, at its own expense, in conspicuous places in the Building. No other directories

shall be permitted without prior written consent from Landlord.

5. Tenants shall not do, or permit anything to be done in or about the Building, or bring or keep anything therein, that

will in any way increase the rate of fire or other insurance on the Building, or on property kept therein, or obstruct or

interfere with the rights of, or otherwise injure or annoy, other tenants, or do anything in conflict with the valid

pertinent laws, rules or regulations of any governmental authority.

6. Landlord shall have the power to prescribe the weight and position of iron safes or other heavy equipment, which shall

in all cases, to distribute weight, stand on plank strips at least two inches thick. Any damage to the Building caused by

installation or removal of Tenant's property, or done by Tenant's property while in the Building, shall be repaired at the

expense of Tenant.

7. Tenant shall notify the Building Maintenance Manager when safes or other heavy equipment are to be taken in or out

of the Building, and the moving shall be done under the supervision of the Building Maintenance Manager, after

written permit from Landlord. Persons employed to move such property shall be approved by Landlord.

8. No furniture, packages, or bulky material of any kind will be received in the Building or carried up or down stairs or in

the elevators, except in the manner and at the times specified by Landlord.

9. Tenant shall cooperate with Landlord's employees in keeping leased Premises neat and clean.

10. To insure orderly operation of the Building, no ice, mineral, or other water, towels, newspapers, etc., shall be delivered

to any leased Premises, except by persons appointed or approved in writing by Landlord.

11. Should a tenant require telegraphic, telephonic, annunciator or other communications service, Landlord will direct the

electricians where and how wires are to be introduced and placed, and none shall be introduced or placed except as

Landlord shall direct. Electric current shall not be used for power or heating without Landlord's prior written

permission.

12. Landlord shall, at reasonable hours, have the right to enter Premises leased to tenants, to examine same or to make

such alterations and repairs as may be deemed necessary, or to exhibit the same to prospective tenants.

13. Tenants shall not make or permit any improper noises in the Building, or otherwise interfere in any way with other

tenants, or persons having business with them.

14. Nothing shall be swept or thrown into the corridors, halls, elevator shafts, or stairways. No birds or animals shall be

brought into or kept in or about the Building.

15. No machinery of any kind shall be operated on leased Premises without the prior written consent of Landlord, nor shall

a tenant use or keep in the Building any inflammable or explosive fluid or substance.

16. Landlord reserves the right to rescind any of these rules and make such other and further rules and regulations as in its

judgment shall from time to time be needed for the safety, protection, care and cleanliness of the Building, the

operation thereof, the preservation of good order therein, and the protection and comfort of its tenants, their agents,

employees and invitees.

SAMPLE 36

EXHIBIT D

Summary of Repair and Maintenance Responsibilities - Tenant

TO BE DETERMINED AT A LATER DATE

SAMPLE 37

EXHIBIT D

SUMMARY OF REPAIR AND MAINTENANCE RESPONSIBILITIES

The following is a summary of repairs and maintenance responsibilities of Landlord and Tenant:

Landlord

Tenant

Not

Applicable

Foundations

Exterior & Bearing Walls

Roof

Electrical Systems

Lighting Systems

Plumbing Systems

Heating Systems

Ventilation Systems

Air Conditioning Systems

Alarm Systems

Plate Glass

Windows & Window Frames

Gutters, Drains, Downspouts

Elevators

Floor Slabs

Common Areas

Ceilings

Interior Walls

Interior Doors

Interior Surfaces & Windows

Refrigeration Equipment

Except as provided elsewhere in the Lease, equipment, appliances, fixtures, furnishings supplied with

the lease (regardless if owned by Landlord or Tenant) but not to exceed $20,000 per year.

Exhaust hood system from the Premises to the rooftop unit

Repainting of Interior Walls

Base and/or moldings

Parking Lot Area

SAMPLE 38

EXHIBIT D

SUMMARY OF SERVICES AND UTILITIES

The following is a summary of service and utility responsibilities of Landlord and Tenant:

N

O

T

A

P

P

L

I

C

A

B

L

E

L

A

N

D

L

O

R

D

T

E

N

A

N

T

F

R

E

Q

U

E

N

C

Y

Paper Supplies, dispensers and waste containers (Premises only)

Light bulbs & fluorescent light tubes and starters

Ballasts and transformers for fluorescent lights, light switches and electrical outlets

Heating and air conditioning control switches

Janitorial service for interior of Premises (dust, waste removal, vacuum, mop, cleaning)

Janitorial service for exterior of Premises and common areas

Carpet, title and linoleum

Gas

Electric

Water

Window washing – interior

Landscaping and gardening

Drapes, blinds, window shades

Kitchen appliances

Refuse, rubbish & garbage disposal from designated receptacles located at or near the Building

Pest control

Grease trap and fat removal on a regular as-needed basis by a Landlord-approved contractor

SAMPLE 39

EXHIBIT E

CONFIRMATION OF LEASE TERM

This Confirmation of Lease Term is entered into as of , 20

between The Regents of the University of California, ("Landlord"), and

("Tenant").

WHEREAS, Landlord and Tenant entered into that certain Lease dated for

the premises located at (the "Lease").

NOW, THEREFORE, in consideration of the mutual covenants herein, the parties hereto

agree as follows:

1. Lease Term. Landlord and Tenant agree that the Lease Term as defined in the Lease

commences on (Lease Commencement Date) and ends on

(Lease Termination Date).

2. Lease Rent. Landlord and Tenant agree that the Lease Rent as defined in the Lease

commences on

(Rent Commencement Date).

The parties have caused this Confirmation of Lease Term to be executed as of the date first set

forth above.

TENANT: LANDLORD:

By: By: ____________________

Its: Its :____________________

Dated: Dated:___________________

SAMPLE 40

ADDENDUM 1 - PARKING PROVISIONS

TO LEASE AGREEMENT DATED , 2013

BY AND BETWEEN

THE REGENTS OF THE UNIVERSITY OF CALIFORNIA

AND

XXXXXXXXXXXXXX

The Premises shall include parking privileges subject to those terms as presented in Article 2 of the

Lease.

SAMPLE 41

ADDENDUM 2 - RENT FOR EXTENDED TERM(S)

TO LEASE AGREEMENT DATED , 2013

BY AND BETWEEN

THE REGENTS OF THE UNIVERSITY OF CALIFORNIA

AND

XXXXXXX

TO BE DETERMINED AT A LATER DATE

SAMPLE 42

ADDENDUM 3 - WORK AGREEMENT

TO LEASE AGREEMENT DATED , 2009

BY AND BETWEEN

THE REGENTS OF THE UNIVERSITY OF CALIFORNIA

AND

XXXXXXX

WORK AGREEMENT

THIS WORK AGREEMENT, dated _______________________, is by and between

________________________ ("Landlord"), and, THE REGENTS OF THE UNIVERSITY

OF CALIFORNIA, a California corporation ("Tenant").

1. Definitions. The terms used in this Work Agreement shall have the meanings as defined in the Lease

dated _______________________ , by and between Landlord and Tenant (the "Lease").

2. Tenant Improvements. Landlord shall construct all Tenant Improvements in accordance with the Plans

and Specifications and the conditions of any applicable governmental approval. Tenant Improvements must

satisfy the State Building Code and Federal Americans with Disabilities Act.

3. Construction Plans, Landlord Review, Estimated Costs, Changes and Delay:

a. Landlord, for Tenant's approval, which approval shall not be unreasonably withheld, shall

provide the complete and detailed proposed Plans and Specifications for the Premises the

design of which shall conform to Tenant's approved program for use of the Premises as

summarized in the attached Exhibit A. Landlord shall submit the proposed Plans and

Specifications to Tenant on or before _______________________ , 20___.

b. Tenant shall provide Landlord with written notice of its approval or disapproval of the Plans

and Specifications within ten (10) business days after receipt of such Plans and Specifications

from Landlord. If Tenant disapproves the Plans and Specifications, Tenant shall notify

Landlord thereof within the ten (10) business day period of any matters as to which the Plans

and Specifications fail to conform to Tenant's construction requirements or otherwise fail to

meet with Tenant's reasonable approval. Landlord shall also provide to Tenant an estimate of

the costs for completion of the work required by the Plans and Specifications (“Work”), and a

schedule for the Work showing principle milestones and the estimated date of completion.

c. Prior to commencement of any Work by Landlord, Tenant shall have approved, by notice to

Landlord, Landlord's estimate of the cost of completing such Work. Tenant shall approve or

disapprove such estimates within five (5) business days of receipt.

d. Construction shall commence in accordance with Article 8 of the Lease.

e. During construction Landlord and Tenant's Representative (as defined below) shall confer

periodically regarding the progress of the Work and the approximate cost of the Work

completed and the estimated total cost of the Work. Tenant's Representative may request

changes, modifications or alterations to the Plans and Specifications by written change order

delivered to Landlord, but no such change shall be made without the written approval of

Landlord, which approval shall not be unreasonably withheld. Landlord shall approve or deny

each Tenant change order within two (2) business days, and Landlord shall also provide to

SAMPLE 43

Tenant's designated representative, ___________________________, or such

other person substituted for ________________________________ ("Tenant's

Representative"), by written notice to Landlord, with an estimate of the maximum cost of each

change order within five (5) business days after the delivery of the change order to Landlord.

No Work based upon a change order shall be undertaken unless and until Tenant's

Representative shall have approved (by notice to Landlord) Landlord's cost estimate.

f. If Landlord determines that a change proposed by Tenant will delay completion of the

construction beyond the period allocated for such construction in Article 8 of the Lease,

Landlord shall, within one (1) business day, notify Tenant's representative of the estimated

length of delay caused by Tenant's request. Tenant's Representative shall advise Landlord

within one (1) business day after receipt of such notice as to whether Landlord shall proceed

with requested change, modification or alteration. Landlord shall not make the requested

change to the Plans and Specifications without Tenant's approval of any proposed time

extensions.

g. If Landlord requests that Tenant clarify or refine the Plans and Specifications, then Tenant's

Representative shall meet with Landlord for the purpose of clarifying or refining the Plans and

Specifications within two (2) business days after Tenant's receipt of Landlord's request therefor.

No such clarification or refinement shall be deemed to be a change order.

h. If Landlord determines that the Plans and Specifications must be changed as a result of

omissions or errors in the Plans and Specifications, then Landlord shall, at Landlord's cost,

prepare and submit to Tenant revised Plans and Specifications correcting any such omission or

error. Tenant shall approve or disapprove such revised Plans and Specifications within two (2)

business days after receipt and shall not unreasonably withhold its approval.

Landlord shall not be responsible for any delays in the time for completion of construction resulting

from Tenant's Delay. For purposes herein, Tenant's Delay means any actual delay in the completion of

the construction of the Tenant Improvements that may arise solely as a result of: (i) Tenant's failure to

comply with its obligations set forth in subsections (b), (c), (f), (g), and (h), above, within the time

specified; (ii) any change made after notification to Tenant that a change will delay completion of the

construction as provided in subsection (f) or (h), above; or (iii) extra time required to obtain any long

lead items specified by Tenant. For purposes herein, an item shall be considered a long-lead item if

Landlord notifies Tenant within ten (10) business days after receipt of Tenant's approval of the Plans

and Specifications that such item is not readily available or readily installable after the same is

requested by Tenant.

4. Approval of Plans by Public Authorities. Landlord shall obtain approval of the Plans and

Specifications for the Premises from all appropriate government agencies, and a copy of the Plans and

Specifications, as approved, shall be dated and initialed by both Landlord and Tenant. Landlord shall

exercise due diligence in obtaining any such approval.

5. Quality of Work. All Work performed hereunder shall be done in a good and workmanlike manner,

free from faults and defects and in accordance with the Plans and Specifications. All materials and

equipment installed in the Tenant Improvements shall be new unless otherwise specified in the Plans

and Specifications.

6. Acceptance of Premises. At any time during the construction of the Tenant Improvements, Tenant may

reject any Work that does not conform to the Plans and Specifications. Within _____________

SAMPLE 44

(______) days after Landlord delivers to Tenant a list of Work items remaining to be done or corrected

and notifies Tenant that the Tenant Improvements are ready for inspection by Tenant's Representative

pursuant to Article 8 of the Lease, Tenant shall deliver to Landlord a list of items that Tenant shall have

reasonably determined that Landlord must complete or correct prior to Tenant's acceptance of

possession in order for the Work to conform to the Plans and specifications. Landlord shall

immediately commence to complete or correct the items listed by Tenant, except those it contends are

not justified. If Tenant fails to deliver such a list within the _____________ (______) day period,

Tenant shall be deemed to have accepted the Premises subject to completion of the corrections on

Landlord's list of corrections and, other than as provided for in Article 8 of the Lease, to have approved

the construction. Failure of Landlord and Tenant to agree on the items to be corrected or completed

within _____________ (______) days after Tenant delivers its list of items shall entitle Tenant to

initiate arbitration to be conducted pursuant to the Construction Industry Arbitration Rules of the

American Arbitration Association, and judgment upon the award of the arbitrator(s) may be entered in

any court having jurisdiction.

7. Tenant's Access During Construction. Tenant and its agents and contractors shall have access to the

Premises during the construction of the Tenant Improvements for activities and purposes related to

construction of the Premises or preparation of the Premises for occupancy. Landlord shall provide to

Tenant, at the earliest practicable time but in no event later than _____________ (______) days prior to

the date of Substantial Completion, Landlord's best estimate of the date of Substantial Completion.

Tenant may, beginning _____________ (______) days prior to Landlord's best estimate of the date of

Substantial Completion, enter the Premises for the purpose of installing furniture, fixtures, and

equipment. Tenant's representatives on the Premises during construction shall cooperate with

Landlord's contractor and not delay in any way the performance by Landlord's contractor or Landlord's

representatives of any Work (including but not limited to the construction of Tenant Improvements).

8. Notices. All notices required or permitted hereunder shall be in writing and shall be delivered as

follows:

(a) If to Tenant, to:

Attention:

with a copy to:

(b) If to Landlord, to:

Attention:

9. Notice of Non-Responsibility. Landlord may post such notices of non-responsibility as it reasonably

deems appropriate in the Premises during the construction provided for herein.

10. Responsibility for Damage. If Tenant installs equipment in the Premises prior to completion of the

Work hereunder, Tenant shall bear the risk of loss to such equipment other than as a result of

negligence or willful misconduct by Landlord, its agent or contractors.

SIGNATURE PAGE TO FOLLOW

SAMPLE 45

IN WITNESS WHEREOF, the parties have executed this Work Agreement as of the date first above

written.

TENANT:

THE REGENTS OF THE UNIVERSITY OF CALIFORNIA

By:

Its:

LANDLORD:

By:

Its:

SAMPLE 46

ADDENDUM 4 - OPERATING AGREEMENT

TO LEASE AGREEMENT DATED , 2013

BY AND BETWEEN

THE REGENTS OF THE UNIVERSITY OF CALIFORNIA

AND

XXXXXXX

The Tenant shall operate the Campus Store on a schedule that will be convenient to students, faculty, and the Landlord’s

community. As a minimum, operating hours are to be from, Monday through Friday 8am to 6pm during regular academic

sessions; Monday through Friday 8am to 5pm during summer sessions, and on Saturdays from 9am to 3pm during regular

academic sessions. Other operating hours will be required by the Landlord to accommodate special events, especially

Saturday and Sundays. Changes in the operating hours described above shall be approved by the Landlord.

SAMPLE 47

ADDENDUM 5 – HOURS OF OPERATION

TO LEASE AGREEMENT DATED ____________________, 2013

BY AND BETWEEN

THE REGENTS OF THE UNIVERSITY OF CALIFORNIA

AND

XXXXXXX

Regular Academic Sessions: Monday – Friday 8:00am to 6:00pm

Saturday 9:00am to 3:00pm

Summer Sessions: Monday – Friday 8:00am – 5:00pm

SAMPLE 48

ADDENDUM 6 – LANDLORD’S F&E

TO LEASE AGREEMENT DATED ____________________, 2013

BY AND BETWEEN

THE REGENTS OF THE UNIVERSITY OF CALIFORNIA

AND

XXXXXXX

SAMPLE 49

ADDENDUM 7 - TENANT’S F&E

TO LEASE AGREEMENT DATED ____________________, 2013

BY AND BETWEEN

THE REGENTS OF THE UNIVERSITY OF CALIFORNIA

AND

XXXXXXX

Exhibit C

Sales by Department

Campus Store

FY 2010/2011 thru 2012/2013

Fiscal Year Fiscal Year Fiscal Year

10/11 11/12 12/13

Textbook Division New Textbooks 3,169,186 2,238,095 1,990,923

Used Textbooks 509,922 457,184 351,302

Course Readers 140,958 66,590 85,930

Rentals 118,078 134,611 88,422

Total Textbooks 3,938,145 2,896,481 2,516,577

Trade Book Division Trade Books 68,884 44,505 18,624

Total Trade Books 68,884 44,505 18,624

Gen. Merchandise Division General Supplies 787,046 809,623 984,454

Clothing 627,122 589,016 601,752

Gifts 283,933 296,627 364,825

Total General Merchandise 1,698,101 1,695,266 1,951,031

CompUCR Computer Hardware 2,184,162 1,445,383 1,298,350

Computer Software 139,634 99,932 81,625

Computer Supplies 485,812 400,508 378,382

Total CompUCR 2,809,607 1,945,823 1,758,357

Total Sales 8,514,738 6,582,075 6,244,588

Other Income Other Income 142,916 105,546 127,399

Total Other Income 142,916 105,546 127,399

Total Income 8,657,654 6,687,621 6,371,987

New Textbook Pricing Policy

Used Textbook Pricing Policy

Course Reader Pricing Policy

Note: Textbooks with the price pre-printed on the book by the Publisher will be sold at the pre-printed price and at the Publisher’s preset margin.

Used Textbooks are priced at 75% of the New Textbook price.

Publisher’s CostRetail Margin Percentage Retail Price Calculation

$0.01 to $24.99 40%Publisher’s Cost divided by .60 and rounded to

the next highest quarter dollar.

$25.00 to $44.99 30%Publisher’s Cost divided by .70 and rounded to

the next highest quarter dollar.

$45.00 to $64.99 27%Publisher’s Cost divided by .73 and rounded to

the next highest quarter dollar.

$65.00 to $99.99 25%Publisher’s Cost divided by .75 and rounded to

the next highest quarter dollar.

$100.00 or Greater 20%Publisher’s Cost divided by .80 and rounded to

the next highest quarter dollar.

Publisher’s CostRetail Margin Percentage Retail Price Calculation

$0.01 to $24.99 40%Publisher’s Cost divided by .60 and rounded to

the next highest quarter dollar.

$25.00 to $44.99 30%Publisher’s Cost divided by .70 and rounded to

the next highest quarter dollar.

$45.00 to $64.99 27%Publisher’s Cost divided by .73 and rounded to

the next highest quarter dollar.

$65.00 to $99.99 25%Publisher’s Cost divided by .75 and rounded to

the next highest quarter dollar.

$100.00 or Greater 20%Publisher’s Cost divided by .80 and rounded to

the next highest quarter dollar.

October 10, 2008

University of California, Riverside Five-Year Academic Calendar, 2010/11-2014/15

2010-2011 2011-2012 2012-2013 2013-2014 2014-2015

F Quarter begins M Sept 20 M Sept 19 M Sept 24 M Sept 23 M Sept 29

A Instruction begins R Sept 23 R Sept 22 R Sept 27 R Sept 26 R Oct 2

L Veterans Day R Nov 11 F Nov 11 M Nov 12 M Nov 11 T Nov 11

L Thanksgiving Nov 25-26 Nov 24-25 Nov 22-23 Nov 28-29 Nov 27-28

Instruction ends F Dec 3 F Dec 2 F Dec 7 F Dec 6 F Dec 12

Finals begin S Dec 4 S Dec 3 S Dec 8 S Dec 7 S Dec 13

Finals end/quarter ends** F Dec 10 F Dec 9 F Dec 14 F Dec 13 F Dec 19

Days of instruction 49 49 49 49 49

2010-2011 2011-2012 2012-2013 2013-2014 2014-2015

W Quarter begins M Jan 3 W Jan 4 W Jan 2 R Jan 2 F Jan 2

I Instruction begins M Jan 3 M Jan 9 M Jan 7 M Jan 6 M Jan 5

N Martin Luther King, Jr. Day M Jan 17 M Jan 16 M Jan 21 M Jan 20 M Jan 19

T Presidents Day M Feb 21 M Feb 20 M Feb 18 M Feb 17 M Feb 16

E Instruction ends F Mar 11 F Mar 16 F Mar 15 F Mar 14 F Mar 13

R Finals begin S Mar 12 S Mar 17 S Mar 16 S Mar 15 S Mar 14

Finals end/quarter ends** F Mar 18 F Mar 23 F Mar 22 F Mar 21 F Mar 20

Days of instruction 48 48 48 48 48

2010-2011 2011-2012 2012-2013 2013-2014 2014-2015

S Quarter begins M Mar 28 W Mar 28 W Mar 27 W Mar 26 W Mar 25

P Chavez Holiday F Mar 25 F Mar 30 F Mar 29 F Mar 28 F Mar 27

R Instruction begins M Mar 28 M Apr 2 M Apr 1 M Mar 31 M Mar 30

I Memorial Day M May 30 M May 28 M May 27 M May 26 M May 25

N Instruction ends F June 3 F June 8 F June 7 F June 6 F June 5 G Finals begin S June 4 S June 9 S June 8 S June 7 S June 6

Finals end/quarter ends** F June 10 F June 15 F June 14 F June 13 F June 12

Commencement June 10-13 June 15-18 June 14-17 June 13-16 June 12-15

Days of instruction 49 49 49 49 49

Total Days of Instruction 146 146 146 146 146

**The last day of the quarter is the degree conferral date.

This Agreement is entered into by and between:

MBS Service Company, fnc.

2TllWestAsh Street

Columbia, Missouri 65203

A Delaware corporation

which is referred to herein as "MBS: and

F sUL

UCR Campus Store

900 University Ave East

Riverside, California

Which is referred to herein as "the UCRCampus Store".

l00Vo of the discount75Vo of the discount50Vo of the discount

MBS Systems Equipment - Software Proyision Agreement

and is executed as of the last date written on the signature page below. It provides for installation ofcertain computer hardware on the UCR Campus Store's premises and implementation servicesrelated to that installation, subject to the terms, conditions and limitations stated below. In exchange,the UCR Campus Store agrees to make payment of fees and perform other undertakings as statedbelow. Therefore, for good and valuable consideration which is hereby acknowledged as received byboth parties, it is agreed as follows:

The parties have agreed that MBS will provide a discount to the UCR Campus Store againstthe computer equipment, software product licensing charges in the total amount of ONE HLINDREDFIFTY-SEVEN THOUSAND FOLJR HUNDRED SEVENTY-NINE DOLLARS $157.479\ and, inconsideration therefore, UCR Campus Store agrees to sell to MBS textbooks in each of the five (5)annual periods commencing on the date of July 1. 2010, the entire wholesale textbook volumepurchased during the opening term, closing term and daily buyback, and allow theprovisionof I00Voof all open orders for l00%o of all adoptions from all UCR Campus Store locations. In addition, theUCR Campus Store will convert to the MBS Systems Hosted suite of applications. This conversionwill be provided at no cost to the UCR Campus Store. The UCR Campus Store will sign the MBSTA'and MBS Software Application License Agreement Addendums in exchange for the abovementioned discounts

In the event that the STORE elects to terminate the Premier Partnership Agreement atanytime prior to end of the five (5) year term, the UCR Campus Store is responsible for repaying MBSthe value of the discount based on the following repayment schedule:

Year l -Year375Vo of the discount50Vo of the discount

If the University elects to lease the Campus Store to a contract company, the University isresponsible for repaying MBS the value of the discount based on the following repayment schedule:

I00Vo of the discountYear 3 -Year 4Year 5

Year l -Year3Year 3 -Yew 4Year 5

MBS Systems Conlidential

seamew

Typewritten Text

Exhibit G

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Typewritten Text

Exhibit H

OPERATING AGREEMENT

FOR

UCR CAMPUS STORE

BY AND BETWEEN

THE REGENTS OF THE UNIVERSITY OF CALIFORNIA

AND OPERATOR

JULY 1, 2014

Page | 2 OPERATING AGREEEMENT

TABLE OF CONTENTS

Page

1. CAMPUS STORE OPERATIONS …………………………………………………………………………5

1.1 Standards of Operation ………………………………………………………………………………….5

1.2 Substandard of Operation ……………………………………………………………………………….5

1.3 Schedule of Operation …………………………………………………………………………………..5

2. VENDOR OBLIGATIONS ………………………………………………………………………………….6

2.1 Conservation …………………………………………………………………………………………….6

2.2 Interior Cleaning ………………………………………………………………………………………...6

2.3 Security ………………………………………………………………………………………………….6

2.4 Emergency Procedures ………………………………………………………………………………….6

2.5 Tax Obligations …………………………………………………………………………………………6

2.6 Permits …………………………………………………………………………………………………..6

2.7 Compliance with University Policy ……………………………………………………………………..6

2.8 Compliance with Law …………………………………………………………………………………..6

2.9 Non-Discrimination …………………………………………………………………………………….6

2.10 Security System ………………………………………………………………………………………...7

3. MARKETING

3.1 Marketing and Promotions Plan ………………………………………………………………………...7

3.2 Special Sales …………………………………………………………………………………………….7

3.3 Alumni Relations ………………………………………………………………………………………..7

3.4 Catalog Sales ……………………………………………………………………………………………7

3.5 Caps and Gowns ………………………………………………………………………………………...7

3.6 Customer Survey ………………………………………………………………………………………..7

4. CAMPUS STORE STOCKING, PRICING, AND DISCOUNTS …………………………………………..7

4.1 Textbook Adoption ……………………………………………………………………………………...7

4.2 Special Order Fulfillment ……………………………………………………………………………….7

4.3 Desk Copies ……………………………………………………………………………………………..8

4.4 Pricing Standards ………………………………………………………………………………………..8

4.5 Used Book Purchases …………………………………………………………………………………...8

4.6 Refund Policy …………………………………………………………………………………………...8

4.7 Credit Sales ……………………………………………………………………………………………...8

4.8 Check Cashing …………………………………………………………………………………………..8

4.9 Departmental Purchase Orders………………………………………………………………………….8

4.10 Credit and Debit Cards …………………………………………………………………………………8

5. UNIVERSITY RIGHTS AND OBLIGATIONS ……………………………………………………………8

5.1 Changes in Methods of Operations ……………………………………………………………………..8

5.2 Prohibited Merchandise …………………………………………………………………………………8

5.3 University Services ……………………………………………………………………………………...9

5.4 University Compliance ………………………………………………………………………………….9

Page | 3 OPERATING AGREEEMENT

TABLE OF CONTENTS

(continued)

Page

6. TRANSFER OF OPERATIONS …………………………………………………………………………….9

6.1 Initial Inventory …………………………………………………………………………………………9

6.2 Purchase of Inventoried Merchandise …………………………………………………………………..9

6.2.1 New Textbooks ………………………………………………………………………………..9

6.2.2 Used Books ……………………………………………………………………………………9

6.2.3 Trade, Reference and Technical Books ……………………………………………………...10

6.2.4 General Merchandise ………………………………………………………………………...10

6.3 Reserved Items ………………………………………………………………………………………...10

6.4 Full Payment …………………………………………………………………………………………..10

6.5 Vendor Credits …………………………………………………………………………………………10

6.6 Accounts Payable ……………………………………………………………………………………...10

7. COMPUTER SYSTEM AND NETWORK ………………………………………………………………..10

7.1 Virtual Campus Store ………………………………………………………………………………….10

7.2 Use of University Network …………………………………………………………………………….10

8. CAMPUS STORE PERSONNEL

8.1 Staffing and Training ………………………………………………………………………………….10

8.2 Current Campus Store Employees …………………………………………………………………….11

8.3 Operator’s Emergency Representative ………………………………………………………………...11

8.4 Corporate Representative ……………………………………………………………………………...11

8.5 Organization …………………………………………………………………………………………...11

8.6 Selection of Campus Store Manager …………………………………………………………………..11

8.7 Replacement of Campus Store Manager ………………………………………………………………11

8.8 Duties of Campus Store Manager ……………………………………………………………………...11

9. RECORDS AND ACCOUNTING …………………………………………………………………………11

9.1 Books and Records …………………………………………………………………………………….11

9.2 Accounting …………………………………………………………………………………………….12

9.3 Annual Statement ……………………………………………………………………………………...12

10. TERM ………………………………………………………………………………………………………12

11. TERMINATION ……………………………………………………………………………………………12

11.1 Termination for Cause ……………...…………………………………………………………………12

11.1.1 Termination for Cause by University ………………………………………………………...12

11.1.2 Termination for Cause by Operator ………………………………………………………….12

11.2 Termination for Convenience …………………………………………………………………………13

11.3 Optional Continuation of Services ……………………………………………………………………13

11.4 Resell of Merchandise ………………………………………………………………………………...13

11.5 Effect of Termination …………………………………………………………………………………13

12. RELATIONSHIP OF PARTIES …………………………………………………………………………...13

13. NONASSIGNABILITY ……………………………………………………………………………………13

Page | 4 OPERATING AGREEEMENT

TABLE OF CONTENTS

(continued)

Page

14. NOTICES …………………………………………………………………………………………………..13

15. REMEDIES ………………………………………………………………………………………………...13

16. WAIVER OF DEFAULT …………………………………………………………………………………..14

17. TIME OF THE ESSENCE …………………………………………………………………………………14

18. WARRANTY OF AUTHORITY …………………………………………………………………………..14

19. FURTHER COOPERATION ………………………………………………………………………………14

20. BINDING EFFECT ………………………………………………………………………………………...14

21. SEVERABILITY……………………………………………………………………………………………14

22. ENTIRE AGREEMENT, MODIFICATIONS AND AMENDMENTS …………………………………...14

23. GOVERNING LAW ……………………………………………………………………………………….14

Page | 5 OPERATING AGREEEMENT

OPERATING AGREEMENT

FOR

UCR CAMPUS STORE

THIS OPERATING AGREEMENT (“Agreement”), dated July 1, 2014 (the “Effective Date”, is made

and entered into by and between THE REGENTS OF THE UNIVERSITY OF CALIFORNIA, a California

corporation (“University”), and OPERATOR (“Operator”).

BACKGROUND

A. The University and Operator have contemporaneously entered into a lease for certain space (the “Premises”) at the University of California, Riverside (the “Lease”), wherein the parties intend for Operator to operate the Campus Store (“Campus Store”). The Campus Store includes sales of computer hardware, software, and accessories (including Apple Computers and products). Operator’s operation of the Campus Store is to be governed by the terms of this Agreement.

B. The Associate Vice Chancellor for Student Affairs Administration ("AVC") shall be the representative

of the University under this Agreement.

C. All capitalized terms, if not defined herein are as defined in the Lease.

NOW, THEREFORE, the University and Operator, intending to be legally bound hereby, agree as follows:

1. CAMPUS STORE OPERATIONS. University hereby grants to Operator the exclusive right to sell, at

retail, textbooks and general books on the UCR campus. Operator's occupancy and use of the Premises

pursuant to the Lease shall be solely for the purpose of sale of textbooks and general books, and such

other operations as are expressly permitted by the Lease. Operator acknowledges that the University

operates several small on-campus retail locations which sell books. The University will not violate the

first sentence of this Section if such sales do not materially increase during the term of this Agreement.

Operator also has the right to sell at retail merchandise traditionally found in the Campus Store including,

but not limited to, class rings, clothing, gifts, jewelry, computer hardware, software and accessories, and

custom anthologies, in compliance with the terms and conditions of this agreement. Operator

acknowledges that the University Advancement, Intercollegiate Athletics and other campus units have

separate marketing activities of products that occur on campus. The name of the store shall be the "UCR

Campus Store.”

1.1 Standards of Operation. Operator shall operate the Campus Store in a manner substantially

equivalent to, or better than, the "Comparable Bookstores at other UC Campuses."

1.2 Substandard Operation. If the Campus Store is, in any material aspect, being operated in a manner

which is worse than the Comparable Campus Stores, he or she shall provide written notice to Operator setting forth in detail the basis for the determination of substandard operation. Operator shall either (a) correct such substandard operation within thirty (30) days from the date of the notice, or (b) if such correction shall reasonably require more than thirty (30) days to correct, present a plan and schedule for correction to the University, and commence such corrective actions within thirty (30) days from the date of the notice. Failure of Operator to act as required in the preceding sentence will be deemed to be cause for termination of this Agreement pursuant to Section 11.1, below.

1.3 Schedule of Operation. Operator shall operate the Campus Store continuously on a 12-month basis, with the Campus Store to be closed only pursuant to a holiday schedule which shall have been approved by the University in a written notice to Operator. Campus Store hours will be extended to coincide with demand. Campus Store hours of operation, except for registration periods and the first two weeks of classes for each quarter shall be, until changed pursuant to a writing signed by the University, as follows:

Page | 6 OPERATING AGREEEMENT

Regular Academic Sessions: Monday – Friday 8:00am to 6:00pm

Saturday 9:00am to 3:00pm

Summer Sessions: Monday – Friday 8:00am – 5:00pm

2. VENDOR OBLIGATIONS. Operator shall perform each of the following obligations in accordance with

the highest standards for commercial practices in the operation of Campus Stores located on a university

campus:

2.1 Conservation. Operator shall participate in the University waste recycling and energy conservation

program on the same basis as University departments.

2.2 Interior Cleaning. In its operation of the Campus Store, Operator shall provide daily cleaning service,

janitorial equipment and cleaning supplies for the purposes of cleaning the Campus Store's interior

space.

2.3 Security. Operator shall provide all security services within the Campus Store necessary to reduce damage to or theft of property to a level no greater than the average of such losses at the Comparable Campus Stores. After consultation with University Police, Operator shall create and maintain a security plan for securing the Campus Store during textbook buyback, rush and other sensitive events. Operator will adhere to the disciplinary guidelines and policies of the University.

2.4 Emergency Procedures. Within sixty (60) days after the Effective Date, and after consultation with

appropriate University officials, Operator shall prepare and deliver to the University a plan for

emergency procedures in the case of fire, theft, and/or other emergencies. The plan shall be

implemented by Operator immediately after the University shall consent thereto in writing, such

consent not to be unreasonably withheld or delayed.

2.5 Tax Obligations. Operator shall be responsible for collection and/or timely payment of all applicable

taxes (local, state and federal) including all property and possessory interest taxes.

2.6 Permits. Operator shall obtain and maintain, at its sole expense, and in its name, all necessary licenses

and permits required to perform the services described herein.

2.7 Compliance with University Policy. Operator shall comply with applicable University policies and

related regulations. The University's Representative shall provide the manager of the Campus Store

with copies of University policies applicable to Operator and its employees. Operator will be informed

of any changes to those policies on a timely basis.

2.8 Compliance with Law. Operator shall comply with applicable federal, state and local laws. This

includes, but shall not be limited to, applicable sanitation, safety and fire codes, and any other city

laws, regulations and ordinances which pertain to Operator's operation of the Campus Store. In

particular, Operator shall at all times comply with the Americans with Disabilities Act ("ADA") in any

modifications to the Premises, placement of fixtures, merchandising of product and the employment of

its personnel. Further, Operator shall cooperate with the University in the University's ADA

compliance efforts.

2.9 Non-Discrimination. Operator will not discriminate with respect to employment or Campus Store

operations based on sex, race, national origin, religion, color, sexual orientation, veteran status,

disabled veteran status, age or disability protected under the ADA.

Page | 7 OPERATING AGREEEMENT

2.10 Security System. Operator will provide one set of door keys for the Premises to the University Police,

but Operator will otherwise control all door keys to the Campus Store. In addition, Operator may, with

the prior written approval of the University, install a security system on the doors and windows of the

Campus Store. Prior to installation of the security system, Operator will submit plans to the

University. In the case of an emergency, entry into the Campus Store by the University without prior

knowledge of Operator's Campus Store manager must be reported to the Campus Store manager as

soon as possible.

3. MARKETING.

3.1 Marketing and Promotions Plan. Operator will create, maintain, and annually update a promotions

and marketing plan, which must be approved by the University's Representative, with such approval

not to be unreasonably withheld or delayed. Promotions may include, but are not limited to, book

signings, parties for University authors, scholarships, complimentary gifts, and other types of financial

assistance, and other such activities as might benefit both Operator and the University.

3.2 Special Sales. Operator will support groups and student government organizations interested in

holding special sales as long as they do not materially impact store sales.

3.3 Alumni Relations. Operator understands the importance of building and maintaining strong

University alumni relations and will develop advertising programs, subject to approval of the

University, tailored to meet the needs of the University of California, Riverside, alumni groups to

stimulate continued alumni support. Operator will not correspond directly to alumni without prior

approval by the University.

3.4 Catalog Sales. Operator shall have the right to design, produce and distribute a catalog featuring

Campus Store merchandise. The merchandise selection, catalog design and production shall have prior approval of the University. Services may be provided by telephone, facsimile, toll-free telephone service or the Campus Store home page.

3.5 Caps and Gowns. Operator will provide for the rental and sale of academic regalia to graduates from

the University of California, Riverside, as well as faculty and administrators involved with Commencement activities.

3.6 Customer Survey. Operator, at its expense, shall conduct annually a customer survey, polling

students, faculty, and staff as to total quality of service and such other matters as may be appropriate in the circumstances. The results of this survey shall be delivered to the University.

4. CAMPUS STORE STOCKING, PRICING, AND DISCOUNTS.

4.1 Textbook Adoption. In determining texts to be adopted for a given quarter, Operator shall adhere to

the schedule and to all other applicable provisions contained in the University Textbook Adoption Policy, attached hereto and incorporated herein by reference, as it may be amended from time to time. Operator shall, in cooperation with Auxiliary, collect and distribute textbook adoption forms from the various departments of the University. The University shall assist in soliciting adoption requests and enforcing the current University text adoption policy. This book list will be provided to all booksellers in the geographical vicinity of UCR, which sell books to students, provided they reciprocate in the exchange of book lists. Operator will stock adopted and optional titles specified for classroom use in sufficient quantities to meet demand. Operator will process textbook requests placed after the textbook adoption deadline in an expeditious manner. Operator will compile and deliver to the University within ten (10) days after the textbook adoption deadline a summary of all late orders, to assist the University in monitoring compliance with the University textbook adoption policy.

4.2 Special Order Fulfillment. Operator shall provide a special order service for textbooks, trade books, and general merchandise typical to a University store. Upon demand, adopted out-of-stock textbooks shall be shipped via next day air. All other merchandise may be shipped in an appropriately expeditious manner. Operator shall facilitate locating hard to find and out of print books from both foreign and

Page | 8 OPERATING AGREEEMENT

domestic publishers by using electronic networks, research services, and other means to order these titles.

4.3 Desk Copies. Operator shall provide "desk copies" of textbooks to faculty who are unable to obtain copies from the publisher within a reasonable time period. Desk copies shall be replaced with new books by the department/faculty member requesting the desk copy. If the desk copy has not been replaced by the end of the quarter for which it was requested, Operator shall bill the department for the retail price of the book, and the University shall pay such billing.

4.4 Pricing Standards. Operator will utilize industry standard, competitive, and fair pricing structures for textbooks, paperback books and trade books.

4.5 Used Book Purchases. Operator shall have the exclusive right to purchase used textbook materials on the UCR campus. Operator shall purchase used textbooks year round. Adopted used textbooks shall be purchased at prices not less than fifty percent (50%) of the current consumer's purchase price. Operator shall re-purchased textbooks in quantities sufficient to meet the needs for the coming quarter. Non-adopted textbooks shall be purchased at published wholesale prices.

4.6 Refund Policy. Operator shall have a fair and equitable refund policy. Operator shall authorize its manager to extend deadlines to assure that Operator meets its commitment to put customers first.

4.7 Credit Sales. Operator will, if requested by the University, assist the University to develop a program to extend credit to financial aid students to enable them to more easily purchase textbooks and other class-related supplies.

4.8 Check Cashing. Operator will cash checks for students, faculty and staff at Operator's discretion.

4.9 Departmental Purchase Orders. Operator will accept UCR departmental purchase orders as a form of

tender for Campus Store purchases. Purchases must be accompanied by appropriate University forms,

and be completed in a manner approved by the University.

4.10 Credit and Debit Cards. In operating the Campus Store, Operator shall accept as a minimum,

MasterCard, Visa, Discover and American Express charge cards. Fees for the right to accept these credit

cards will be paid by Operator. Operator will also accept University's debit card, if any, or debit cards

approved by the University. Fees for the right to accept University’ s debit card (Bear Bucks) 3%.

5. UNIVERSITY RIGHTS AND OBLIGATIONS.

5.1 Changes in Methods of Operation. The University, acting through the AVC, shall have the right,

after consultation with Operator, to establish or change the service hours, plans or other methods of

operation of the Campus Store.

5.2 Prohibited Merchandise. UCR shall have the right to adopt policies which forbid selling items

purchased from specific sources for the Campus Store.

5.2.1 companies which directly develop, manufacture or sell weaponry;

5.2.2 companies which seriously degrade or cause irreparable harm to the natural environment;

5.2.3 companies which seriously endanger the existence of any living species;

5.2.4 companies which manufacture or sell tobacco products;

5.2.5 companies which manufacture or sell alcoholic beverages; and

Page | 9 OPERATING AGREEEMENT

5.2.6 companies which deprive or contribute to the deprivation of health safety, adequate

sustenance, human rights or fundamental freedoms, including the right to be free from

discrimination based on race, sex, sexual preference, religious or political belief of any

people.

5.3 University Services. In addition to the building and utility services specified in the Lease, the

University shall provide the following services to the Campus Store:

5.3.1 security service provided by the University Police in the same manner provided for other

University campus buildings;

5.3.2 building electronic security services provided as part of the University's current security

system. Notwithstanding the provision of such security services, the University shall not

be held liable for any injury, losses or damages suffered by Operator, its employees and

agents as a result of such services, even if due to the negligence of the University, its

employees or agents.

5.3.3 lost and found service provided through the University;

5.3.4 use of the University access control network for debit card sales and interdepartmental

sales; however, in order to use the University network, Operator shall be required to pay

the University a mutually agreed upon price for rental of necessary equipment, installation

of appropriate data security devices (e.g. firewalls), and maintenance of the

communications network. Operator will comply with UC PCI and Data Security

standards and policies as per Appendix PCI and Appendix DS. Operator will absorb all

expenses related to compliance to these standards including the cost to test and analyze

systems.

5.4 University Compliance. The University will comply with all other terms and conditions set forth in

this Agreement which are applicable to the University's performance hereunder.

6. TRANSFER OF OPERATIONS.

6.1 Initial Inventory. Prior to assuming operations of the Campus Store, a joint inventory ("Inventory")

will be taken of the Campus Store's merchandise, which shall include all Campus Store merchandise

at the Campus Store and any warehouse, in a manner to be agreed upon by the University and

Operator. Representatives of the University and Operator shall be present and shall supervise the

inventory. Upon completion of the inventory, Operator shall assume operation of the Campus Store

and shall open the Campus Store for business on the next business day.

6.2 Purchase of Inventoried Merchandise. Operator agrees to purchase merchandise included in the

Inventory as follows:

6.2.1 New Textbooks.

(a) All new textbooks that are formally adopted for the next academic term in

quantities not exceeding the course requirements will be purchased at standard industry discounts or cost, defined as agreed upon, based on actual store gross margins. New textbooks not formally adopted, but anticipated to be adopted, will be purchased on a consignment basis.

(b) All excess new textbooks, not adopted for the next quarter and not accepted for

return, will be purchased by Operator at the current wholesale price.

6.2.2 Used Textbooks.

Page | 10 OPERATING AGREEEMENT

(a) Used textbooks that are adopted for the next term in normal quantities, not exceeding

course requirements, will be purchased at the current new text-selling price, less fifty

percent (50%).

(b) All non-adopted used textbooks or adopted used texts in excessive quantities will be

purchased at their current wholesale price.

6.2.3 Trade, Reference and Technical Books.

(a) Trade books that are in saleable condition and are returnable to the publishers will be

purchased at standard industry discounts or cost, defined as agreed upon, based on

actual store gross margins.

(b) Trade books not meeting these requirements will be set aside and purchased at a

mutually agreed upon price.

6.2.4 General Merchandise.

(a) All general merchandise in saleable condition will be purchased at standard industry

discounts or cost, defined as agreed upon, based on actual store gross margins.

(b) General merchandise not meeting these requirements will be set aside and purchased

at a mutually agreed upon price.

6.3 Reserved Items. The University reserves the right not to sell to Operator any item or items included in

the Inventory at the University's sole discretion.

6.4 Full Payment. Unless otherwise specified in this Agreement, or by a writing signed by both parties,

Operator shall make full payment to the University for all merchandise purchased in accordance with

Section 6.2 of this Agreement within thirty (30) days after completion of the Inventory.

6.5 Vendor Credits. Operator shall purchase all usable University's outstanding publisher and vendor

credits at face value. Operator shall pay the University for such credits within thirty (30) days after

receipt of vendor confirmation of the transfer of credit memoranda.

6.6 Accounts Payable. Operator will assume existing accounts payables for all merchandise received at the

Campus Store after the Inventory. University shall pay for all merchandise received prior to the

Inventory.

7. COMPUTER SYSTEM AND NETWORK.

7.1 Virtual Campus Store. Operator will develop a virtual Campus Store for UCR, incorporating a full

selection of services and products. Operator will submit its plans to the University for advance

approval. The Internet-based virtual Campus Store shall be online by September, 2014. In addition, the

Campus Store Internet site shall also have textbook ordering capability no later than September, 2014.

7.2 Use of University Network. Operator may be allowed limited use of the University computer network

and/or information resources, with the approval of the University. In conjunction with appropriate

University personnel, Operator shall determine, and notify the University as to, what access, if any,

shall be required to link Operator to the University's Internet for communication and electronic mail

purposes.

8. CAMPUS STORE PERSONNEL.

Page | 11 OPERATING AGREEEMENT

8.1 Staffing and Training. Operator will provide sufficient personnel to ensure efficient and courteous

service to customers and will have adequately trained personnel available to substitute in the event of

regular employee absence. Operator will provide ongoing training in customer service. Operator will

formally recognize and applaud employees who provide superior customer service. As a matter of

policy, Operator will utilize and employ part-time employees and students to supplement the regular

full-time staff.

8.2 Current Campus Store Employees. The Proposer will assume 5 FTE existing Campus Store full time

employees. These positions will remain as UCR employees assigned to the Proposer. As these

positions become vacant (due to attrition, etc.) the Proposer will not be required to fill them with UCR

employees. The Proposer will supervise, manage, and train these employees.

8.3 Operator's Emergency Representative. Operator shall maintain 24-hour availability of a responsible

employee with decision making authority to be contacted in case of an emergency. Operator agrees to

maintain a schedule with the name and contact number of such employee, or his or her substitute, with

the University and the University Police.

8.4 Corporate Representative. At all times during the term of this Agreement, Operator will arrange to

have one of its corporate representatives available to meet with the University's representatives on the

campus within twenty-four (24) hours of a University request in order to discuss and resolve issues

related to the operation of the Campus Store.

8.5 Organization. Operator shall notify the University of Operator's organizational line of authority for

management personnel from the local Operator representative to the representative at the highest

corporate level. The University shall be informed of any subsequent changes in Operator's

organization.

8.6 Selection of Campus Store Manager. The University and his or her designees shall be allowed to

participate in interviewing and evaluation of Operator's Campus Store Manager. Selection of the

Campus Store Manager must be approved by the University. Operator's Campus Store Manager will (a)

have extensive experience in management of Campus Stores serving a University community (students,

faculty, campus); (b) be knowledgeable about Operator's philosophy and operational procedures, and

(c) must possess well-developed, written and oral communication skills, and (d) exhibit the ability to

deal effectively with University students, faculty and staff.

8.7 Replacement of Campus Store Manager. The University reserves the to request the replacement of the

Campus Store Manager, upon thirty (30) days' notice, for good cause, as determined by the University,

or if the University determines, in the sole judgment of the University, that such replacement is in the

best interests of the University. In such event, the selection of a new Campus Store Manager shall be

made pursuant to Section 8.6 of this Agreement.

8.8 Duties of Campus Store Manager. The Campus Store Manager shall be expected to meet periodically

with University deans, division directors and other faculty members. The Campus Store Manager, and

other appropriate Campus Store employees, shall be required to attend University staff meetings, and

other scheduled meetings as may be deemed appropriate.

9. RECORDS AND ACCOUNTING.

9.1 Books and Records. Operator shall keep and maintain accurate books and records of account in

accordance with generally accepted accounting principles for all business conducted at the Campus

Store, including all catalog and Internet business. Such records shall include a complete inventory.

Operator shall also keep all supporting documentation for Net Sales and exclusions or deductions from

Net Sales, including daily receipts, sealed cash register rolls, and serialized sales slips. Operator shall

Page | 12 OPERATING AGREEEMENT

keep and maintain the foregoing books, records, and supporting documentation pertaining to each lease

year for at least five (5) years after expiration of that Percentage Rent Period. Notwithstanding the

foregoing, if any books, records, or supporting documentation kept and maintained by Operator are the

subject of an audit requested by the University or an unresolved controversy involving the University,

Operator shall keep and maintain them until the audit or controversy is terminated.

9.2 Accounting. The University's accountants or representatives may exami.ne the books and records of

Operator for the purpose of conducting an audit of Net Sales, provided that (a) at least ten (10) days'

advance written notice is given to Operator, and (b) an audit is not performed more frequently than

semi-annually. If an audit discloses that the actual Net Sales generated by Operator for the period in

question are greater than Net Sales previously reported by Operator to the University, Operator shall

pay the excess amount to the University. If the excess amount is greater than three percent (3%),

Operator shall pay the full cost of the audit; otherwise, the University shall pay the full cost of the audit.

If the excess amount is greater than five percent (5%), then the University shall have the right to

terminate this Agreement. Any information obtained by the University in conducting an audit of

Operator's books and records shall be treated as confidential except in any litigation or proceeding

between the University and Operator, or as otherwise required by law.

9.3 Annual Statement. At the same time that Operator pays Percentage Rent under the Lease, Operator

shall provide the University with a written and itemized annual financial statement accounting for all

Net Sales and all permitted deductions or exclusions for the preceding year broken down by month

("Annual Statement"). The Annual Statement shall account separately for the Campus Store and

catalog sales, as well as any sales of other divisions in both the retail and catalog categories. The

Annual Statement will be certified correct by Operator's chief corporate financial officer, or at the

request of the University, by an independent certified public accountant reasonably satisfactory to the

University.

10. TERM. This Agreement shall be effective and binding on both parties as of the Effective Date and, unless

sooner terminated, shall continue full force and effect until the Campus Store Lease shall have expired or

terminated. Any termination of the Campus Store Lease, subject to the provisions of Section 10, below,

shall also terminate this Agreement as of the date the Campus Store Lease terminates.

11. TERMINATION.

11.1 Termination for Cause. This Agreement may be terminated for cause by either party by giving the

other party not less than sixty (60) days' prior written notice of the intention to terminate as of the date

specified.

11.1.1 Termination for Cause by University. The University shall be deemed to have cause to terminate

this Agreement if:

(a) Operator shall be in default of any of its material obligations under this Agreement or

under the Campus Store Lease and shall fail to remedy such default within thirty (30) days

after notice thereof from the University.

(b) Operator shall have breached a covenant, condition or warranty made in this Agreement

and shall fail to remedy such breach within thirty (30) days after notice thereof from the

University.

(c) Operator makes a general assignment for the benefit of creditors; or a petition is filed to

have Operator adjudicated a bankrupt (unless, in the case of a petition filed against

Operator, it is dismissed within thirty (30) days); or a trustee or receiver is appointed for

substantially all of Operator's assets.

Page | 13 OPERATING AGREEEMENT

11.1.2 Termination for Cause by Operator. Operator shall be deemed to have cause to terminate this

Agreement if the University shall be in default of any of its material obligations under this

Agreement or under the Campus Store Lease and shall fail to remedy such default within thirty

(30) days after notice thereof from Operator.

11.2 Termination for Convenience. The University, but not Operator, may terminate this Agreement for

convenience by giving Operator not less than one hundred twenty (120) days' prior written notice of

termination. Should the University terminate this Agreement for a reason other than cause, the

University shall pay Operator the depreciated book value (straight-line over ten (10) years) of all Tenant

Improvements made by Operator to the Premises as part of the initial renovation project, not including

personal property purchased by Operator.

11.3 Optional Continuation of Services. If this Agreement is terminated for any reason, Operator shall, at -

the option of the University, continue operation of the Campus Store for a period not to exceed six

(6) months from the date of termination, in accordance with the terms and conditions of this

Agreement, until a new contractor or the University is able to commence operations.

11.4 Resell of Merchandise. Operator will, following written notice from the University directing it to do so,

resell then existing merchandise to the University or to a succeeding company, in accordance with the

terms set forth in this Agreement for Operator's purchase of the merchandise.

11.5 Effect of Termination. Termination of this Agreement shall not affect any right of either party which

accrues prior to such termination.

12. RELATIONSHIP OF PARTIES. Nothing contained in this Agreement or the Lease shall be deemed or

construed by the parties or any third party to create the relationship of principal and agent, or partnership, or

joint venture, nor shall this Agreement be construed to authorize either party to act as the agent of the other.

In the performance of this Agreement, Operator is a tenant and independent contractor of the University.

Neither party shall order any merchandise or equipment, incur any indebtedness, enter into any undertaking

or make any commitment in the other party's name or purporting to be on the other party's behalf except as

expressly authorized by the terms of this Agreement, or by separate written agreement with the other

party.

13. NONASSIGNABILITY. Neither party may assign its rights and/or duties under this Agreement without

obtaining the prior written consent of the other party. Operator will not sublet or grant concessions to any

portion of the Campus Store without the prior written consent of the University.

14. NOTICES. All notices which are required or may be given pursuant to the terms of this Agreement shall

be deemed given two (2) business days after they are deposited in the United States mail, certified, return

receipt requested, with postage prepaid, or after delivery to a recognized overnight courier service, or on the

date personally delivered or sent by facsimile (with acknowledgment of receipt), addressed as follows:

To the University:

Associate Vice Chancellor

Student Affairs Administration

900 University Ave.

Riverside, CA 92521

Phone: (951) 827-3091

Fax: (951) 827-2248

To Operator:

[Insert Operator Info]

Either party may change its address for notice purposes by giving notice to the other party.

Page | 14 OPERATING AGREEEMENT

15. REMEDIES. In the event of a material default hereunder by either party, the non- defaulting party may

recover all damages and costs, including reasonable attorneys' fees, incurred as a result of such default.

16. WAIVER OF DEFAULT. The waiver by either party of any term, covenant or condition herein shall not be

deemed to be a waiver of any other term, covenant or condition, nor shall either party's consent to any

breach of any term, covenant or condition be deemed to constitute or imply its consent to any subsequent

breach of either the same or other term, covenant or condition contained in this Agreement.

17. TIME OF THE ESSENCE. Time is of the essence of each term and condition of this Agreement.

18. WARRANTY OF AUTHORITY. The person executing this Agreement on behalf of each party warrants

that such party is a duly organized and existing corporation and is duly authorized to execute this

Agreement.

19. FURTHER COOPERATION. Each party warrants to the other that it will cooperate in the prompt

execution and delivery of such documents as shall be reasonably required to affect the purposes of this

Agreement and the Lease.

20. BINDING EFFECT. This Agreement shall bind the parties and their respective successors and permitted

assigns.

21. SEVERABILITY. In the event that any provision hereof shall be deemed in violation of any law or held to

be invalid by any court in which this Agreement shall be interpreted, the violation or invalidity of any

particular provision shall not be deemed to affect any other provision hereof, but this Agreement shall be

thereafter interpreted as though the particular provision so held to be in violation or invalid were not

contained herein.

22. ENTIRE AGREEMENT, MODIFIATIONS AND AMENDMENTS. This Agreement and the Lease shall

constitute the entire agreement by and between the parties. To the extent of inconsistencies between this

Agreement and the Lease, this Agreement shall govern. Statements or representations not included in the

foregoing documents shall not be binding upon the parties. No modification or amendment of any term or

condition of this Agreement shall be valid or binding unless made in writing and signed by authorized

representatives of both parties.

23. GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the laws of

the State of California. This Agreement is entered into in Alameda County and proper venue for any legal

proceeding regarding this Agreement shall be in Alameda County. All actions or proceedings in any way,

manner or respect arising out of or from or related to this Agreement, shall be litigated in a California court

having a site within the County of Alameda, California, or a federal court sitting in the City and County of

San Francisco. Operator consents and submits to the jurisdiction of any such court. The parties hereto

waive any right they may have to transfer or change the venue of any litigation.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

UNIVERSITY: