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E. E. KOHNNORST
Vice Arasidont
R,-".-N,
&rnsrinweriAg August 27, 1986
Secretary
British-American Tobacco Co., Ltd.
P. 0. Box 482
Westminster House
7 Millbank
London SWIP 3JE
England
Dear Sir:
This letter states an a reement between British-
American Tobacco Co., age ("BAT") and Brown
Williamson Tobacco Corporation (IIS&W
1. BAT shall conduct a broad centralized program of
research projects ("Central Group Research") to
serve the Affiliates. "Affiliates" means all
companies engaged in the manufacture and
marketing of tobacco products in which BAT owns,
directly or indirectly, at least 30% of the
voting stock.
2 . BAT shall administer the research program in a
manner which maximizes the economic benefits of
centralization of the research. B&W anticipates
that substantial economic benefits will result
from the centralization of projects related to
particular areas of research.
3. B&WIs contribution to Central Group Research for
the 1986 calendar year shall be the amount of
$1,000,000. The amount covers B&W I share of the
substantial costs of maintaining the centralized
research program and of conducting research
projects of special interest to B&W. The amount
of B&W I contribution to Central Group Research

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for the calendar years after 1986 is to be
negotiated annually based on planned research
projects.
4. B&W shall remit the amount of its contribution
within 90 days following the close of the
calendar year.
-5. B&W shall have royalty-free use in the United
States of all developments resulting from Central
Group Research. BAT shall promptly provide B&W
with information resulting from Central Group
Research.
6. "Company Research" means research carried out
individually by BAT, B&W and other affiliates
except BAT's Central Group Research. Each
company shall bear the costs of its own Company
Research. BAT, B&W and other Affiliates shall
have full worldwide proprietary rights to all
developments resulting from their respective
Company Research, including, without limitation,
the right to patent and license such development.
7. The letter states the entire and exclusive
agreement pertaining to the subjects, except as
expressly provided herein.
Sincerely,
BROWN & WILLIAMSON
TOBACCO CORPO
By: Az@
E. E. Kohnbo-rst
Vice President, Research,
4@f Development & Engineering
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AGREED:
BRITISH-AMERICAN
TOBACCO CO., LTD.
By:
Title:
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