RkD COST SHARTNG. CONFIDENTIAT ITY AND LIC'PNC'F
AGRFFMFN-r
THIS AGREEMENT is made the day of 1992
BETWEEN BRITISH-AMERICAN TOBACCO COMPANY
LIMITED, whose registered office is situated at
Millbank, Kaowle Green, Stairics TW18 IDY
(hereinafter called "BATCo")
of the one part
AND BROWN & WILLIAMSON TOBACCO
CORPORATION on behalf of itself and its
subsidiary companies whose registered office is
situated at 1500 Brown & Williamson Tower,
PO Box 35090, Louisville, Kentucky 40232, USA
(hcreinaftcr called "B&W")
of the second part
WHEREAS:
A. BATCo has for many years maintained a research
and development centre in England
(hereinafter called "the Centre") and conducts and
commissions research and
development work for BATCo and its affiliates in
connection with or directed to the
devcloprncnt~ manufacture and sale of tobacco
products as follows:
(i) pmjccts which are spe6ifically and separately
commissioned by affiliates of
BATCo or by BATCo itself and which are paid for by
the commissioning
company (hereinafter called "Commissioned
Research").
(1 i) Central Research (as defined below) which is
carried out for the mutual benefit of
Participants (as defined below) including B&W.
B. Research areas and the cost of Central Research
are to be discussed and agreed annually
by BATCo, B&W and the other Participants.
IT IS HEREBY AGREED as follows:
Nothing contained in this Agreement shall preclude
B&W from conducting its own
research at its own expense and from having full
worldwide proprietary rights to all
developments resulting from such research.
2. (a) "Central Research" means the research and
development work carried out by or
on behalf of BATCo (not including Commissioned
Research) in the following
areas:
(i) product research
(ii) smokcr research
(iii) process and engineering research
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(b) "Research Material" means data (including data
held in clectronic or other non
material form) and information (including process
and product developments and
rclatcd information) resulting from or arising out
of Central Research as may be
agreed to be of value in (i) the development,
manufacture or sale of tobacco
products in the USA and (ii) research and
development work undertaken by
B&W.
(c) "BATCo Documents" means the Research Material
and copies thereof and any
other documents or material in B&Ws possession
whether prepared by BATCo
or by B&W or by any other person containing
information which is included in
or derived from or refers to the Research MateriaL
A "Participant" means any company (including B&W)
listed in the schedule hcreto
as amended by notice from time to time by BATCo.
3. B&W shall make an annual contribution to the
actual cost of Central Research
hereunder. The amount of B&Ws contribution in each
year shall be calculated in
accordance with the following formula:
Cost of Central Research X B&Ws net turnover
(excluding sales to other
Participants or companies within the BAT
Industries Group)
- ----- - ----------------------- - - - ---
total net turnover of the Participants (excluding
sales by each Participant to other Participants or
companies within the BAT Industries Group).
For the purpose of this calculation "net turnovee,
means net turnover excluding duty and
excise taxes arising from the manufacture and sale
of tobacco products (finished goods)
during the relevant year or in the case of a
Participant's financial year ending on a date
other than 31st December during that Participant's
financial year ending during the
relevant year.
B&Ws contribution shall be paid in the following
trianner. BATCo shall in the first
quarter of each year estimate the amount payable
by B&W under this Clause in that year.
Such estimate shall be based upon the estimated
cost of Central Research for the relevant
year and the net turnovers of the Participants
during the previous financial year. The
amount so estimated shall be invoiced by BATCo to
B&W. In the month of April in the
following year, the charge for the previous year
shall be recalculated by BATCo on the
basis of the actual cost of Central Research and
the actual net turtiovers of the
Participants for the previous year. Any difference
between the amount due under such
calculation and the amount previously paid by B&W
on the estimated basis shall be
invoiced by BATCo to B&W or, as the case may be,
credited by BATCo to B&W.
Invoices issued by BATCo under this Clause shall
be payable within 90 days of the date
of issue. B&W may, within 90 days of the date of
issue of an invoice or credit note in
respect of B&Ws contribution for the previous
vcar, request, in which event BATCo
shall provide, either an accountant's or an
auditor's certificate confirming the actual cost
of Central Research in the relevant calendar year
provided always that this obligation
shall only apply where such confirmation is
requested and arises out of or in connection
'
with tax~t=,
exchange control or other fiscal purposes in the
USA. Where B&W NJ
requests an auditoes certificate the Ml amount of
the auditoes fees and other expenses C:)
incurred in connection with the provision of the
certificate shall be reimbursed by B&W
to BATCo upon provision of the certificate. C:~
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4. (1) BATCo shall provide B&W with Research
Material created in accordance with
the provisions of this Agreement and B&W shall
during the life of this
Agreement irrevocably have royalty-firce use of
this Research Material and
developments resulting therefrom in the USA and in
each other country in which
B&V,rs marketing, export sales, licensing for sale
or licensing for manufacture of
a product constitutes a use of Rzscarch Mawrial.
(2) BATCo grants a right of access by B&Ws
scientific research personnel to the
Centre and to Research Material held there for the
purpose of observing progress
with Central Research and for scientific
consultation in connection therewith.
(3) Subject to Clause 5(4) where a specific
programme of Central Research to which
B&W has contributed generates a patent which is
licensed by BATCo to a third
party which is neither a Participant nor an
affiliate or associated company of any
Participant BATCo shall pay to B&W such proportion
of the net income BATCo
receives from the said licence (after deduction of
all costs of maintaining and
enforcing the patent and any other costs in
relation to the patent or licence) as
B&Ws contribution to the programme which generated
the said patent bore to the
total cost of such programme.
5. (1) The Research Material provided under 4(l)
or made available under 4(2) hereof
by BATCo to B&W pursuant to this Agreement is
confidential to BATCo and
shall be accorded Rill security protection (and in
any event no lesser standard of
security protection than B&Ws own most
confidential research information).
(2) B&W will retain the Research Material provided
or made available hereunder in
confidence and shall not without the prior consent
of BATCo disclose. the same to
any third party except third parties which have
executed a confidentiality
agreement in the form shown in the Appendi?- B&W
will advise BATCo of all
disclosures being made and proposed to be made
under this provision.
(3) B&W will upon request immediately return to
BATCo all BATCo Documents.
The obligations of confidentiality in (1) and (2)
above and this obligation to
return the BATCo Documents to bATCo shall not
apply to information which is
or comes into the public domain other than by
breach of these obligations or of
any other obligation of confidentiality owed by
B&W to any of the Participants.
(4) BATCo has full worldwide proprietary rights to
the Research Material including
inter alia the right to patent inventions and the
right to license product processes
and know how described or contained therein or
resulting therefrom and the right
to license said patents provided that BATCo shall
not license any third party to
use any such inventions products processes and
know how (whether the subject of
a patent or not) in the USA without B&Ws prior
written consent which consent
shall not be unreasonably withheld.
6. This Agreement shall be deemed to have taken
cffcct on Ist January 1991 and shall
terminate on a change of control of B&W after the
date hereof bein2 a chanec other than
within the B.-kT Industries Group.
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BAT Industries doCUrnent for Province of British
COIUMbia 12 Novernber 1999


This Ag=mcnt may also be terminated by either
party giving no less than twelve,
months written noticc of termination to the other
party such notice to expire on
December 31 of any year. Without prejudice to
Clause 4(l), immediately prior to
termination B&W will comply with the obligation to
return the BATCo Documents as
though BATCo had specifically made the request
mentioned in Clause 5(3). The
obligations of coafidcnUity contained in Clause
5(l) and (2) shall endure beyond the
terryination of this Agreement and such
termination shall not end or impair any
out-t-ndine licences granted hereunder.
7. In relation to Central Research carried out
since Ist January 1991, any prior agreement
for the sharing of costs of Central Research is
hereby automatically cancelled, but any
Research Material (as herein dcf=d) which has been
provided to B&W under such prior
agreement shall continue to be available to B&W
but, without prejudice to any rights or
licences actually granted to or by B&W thereunder,
shall be deemed to have been
supplied an the temis of this Ag=crr=nL
8. This Agreement shall be govcmcd by and
construed in accordance with the Laws of
England and the parties hereby submit to the
exclusive jurisdiction of the English Courts
except that this submission to that jurisdiction
shall not preclude the parties from
agreeing alternative means for resolving any
dispute between them arising hereunder.
AS WITNESS the hands of the duly authorised
representatives of the parties hereto the day and
vear first above written.
WITNESS
SIGNED BY
DIRECTOR
WITNESS
for and on behalf of
British-American Tobacco Company Limited
SIGNED BY
DIRECTOR
Rcf. opgroups/BATC&R&D-agrc
for and on behalf of
Brown & Williamson Tobacco Corporation
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BAT Industries document for Province of British
Columbia 12 November 1999


APPEND[X
To: Brown & Williamson Tobacco Corporation
Gentlemen
We write to confirm that in consideration of your
agreeing to disclose to us certain proprietary
information of a confidential nature, we undertake
as follows:-
1. We will accept and keep such information in
confidence and will restrict its distribution
to those of our emp loyces who need to know such
information for the purpose of [insert
purpose of disclosure] and who have been informed
of the terms and conditions of this
undertaking as to the confidential nature and
treatment of the information and directly to
comply therewith.
2. The information will be held in confidence and
not disclosed to any third parties
(including our affiliates) for [a minimum period
of five] years from the date of this letter,
and we will take necessary and reasonable
precautions to prevent any such disclosure
during that period, and will destroy or return all
copies of such information and of
documents incorporating any substantial part
thereof as and when requested by you.
During the same [ ] year period, we will not use
such information for commercial
purposes without your prior written consent.
3. The foregoing commitments will not, however,
extend to any information disclosed
which was publicly known prior to disclosure
pursuant to this undertaking as evidenced
by written records, or becomes publiciv known
after such disclosure through no act or
failure on our part.
4. Disclosure will not be construed as the grant
of any licence, or of any right to use the
information except for the purpose stated above.
for and on behai f of
COMTANY X
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SCHIFTILITY.
Ust of Participants
1. British-American Tobacco Company Limitied
2. B.A.T Cigarettenfabrikcn GmbH
3. Brown & Williamson Tobacco Corporation
4. Imperial Tobacco Limited
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BAT Industries document for Province of British
Columbia 12 November 1999