Tobacco Documents Online

r¸ j ...... ; I. ( ::lL~"'r - 23.2 73 ~SV~ iqLODOCT AG]I~F;,iTNT T II I S .% G R E F. t,1 }~ N T is mnde tlm day oC 1973 B E T W i-'. Z N G'TL:,:IN,~c~:: s;"0;':~ r.r;,~r'~rl} whOSe rcF.ir.tered olfice is nt Sv;ord Work~, ;;euthf~e!ll Ro:.',I, ;o)~dm), lVd 5LE ("i~ i Iki nson" ) and DR lTJ Ull =A,',11.:l~ rCA:.: 'I OI!ACCO C('tIPA~'~%' ], [ :,:l'. ED whose registered office is ut P.O. Do:: .lgS, Wo.ctlg)llStt, r l[otlt:c, 7 Mzllbar~It, London Sl1"iP 3JE ("D.A.T.") V~" [ T ': E S S 7, T II T II A T: ~}~IERL~S (I) ~%'ilkJllSOll has deve]ol)ed a ser~es cf compounds for Jmvartln(= a coo[~r~:.. ¢~'ffcct to (intql- alin) tobacco p~OdllCtS fl:Id SI;IL,kJll~ accessol'ies mid these compouhds tony mal:c p~ssib.~e the sate by I].A.T, of new or improved tol)scco produi:ts and smokinK accessories ; s|~cl (2) B.A.T. wishes to srrcn~e for tile further eval~:aticn of such compo~,nds and 1:O obtain commitments o,[ access to Snformat$ol~ md supplies on the terms p~ovided heroin; NOW IT IS }IHHEHY AGREED as fel[o~.s:~ DEF INTTr O':S In %his Agreement the fellowSn~ oxp1°essions 9])all mea:):- "~he Compounds" "the Products" ° ~)Net Sales" s series of p,%v,%month~ne derivative ccz~pe~nds or any one the).,~of developed by Wilhinson for ~mpart~nE ,~ cooling effect to (i,~ter alia) tobacco pro)ducts and smc.hJ!~F, access- o~- J es one or mol-e tol)sceo produots el' s:';c!:ir'~ aCCOSSOA'iCS ]I~COI'~IC)Y.ItJI%~. tile (~.£.)~I!)OU;!'J'.4 ()i~ ~,,a~e by USe Of 1he tec!~=~i,'q). '~nfOrr)n).~,O~) supplied h)" ~"JlkJnson hereunder- in the c~se of smo].;i~ acce~s<~r~es e~)mpr~se~ withiu the deflnitibu of "the Produces)': gross .~ales less re~urns and allowances m:tual)y g~v,.m and af£er deductin~ any taxes on sales or co.~s of hand|ing, Jtl~rance or d@l/v~rv ['.Jlled I:o customers (the sales p~ce b,)i;~ ad.iusted ~s nece~;~arv in the cas~ of '.'ales Co a/fiii,qlrd ctls~om~rs so an I~O eOrrot:|~ont[ to £h-.' sales price e×Len¢led to urln/fiI :aC,d customc.rs~ aml Jn¢.iud~Z .~:ales <,r 5fft~ of sUCh l)rodu~ts ~:£the~ ~;[th o~hcr 0 0 0 BATCo document for Legal Services : Health Canada 27 November 2000

- 2. - "Net ~:lles" cunttd "tile initial Launch" - , products at a si~zgle I,t'ice or ut:hcv~:Jse (~.'hich such .,:a)cs or gi[t:~ ,.hall 1,e deemed to h;tve been al ILA.T.'s u:a,al price for sat~s thc,:.of Lo third ~)"}~'ty CUStOtl;I.~I'S i|* boIh"l fid~ ~r;.s 1,~.gth it;resection&) il~ the C;LSe of pt'odI1c~ oEhcr £hnn smoking ~cces:;ortcs, .ind comprised wlthin the ~ofitti~o:~ of "the rroduc~s": all sales ]ess returns nnd incl.dhls~ sales or gifts of such products either wi~h other pL'oducts at a single price Or otherwise the dace af the first supply sa]e offur or advertiscmc,~c of £hc Products ; .Ind cognate expressions :;h:,l[ bu co.sCrued a~curdlngly • W~LK INSON' S OIIT,TC~TICNS 2.1 Wllkinson will on D.A.T~s requuut supply D.A.T. with l, ll w1-~.~, technical information in %%'ilk'-nson's l~ossesslon v.'ith respect to the Compounds which is pertinent to the use of the Compounds i'l tobacco products, such information including without limitation data cn amou:its of the Compounds necessary to achieve designated physio]osical effects, compatibility o~ the Compounds with oiher Ingredlents a:id d.~ta cn pharmacology and toxicology. "I"o provide additlostal info:-mat~on on ~he subject of this Agreement Wilkinson will also at the rctluest ~nd expense of B.A.T. make available 1:o B.A.T. for const~Itation up £o three of Its-techllical personnel familiar :t'Jth the characteristics of the Compounds for periods of up to thirty man-days in troy c~l~.ndar year during the period of tbisAgreem~nt prior to the dat~. of commencer..nl of mnrketin~ of the Products. 2.2 Wilkinson wil% on D.A.T!s request s~pDly on its normal tee'~;s ni~d conditions of sale sl~d subject to a~ly circumstances beyoHd i~s reasonable control amounts Of the Compounds In qumltities sufficient to meet B.;\.T's manu~acturin~ requirements for the Products at prices equivalo,~t to ~he cost thereof to Wilkinson plus IC~',~, subject to B.A.T's pLacin~ firm orders for such quan£1ties with reasonable sdvs~ice notice specified hy Wi Ik~nson. 2.3 If B.A.T. prefers tO obtain sttpplies of the CoT~potlnds from sources other ~han %gilki~son, Wilkinson will on req~e:;t ,~ra~t i%.A.T. such non-oxcIilsive licenses under any Uniter) }{inV, dom or foce~<n )~:~(,~IS or Cechnolol/y owned or contrulled by V:ilki*~son ns mgy l~e :',e~.t,~'_:nt'v ~e permit ~h~ manufacture and t~se of the Cn~po~.,ds or the ~a~o o~ th,. Products. Such licm~es ~hal] bear ,-eynti~es ~t a ,a'.e of ~O[ of Ib s:~les or ft,}r m~trket vt%tu~ (~O be dct'or!;}iued by reference ~o bo~a fid~ a~ms lenZth tt-n..~nc~ions) ,>f ~he Cenq-.~,ndn n'zd,, ~z..:~d ~: sold pursum~C to such Licenses. O czD t/3 O C J3 ¢X9 BATCo document for Legal Services • Health Canada 27 November 2000

::::.~,:.:.. R ' .... 3. f ,_jI ° ~'ilhin~e;~ of f~-r~m .~O~;l'C'ms nlhOt• l|iml {;'i11:i~,;ou, l'iIhill:~c.l, ".~ill ill to the Combound~. 2.G To provide B.A.'j'. with ~ reasolmhle oPpor~.ni~y to r~'~'nptuce i's expense~ of evaluaLion of the Cn:;tl~O~lldS a;ld dcve|o[~rnOll~ niid ¢Om~,ere~l inCrod~etion of the Products, B.A.T. w}]l for ~ ~nr~od of f~v~ years from tl~e date hereof be [l~e. on}y m,', state co~'o~l ~[¢~,)-~ mnnuf~cturer of tobacco ])rodllets¢ to v:ltich tVilk~nn¢~n ~vi~l f~v~h ~he Information described in Cia~se 2,1 h~u'eof for the p~,~'rpese o;" o)~abting such manufncture~, to use the Compound:: in tobn~o prod,m~s or ~mo!¢~n~ accessories. I$'llkinson will not tx~ obli~:c-d however £o place a~Lv restrictions on the u.=.~ o£ the COI11p¢311111|S ~0'~({ b%° ~[ O~ man;~fac~urmd under licence from {t or to refz'~in from salP o[" the Compounds to others. B.A.T,'S OBLIGATIONS 3oi B.A.T° will ;~rocecd d~ligently in ~ts e:'alunticn of the Compound~ and the incorporation of tlle same into such of the Produces n.~ D.A.T. in the exe~'cise o£ [ta sole discretion shall determino ~o lm=uch. 3=2 In consideration of the obligations tmdertak~n by Wilkinson hereunder B.A.T. will m~ke the follo~ing fixed ,rid cont~ngc~,~t pa)~ents to ',Yi Ikinson: 3.2.1 On signature of this A~ree:.,o~t £25 £%~=~0 3.2.2 "fwo]ve mcllt]ls from tho dnl.n hereof~ unless n.A.T, notifies Wjll:~n.~en [n writJn~ on or before that date that it elects to terminate th~s Agreement or unless such dste fails nf~er the initial Launch of ~he P~oducts, a further sum of rl~__cz_OOO 3.2.3 Eighteen months from the daLe b~reo~, unless B.A.T. notifies b"i]kln:~on il~ w~jting on or before ~ha~ date tha~ it elects to terrain&to ibis A~reemont or unless such date falls after tile . iniEial Launch of the ProducEs, .. a further sum of £20,000 3.2.4 Unless halite of termination has bern ~iven in accordance with Clauses 3.2.2 Or 3.2.3 above, Commonci~ on the e~rlier of (a) the expiration of ~he ri~&ts of tm]'mination provided "~n .miCh Clauses O~ (b) tl,e zuitial Launch of ~he Products 0 0 Lf'I 0 BATCo document for Legal Services • Health Canada 27 November 2000

-4- 4, roynlt:~es at the followi.g rates on I}.A.T's Net Sales of the Product.:,. subject to the mSuimum payment set o.t below;: t'r6d,cts other t:h.1, :~mol.i.~_ Aimua ! S;;I US First one milliou Kgms Next four million l'gn,.s Excess Smokin~ ;tCCeSSOL'iC'~ only All sales ~irlim, u.;.~uaLt=_rlv l:avmmlt (lqc~,: Pence) 10p per l'gm 5p pec Kgm 2;) per Kgm (/k'r c m~ t a_$.~) 4% of Net Sales 3.3. B.A.T. will forthwith after the happening thereof noti[y Wilkiuson in writing of the initial Launch. 3.4 Royalties shall be F~yable i. sterling in London ~'t:hin thirty days from the end of each cnle,ld;;r q,,.~rter with re~pect to all royalty-beaciiig sales prloc to the et~d of st~ch quarter not previously accounted for, and shall in the case of smok/1,g accessories be computed in the currency ~n whirl, the payment for each snlc is made con-,crted at the official closing rate ruling in Lottdou at the e~I¢[ o~ such quarter. Adju.':tmeu~s to correct quat't~:rly m~tlerpaynlonLs or overpayments sh:~[l be made an~u:ally within 30 days of the anniversary of this Agreeme,,to GEHEILAL PROVISIONS 4.! Itlformation f.rnishcd by either party to the other hereunder and designated confidential shall be held Jt~ confidence by the recipient with the same degree of care £[lat it exercise=,: ~.Hth respect to its own proprietary information a,~d shall not be used or disclosed ~o others except pursuant to the terms hereof. This undertaking shall not apply to information available to the public, information which cas be shown to have been already in the possession of the recipient when received, or information lawfully received from third parties. This obligatiou shall survive termination or expiration of this Agreement. 4.2 B.A.T. shall bear full responsibility for the Products and for any c]aims or represe:itations made by B.A.T. in respect thereof. (ID O Un CD C7", CID BATCo document for Legal Services : Health Canada 27 November 2000

-5- ,.. • ..,.~.:., I '[his A~:veemcut r.lu~II expir," t,'. y,.,,r~ rY,.. tl... illiti.~.l l,a,.lch ol:." tile FL'oducts b.~ may be Lc~~.i,~atcd with i.nm~e.di:ite effect prior ~o ~,ch e-;l~jraL:iol 1)y ~¢t:~th~:~ notice in the followi.g circumstaucms:- 4.3.1 by TLA.T. as provided in Clnusc 3.2 hereof 4.3.2 by Wilkinson if B.A.T. a,h,~ses t4i]k~,so,~ that it does not intend to launch the Pr~ducts or if B.A.T. does ~ot |:~u~:h the Products ~ith~n - = si× months of the e×piratio:, ~f B.A.To'S rights of termiuation under Clm,s~' 3.2 ahove or if airy royalties payable hereunder a,.'e in hi'rear 4.3.3 by ei~'her party if the aglwcg.l~e roya11~'~.~ go,crated by Net Sales of the Product:; do not exceed the minimum provi~Jed in Cla, se 3.2 hereof for e~ch of two successive years fol~otcj~,g the iuit~a[ l.~ul,~:h of the Produ~:~.s (other tha,~ I:he first veaL- ¢hereafter) 4.3.4 by either party if tlm other pnrty defn,lts in the performance of any mater~.~l obli~;atio~ (el her than the obligation to pay royalties) ce~t:,~:~ed heu-e~n and fails to remedy such default within thirty days of receiving notice thereof from Lhe agg~'~ev,-d party or if the other party ha.s a receiver or manager appointed of the whole or any part of its undertak~nB or as~-eCs or an order is made or a resolution ~s passed for the ~;~ndi~g-.p of such other par=y (other th.~,~ for the p-rpo.re of amalgamation or reco.n~vr.ctjo:~). 4.4 Royalty payments here..der .~hn]l he ;]ccellil~n~,Jd by fully detailed state.nlents co,~t.~in~ng the b:,,'~is of coml;~,tat*lon of royalties and shall'be certified as accurntn by ILA.T~s a:~d~tors at B.N.T's expense, B.A.T. shall maintain record:: co,,ta~ui.;: f~ll information rega~d|~g the mm~ufsct,re, sale or other d~.~pos:~l of the Products and all data necessary for the proper comF,~ta~io~ of roynlty payments hereunder and Wilkinson's dt~ly authorJsed repre~;enratives shal] h~ve the right at all reasonable t~mes to i,spect such records and take copies thereof or extracts therefrom. 4.5 Notices and other ¢ommunicatio,s hereu,~der shall be sent or delivered to the addresses set o,I: nt the heg~u~ng of this Agreement or such ether address as shall have previo~sly b~,c,~ notified G L_,m O BATCo document for Legal Services • Health Canada 27 November 2000

v -6- to L'he ::eu,lcr in writhing. &.6 ThEs Agr'eement shall not b,: ,~.':~.~Eg.ed by either of the' "~ti-es hereto without the prior wL-ittc, co~.~cnt of Lhe other. 4.7- This Agreement embodies the el~tire agree~lent between the parties with respect ~o the subject matter hereof a~id ,;ay be modified only in writing. 4.8 This Ag~eement shall be governed by a~d con.~trued in accordance with the law of England, AS ~,~ITNESS the hands of the parties hereto by their duly authoL-ised representatives as of the da~e fJ~-st before writf:cu. • WILKINSON SWORD LINITED By BRITISH-A~RICAN TOBACCO COMPANY LI~IITED By CID 0 CD 0", BATCo document for Legal Services • Health Canada 27 November 2000

] ~J? 3 (~ - and - BRITISII-~I~;EIIICAJ~ 'rOBACCD C/)'.!PA':Y L~',I II;D :::..:.~. DRAFT/ i~J~l'? PRODUCT AGIU~:I:L'I.:I,"r Dllt/alIf23.2.13 C~ .CD ~D C~ C~ BATCo document for Legal Services • Health Canada 27 November 2000

BRITISH-AMERiCAN TOBACCO COMPANY LIMUFED DRAFT. Wilkinson Sword HEADS OF AGREEMENT I. W.S. agree to license B-A.T. to make and use in tobacco products the materials covered by the patents in the countries as given in the schedule attached. 2. B-A. T. will pay to W.S. a royalty based on total sales in the scheduled countries of cigarettes (or equivalent) incorporating materials covered by the scheduled patents. This royalty will be at the rates indicated: For the first ten million cigs. sold x~ (U. S. A. ) per thousand. For the next 90 million cigs. sold 0.5x~ " For the next i00O million cigs. sold 0. lx~ " Thereafter at O. 05x~ " " " A minimum royalty of $I00, D00 (U. S. ) will be paid by B-A. T. for the first year and $50,000 (U.S.) each year thereafter. , W.S. will not license other tobacco manufacturers or others for use of the materials on tobacco products until after five years from date of this agreement and thereafter wiI1 not license others at terms more favourable than those applicable in any particular country for B=A. T. . This agreement shall run in each country scheduled for the life of the patent(s) in that country or until the patent is abandoned or ceases to be effective in providing exclusivity to B-A.T. or any other licensee. . This agreement covers all tobacco products on the following basis: 1 cigar is equivalent to the number of cigarettes which would give the same weight as the cigar calcu.lated at !gin per cigarette. 1 oz. pipe tobacco is equivalent to 25 cigarettes. . This agreement can be terminated by B=A.T. giving one year's notice. , After 5 years W.S. may, by giving one year's notice delete any country from the schedule covered by this agreement where relevant sales have not reached 0.2% of the total market for cigarettes. SJG/FA:8. 1.73. o o 0 BATCo document for Legal Services • Health Canada 27 November 2000

/i BRITISH-AMERICAN TOBACCO COMPANY LIMITED DRAFT Wflklnson Sword HEADS OF AGREEMENT I, W.S. agree to license B-A. T. to make and use tn tobacco products the materials covered by the patents in the countries as given in the schedule attached. 2. B-A. T. will pay to W, S. a royalty based on total sales in the scheduled countries of cigarettes (or equivalent) incorporating materials covered by the scheduled patents° This royalty will be at the rates indicated: For the first ten million clgs. sold x¢~ (U.S.A.) per thousand. For the next S0 mlll~on,clgs, sold 0.5xd .... " For the next 1000 mflllon clgs. sold 0. lx~ " ,! It Thereafter st 0.05x~ " " " A minimum royalty of $I00,000 (U. S. ) wil! be pald by B-A. T. for the first year and $50,000 (U. S. ) each year thereafter. 3® W.S. will not !Icense oilier tobacco manufacturer.,] or others for use of the materials on tobacco products until after five years from date of this agreement and thereafter will not license others at terms more favourable than those applicable in any particular country for B-A. T. 4~ This agreement shall run in e~ch country scheduled for the life of the patent(e) in that country or until the patent is abandoned or ceases to be effective in providlnff exclusivity to B-A. T. or any other licensee. . This agreement covers all tobacco products on the following basis: 1 cigar ia equivalent to the number of cigarettes which would give the same weight as the cigar calculated at lgm per cigarette° 1 oz. pipe tobacco is equivalent to 25 cigarettes. 8e This agreement can be terminated by B-A. T. giving one year's notice. 7, After 5 years W.S. may, by giving one year's notice delete any country from the schedule covered by this agreement where relevant sales have not reached 0. 2,% of the total market for cigarettes. SJG/FA:8. I. 73. 0 0 0 BATCo document for Legal Services • Health Canada 27 November 2000

CO ~> --4 C) 0 0 C 3 o r- tQ O) cD ml CD le "1" m Ck -q Z o < t~ 3 O" t~ 0 0 I