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TA TOBACCO L
ATIGATIT PROTECTIVE ORDER I
B. E. BACON
11 C> rV
PO 1.1-iiis,ille. K, -totit. !kj I .102M
February 7, 1977
Secretary
British-American Tobacco Co. Ltd.
P.O. Box 482
Viestminster House, 7 MiUbank
London, SWIP 3JE, England
Dear Sir:
Under a Cost and Risk Pooling Agreement dated July 9, 1969 (as amended
June 20, 1974 and December 12, 1975), British-American Tobacco Co. Ltd.
("BAT") and Brown &Williamson Tobacco Corporation ("B&W") agreed to
share the costs of certain research and to make research information and
41- product development freely available to each other.
Over the past year a broad review has been made of the conduci and financing
of research among the companies. including B&W, affiliated with BAT and
engaged in the manufacture and marketing of tobacco products. This review
has served to underscore the importance of the centralized and coordinated
research program which is being carried out by BAT in support of long-range
overall Group strategy. It has also indicated the need to revise the existing
arrangements for sharing the costs of such Central Group research so that
those companies who benefit from that research will bear their fair share
of the overall expense.
In addition, it is considered desirable to encourage the separate research
programs carried out by BAT. B&M, and by other companies affiliated with
BAT and to allow each company to benefit from its own research efforts by
retaining proprietary rights to its developments.
Accordingly, effective with the fiscal year beginning October 1, 1976, the
existing Cost and Risk Pooling Agreement is rescinded, and a new agreement
shall apply under the following terms and conditions:
1. Affiliates. "Affiliates" means all companies engaged in the manufacture
and marketing of tobacco products in which BAT owns, directly or in-
directly, at least 30 percent of the voting stock.
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@B&W) PROTECTED BY MI PROTECTIVE ORDER
TOBACCO LITIGA
2. (a) Central Group Research* "Central Group (ie search" means the
central research and development work carried out by BAT for
the mutual benefit of itself, B&W, and other affiliates in the
following areas:
(1) Biological Research and Information
(2) Product Research
(3) Smoker Research
(4) Process and Engineering Research
(5) New Smoking Material Research
(b) B&AN' shall contribute to the cost of Central Group Rese&arch for
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each fiscal year ending September 30 an amount equal to 0. 1 576
of B&V"s net turnover for such fiscal year.
(c) B&W shall remit the amount of its contribution within 90 days
following the close of the September 30 fiscal year.
(d) B&.M' shall have royalty-free use in the United States of all
developments resulting from Central Group Research.
A-1 W will be promptly provided with information resulting from
(e) B&
Central Group Research.
:at
3. (a) Company Research. "Company Research" means all Research
carried out by BAT. B&W, and other affiliates except BAT's
Central Group Research.
(b)'. The cost of Company Research shall be borne by the company
carrying out such Research.
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(c) BAT. B&W, and other affiliates each 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 developments.
Sincerely,
BROVIN & WILLIAMSON TOBACCO CORPORATION
By
AGREED:
BRITISH-AMERICAN TOBACCO COMPANY LTD.
By_
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