UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 8-K
CURRENT REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): September 28, 2015
Reynolds American Inc.
(Exact Name of Registrant as Specified in Charter)
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North Carolina |
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1-32258 |
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20-0546644 |
(State or Other jurisdiction
of Incorporation) |
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(Commission
File Number) |
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(I.R.S. Employer Identification No.) |
401 North Main Street
Winston-Salem, North Carolina 27101
(Address of Principal Executive Offices) (ZIP Code)
Registrants telephone number, including area code: (336) 741 2000
Not Applicable
(Former
Name or Former Address, if Changed Since Last Report)
Check the appropriate box below
if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 1.01 Entry into a Material Definitive Agreement.
On September 28, 2015, Santa Fe Natural Tobacco Company, Inc., a New Mexico corporation (SFNTC), R. J. Reynolds Global
Products, Inc., a Delaware corporation (RJRGP), and R. J. Reynolds Tobacco B.V., a Dutch private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid) (RJRT BV, and together with SFNTC
and RJRGP, Sellers) entered into a definitive agreement (the Purchase Agreement), dated as of September 28, 2015, with JT International Holding BV, a Dutch private company with limited liability (besloten vennootschap
met beperkte aansprakelijkheid) (Buyer) and, for certain provisions of the Purchase Agreement and as guarantors, Reynolds American Inc., a North Carolina corporation and the direct or indirect parent of Sellers (RAI), and
Japan Tobacco Inc., a Japanese corporation (kabushiki kaisha) and the parent of Buyer (JT).
Pursuant to the Purchase
Agreement, Sellers will sell, and Buyer will purchase, the non-United States operations of Sellers Natural American Spirit brand (the Business and such transaction, the Transaction).
The purchase price for the Business is $5 billion in cash (subject to customary adjustments for closing date levels of cash, debt and working
capital), for which Buyer will acquire (1) the intellectual property of SFNTC relating to the Business and (2) subsidiaries of the Sellers in Belgium, France, Germany, Italy, Japan, the Netherlands, Spain, Switzerland and the United
Kingdom through which the Business is conducted (collectively, the Acquired Companies).
The Purchase Agreement contains
customary representations, warranties and covenants made by Sellers and Buyer. The Purchase Agreement also contains a guarantee of Sellers obligations by RAI, and a guarantee of the Buyers obligations by JT. Further, in the Purchase
Agreement, RAI agrees not to compete with JT in the business of producing, selling, distributing and developing natural, organic and additive-free combustible tobacco cigarettes and roll your own or make your own tobacco products outside of the
United States, and JT agrees not to compete with RAIs conduct of such business in the United States, in each case, for five years following the closing of the Transaction.
Pursuant to the Purchase Agreement, concurrently with the closing of the Transaction, Sellers and Buyer, and/or their respective affiliates,
will enter into various ancillary agreements. These agreements include: (1) a brand and product integrity agreement, in which SFNTC and Buyer will agree, for a limited period, to (A) certain restrictions on use of the Natural American Spirit brand
and related trademarks; (B) quality standards for specified products sold under the Natural American Spirit brand; and (C) a process for collaboration to maintain and enhance the equity and goodwill of the Natural American Spirit brand; (2) a leaf
supply agreement, in which SFNTC will agree to supply Buyer with its requirements for specified tobacco leaf for a limited period and on a non-exclusive basis; (3) a contract manufacturing agreement, in which SFNTC will agree to manufacture
specified products sold under the Natural American Spirit brand for Buyer; (4) an intellectual property transfer and license agreement, which will provide for (A) the sale to Buyer of all of SFNTCs rights to the non-U.S. trademarks and other
intellectual property and goodwill associated with the Business; (B) the assignment of certain trademark and co-existence agreements to Buyer and (C) the grant of licenses to Buyer to use other intellectual property relating to the Business; and (5)
a transition services agreement, in which Sellers and Buyer will agree to provide each other with various services related to the Business for a limited period to facilitate an orderly transition of ownership of the assets and properties relating to
the Business from Sellers to Buyer.
The obligation of each party to consummate the Transaction is subject to customary closing
conditions, including, among other things: (1) the absence of legal restraints in effect that would prohibit the Transaction; (2) obtaining certain required antitrust approvals related to the Transaction; (3) the accuracy of the other
partys representations and warranties (subject to
certain materiality exceptions); and (4) the other party having performed in all material respects its obligations. The obligation of Buyer to consummate the Transaction is also subject to
the non-occurrence of a material adverse effect relating to the Acquired Companies, the Business or the ability of Sellers to perform under the Purchase Agreement.
The Purchase Agreement contains indemnification provisions with respect to breaches of representations, warranties and covenants and with
respect to other matters, including potential litigation relating to specified claims. The indemnification obligations are subject to customary limitations as set forth in the Purchase Agreement.
The Purchase Agreement may be terminated by mutual written consent of RAI and JT, and contains certain termination rights for each of RAI and
JT, including the right of either party to terminate the Purchase Agreement if (1) the Transaction has not been consummated by February 29, 2016 (the End Date), subject to an automatic three-month extension if, on the End Date,
the Transaction has not yet been granted certain required antitrust approvals but all other closing conditions have been satisfied; (2) a final and nonappealable governmental order has been issued that prohibits the Transaction; or (3) the
non-terminating party breaches its representations and warranties or fails to perform its covenants in the Purchase Agreement in any material respect and in a manner that cannot be cured.
In addition, pursuant to the Purchase Agreement, RAI will be entitled to receive a termination fee of $175 million in the event that the
Purchase Agreement is terminated by either RAI or JT because (1) a governmental authority has issued a final and non-appealable order that prohibits the Transaction on antitrust grounds or (2) the End Date (including the extension) has
passed and, in either case, the condition to closing that relates to obtaining the required antitrust approvals is the only condition to closing that has not been satisfied or waived.
The foregoing description of the Purchase Agreement does not purport to be a complete description of the terms of such agreement, which are
qualified in all respects by reference to the complete text of the Purchase Agreement, a copy of which is being filed as Exhibit 2.1 hereto and is incorporated into this Item 1.01 by reference.
A copy of the Purchase Agreement has been included as an exhibit to this Current Report on Form 8-K to provide investors with information
regarding its terms. It is not intended to provide any other factual information about RAI, JT or any of their respective subsidiaries or affiliates. The representations, warranties and covenants contained in the Purchase Agreement were made only
for purposes of that agreement and as of specific dates; were made solely for the benefit of the parties to such agreements; are subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosures;
may not have been intended to be statements of fact, but rather, as a method of allocating contractual risk and governing the contractual rights and relationships between the parties to such agreements; and may be subject to standards of materiality
applicable to the parties that differ from those applicable to investors. RAIs investors should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or
condition of a party to the Purchase Agreement or any of its subsidiaries or affiliates. Moreover, information concerning the subject matter of the representations, warranties or covenants may change after the date of the Purchase Agreement, which
subsequent information may or may not be fully reflected in RAIs public disclosures.
Item 8.01 Other Events.
On September 29, 2015, RAI issued a press release announcing the entry into the Purchase Agreement. A copy of the press release is
attached to this Current Report on Form 8-K as Exhibit 99.1.
Cautionary Statement Regarding Forward-Looking Statements
Statements included in this Current Report on Form 8-K that are not historical in nature, including financial estimates and statements as to
regulatory approvals and the expected timing, completion and effects of the proposed Transaction, constitute forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. When used in
this Current Report on Form 8-K, and in any documents incorporated by reference, forward-looking statements include, without limitation, statements regarding the benefits of the proposed Transaction, including future financial and operating results,
expectations, beliefs, intentions and future strategies, and other statements that are not historical facts, that are signified by the words anticipate, believe, estimate, expect, intend,
may, objective, outlook, plan, project, possible, potential, should and similar expressions. These statements regarding future events or the future
performance or results of RAI following the Transaction inherently are subject to a variety of risks, contingencies and uncertainties that could cause actual results, performance or achievements to differ materially from those described in or
implied in the forward-looking statements.
Among the risks, contingencies and uncertainties that could cause actual results to differ
from those described in the forward-looking statements or could result in the failure of the proposed Transaction to be consummated or, if consummated, could have an adverse effect on the results of operations, cash flows and financial position of
RAI are the following: the occurrence of any event, change or other circumstances giving rise to the right of a party to terminate the Purchase Agreement; the failure to obtain necessary regulatory approvals for the proposed Transaction, or if
obtained, the possibility of being subjected to conditions as a result of regulatory approval that could reduce the expected benefits of the proposed Transaction, result in a material delay in, or the abandonment of, the proposed Transaction or
otherwise have an adverse effect on RAI; the failure to satisfy required closing conditions or complete the proposed Transaction in a timely manner; the effect of restrictions placed on RAIs and its subsidiaries business activities,
including restrictions associated with RAIs agreement not to compete with JT in the business of producing, selling, distributing and developing natural, organic and additive-free combustible tobacco cigarettes and roll your own or make your
own tobacco products outside of the United States for a period of five years after the closing, and the limitations put on RAIs ability to pursue alternatives to the proposed Transaction pursuant to the Purchase Agreement; the possibility of
delay or prevention of the proposed Transaction if lawsuits challenging the proposed Transaction are filed against RAI, the members of the RAI board of directors, JT and/or the members of the JT board of directors; RAIs obligation to indemnify
JT for specified matters and to retain certain liabilities related to the acquired business; the incurrence of significant pre- and post-Transaction related costs in connection with the
proposed Transaction; and the effect of the announcement of the proposed Transaction on the ability of RAI and its subsidiaries to retain and hire key personnel, maintain business relationships,
and on operating results and businesses generally. Discussions of additional risks, contingencies and uncertainties are contained in RAIs filings with the U.S. Securities and Exchange Commission.
Due to these risks, contingencies and other uncertainties, you are cautioned not to place undue reliance on these forward-looking statements,
which speak only as of the date of this Current Report on Form 8-K. Except as provided by federal securities laws, RAI is under no obligation to, and expressly disclaims any obligation, to update, alter or otherwise revise any forward-looking
statements, whether written or oral, that may be made from time to time, whether as a result of new information, future events or otherwise.
Item 9.01 Financial Statements and Exhibits.
The following exhibits are hereby filed as part of this Current Report on Form 8-K:
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Exhibit No. |
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Description |
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2.1* |
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Purchase Agreement, dated as of September 28, 2015, by and among Sellers, Buyer, RAI and JT. |
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99.1 |
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Press Release of RAI, dated September 29, 2015. |
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RAI has omitted schedules and other similar attachments to this agreement pursuant to Item 601(b) of Regulation S-K. RAI will furnish a copy of such omitted document to the U.S. Securities and Exchange Commission
upon request, provided that RAI may request confidential treatment for any schedule or other similar attachment so furnished. |
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Portions of this exhibit have been omitted and filed separately with the Securities and Exchange Commission as part of an application for confidential treatment pursuant to the Exchange Act. |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
Date: September 29, 2015
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REYNOLDS AMERICAN INC. |
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By: |
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/s/ McDara P. Folan, III |
Name: |
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McDara P. Folan, III |
Title: |
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Senior Vice President, Deputy General Counsel and Secretary |
EXHIBIT INDEX
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Exhibit No. |
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Description |
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2.1* |
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Purchase Agreement, dated as of September 28, 2015, by and among Santa Fe Natural Tobacco Company, Inc., R. J. Reynolds Global Products, Inc., R. J. Reynolds Tobacco B.V. and JT International Holding BV, and Reynolds American Inc.
and Japan Tobacco Inc. |
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99.1 |
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Press Release of Reynolds American Inc., dated September 29, 2015. |
* |
Reynolds American Inc. has omitted schedules and other similar attachments to this agreement pursuant to Item 601(b) of Regulation S-K. Reynolds American Inc. will furnish a copy of such omitted document to the
U.S. Securities and Exchange Commission upon request, provided that RAI may request confidential treatment for any schedule or other similar attachment so furnished. |
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Portions of this exhibit have been omitted and filed separately with the Securities and Exchange Commission as part of an application for confidential treatment pursuant to the Exchange Act. |
EXHIBIT 2.1
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
PURCHASE AGREEMENT
by and
among
SANTA FE NATURAL TOBACCO COMPANY, INC.,
R. J. REYNOLDS GLOBAL PRODUCTS, INC.,
R. J. REYNOLDS TOBACCO B.V.
JT INTERNATIONAL HOLDING BV
and
For purposes of
Section 6.19 and Section 10.17,
REYNOLDS AMERICAN INC. and JAPAN TOBACCO INC.
Dated as of September 28, 2015
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
TABLE OF CONTENTS
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ARTICLE I DEFINITIONS |
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2 |
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Section 1.1 |
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Certain Definitions |
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2 |
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Section 1.2 |
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Interpretation |
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16 |
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ARTICLE II PURCHASE AND SALE |
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16 |
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Section 2.1 |
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Purchase and Sale; Purchase Price |
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16 |
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Section 2.2 |
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Closing |
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16 |
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Section 2.3 |
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Estimated Purchase Price; Closing Deliveries |
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17 |
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Section 2.4 |
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Adjustment to Purchase Price |
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19 |
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Section 2.5 |
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Proceedings |
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21 |
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Section 2.6 |
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Allocation of the Aggregate Purchase Price |
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21 |
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ARTICLE III REPRESENTATIONS AND WARRANTIES REGARDING SELLERS |
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22 |
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Section 3.1 |
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Organization |
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22 |
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Section 3.2 |
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Authorization |
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22 |
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Section 3.3 |
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Noncontravention |
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22 |
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Section 3.4 |
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Government Authorizations |
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22 |
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Section 3.5 |
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Ownership of Interests |
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23 |
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Section 3.6 |
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Litigation |
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23 |
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Section 3.7 |
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Brokers Fees |
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23 |
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ARTICLE IV REPRESENTATIONS AND WARRANTIES REGARDING THE BUSINESS |
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23 |
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Section 4.1 |
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Organization of the Acquired Companies |
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23 |
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Section 4.2 |
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Noncontravention |
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24 |
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Section 4.3 |
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Subsidiaries |
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24 |
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Section 4.4 |
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Financial Information |
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24 |
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Section 4.5 |
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No Undisclosed Liabilities |
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25 |
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Section 4.6 |
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Sufficiency and Title to Tangible Assets |
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25 |
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Section 4.7 |
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Absence of Certain Changes |
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26 |
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Section 4.8 |
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Litigation |
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26 |
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-i-
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
TABLE OF
CONTENTS
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PAGE |
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Section 4.9 |
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Compliance with Applicable Laws; Permits |
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26 |
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Section 4.10 |
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Tax Matters |
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27 |
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Section 4.11 |
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Real Property |
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27 |
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Section 4.12 |
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Intellectual Property |
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28 |
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Section 4.13 |
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Information Technology |
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29 |
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Section 4.14 |
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Environmental Matters |
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30 |
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Section 4.15 |
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Material Contracts |
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30 |
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Section 4.16 |
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Employee Matters |
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32 |
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Section 4.17 |
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Labor Matters |
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34 |
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Section 4.18 |
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Insurance |
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35 |
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Section 4.19 |
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Intercompany Agreements |
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35 |
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Section 4.20 |
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Compliance with Data Privacy Laws |
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35 |
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Section 4.21 |
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Brokers Fees |
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35 |
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Section 4.22 |
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Product Recalls, Other Market Withdrawals |
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35 |
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ARTICLE V REPRESENTATIONS AND WARRANTIES REGARDING BUYER |
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36 |
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Section 5.1 |
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Organization |
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36 |
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Section 5.2 |
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Authorization |
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36 |
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Section 5.3 |
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Noncontravention |
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36 |
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Section 5.4 |
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Government Authorizations |
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36 |
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Section 5.5 |
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Litigation |
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36 |
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Section 5.6 |
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Brokers Fees |
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37 |
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Section 5.7 |
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Financial Capacity |
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37 |
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Section 5.8 |
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Investment |
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37 |
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Section 5.9 |
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Information |
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37 |
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ARTICLE VI COVENANTS |
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38 |
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Section 6.1 |
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Conduct of Business |
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38 |
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Section 6.2 |
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Access to Information; Confidentiality |
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42 |
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-ii-
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
TABLE OF
CONTENTS
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PAGE |
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Section 6.3 |
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Efforts; Consents |
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44 |
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Section 6.4 |
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Public Announcements |
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45 |
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Section 6.5 |
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Retained Names and Marks |
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45 |
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Section 6.6 |
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Notification of Certain Matters; Update of Disclosure Schedule |
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47 |
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Section 6.7 |
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Exclusive Dealing |
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48 |
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Section 6.8 |
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Post-Closing Access; Preservation of Records |
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48 |
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Section 6.9 |
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Further Assurances; Wrong Pockets; Data Room |
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49 |
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Section 6.10 |
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Employee Matters |
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49 |
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Section 6.11 |
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Taxes |
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54 |
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Section 6.12 |
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Termination of Intercompany Agreements |
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57 |
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Section 6.13 |
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Release |
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58 |
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Section 6.14 |
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Certain Post-Closing Corporate Actions |
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58 |
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Section 6.15 |
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Payment of Transaction Expenses |
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59 |
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Section 6.16 |
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Replacement Credit Support |
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59 |
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Section 6.17 |
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Access to Occurrence-Based Third Party Insurance Policies |
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59 |
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Section 6.18 |
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Entry into Other Transaction Documents |
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60 |
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Section 6.19 |
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Non-Competition |
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60 |
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ARTICLE VII CONDITIONS TO CLOSING |
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63 |
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Section 7.1 |
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Conditions Precedent to Obligations of the Parties |
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63 |
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Section 7.2 |
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Conditions Precedent to Obligation of Sellers |
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63 |
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Section 7.3 |
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Conditions Precedent to Obligations of Buyer |
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64 |
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ARTICLE VIII TERMINATION |
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64 |
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Section 8.1 |
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Termination |
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64 |
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Section 8.2 |
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Effect of Termination |
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65 |
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ARTICLE IX INDEMNIFICATION |
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66 |
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Section 9.1 |
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Indemnification by Sellers |
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66 |
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Section 9.2 |
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Indemnification by Buyer |
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67 |
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-iii-
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
TABLE OF
CONTENTS
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PAGE |
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Section 9.3 |
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Survival Period; Limitations on Indemnification; Recourse for Certain Breaches |
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68 |
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Section 9.4 |
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Notice of Claims |
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71 |
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Section 9.5 |
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Procedures for Third Party Claims |
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71 |
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Section 9.6 |
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Exclusive Remedy |
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73 |
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Section 9.7 |
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Tax Claims |
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73 |
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ARTICLE X MISCELLANEOUS |
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73 |
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Section 10.1 |
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Parties in Interest |
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73 |
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Section 10.2 |
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Assignment |
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73 |
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Section 10.3 |
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Notices |
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74 |
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Section 10.4 |
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Amendments and Waivers |
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74 |
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Section 10.5 |
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Exhibits, Schedules and Disclosure Schedule |
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75 |
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|
Section 10.6 |
|
Construction |
|
|
75 |
|
|
|
|
Section 10.7 |
|
Certain Acknowledgements |
|
|
75 |
|
|
|
|
Section 10.8 |
|
Entire Agreement |
|
|
76 |
|
|
|
|
Section 10.9 |
|
Severability |
|
|
76 |
|
|
|
|
Section 10.10 |
|
Currency and Exchange Rates |
|
|
76 |
|
|
|
|
Section 10.11 |
|
Governing Law |
|
|
77 |
|
|
|
|
Section 10.12 |
|
Consent to Jurisdiction; Waiver of Jury Trial |
|
|
77 |
|
|
|
|
Section 10.13 |
|
Specific Performance |
|
|
78 |
|
|
|
|
Section 10.14 |
|
Bulk Sales Laws |
|
|
78 |
|
|
|
|
Section 10.15 |
|
Counterparts |
|
|
78 |
|
|
|
|
Section 10.16 |
|
Transaction Privilege; Related Matters |
|
|
78 |
|
|
|
|
Section 10.17 |
|
Guarantees |
|
|
80 |
|
-iv-
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
TABLE OF
CONTENTS
EXHIBITS
Exhibit A Form of Brand and Product Integrity Agreement
Exhibit B Form of Contract Manufacturing Agreement
Exhibit C Form of Intellectual Property Transfer and License Agreement
Exhibit D Form of Leaf Supply Agreement
Exhibit E Form of Transition Services Agreement
Exhibit F Form of Share Transfer Deed of SFR Tobacco International GmbH
Exhibit G Form of Share Transfer Deed of Santa Fe Natural Tobacco Company: Germany GmbH
Exhibit H Form of Share Transfer Deed of Santa Fe Natural Tobacco Company Italy S.r.l.
Exhibit I Form of Share Transfer Agreement of Santa Fe Natural Tobacco Company Japan K.K.
Exhibit J Form of Share Transfer Agreement of Santa Fe Natural Tobacco Company Belgium B.V.B.
Exhibit K Form of Execution Date Press Release
SCHEDULES
Schedule A Purchased IP
Schedule B Core Brand Elements
Schedule C Calculation of Net Working Capital
Schedule D Retained Names and Marks
Disclosure Schedule
Section 2.3(b)(ix)
Manufacturing; Know-How
Section 2.3(c)(i) Payment of Estimated Purchase Price
Section 2.6 Allocation of the Aggregate Purchase Price
Section 3.5 Ownership of Interests
Section 4.2 Noncontravention
-v-
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
TABLE OF
CONTENTS
Section 4.3 Subsidiaries
Section 4.4 Financial Information
Section 4.5 No Undisclosed Liabilities
Section 4.6(b) Sufficiency of Assets
Section 4.7 Absence of Certain Changes
Section 4.8 Litigation
Section 4.9(a) Compliance with Applicable Laws; Permits
Section 4.10 Tax Matters
Section 4.12 Intellectual Property
Section 4.15(a) Material Contracts
Section 4.16 Employee Matters
Section 4.17(b) Labor Matters
Section 4.18 Insurance
Section 4.19 Intercompany Agreements
Section 4.22 Product Recalls; Other Market Withdrawals
Section 6.1(b) Conduct of the Business
Section 6.10(d)(i) 2015 Bonuses
Section 6.10(i) Expatriate Agreements
Section 6.16 Replacement Credit Support
Section 7.1(b) Antitrust Consents
-vi-
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
PURCHASE AGREEMENT
This PURCHASE AGREEMENT, dated as of September 28, 2015, is by and among Santa Fe Natural Tobacco Company, Inc., a New Mexico corporation
(SFNTC); R. J. Reynolds Global Products, Inc., a Delaware corporation (Seller GP); R. J. Reynolds Tobacco B.V., a Dutch private company with limited liability (besloten vennootschap met beperkte
aansprakelijkheid) (Seller BV, and collectively with SFNTC and Seller GP, the Sellers and, each individually, a Seller); JT International Holding BV, a Dutch private company with limited
liability (besloten vennootschap met beperkte aansprakelijkheid) (Buyer); and, for purposes of Section 6.19 and Section 10.17, Reynolds American Inc., a North Carolina corporation (RAI), and
Japan Tobacco Inc., a Japanese corporation (kabushiki kaisha) (JT). Sellers and Buyer, and, for purposes of Section 6.19 and Section 10.17, RAI and JT, are referred to collectively herein as the
Parties.
RECITALS
A. SFNTC owns: (i) the Purchased IP; and (ii) all of the issued and outstanding equity interests in Santa Fe Natural Tobacco
Company: Germany GmbH (SFNTC Germany).
B. Seller GP owns all of the issued and outstanding equity interests of:
(i) Santa Fe Natural Tobacco Company Japan K.K. (SFNTC Japan); and (ii) Santa Fe Natural Tobacco Company Italy S.r.l. (SFNTC Italy).
C. Seller BV owns: (i) all of the issued and outstanding equity interests of SFR Tobacco International GmbH (SFRTI
Holdings); and (ii) one issued and outstanding share of Santa Fe Natural Tobacco Company Belgium BVBA (SFNTC Belgium).
D. SFRTI Holdings owns: (i) 99 of the issued and outstanding shares of SFNTC Belgium (which together with the one share owned by Seller
BV constitutes the entire issued and outstanding share capital of SFNTC Belgium); and (ii) all of the issued and outstanding equity interests of: (A) Santa Fe Natural Tobacco Company UK Limited (SFNTC UK); (B) Santa
Fe Natural Tobacco Company France SAS (SFNTC France); (C) Santa Fe Natural Tobacco Company Spain S.R.L. (SFNTC Spain); and (D) Santa Fe Natural Tobacco Company the Netherlands B.V. (SFNTC
Netherlands, and collectively with SFNTC Belgium, SFNTC UK, SFNTC France, SFNTC Spain, SFRTI Holdings, SFNTC Germany, SFNTC Japan and SFNTC Italy, the Acquired Companies and, each individually, an Acquired
Company).
E. The Acquired Companies collectively operate the business of the development, design, manufacture, packaging,
labeling and/or production of tobacco and tobacco-related products for delivery, sale, resale, distribution, marketing and/or promotion under the brand known as Natural American Spirit outside the United States (the Business).
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
F. The assets of the Acquired Companies, together with the Purchased IP and the Licensed
Shared IP, represent all of the assets exclusively used to conduct the Business as conducted as of the date of this Agreement.
G. Sellers
wish to transfer to Buyer, and Buyer wishes to assume and acquire, or cause one or more Designated Buyers to assume and acquire, from Sellers, all of Sellers interests in the issued and outstanding equity interests of the Acquired Companies
and Sellers rights to the Purchased IP.
H. The Parties desire to make certain representations, warranties and covenants in respect
of, and also to provide certain conditions to the consummation of, the Transactions.
ARTICLE I
DEFINITIONS
Section 1.1 Certain Definitions. As used in this Agreement, the following terms have the following meanings:
2015 Bonuses has the meaning ascribed to such term in Section 6.10(d)(i).
2016 Bonuses has the meaning ascribed to such term in Section 6.10(d)(ii).
2016 LTIP Awards has the meaning ascribed to such term in Section 6.10(e)(ii).
Accounting Firm has the meaning ascribed to such term in Section 2.4(c).
Acquired Company has the meaning ascribed to such term in the Recitals.
Action means any criminal, civil, judicial, administrative or regulatory proceeding, claim, action, charge, complaint,
material grievance, arbitration, investigation, inquiry, suit or other proceeding, at law or in equity, brought by any Person before a Governmental Authority or arbitrator.
Affiliate means, when used with respect to a specified Person, another Person that either directly, or indirectly through
one or more intermediaries, controls, is controlled by or is under common control with, the specified Person. For purposes of this definition, control (including, with correlative meaning, the terms controlled by and
under common control with) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of an entity, whether through the ownership of voting securities or otherwise, and
shall be construed in accordance with the rules promulgated under the Securities Act. Notwithstanding anything herein to the contrary, none of British American Tobacco p.l.c. or any of its Affiliates or Subsidiaries will be considered an Affiliate
of any Seller or any of their Affiliates or Subsidiaries, and no Seller nor any of its Affiliates or Subsidiaries will be considered an Affiliate of any of the foregoing.
- 2 -
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
Agreement means this Purchase Agreement, including all Exhibits and
Schedules hereto (including the Disclosure Schedule), as the same may be amended, modified or supplemented from time to time in accordance with its terms.
Anti-Bribery Law means (i) the US Foreign Corrupt Practices Act of 1977, (ii) the UK Bribery Act 2010 and
(iii) any other Law of any jurisdiction that relates to bribery or corruption
Antitrust Approvals has the meaning
ascribed to such term in Section 7.1(b).
Antitrust Laws means any Law of any jurisdiction (including without
limitation any antitrust, competition or trade regulation Laws) that is designed or intended to prohibit, restrict or regulate actions having the purpose or effect of monopolization or restraint of trade or lessening competition through merger or
acquisition.
Bankruptcy and Equity Exception means (a) applicable bankruptcy, insolvency, reorganization,
moratorium, and any other Laws of general application, heretofore or hereafter enacted or in effect, affecting the rights and remedies of creditors generally, and (b) the exercise of judicial or administrative discretion in accordance with
general equitable principles.
Basket means $20,000,000.
Brand and Product Integrity Agreement means the brand and product integrity agreement to be entered into between SFNTC and
Buyer at the Closing substantially in the form set out in Exhibit A.
Business has the meaning ascribed to such term in
the Recitals.
Business Day means any day other than (a) a Saturday or a Sunday or (b) any other day on which
banks in New York City, New York, Tokyo, Japan or Geneva, Switzerland are authorized or required to close by applicable Law.
Business Employee has the meaning ascribed to such term in Section 4.16(a).
Business Employee Plan has the meaning ascribed to such term in Section 4.16(a).
Business Financial Information has the meaning ascribed to such term in Section 4.4.
Business IP means the Owned IP, the Purchased IP, the Licensed Shared IP and all other Intellectual Property that is, or
has in the two years before the date of this Agreement been, used in the Business.
- 3 -
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
Buyer has the meaning ascribed to such term in the preamble to this
Agreement.
Buyer Group Member has the meaning ascribed to such term in Section 10.16(a).
Buyer Indemnitees has the meaning ascribed to such term in Section 9.1.
Buyer Material Adverse Effect means any change, effect, event, circumstance, development or occurrence that, individually
or in the aggregate with all other changes, effects, events, circumstances, developments or occurrences, would prevent or materially impair, or would reasonably be expected to prevent or materially impair, the ability of Buyer to perform its
obligations under this Agreement or consummate the Transactions.
Buyer Parties has the meaning ascribed to such term
in Section 8.2(b)(ii).
Cap means $150,000,000.
Cash and Cash Equivalents means the sum of the fair market value (expressed in United States dollars) of all cash and cash
equivalents of any kind in accordance with GAAP (including bank account balances (net of outstanding checks), marketable securities and short term investments) and certificates of deposit of the Acquired Companies with a remaining duration of less
than 90 days.
Closing has the meaning ascribed to such term in Section 2.2.
Closing Date has the meaning ascribed to such term in Section 2.2.
Code means the United States Internal Revenue Code of 1986.
Confidentiality Agreements means (a) the confidentiality agreement, dated March 2, 2015, between JT International
SA and RAI and (b) the clean team agreement, dated August 10, 2015, between JT International SA and RAI.
Consents means any approval, consent, ratification, permission, waiver or authorization.
Continuing Employee has the meaning ascribed to such term in Section 6.10(a).
Contract means, with respect to any Person, any legally binding agreement, instrument, commitment, mortgage, note,
understanding, document, lease or other arrangement (in each case, including any extension, renewal, amendment or other modification thereof), to which such Person is a party or by which such Person is, or such Persons assets are, bound or to
which the such Person has any right or interest.
- 4 -
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
Contract Manufacturing Agreement means the contract manufacturing
agreement to be entered into between SFNTC and SFRTI Holdings at the Closing substantially in the form set out in Exhibit B.
Core Brand Element means each of (a) the Trademark NATURAL AMERICAN SPIRIT and (b) the Trademarks set forth in
Schedule B.
Data Room means all information made available to Buyer and its Representatives on or prior to the date of
this Agreement, comprised in the electronic data room maintained by Sellers for purposes of the Transactions.
Debt
means, without duplication, the outstanding principal amount of, all accrued and unpaid interest on and other payment obligations (including any premiums, termination fees, expenses or breakage costs due upon prepayment of or payable in connection
with this Agreement or the consummation of the Transactions) in respect of, (a) any indebtedness for borrowed money of any Acquired Company, whether or not recourse to such Acquired Company, other than any such indebtedness of an Acquired
Company owed to another Acquired Company, (b) any obligation of any Acquired Company evidenced by bonds, debentures, notes or other similar instruments, (c) any lease obligation of any Acquired Company required to be classified as a
capitalized lease obligation under GAAP, (d) any obligation of any other Person (other than an Acquired Company) the payment of which any Acquired Company has guaranteed or for which any Acquired Company is responsible or liable, directly or
indirectly, jointly or severally, as obligor, guarantor or otherwise, (e) any Liability in connection with any letter of credit (to the extent drawn), bankers acceptance or similar credit transaction entered into by or on behalf of an Acquired
Company, (f) any net cash payment obligations of an Acquired Company under interest rate cap contracts, foreign currency exchange contracts and other hedging or similar contracts that will be payable upon termination thereof (assuming they were
terminated (by the Acquired Company as the defaulting party) on the date of determination), and (g) to the extent not included in any of the foregoing, any financing of accounts receivable or inventory of any Acquired Company.
Designated Buyer has the meaning ascribed to such term in Section 10.2.
Disclosure Schedule means the disclosure schedule delivered by Seller to Buyer contemporaneously with the execution of this
Agreement.
Disputed Purchase Price Items has the meaning ascribed to such term in Section 2.4(c).
Environment means all or any of the following media: air; surface water; ground water; or land.
- 5 -
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
Environmental Laws means all Laws currently in effect relating to
(a) the pollution or protection of the Environment or (b) the generation, manufacture, processing, use, handling, treatment, storage, disposal, release, distribution and transportation of Hazardous Materials.
ERISA means the Employee Retirement Income Security Act of 1974.
Estimated Purchase Price means (a) $5,000,000,000, plus (b) Sellerss estimate of the Net Working
Capital Adjustment (which may be a negative number if the calculation results in a negative number under clause (b) of the definition of Net Working Capital Adjustment) as set forth in the Estimated Purchase Price Statement
(prepared in accordance with Section 2.3), plus (c) Sellerss estimate of the amount of Cash and Cash Equivalents as set forth in the Estimated Purchase Price Statement (prepared in accordance with Section 2.3), and
minus (d) Sellerss estimate of the amount of Debt as set forth in the Estimated Purchase Price Statement (prepared in accordance with Section 2.3).
Estimated Purchase Price Statement has the meaning ascribed to such term in Section 2.3(a).
Existing Stock has the meaning ascribed to such term in Section 6.5(c).
Expatriate Employee has the meaning ascribed to such term in Section 6.10(i).
Expatriate Package has the meaning ascribed to such term in Section 6.10(i).
Freshfields has the meaning ascribed to such term in Section 10.16(b).
Fundamental Representations has the meaning ascribed to such term in Section 9.3(a).
GAAP means United States generally accepted accounting principles consistently applied by Parent and its Subsidiaries
(including the Acquired Companies) in their books and records throughout the periods involved.
Game Changer Awards has
the meaning ascribed to such term in Section 6.10(e)(iii).
Governing Documents means, with respect to any Person
who is not a natural Person, the certificate or articles of incorporation, bylaws, deed of trust, formation or governing agreement and other charter documents or organizational or governing documents or instruments of such Person.
Governmental Authority means any national, supra-national, federal, state, provincial, county, municipal or local
government or governing body, foreign or domestic, or the government of any political subdivision of any of the foregoing, or any court, tribunal, arbitrator, arbitration panel, entity, authority, agency, ministry or other similar body exercising
executive, legislative, judicial, regulatory or administrative authority or functions of or pertaining to government, including any authority or other quasi-governmental entity established to perform any of such functions.
- 6 -
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
Guaranteed Buyer Obligations has the meaning ascribed to such term in
Section 10.17(b)(i).
Guaranteed Seller Obligations has the meaning ascribed to such term in
Section 10.17(a)(i).
Hazardous Materials means any material or substance, including waste, but not including any
material or substance included in a NAS Product which, alone or in combination with other substances, causes or may cause harm or damage to the Environment.
Indemnitee has the meaning ascribed to such term in Section 9.4.
Indemnitor has the meaning ascribed to such term in Section 9.4.
Intellectual Property means: (a) patents, utility models and rights in inventions, (b) trademarks, service marks,
rights in logos, trade names, rights in each of get-up and trade dress, rights to sue for passing off (including trademark-related goodwill), rights to sue for unfair competition, and domain names (Trademarks), (c) copyright,
moral rights, database rights and rights in designs, (d) rights in each of know-how, confidential information and trade secrets (Know-How), and (e) any other intellectual property rights, in each case: (i) anywhere
in the world, (ii) whether unregistered or registered (including all applications, rights to apply and rights to claim priority), and (iii) including all divisionals, continuations, continuations-in-part, reissues, extensions,
re-examinations and renewals.
Intellectual Property Transfer and License Agreement means the assignment and license
agreement in respect of the Purchased IP and the Licensed Shared IP to be entered into between SFNTC and Buyer at the Closing substantially in the form set out in Exhibit C.
Intercompany Agreements has the meaning ascribed to such term in Section 4.19.
Interests means the issued and outstanding equity interests of SFNTC Germany, SFNTC Japan, SFNTC Italy, SFRTI Holdings and
one issued and outstanding share of SFNTC Belgium held by Seller BV.
IP Title Representations means the
representations and warranties of Sellers contained in the second and third sentences of Section 4.12(a).
IT
System means the material information and communications technologies used by the Business.
JT has the
meaning ascribed to such term in the preamble to this Agreement.
- 7 -
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
JT Restricted Business has the meaning ascribed to such term in
Section 6.19(b).
Know How has the meaning ascribed to such term in the definition of Intellectual Property.
Knowledge means the actual (but not constructive or imputed) knowledge as of the date of this Agreement (or, with respect
to a certificate delivered pursuant to this Agreement, as of the date of delivery of such certificate) without any implication of verification or investigation concerning such knowledge, of (a) William Morachnick, Tomas Lenk, Alexander Zinser,
Annette Roodhart and Mark Peters, with respect to Sellers, and (b) Martin-Ralph Frauendorfer, with respect to Buyer.
Laws means all applicable federal, state, local and foreign laws, statutes, constitutions, rules, regulations, ordinances,
directives, executive orders or edicts by a Governmental Authority and similar provisions having the force of law and all Orders.
Leaf Supply Agreement means the leaf supply agreement to be entered into among Sellers and Buyer at the Closing
substantially in the form set out in Exhibit D.
Leases has the meaning ascribed to such term in Section 4.11.
Liability means any liability, expense, commitment, costs or obligation (whether known or unknown, whether asserted or
unasserted, whether absolute or contingent, whether accrued or unaccrued, whether liquidated or unliquidated, and whether due or to become due).
Licensed Shared IP means, in each case other than the Purchased IP and any Trademarks, (a) all Intellectual Property
owned by a Seller Group Entity as of the Closing in respect of the Manufacturing Know-How, and (b) except as set forth in clause (a), all other Intellectual Property owned by a Seller Group Entity as of the Closing to the extent that
(i) it is or has, in the two years before the date of this Agreement, been used in the Business and (ii) it is not and has not been used by a Seller Group Entity in any business other than the Business or the US Business; provided,
however, that in no event will Licensed Shared IP include any Know-How, information, materials or data that was known to Buyer as of the Closing Date, other than under an obligation of confidentiality.
Lien means any mortgage, pledge, lien, encumbrance, restriction, option, charge or other security interest.
Loss has the meaning ascribed to such term in Section 9.1.
LTIP Awards has the meaning ascribed to such term in Section 6.10(e)(i).
- 8 -
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
Manufacturing Know-How means all information, documentation, data or
Know-How used in the Business in the two years before the date of this Agreement to manufacture NAS Products or the packaging for NAS Products including product specifications, manufacturing specifications, packaging specifications, recipes, blend
composition and other ingredient specifications, training manuals and other training materials; provided, however, that in no event will Manufacturing Know-How include any Know-How, information, materials or data that was known to
Buyer as of the Closing Date, other than under an obligation of confidentiality.
Material Adverse Effect means any
change, effect, event, circumstance, development or occurrence that, individually or in the aggregate with all other changes, effects, events, circumstances, developments or occurrences, (a) has had or would reasonably be expected to have a
material adverse effect on the Acquired Companies or the Business (taking the Acquired Companies and the Business together as a whole), or (b) would prevent or materially impair, or would reasonably be expected to prevent or materially impair,
the ability of Sellers to perform their obligations under this Agreement or consummate the Transactions; provided that with respect to clause (a), in no event will any effect resulting or arising from or relating to any of the following
matters be considered, either alone or in combination, to constitute or contribute to a Material Adverse Effect: (i) changes in economic or political conditions or the financing, banking, currency or capital markets in general, including with
respect to interest rates or currency exchange rates; (ii) changes in Laws or changes in accounting requirements or principles (or interpretation or enforcement thereof); (iii) changes affecting the tobacco and cigarette industries or the
markets or geographical areas in which the Business is operated; (iv) the negotiation, announcement, execution, pendency or performance of the Transaction Documents or the consummation of the Transactions; (v) conduct by any Seller or
Acquired Company, including any action taken to obtain the Antitrust Approvals, for which Buyer gave its prior written consent; (vi) any natural disaster or any conditions resulting from natural disasters; (vii) acts of terrorism,
sabotage, military action, armed hostilities or war (whether or not declared) or any outbreak, escalation or worsening thereof; or (viii) the failure, in and of itself, of the Business to meet any internal or published projections, forecasts,
estimates or predictions in respect of revenues, earnings or other financial or operating metrics before, on or after the date of this Agreement (it being agreed and understood that the underlying facts giving rise or contributing to such change may
be taken into account in determining whether there has been, or is reasonably expected to be, a Material Adverse Effect); provided, however, that changes, effects, events or occurrences referred to in subclauses (i), (ii),
(iii), (vi) or (vii) will be considered in determining whether there has been, or is reasonably expected to be, a Material Adverse Effect to the extent that such changes have a disproportionate impact on the Acquired Companies
or the Business (taking the Acquired Companies and the Business together as a whole), as compared to other participants in the industry (in which case the incremental disproportionate impact or impacts shall be taken into account in determining
whether there has been, or is reasonably expected to be, a Material Adverse Effect).
Material Contract has
the meaning ascribed to such term in Section 4.15(a).
Minimum Claim Amount has the meaning ascribed to such term
in Section 9.3(b).
- 9 -
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
NAS Products means tobacco products sold under the brand known as Natural
American Spirit outside the United States.
Net Working Capital means the combined net book value of (a) the line
items of current assets (other than (i) Cash and Cash Equivalents and (ii) deferred income Tax assets) of the Acquired Companies set forth on Schedule C, minus (b) the line items of current liabilities (other than
(i) Liabilities included in the calculation of Debt and (ii) deferred income Tax Liabilities) of the Acquired Companies set forth on Schedule C, in each case, without duplication, as of the Closing and as determined in accordance with GAAP
and otherwise as determined in accordance with the accounting principles, methodologies, procedures and classifications set forth in Schedule C.
Net Working Capital Adjustment means (a) the amount by which the Net Working Capital exceeds $62,500,000 or
(b) the amount by which Net Working Capital is less than $62,500,000, provided that any amount which is calculated pursuant to clause (b) above shall be deemed to be a negative number.
Non-Confidential Information means any Know-How, information, materials or data that (a) was known to Buyer as of the
Closing Date, other than under an obligation of confidentiality, (b) was generally available to tobacco manufacturers, to the public or was otherwise part of the public domain as of the Closing, (c) became generally available to tobacco
manufacturers, to the public or otherwise became part of the public domain after the Closing Date other than through any act or omission of Buyer in breach of any Transaction Document, (d) was received by Buyer from a third Person (other than
from a third Person reasonably believed by Buyer to be under an obligation of confidentiality) reasonably believed by Buyer to lawfully be in possession of such information, materials or data that was itself free from any restrictions on use or
obligations of confidentiality with respect to such information, materials or data, or (e) was independently developed by Buyer, without reference or access to any Licensed Shared IP.
Order means any binding order, judgment, injunction, decree, writ, stipulation, determination or award, in each case,
entered by or with any Governmental Authority or arbitrator.
Outside Date has the meaning set for in
Section 8.1(b).
Owned IP means the Intellectual Property owned by the Acquired Companies other than any Retained
Names and Marks.
Packaging and Marketing IP means all trademarks, service marks, rights in logos, trade names, rights
in each of get-up and trade dress, rights to sue for passing off (including trademark-related goodwill), rights to sue for unfair competition, copyrights (other than in software) and rights in designs, in each case in any NAS Product packaging and
marketing and promotional material, that are (a) owned by a Seller Group Entity as of the Closing (b) registered, applied for or subsisting outside of the United States, and (c) are, or have in the two years before the date of this
Agreement been, used in the Business.
- 10 -
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
Parties has the meaning ascribed to such term in the preamble to this
Agreement.
Permits means licenses, franchises, permits, certificates, consents, orders, approvals and authorizations
from Governmental Authorities.
Permitted Liens means any (a) mechanics, materialmens, laborers,
workmens, repairmens, carriers and similar Liens, including all statutory Liens, arising or incurred in the ordinary course of business for amounts not delinquent, (b) Liens for Taxes, assessments and other governmental
charges not yet due and payable or, if due, (i) not delinquent or (ii) being contested in good faith through appropriate proceedings, (c) purchase money Liens and Liens securing rental payments under capital lease arrangements,
(d) pledges or deposits under workers compensation legislation, unemployment insurance Laws or similar Laws, (e) Liens specifically identified as such in the Business Financial Information, (f) zoning, building codes and other
land use Laws regulating the use or occupancy of real property or the activities conducted thereon which are imposed by any Governmental Authority having jurisdiction over such real property, which are not materially violated by the current use or
occupancy of such real property or the operation of the Acquired Companies thereon, (g) any Liens that are released or otherwise terminated at or prior to Closing without post-Closing liability attaching to any Acquired Company or the Business,
(h) non-exclusive licenses of Intellectual Property (i) to the extent included in confidentiality or non-disclosure agreements or in Contracts with suppliers, manufacturers, distributors or other service providers entered into in the
ordinary course of business or (ii) disclosed in Section 4.15(a)(ix) of the Disclosure Schedule and (i) as to any real property leased by an Acquired Company, Liens created, permitted or suffered by the fee owner thereof without, in
any such case, the consent of, or action by, any Acquired Company, RAI or any Affiliate of RAI.
Person means an
individual, partnership, limited liability partnership, corporation, limited liability company, association, joint stock company, trust, estate, joint venture, unincorporated organization, or Governmental Authority (or any department, agency, or
political subdivision thereof).
Pre-Closing Insurance has the meaning ascribed to such term in Section 6.17.
Proposed Final Purchase Price Statement has the meaning ascribed to such term in Section 2.4(a).
Proprietary Information has the meaning ascribed to such term in Section 4.12(g).
- 11 -
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
Purchase Price means (a) $5,000,000,000, plus (b) the Net
Working Capital Adjustment (which may be a negative number if the calculation results in a negative number under clause (b) of the definition of Net Working Capital Adjustment) as finally determined pursuant to Section 2.4,
plus (c) the amount of Cash and Cash Equivalents as finally determined pursuant to Section 2.4, and minus (d) the amount of Debt as finally determined pursuant to Section 2.4.
Purchase Price Allocation has the meaning ascribed to such term in Section 2.6.
Purchase Price Dispute Notice has the meaning ascribed to such term in Section 2.4(c).
Purchased Brand IP means, other than the Intellectual Property set forth in Schedule A, (a) all registered
Intellectual Property owned by a Seller Group Entity that is registered or applied for outside of the United States, in each case that comprises or contains a Core Brand Element, and (b) the Packaging and Marketing IP.
Purchased IP means the Intellectual Property set forth in Schedule A and the Purchased Brand IP.
RAI has the meaning ascribed to such term in the preamble to this Agreement.
RAI Restricted Business has the meaning ascribed to such term in Section 6.19(a).
Representative of a Person means the directors, managing directors, officers, employees, advisors, agents, consultants,
attorneys, accountants, investment bankers or other representatives of such Person.
Restricted Period has the meaning
ascribed to such term in Section 6.19(a).
Restrictive Covenants has the meaning ascribed to such term in
Section 6.19(d).
Retained Names and Marks has the meaning ascribed to such term in Section 6.5(a).
Securities Act means the U.S. Securities Act of 1933.
Seller BV has the meaning ascribed to such term in the preamble to this Agreement.
Seller GP has the meaning ascribed to such term in the preamble to this Agreement.
Seller Group Entity means the Sellers and each of their Affiliates other than the Acquired Companies.
Seller Group Member has the meaning ascribed to such term in Section 10.16(a).
Seller Indemnitees has the meaning ascribed to such term in Section 9.2.
- 12 -
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
Sellers has the meaning ascribed to such term in the preamble to this
Agreement.
SFNTC has the meaning ascribed to such term in the preamble to this Agreement.
SFNTC Belgium has the meaning ascribed to such term in the Recitals.
SFNTC France has the meaning ascribed to such term in the Recitals.
SFNTC Germany has the meaning ascribed to such term in the Recitals.
SFNTC Italy has the meaning ascribed to such term in the Recitals.
SFNTC Japan has the meaning ascribed to such term in the Recitals.
SFNTC Netherlands has the meaning ascribed to such term in the Recitals.
SFNTC Spain has the meaning ascribed to such term in the Recitals.
SFNTC UK has the meaning ascribed to such term in the Recitals.
SFRTI Holdings has the meaning ascribed to such term in the Recitals.
Share Transfer Agreement of SFNTC Japan has the meaning ascribed to such term in Section 2.3(b)(iv).
Share Transfer Agreement of One SFNTC Belgium Share has the meaning ascribed to such term in Section 2.3(b)(v).
Share Transfer Deed of SFRTI Holdings has the meaning ascribed to such term in Section 2.3(b)(i).
Share Transfer Deed of SFNTC Germany has the meaning ascribed to such term in Section 2.3(b)(ii).
Share Transfer Deed of SFNTC Italy has the meaning ascribed to such term in Section 2.3(b)(iii).
Spot Rate has the meaning ascribed to such term in Section 10.10.
Subsidiary when used with respect to any Person, means any other Person of which (a) in the case of a corporation, at
least (i) a majority of the equity and (ii) a majority of the voting interests are owned or controlled, directly or indirectly, by such first Person, by any one or more of its Subsidiaries, or by such first Person and one or more of its
Subsidiaries or (b) in the case of any Person other than a corporation, such first Person, one or more of its Subsidiaries, or such first Person and one or more of its Subsidiaries (i) owns a majority of the equity interests thereof and
(ii) has the power to elect or direct the election of a majority of the members of the governing body thereof.
- 13 -
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
Tax means any federal, state, local, or foreign tax, charge, duty, fee,
levy or other assessment, in each case imposed by a Governmental Authority, including income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental (including taxes under
Section 59A of the Code), customs duties, capital stock, franchise, profits, withholding, social security (or similar), contributions, unemployment, disability, real or personal property, sales, use, transfer, registration, value added,
alternative or add-on minimum, estimated or other tax of any kind whatsoever, and including any interest, penalty, or addition thereto.
Tax Authority means any Governmental Authority responsible for the administration or the imposition of any Tax.
Tax Claim means any deficiency, audit or other Action with respect to Taxes that relates to any Acquired Company or the
Purchased IP.
Tax Return means any return, declaration, report, claim for refund, or information return or statement
relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof, required to be filed with any Tax Authority.
Termination Fee has the meaning ascribed to such term in Section 8.2(b).
Third Party Claim has the meaning ascribed to such term in Section 9.5(a).
Tier 1 Representations means the representations and warranties of Sellers contained in Section 3.5,
Section 4.3(a), Section 4.3(b)(ii), Section 4.3(b)(iii) and the IP Title Representations.
Tier 2
Representations means the representations and warranties of Sellers contained in Section 3.1, Section 3.2, Section 3.7, Section 4.1, Section 4.3(b)(i), Section 4.3(c) and Section 4.21.
Tier 3 Representations means all representations and warranties of Sellers contained in ARTICLE III and ARTICLE IV other
than the Tier 1 Representations and the Tier 2 Representations.
Tobacco Products means (i) combustible tobacco
cigarettes and (ii) roll your own/make your own tobacco products.
Trademarks has the
meaning ascribed to such term in the definition of Intellectual Property.
- 14 -
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
Transaction Documents means this Agreement, the Intellectual Property
Transfer and License Agreement, the Leaf Supply Agreement, the Brand and Product Integrity Agreement, the Contract Manufacturing Agreement and the Transition Services Agreement and all other documents delivered or required to be delivered by any
Party pursuant to this Agreement.
Transaction Expenses means all out-of-pocket expenses (including all fees and
expenses of counsel, accountants, investment bankers, advisors, experts and consultants to a Party and to its Affiliates) incurred in connection with or related to the authorization, preparation, negotiation, execution and performance of the
Transaction Documents and the Transactions, as well as, in the case of expenses of Sellers and the Acquired Companies, any such expenses incurred in the pursuit or consideration of any alternative transaction (regardless of the form of any such
alternative transaction) with respect to the Acquired Companies, the Purchased IP or the Business.
Transactions means
the transactions contemplated by the Transaction Documents.
Transfer Taxes means all transfer or similar Taxes
(excluding Taxes measured by net income or gain in lieu of such Taxes), including sales, real property, use, excise, stock transfer, stamp, documentary, filing, recording, registration, permit, license, authorization and similar Taxes, filing fees
and similar charges, together with any interest, penalties or additions thereto.
Transition Services Agreement means
the transition services agreement to be entered into among Sellers and Buyer at the Closing substantially in the form set out in Exhibit E.
United States means the United States of America, its territories, possessions and dependencies, including duty-free retail
outlets located in the United States or any such territories, possession or dependencies, together with any U.S. military bases, wherever located.
Unresolved Purchase Price Items has the meaning ascribed to such term in Section 2.4(c).
US Business means the business of the development, design, manufacture, packaging, labeling and/or production of tobacco
and tobacco-related products for delivery, sale, resale, distribution, marketing and/or promotion under the brand known as Natural American Spirit in the United States.
Unrestricted Business means the business of developing, designing, manufacturing, packaging, labeling, producing,
distributing, selling, marketing and/or promoting medical devices, nicotine replacement therapy products, e-cigarettes, heat not burn products, vapor products, moist snuff, snus, cigars, cigarillos or any smokeless tobacco products.
- 15 -
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
Section 1.2 Interpretation. Unless the context requires otherwise, (a) all
references to Sections, Articles, Exhibits or Schedules are to the Sections, Articles, Exhibits or Schedules of or to this Agreement, (b) each accounting term not otherwise defined in this Agreement has the meaning commonly applied to it in
accordance with GAAP, (c) words in the singular include the plural and vice versa, (d) to the extent the term day or days is used, it will mean calendar days unless Business Days are specified and all references to
times of the day are to New York time unless otherwise specified, (e) the pronoun his refers to the masculine, feminine and neuter, the words herein, hereby, hereof, hereunder and
other words of similar import refer to this Agreement as a whole and not to any particular Section, Article, or other subdivision, (f) the term including means including without limitation, (g) the term
or will be disjunctive but not exclusive, (h) the term extent in the phrase to the extent means the degree to which a subject or other thing extends, and such phrase will not mean simply if,
(i) references to documents or other materials delivered or made available to Buyer or similar phrases shall mean that such documents or other materials were delivered to Buyer or its Representatives or were present in
the Data Room, (j) any reference to any contract or Law is a reference to it as amended, modified and supplemented from time to time (and, in the case of a Law, to (i) any successor provision and (ii) the rules and regulations
promulgated thereunder) and (k) the terms in the ordinary course and in the ordinary course of business shall be deemed to be followed by the words consistent with past practice. The table of contents and
headings contained in this Agreement or in any Exhibit, Schedule or the Disclosure Schedule are for convenience of reference purposes only and will not affect in any way the meaning or interpretation of this Agreement.
ARTICLE II
PURCHASE AND SALE
Section 2.1 Purchase and Sale; Purchase Price. Upon the terms and subject to the conditions of this Agreement, in
consideration of the payment of the Purchase Price, at the Closing (a) Buyer shall purchase from Sellers (or cause one or more Designated Buyers to purchase from Sellers), and Sellers shall transfer to Buyer (or one or more Designated Buyers),
all of the Interests, free and clear of all Liens, except for any restrictions on sales or transfers of securities under applicable securities Laws, and (b) Buyer shall assume from the applicable Seller (or cause one or more Designated Buyers
to assume from such Seller), and the applicable Seller shall assign to Buyer (or one of more Designated Buyers), all of such Sellers rights, title and interest in, to and under the Purchased IP contemplated to be transferred pursuant to the
Intellectual Property Transfer and License Agreement.
Section 2.2 Closing. Subject to the satisfaction or waiver of the
conditions set forth in ARTICLE VII, the closing of the transactions contemplated by this Agreement (the Closing) and all actions specified in this Agreement to occur at the Closing shall take place at the offices of Jones Day,
222 East 41st Street, New York, New York 10017, at 10:00 a.m., Eastern time, on the fifth Business Day immediately following the day on which the last of the conditions set forth in ARTICLE VII
(other than those conditions that by their nature are to be satisfied at the
- 16 -
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
Closing, but subject to the satisfaction or waiver of those conditions at the Closing) are satisfied or waived in accordance with this Agreement, or at such other place and on such other date as
the Parties shall otherwise agree; provided that if Sellers deliver a notice pursuant to Section 6.6(c) at any time following the tenth Business Day prior to the day on which the last of the conditions set forth in ARTICLE VII (other
than those conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver of those conditions at the Closing) are satisfied or waived in accordance with this Agreement, the Closing shall not occur until
that tenth Business Day following the date of such notice (the date on which the Closing takes place, the Closing Date).
Section 2.3 Estimated Purchase Price; Closing Deliveries.
(a) No later than five Business Days prior to the Closing Date, Sellers shall deliver to Buyer a statement (the Estimated Purchase
Price Statement) setting forth Sellers estimates of Cash and Cash Equivalents, Debt and Net Working Capital of the Acquired Companies, in each case, estimated as of the Closing Date, and the Estimated Purchase Price calculated
therefrom, together with reasonable supporting detail, and based on the Acquired Companies books and records and other information then available, and together with wire transfer instructions for the payment of the Estimated Purchase Price.
Sellers shall prepare the Estimated Purchase Price Statement in good faith in accordance with GAAP and Schedule C.
(b) At or prior to the
Closing, Sellers will deliver or cause to be delivered to Buyer the following:
(i) (A) a deed evidencing the transfer
of the Interests of SFRTI Holdings substantially in the form set out in Exhibit F (the Share Transfer Deed of SFRTI Holdings), duly executed by Seller BV, (B) a decision of the general meeting of the partners of SFRTI
Holdings approving the transfer of the Interests of SFRTI Holdings to Buyer and (C) the share ledger of SFRTI Holdings showing Buyer as sole holder of the Interests of SFRTI Holdings;
(ii) a deed evidencing the transfer of the Interests of SFNTC Germany substantially in the form set out in Exhibit G (the
Share Transfer Deed of SFNTC Germany), duly executed by SFNTC and notarized by a German notary public;
(iii) a deed evidencing the transfer of the Interests of SFNTC Italy substantially in the form set out in Exhibit H (the
Share Transfer Deed of SFNTC Italy), duly executed by Seller GP and notarized by an Italian notary public;
(iv) (A) an agreement evidencing the transfer of the Interests of SFNTC Japan substantially in the form set out in Exhibit
I (the Share Transfer Agreement of SFNTC Japan), duly executed by Seller GP, (B) a request form in the name of Seller GP in order to register Buyer as the holder of the Interests of SFNTC Japan on the shareholder register of
SFNTC Japan, duly executed by Seller GP and (C) a certified copy of the minutes of the general meeting of shareholder of SFNTC Japan regarding approval of the transfer of the Interests of SFNTC Japan;
- 17 -
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
(v) an agreement evidencing the transfer of one issued and outstanding share
of SFNTC Belgium held by Seller BV substantially in the form set out in Exhibit J (the Share Transfer Agreement of One SFNTC Belgium Share), duly executed by Seller BV;
(vi) resignation letters or written declarations of resignation of the officers, directors and managing directors, as
applicable, of the Acquired Companies from their offices at such Acquired Companies effective as of the Closing (other than those Persons identified by Buyer prior to Closing with respect to whom such resignation is not required);
(vii) the certificate referred to in Section 7.3(c);
(viii) each of the Intellectual Property Transfer and License Agreement, the Leaf Supply Agreement, the Brand and Product
Integrity Agreement, the Contract Manufacturing Agreement and the Transition Services Agreement, duly executed by the applicable Seller; and
(ix) the items containing Manufacturing Know-How set forth on Section 2.3(b)(ix) of the Disclosure Schedule.
(c) At or prior to the Closing, Buyer will deliver or cause to be delivered the following:
(i) to each Seller, the portion of the Estimated Purchase Price set forth next to such Sellers name on
Section 2.3(c)(i) of the Disclosure Schedule, by wire transfer of immediately available funds pursuant to wire instructions provided by Sellers to Buyer pursuant to Section 2.3(a);
(ii) the Share Transfer Deed of SFRTI Holdings, duly executed by Buyer;
(iii) the Share Transfer Deed of SFNTC Germany, duly executed by Buyer and notarized by a German notary public;
(iv) the Share Transfer Deed of SFNTC Italy, duly executed by Buyer and notarized by an Italian notary public;
(v) (A) the Share Transfer Agreement of SFNTC Japan duly executed by Buyer and (B) a request form in the name of
Seller GP in order to register Buyer as the holder of the Interests of SFNTC Japan on the shareholder register of SFNTC Japan, duly executed by Buyer;
- 18 -
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
(vi) the Share Transfer Agreement of One SFNTC Belgium Share, duly executed
by Buyer;
(vii) the certificate referred to in Section 7.2(c); and
(viii) each of the Intellectual Property Transfer and License Agreement, the Leaf Supply Agreement, the Brand and Product
Integrity Agreement, the Contract Manufacturing Agreement and the Transition Services Agreement, duly executed by Buyer or Designated Buyer party thereto.
Section 2.4 Adjustment to Purchase Price.
(a) As soon as practicable, but in no event later than 90 days after the Closing Date, Buyer shall prepare and deliver to Sellers a statement
(the Proposed Final Purchase Price Statement) setting forth Buyers proposed calculation of the Purchase Price and the components thereof, including (i) a proposed calculation of the actual Net Working Capital of the
Acquired Companies as of the Closing and the related Net Working Capital Adjustment, (ii) a proposed calculation of the actual amount of Cash and Cash Equivalents of the Acquired Companies as of the Closing, and (iii) a proposed
calculation of the actual amount of Debt of the Acquired Companies as of the Closing, and, in each case, the components thereof, together with reasonable supporting detail. Buyer shall prepare the Proposed Final Purchase Price Statement in good
faith in accordance with GAAP and Schedule C and shall cause it to be in the same form and include the same line items as the Estimated Purchase Price Statement.
(b) During the 30-day period following Sellers receipt of the Proposed Final Purchase Price Statement, Sellers and their
accountants and other Representatives shall be permitted reasonable access to review the books and records and other relevant information of the Acquired Companies during regular business hours and such other good faith, reasonable cooperation from
Buyer and its personnel, accountants and advisors (including access to the personnel, accountants and advisors of Buyer and the Acquired Companies) as it may reasonably request to enable it to review and evaluate Buyers determination of the
Proposed Final Purchase Price Statement; provided that such review and evaluation shall only be upon reasonable notice, in compliance with all applicable Laws, shall not unreasonably disrupt personnel and operations of the Business and shall be at
Sellers sole cost and expense. Notwithstanding the foregoing, this Section 2.4(b) shall not require Buyer or any Acquired Company to disclose any information that in the reasonable, good faith judgment of Buyer would reasonably be
expected to result in any violation of any Law to which Buyer or its Subsidiaries (including any Acquired Company) is subject to or cause any privilege (including attorney-client privilege) which Buyer or any of its Subsidiaries (including any
Acquired Company) would be entitled to assert to be undermined with respect to such information and such undermining of such privilege would in Buyers good faith judgment (after consultation with outside counsel) adversely affect in any
material respect Buyers position in any pending or, what Buyer believes in good faith (after consultation with outside counsel) would reasonably be expected to be, future litigation; provided that, in such
- 19 -
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
cases the Parties shall cooperate in seeking to find a way to allow disclosure of such information (including by entering into a joint-defense or similar agreement) to the extent doing so would
not (in the good faith belief of Buyer) reasonably be likely to result in the violation of any such Law or reasonably be likely to cause such privilege to be undermined with respect to such information.
(c) If Sellers do not deliver a written notice of dispute setting forth in reasonable detail the items and amounts in dispute (a
Purchase Price Dispute Notice) to Buyer within 30 days after receiving the Proposed Final Purchase Price Statement, the Parties agree that the Proposed Final Purchase Price Statement shall become final, binding and conclusive upon
the Parties. If Sellers deliver a Purchase Price Dispute Notice to Buyer (the items and amounts in dispute, the Disputed Purchase Price Items) within such 30-day period, the Parties shall use their reasonable best efforts to
resolve the Disputed Purchase Price Items during the 30-day period commencing on the date Buyer receives such Purchase Price Dispute Notice. If the Parties reach agreement with respect to any Disputed Purchase Price Items within such 30-day period,
Buyer shall revise the Proposed Final Purchase Price Statement to reflect such agreement, which agreed items shall be final, binding and conclusive upon the Parties. If the Parties do not obtain a final written resolution of any Disputed Purchase
Price Item within such 30-day period, then the unresolved Disputed Purchase Price Items (the Unresolved Purchase Price Items) shall be submitted immediately to an internationally recognized, independent accounting firm mutually
agreed by the Parties (the Accounting Firm). The Accounting Firm, acting as expert and not as arbitrator, shall be directed to render a determination regarding the Unresolved Purchase Price Items within 30 days after referral of
the matter to the Accounting Firm (or as soon as practicable thereafter) which determination must be in accordance with the terms of this Agreement and in writing and must set forth, in reasonable detail, the basis therefor. The determination of the
Accounting Firm shall be final, conclusive and binding upon the Parties absent manifest error, and judgment may be entered upon the determination of the Accounting Firm in any court having jurisdiction over the party against which such determination
is to be enforced.
(d) The Accounting Firm shall make a determination only with respect to the Unresolved Purchase Price Items, and in a
manner consistent with this Section 2.4, and in no event shall the Accounting Firms determination of Unresolved Purchase Price Items be for an amount outside the range of disagreement among the Parties. Each Party shall use its reasonable
best efforts to furnish to the Accounting Firm such work papers and other documents and information pertaining to the Unresolved Purchase Price Items as the Accounting Firm may request in connection with the performance of its work contemplated
hereby. The fees and expenses of the Accounting Firm shall be borne in the same proportion as the aggregate dollar amount of the Unresolved Purchase Price Items that are unsuccessfully disputed by each party (as finally determined by the Accounting
Firm) bears to the aggregate dollar amount of all of the Unresolved Purchase Price Items submitted to the Accounting Firm.
- 20 -
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
(e) Buyer shall revise the Proposed Final Purchase Price Statement to reflect the
determination of the Accounting Firm pursuant to this Section 2.4. No later than five Business Days after the date on which the Purchase Price is finally determined pursuant to this Section 2.4:
(i) if the Purchase Price exceeds the Estimated Purchase Price, Buyer shall pay or cause to be paid to Sellers, by wire
transfer of immediately available funds pursuant to wire instructions provided by Sellers to Buyer, an amount in cash equal to the amount by which the Purchase Price exceeds the Estimated Purchase Price; and
(ii) if the Estimated Purchase Price exceeds the Purchase Price, Sellers shall pay or cause to be paid to Buyer, by wire
transfer of immediately available funds pursuant to wire instructions provided by Buyer to Sellers, an amount in cash equal to the amount by which the Estimated Purchase Price exceeds the Purchase Price.
(f) The measurement time for purposes of calculating an Acquired Companys actual amount of Net Working Capital, Cash and Cash Equivalents
and Debt as of the Closing in accordance with Section 2.4 shall be 12:01 A.M. on the Closing Date in the jurisdiction in which such Acquired Company is organized.
Section 2.5 Proceedings. Except as otherwise specifically provided for herein, all proceedings that will be taken and all
documents that will be executed and delivered by the Parties on the Closing Date will be deemed to have been taken and executed simultaneously, and no proceeding will be deemed taken nor any document executed and delivered until all such proceedings
have been taken, and all such documents have been executed and delivered.
Section 2.6 Allocation of the Aggregate Purchase
Price. The Parties have agreed to the allocation of the Purchase Price among the Interests, the Purchased IP and among the other assets of the Acquired Companies as set forth in Section 2.6 of the Disclosure Schedule (the Purchase
Price Allocation), provided, however, that in the event of any material changes in the balance sheets of the Acquired Companies between signing and Closing, the Parties will adjust the allocation of the Purchase Price to the
Interests to the extent necessary to account for such changes (but in the event of any such material change, in no event will the Purchase Price allocated to particular Interests be less than the net book value of such Interests on the Closing
Date). Each Party will: (a) be bound by the Purchase Price Allocation for purposes of determining any Taxes; (b) prepare and file, and cause its Affiliates to prepare and file, its Tax Returns on a basis consistent with the Purchase Price
Allocation; and (c) take no position, and cause its Affiliates to take no position, inconsistent with the Purchase Price Allocation on any applicable Tax Return or in any Action before any Tax Authority or otherwise. In the event that the
Purchase Price Allocation is disputed by any Tax Authority, the Party receiving notice of the dispute shall promptly notify the other Parties, and each Party agrees to use its reasonable best efforts to defend such Purchase Price Allocation in any
audit or similar Action.
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CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
ARTICLE III
REPRESENTATIONS AND WARRANTIES REGARDING SELLERS
Except as set forth in the Disclosure Schedule, each Seller severally, and not jointly, represents and warrants to Buyer as follows:
Section 3.1 Organization. Such Seller is validly organized and existing under the laws of its respective jurisdiction of
organization or formation. Such Seller is in good standing under the laws of its respective jurisdiction of organization or formation (to the extent such concept is known or acknowledged in the relevant jurisdiction), except where the failure to be
in good standing would not prevent or materially impair the ability of such Seller to perform its obligations under this Agreement or consummate the Transactions.
Section 3.2 Authorization. Such Seller has all requisite power and authority to execute and deliver this Agreement and the other
Transaction Documents to which it is party, to perform its obligations hereunder and thereunder and to consummate the Transactions. The execution, delivery and performance by such Seller of this Agreement and the other Transaction Documents to which
it is party and the consummation of the Transactions have been duly authorized by all necessary action on the part of such Seller. This Agreement has been, and at the Closing, each other Transaction Document to which such Seller is a party will be,
duly executed and delivered by such Seller and, assuming this Agreement, and at the Closing, assuming each other Transaction Document to which such Seller is a party, constitutes a legal, valid and binding obligation of the other applicable parties
thereto, this Agreement constitutes, and at the Closing each other Transaction Document will constitute, a legal, valid and binding obligation of such Seller, enforceable against such Seller in accordance with its terms, subject to the Bankruptcy
and Equity Exception.
Section 3.3 Noncontravention. Neither the execution and delivery of this Agreement by such Seller, nor
the consummation by such Seller of the Transactions will (a) conflict with any provision of the Governing Documents of such Seller, (b) result in any material breach of, or constitute a material default (or event that, with the giving of
notice or lapse of time, or both, would become a material default) under, or give to any Person any rights of termination, cancellation or acceleration of any obligation pursuant to a material Contract to which such Seller is a party or
(c) subject to the Consents specified in Section 3.4, violate in any material respect any Law to which such Seller is subject.
Section 3.4 Government Authorizations. Except for (a) required filings under any applicable Antitrust Law, (b) the
applicable requirements of the Securities Exchange Act of 1934 and other applicable federal securities Laws, (c) Consents that, if not obtained, would not be material to an Acquired Company or to the Business (taking the Acquired Companies and
the Business together as a whole), and (d) Consents not required to be made until after the Closing, no Consent of, with or to any Governmental Authority is required to be obtained or made by or
- 22 -
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
with respect to such Seller or any of its Subsidiaries in connection with the execution and delivery of this Agreement and the other Transaction Documents to which it is party by such Seller or
the consummation by such Seller of the Transactions, other than any such requirement that is applicable as a result of the identity, status or nationality of Buyer or as a result of any other facts that specifically relate to the business or
activities in which Buyer is or proposes to be engaged, other than the Business as conducted as of the date of this Agreement.
Section 3.5 Ownership of Interests. Such Seller is the sole and exclusive holder of record and beneficial owner of the Interests
set forth across from such Seller on Section 3.5 of the Disclosure Schedule. At the Closing, such Seller shall transfer to Buyer title to such Interests set forth across from each such Seller on Section 3.5 of the Disclosure Schedule, free
and clear of all Liens, except for any restrictions on sales of securities under applicable securities Laws. The Interests represent all of the issued and outstanding equity interests in SFNTC Germany, SFNTC Japan, SFNTC Italy and SFRTI Holdings,
and one issued and outstanding share of SFNTC Belgium, which one share is held by Seller BV.
Section 3.6 Litigation. There
are no Actions pending or, to the Knowledge of such Seller, threatened, against such Seller which are material to such Sellers ability to perform its obligations under this Agreement or consummate the Transactions, and there are no outstanding
Orders to which such Seller is a party or by which it is bound that are material to such Sellers ability to perform its obligations under this Agreement or consummate the Transactions.
Section 3.7 Brokers Fees. Neither such Seller nor any of its Affiliates has entered into any Contract which may result in
the obligation of an Acquired Company or Buyer or any of its Affiliates to pay any fees or commissions to any broker or finder as a result of the execution and delivery of this Agreement or the consummation of the Transactions.
ARTICLE IV
REPRESENTATIONS
AND WARRANTIES REGARDING THE BUSINESS
Except as set forth in the Disclosure Schedule, each Seller represents and warrants to Buyer,
severally and not jointly solely as to itself, as to the Acquired Companies that are its Subsidiaries and, with respect to SFNTC, as to the Purchased IP, as follows:
Section 4.1 Organization of the Acquired Companies. Each Acquired Company is duly organized, validly existing and in good standing
(to the extent such concept is known or acknowledged in the relevant jurisdiction) under the Laws of its respective jurisdiction and has all requisite power and authority to carry on its business as it is currently conducted and to own, lease and
operate its properties where such properties are now owned, leased or operated. Each Acquired Company is duly qualified or licensed to do business and is in good standing in each jurisdiction in which the property owned, leased or operated by it or
the nature of the business conducted by it makes such qualification or license necessary, except where the failure to be so qualified or licensed or in good standing would not have a Material Adverse Effect.
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CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
Section 4.2 Noncontravention. Neither the execution and delivery of this
Agreement by Seller, nor the consummation by Seller of the Transactions will (a) conflict with any provision of the Governing Documents of any Acquired Company, (b) except as set forth in Section 4.2 of the Disclosure Schedule, result
in any material breach of, or constitute a material default (or event that, with the giving of notice or lapse of time, or both, would become a material default) under, or give to any Person any rights of termination, cancellation or acceleration of
any obligation pursuant to a Material Contract or otherwise result in the creation of any Lien (other than a Permitted Lien) on any of the assets of the Business, or (c) subject to the Consents of Governmental Authorities described in
Section 3.4, violate any Law in any material respect to which any Acquired Company or any Purchased IP is subject.
Section 4.3
Subsidiaries.
(a) Section 4.3(a) of the Disclosure Schedule sets forth the name and jurisdiction of organization of each
Subsidiary of SFRTI Holdings. SFRTI Holdings is the sole holder of record and beneficial owner of all the equity interests of each such Subsidiary, free and clear of all Liens, except (i) as may be set forth in the Governing Documents of such
Subsidiary or (ii) for any restrictions on sales of securities under applicable securities Laws.
(b) Except for the Subsidiaries set
forth on Section 4.3(a) of the Disclosure Schedule, (i) no Acquired Company has equity investments (whether through acquisition of an equity interest or otherwise) in any other Person, (ii) no third Person has any rights pursuant to
any shareholder agreements, voting trusts, proxies or other agreements with respect to the purchase, sale or voting of the capital stock or stock rights of any Acquired Company, and (iii) there is no existing option, warrant, convertible or
exchangeable security or other right requiring, or Contract to which any Acquired Company is a party requiring, and there are no convertible securities of an Acquired Company outstanding which upon conversion or exchange would require, the issuance
of any shares of capital stock or other equity interests in any Acquired Company or other securities convertible into shares of capital stock or other equity interests of an Acquired Company, and there are no outstanding or authorized equity
appreciation, phantom unit, profit participation or similar rights of any Acquired Company.
(c) Except as set forth on Section 4.3(c)
of the Disclosure Schedule, the operations of the Business are conducted solely by the Acquired Companies and not through any other Person. The Acquired Companies do not conduct any business activities other than the Business.
Section 4.4 Financial Information. The statutory financial statements prepared in respect of each Acquired Company have been
prepared in all material respects in compliance with applicable Law. The historical financial information identified as such in the document titled Business OverviewMay 2015 set forth in Section 4.4 of the Disclosure Schedule
(such
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CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
information, the Business Financial Information) (a) has been prepared from, and can be reconciled with, the books and records of the Acquired Companies that are those
regularly maintained to assist in the preparation of the audited financial statements of RAI, (b) was prepared in good faith in accordance with the historical accounting methods and policies of RAI, applied on a consistent basis during the
periods involved, (c) fairly presents, in all material respects, as applicable, the brand contribution of the Business, in the case of the unaudited summary combined brand contribution included in the Business Financial Information, and the
Business generally at their respective dates and for the periods covered by such statements, (d) is not materially inaccurate or misleading taken as a whole and (e) reflects accurately all material costs and expenses of the Business as if
it were independent and not affiliated with Sellers, RAI or any other Person. Each Acquired Company maintains books, records, and accounts that, in reasonable detail, accurately and fairly reflect in all material respects all of its transactions and
dispositions of assets, and maintains a system of internal accounting controls sufficient to provide reasonable assurances that its transactions are executed and access to its assets is permitted only in accordance with its managements
authorization.
Section 4.5 No Undisclosed Liabilities. Except (a) as specifically identified in the Business Financial
Information, (b) for Liabilities incurred in the ordinary course of business since December 31, 2014, and (c) for Liabilities incurred in connection with this Agreement, no Acquired Company has any Liabilities of a kind required by
GAAP to be reflected or reserved against in a balance sheet of such Acquired Company (or the notes thereto), other than any such Liabilities that are immaterial in nature or amount to the Acquired Companies or the Business (taking the Acquired
Companies and the Business together as a whole).
Section 4.6 Sufficiency and Title to Tangible Assets.
(a) The material tangible assets of the Acquired Companies are structurally sound, in operating condition, and adequate for the uses to which
they are currently being put, in each case, subject to ordinary wear and tear.
(b) Except as set forth on Section 4.6(b) of the
Disclosure Schedule and except for the Retained Names and Marks and the Intercompany Agreements to be terminated pursuant to this Agreement, the assets of the Acquired Companies will, together with the Purchased IP and Buyers rights under the
Transaction Documents, constitute all of the assets, properties, rights and interests necessary for Buyer to conduct the Business immediately following the Closing in all material respects as the same is conducted as of the date of this Agreement;
provided, however, that no representation or warranty is made in this Section 4.6(b) with respect to any infringement or violation of Intellectual Property owned by any third party, and the Parties acknowledge that any such
representations and warranties are made in Section 4.12. Following the Closing (other than interests arising as a result of being party to a Transaction Document), no Seller nor any Affiliate of a Seller will have any ownership interest in or
right to use any asset of any Acquired Company.
- 25 -
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
(c) Except for Permitted Liens, each Acquired Company has good and valid title to, a valid
leasehold interest in, or a valid license to use, its tangible properties and assets, free and clear of all Liens, except for (i) properties and assets disposed of in the ordinary course of business, (ii) Permitted Liens, and
(iii) with respect to Contracts, the rights of the other parties specified therein.
Section 4.7 Absence of Certain
Changes. From January 1, 2015 to the date of this Agreement, there has not occurred any change, effect, event, circumstance, development or occurrence that has had or would reasonably be expected to have a Material Adverse Effect. Except as
contemplated by this Agreement or any other Transaction Document or except as set forth on Section 4.7 of the Disclosure Schedule, and other than in connection with the negotiation, execution and delivery of this Agreement, the other
Transaction Documents and the other actions taken in connection with the Transactions, from January 1, 2015 to the date of this Agreement: (a) the Acquired Companies have operated and conducted the Business in the ordinary course in all
material respects and (b) no Seller or Acquired Company has taken any action that, if such action were taken after the date of this Agreement, would require Buyers consent pursuant to Section 6.1.
Section 4.8 Litigation. Except as set forth on Section 4.8 of the Disclosure Schedule, there is no Action pending or, to the
Knowledge of Sellers, threatened against an Acquired Company or any of its properties, rights or assets or against the Owned IP or the Purchased IP that is material to any Acquired Company or the Business (taking the Acquired Companies and the
Business together as a whole). There is no Order outstanding against an Acquired Company or any of its properties, rights or assets or against the Owned IP or the Purchased IP that is material to any Acquired Company or the Business. There is no
Action by any Seller or any Acquired Company pending, or, to the Knowledge of Seller, which any Acquired Company intends to initiate, against another Person, in each case that is material to such Acquired Company or the Business (taking the Acquired
Companies and the Business together as a whole).
Section 4.9 Compliance with Applicable Laws; Permits.
(a) Except as set forth on Section 4.9(a) of the Disclosure Schedule, the Acquired Companies are, and since January 1, 2013 have
been, in compliance, in all material respects, with all applicable Laws.
(b) To the Knowledge of Sellers, since January 1, 2013, no
Acquired Company or any Person acting on its behalf has taken or failed to take any action which would reasonably be expected to result in a material breach of procedures designed to ensure compliance by each Acquired Company with Anti-Bribery Laws.
(c) The Acquired Companies hold all material Permits necessary to own, lease or operate their properties and assets and to carry on the
Business as currently conducted and each of the material Permits is in full force and effect in all material respects. There is no Action pending or, to the Knowledge of Sellers, threatened alleging that an Acquired Company is not in material
compliance with any such material Permit or which challenges or questions the validity in any material respect of any such material Permit.
- 26 -
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
Section 4.10 Tax Matters.
(a) Each Acquired Company has duly and timely filed, or caused to be timely filed, with the appropriate Tax Authorities all material Tax
Returns that it was required to file, and paid or caused to be paid all material Taxes shown to be due thereon, except to the extent disputed in good faith and by appropriate proceedings. All such Tax Returns are true, correct and complete in all
material respects. No Acquired Company is currently a beneficiary of any extension of time under which to file any material Tax Returns.
(b) There are no Liens for Taxes on any of the assets of the Acquired Companies or the Purchased IP other than Permitted Liens.
(c) No Acquired Company has waived or requested a waiver of any statute of limitations in respect of material Taxes or agreed to or requested
any extension of time with respect to a material Tax assessment or deficiency, which waiver or extension has not expired.
(d) Except as
set forth on Section 4.10(d) of the Disclosure Schedule, no Acquired Company has received written notice of any material action, dispute, proceeding, audit, claim or assessment pending or, proposed in respect of Taxes or in respect of any Tax
Return of any Acquired Company.
(e) No Acquired Company is a party to any Tax sharing, allocation or indemnity agreement or arrangement.
(f) No Acquired Company has participated in any listed transaction as defined in Section 6707A(c)(2) of the Code or
Treasury Regulation Section 1.6011-4(b)(2).
(g) The representations and warranties made in this refer only to the past activities of
the Acquired Companies and are not intended to serve as representations and warranties regarding, or a guarantee of, nor can they be relied upon with respect to, Taxes attributable to any Tax period (or portion thereof) beginning after, or any Tax
position taken after, the Closing Date.
Section 4.11 Real Property. No Acquired Company owns any real property. All leases
with respect to real property leased by an Acquired Company (the Leases) are valid and in full force and effect, except, in each case, as has not had and would not reasonably be expected to have a Material Adverse Effect. Each
Acquired Company is in possession of the properties or assets purported to be leased under all the Leases, except for failures to have such possession of such properties or assets as have not had and would not reasonably be expected to have a
Material Adverse Effect.
- 27 -
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
Section 4.12 Intellectual Property.
(a) Section 4.12(a) of the Disclosure Schedule is a complete and accurate list of all registered Owned IP (including
applications), and Schedule A contains a complete and accurate list of all registered Purchased IP (including applications). SFNTC owns the entire right, title and interest in and to each item of the Purchased IP, free and clear of any Liens, other
than Permitted Liens. An Acquired Company owns the entire right, title and interest in and to each item of the Owned IP, free and clear of any Liens, other than Permitted Liens. To the Knowledge of Sellers, each item of the Owned IP and the
Purchased IP is subsisting and has not been adjudged invalid, unregistrable or unenforceable, in whole or in part.
(b)
Schedule A contains a complete and accurate list of all Trademarks registered in jurisdictions other than the United States and used in the Business in relation to the NAS Products, excluding the Retained Names and Marks.
(c) Except as set forth on Section 4.12(c) of the Disclosure Schedule, to the Knowledge of Sellers, no Seller Group Entity
or any Acquired Company has received notice of any claims, either asserted or threatened, that the use, sale, testing, promotion or distribution of any of the Owned IP or the Purchased IP infringes or otherwise violates the rights of any third
Person, except in each case for such matters as would not have a Material Adverse Effect. Sellers make no warranty that they have carried out any search to attempt to determine whether any such third Person rights exist. Except as set forth on
Section 4.12(c) of the Disclosure Schedule, to the Knowledge of Sellers, the operation of the Business does not infringe and has not in the two years before the date of this Agreement infringed, the Intellectual Property of a third party.
Except as set forth on Section 4.12(c) of the Disclosure Schedule, in the two years before the date of this Agreement, no Seller Group Entity or any Acquired Company has received written notice from any third party disputing the right of an
Acquired Company or a Seller Group Entity to use the Business IP.
(d) Except as set forth on Section 4.12(d) of the
Disclosure Schedule, to the Knowledge of Sellers, no third party is infringing the Owned IP, the Purchased IP or the Licensed Shared IP, except in each case for such matters as are not material to any Acquired Company or the Business (taking the
Acquired Companies and the Business together as a whole). Except as set forth on Section 4.12(d) of the Disclosure Schedule, in the two years before the date of this Agreement, no Acquired Company or, in relation to the Business, Seller Group
Entity has disputed in writing the right of a third party to use the Intellectual Property owned or used by such third party.
- 28 -
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
(e) Except as set forth on Section 4.12(e) of the Disclosure Schedule,
to the Knowledge of Sellers, as of the date of this Agreement there are no circumstances that would prevent the use by any of the Acquired Companies of any Core Brand Element or an application by any of the Acquired Companies for Trademark
registration of any Core Brand Element in connection with the Business from being granted, in each case in any jurisdiction in which NAS Products are actively being sold or in which any Seller or Acquired Company as of the date of this Agreement has
a pending application to register a Core Brand Element as a trade mark, in each case in connection with the Business as of the date of this Agreement.
(f) Except as would not have a Material Adverse Effect, each officer, director, employee and independent contractor of an
Acquired Company or, in respect of the Business, a Seller who, either alone or with others, has created, developed or invented Intellectual Property that an Acquired Company or, in relation to the Business, a Seller Group Entity uses has entered
into a written agreement with an Acquired Company or a Seller Group Entity (as applicable) obliging such Person to assign such Intellectual Property to an Acquired Company or a Seller where and when necessary to convey to an Acquired Company or a
Seller such Intellectual Property.
(g) Sellers have taken commercially reasonable actions to protect the confidentiality
of Proprietary Information which the Seller Group intends to protect as a trade secret and, to the Knowledge of Sellers, all such Proprietary Information has been kept confidential. For the purposes of this clause (g), Proprietary
Information means confidential information (in any form) relating to the Business, including: (i) information relating to any Acquired Companys or, in relation to the Business, a Seller Group Entitys financial or trading
position, assets, customers, suppliers, employees, operations, processes, products, plans or market opportunities; (ii) Know-How (including Manufacturing Know-How), technical information or software, and (iii) findings, data or analysis
derived from anything in (i) or (ii).
Section 4.13 Information Technology.
(a) To the Knowledge of Sellers, all of the IT Systems that are material to any Acquired Company or the Business (taking the
Acquired Companies and the Business together as a whole) are owned by, or validly licensed, leased or supplied under Contracts to, an Acquired Company.
(b) To the Knowledge of Sellers, in the last 18 months, the IT Systems have not failed to any material extent and the data that
they process has not been corrupted or compromised.
- 29 -
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
Section 4.14 Environmental Matters. This Section 4.14 shall constitute the
sole representations of Sellers with respect to environmental matters, including matters relating to Environmental Law or Hazardous Materials. Except for matters that have not been material to an Acquired Company or the Business (taking the Acquired
Companies and the Business together as a whole):
(a) each Acquired Company is, and since January 1, 2013 has been, in compliance with
all applicable Environmental Laws, and no Seller or Acquired Company has received:
(i) to Sellers Knowledge, any
communication from a Governmental Authority, or any written communication from any other Person that alleges that an Acquired Company is in violation of, or has Liability under, any Environmental Law or any Permit issued pursuant to Environmental
Law; or
(ii) to Sellers Knowledge, any request for information pursuant to any Environmental Law that is outstanding
or unresolved that would form the basis of any violation or Liability under Environmental Law; and
(b) there are no Actions pending or, to
the Knowledge of Sellers, threatened against any Acquired Company which allege Liability arising out of, based on or resulting from the failure of an Acquired Company to comply with any Environmental Law or any Permit issued pursuant to
Environmental Law.
Section 4.15 Material Contracts.
(a) Except as set forth on Section 4.15(a) of the Disclosure Schedule, no Acquired Company or, solely to the extent related to the
Business, no Seller, is a party to or bound by the following Contracts (with such Contracts to which an Acquired Company or, solely to the extent related to the Business, a Seller is a party or is otherwise bound being referred to herein as the
Material Contracts):
(i) any Contract that purports to limit, curtail or restrict the Business in any
material respect to engage or compete in any business in any geographic area outside the United States;
(ii) any Lease, or
any other lease (whether of real or personal property) providing for annual rental payments of $500,000 or more that cannot be terminated on not more than one years notice without payment by any Acquired Company of any material penalty;
(iii) any Contract for the purchase of materials, supplies, goods, services, equipment or other assets providing for annual
payments of $500,000 or more that cannot be terminated on not more than one years notice without payment by any Acquired Company of any material penalty;
- 30 -
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
(iv) any sales, distribution or other similar Contract providing for the sale
by the Acquired Companies of materials, supplies, goods, services, equipment or other assets that provides for annual payments to the Acquired Companies of $500,000 or more that cannot be terminated on not more than one years notice without
payment by any Acquired Company of any material penalty;
(v) any Contract establishing a partnership, joint venture or
similar arrangement;
(vi) any Contract relating to the acquisition or disposition of any business (whether by merger, sale
of stock, sale of assets or otherwise);
(vii) any Contract relating to Debt, except any such Contract with an aggregate
outstanding principal amount or guarantee of Debt or other obligation not exceeding $500,000;
(viii) any collective
bargaining Contract or other Contract with any labor organization, works council, union or other similar association;
(ix)
any Contract relating to the license of any Intellectual Property to or from any Acquired Company (other than agreements for commercially available software products, confidentiality and non-disclosure agreements and agreement with suppliers,
manufacturers, distributors and other service providers entered into in the ordinary course of business);
(x) any
co-existence, settlement or similar Contract;
(xi) any Contract under which an IT System that is material to any Acquired
Company or the Business (taking the Acquired Companies and the Business together as a whole), is licensed, leased, supplied, maintained or supported;
(xii) any Contract with any Governmental Authority;
(xiii) any Intercompany Agreement (other than a Transaction Document) that will continue to be in effect following the Closing;
or
(xiv) any Contract that, if terminated or not renewed (or otherwise were not in effect), would, or would reasonably be
expected to, result in a Material Adverse Effect or otherwise result in a material disruption to the Business.
(b) Each Material Contract
is a legal, valid and binding obligation of the Acquired Company or Seller party thereto and, to the Knowledge of Sellers, of each other counterparty to such Material Contract, and is enforceable against the Acquired Company or Seller party thereto
and, to the Knowledge of Sellers, against each such other party in accordance with its terms,
- 31 -
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
subject, in each case, to the Bankruptcy and Equity Exception. No Acquired Company, nor any Seller party to any Material Contract, nor, to the Knowledge of Sellers, any other counterparty to a
Material Contract, is in material default or has failed to perform any material obligation under such Material Contract. The Sellers have made available to Buyer true, correct and complete copies of each Material Contract.
Section 4.16 Employee Matters.
(a) Section 4.16(a) of the Disclosure Schedule sets forth a true and accurate list of (i) all employee benefit plans (within the
meaning of Section 3(3) of ERISA (whether or not subject to ERISA)) and all bonus, incentive, deferred compensation, pension, retiree health or life insurance, supplemental retirement, employment, severance, superannuation, profit-sharing,
welfare or other benefit plans, programs, agreements or arrangements, that are maintained, contributed to, or sponsored by any Acquired Company or with respect to which any Acquired Company would reasonably be expected to have any Liability, for the
benefit of any employee who is employed by an Acquired Company (each such individual (including any employees of an Acquired Company who are not actively employed at such time and who have a right of re-instatement), a Business
Employee), any other individual service provider of the Acquired Companies or any dependents thereof and (ii) all individual employment, assignment, retention, termination, change in control, severance or other similar contracts or
agreements pursuant to which any Acquired Company currently has any Liability with respect to any Business Employee, any other individual service provider of the Acquired Companies or any dependents thereof (the plans, programs, arrangements,
contracts and agreements described in clauses (i) and (ii) above, excluding any plans, programs, arrangements, contracts or agreements not sponsored by any Acquired Company to which contributions by an employer are mandated by a
Governmental Authority or by Law, are hereinafter referred to as the Business Employee Plans). Each Business Employee Plan is in writing and, with respect to each Business Employee Plan, Sellers have previously made available to
Buyer, true and correct copies of (A) each Business Employee Plan (or to the extent no such copy exists, an accurate and detailed written description thereof), (B) all amendments and related trust documents, and all material written
Contracts relating to each Business Employee Plan, including administrative service agreements and group insurance Contracts, and (C) the most recent summary plan description, most recent annual report and most recent actuarial report prepared
for each Business Employee Plan, as applicable. Except as specifically provided in the foregoing documents made available to Buyer and except as provided by applicable Law, there are no amendments to any Business Employee Plan, nor has any party
with the authority to do so undertaken to make any such amendments or to adopt or approve any new Business Employee Plan.
(b) Each
Business Employee Plan complies in form and has been maintained, operated and administered in all material respects in compliance with its terms and all applicable Laws.
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CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
(c) All contributions to, and payments from and with respect to (including, without
limitation, insurance premiums), each Business Employee Plan that may have been required to be made in accordance with the terms of any such Business Employee Plan and, when applicable, the Law of the jurisdiction in which such Business Employee
Plan is maintained, have been timely made or properly accrued in all material respects in accordance with the terms of the applicable Business Employee Plan, applicable Law and GAAP (or other applicable accounting standards).
(d) Except as set forth on Section 4.16(d) of the Disclosure Schedule, the consummation of the Transactions (whether alone or in
combination with any other related event) will not (i) require the payment to any Business Employee or other individual service provider of any Acquired Company of any money or other property or rights under any Business Employee Plan,
(ii) accelerate or provide any other rights or benefits to any Business Employee under any Business Employee Plan, or (iii) limit or restrict the right to merge, amend, terminate or transfer the assets of any Business Employee Plan on or
following the Closing.
(e) There are no (i) pending or threatened audits or investigations by any Governmental Authority involving
any Business Employee Plan, (ii) claims pending or, to the Knowledge of Sellers, threatened (except for routine claims for benefits payable in the normal operation of such Business Employee Plan) against any Business Employee Plan, any trustee
or fiduciary thereof, or the assets of any trust of any Business Employee Plan, or (iii) Actions against or involving any Business Employee Plan asserting any rights or claims to benefits under such Business Employee Plan, in each case, which
will, or would reasonably be expected to, give rise to any material Liability.
(f) No Business Employee Plan provides post-retirement
health and/or welfare benefits to any current or former Business Employee of the Acquired Companies, except as required by applicable Law.
(g) Except as set forth on Section 4.16(g) of the Disclosure Schedule, none of the Business Employee Plans are single employer pension
plans, multiemployer plans (within the meaning of Section 3(37) of ERISA), or any other type of plan subject to Title IV of ERISA or Section 302 of ERISA, and, except as set forth on Section 4.16(g) of the Disclosure Schedule, neither
the Acquired Companies nor any entity that would be deemed a single employer with the Acquired Companies under Section 414(b), (c), (m) or (o) of the Code or Section 4001 of ERISA sponsors, maintains, contributes to,
has any obligation to contribute to, or has, within the past six years, contributed to or had any obligation to contribute to any plan subject to Title IV of ERISA or Section 302 of ERISA.
(h) With respect to each Business Employee Plan, the fair market value of the assets of each funded Business Employee Plan, the liability of
each insurer for any Business Employee Plan funded through insurance or the book reserve established for any Business Employee Plan for which a book reserve is required by GAAP, together with any accrued contributions, is
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CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
sufficient to procure or provide for the accrued benefit obligations thereunder. The Transactions will not directly or indirectly adversely affect the sufficiency of such assets, insurance or
book reserves. Each Business Employee Plan that is intended to qualify for special tax treatment under any applicable Law satisfies all requirements for such treatment.
(i) Besides the arrangements disclosed in Section 4.16(a) of the Disclosure Schedule or as otherwise required by Law, there is no
arrangement in respect of any Business Employee that an Acquired Company is or may become liable (whether such Liability be actual or contingent, present or future) to provide or contribute to, under or in connection with which benefits are payable
on death, retirement or leaving employment, including, but not limited to, leaving employment on grounds of long-term sickness absence.
(j) Besides the arrangements disclosed in Section 4.16(a) of the Disclosure Schedule, no Acquired Company has made, or agreed to make, a
payment, or provided, or agreed to provide, a benefit to a former or current Business Employee or to their dependents in connection with an actual or proposed termination or suspension of employment or variation or proposed variation of an
employment contract.
(k) Except as set forth on Section 4.16(k) of the Disclosure Schedule, with respect to services of the type
typically provided by employees, all personnel whose services are utilized in or by the Acquired Companies are employed by the Acquired Companies.
Section 4.17 Labor Matters.
(a) Each Acquired Company is in compliance in all material respects with all applicable Laws governing the employment of labor, including all
applicable Laws relating to wages, hours, discrimination, termination, reductions in force, classification of employees for purposes of overtime, overtime payments and Business Employee Plan participation, immigration, civil rights, safety and
health, workers compensation, and the collection and payment of withholding and/or social security Taxes and similar Taxes.
(b)
Except as set forth on Section 4.15(a)(viii) of the Disclosure Schedule, none of the Acquired Companies is a party to or is bound by a collective bargaining or works council agreement. Except as set forth on Section 4.17(b) of the
Disclosure Schedule, no union, employee association, works council or similar organization represents any Business Employees, no such organization has made a written demand against any Acquired Company or any of its Affiliates for recognition with
respect to representation of any Business Employee or a group of such employees and no such organization is attempting to organize such employees. There are no pending, and since January 1, 2013 there have been no, (i) strikes, work
stoppages, slowdowns, lockouts, or other material labor disputes threatened against or involving any Acquired Company or (ii) material layoffs or reductions in force involving the employees of any Acquired Company. There are no material written
grievances or arbitrations, or written complaints, by represented employees of any Acquired Company, and, to the Knowledge of Sellers, no such grievances or complaints are threatened.
- 34 -
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
(c) Sellers have previously provided Buyer with a true and correct listing, as of
September 7, 2015, of each Business Employee (with his or her name redacted), his or her current rate of annual base salary or current wages, 2015 annual bonus target, job title, employment status, work location and date of hire.
Section 4.18 Insurance. Section 4.18 of the Disclosure Schedule sets forth a list and summary of all material insurance
policies and fidelity bonds relating to the Business. There are no material claims by any Acquired Company pending under any of such policies or bonds as to which coverage has been questioned, denied or disputed by the underwriters of such policies
or bonds or in respect of which such underwriters have reserved their rights.
Section 4.19 Intercompany Agreements.
Section 4.19 of the Disclosure Schedule sets forth each Contract between an Acquired Company, on the one hand, and a Seller or any of its Affiliates (other than an Acquired Company), on the other hand (collectively, the Intercompany
Agreements).
Section 4.20 Compliance with Data Privacy Laws. Except for matters which have not been, and would not
reasonably be expected to be, material to any Acquired Company or to the Business (taking the Acquired Companies and the Business together as a whole), the Business has been conducted in compliance, in all material respects, with all applicable Laws
relating to personally identifiable information. Since January 1, 2013, no Acquired Company has received any written notice or written allegation that it has not complied with any of such Laws.
Section 4.21 Brokers Fees. No Acquired Company nor Buyer or any of its Affiliates is or will be liable to pay any fees or
commissions to any broker or finder or Person providing comparable or similar services as a result of the execution and delivery of this Agreement or the consummation of the Transactions.
Section 4.22 Product Recalls, Other Market Withdrawals. Section 4.22 of the Disclosure Schedule sets forth a true, complete
and correct list, as of the date of this Agreement, of mandatory and voluntary product recalls or withdrawals from the market of any NAS Product conducted outside the United States by any Seller or any of such Sellers Affiliates or any
Acquired Company since January 1, 2013.
- 35 -
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
ARTICLE V
REPRESENTATIONS AND WARRANTIES REGARDING BUYER
Buyer represents and warrants to Sellers as follows:
Section 5.1 Organization. Buyer is a Dutch private company with limited liability duly organized, validly existing, and in good
standing under the laws of the Netherlands and Buyer has all requisite power and authority to carry on its business as it is currently conducted and to own, lease and operate its properties where such properties are now owned, leased or operated.
Buyer is duly qualified or licensed to do business and is in good standing in each jurisdiction in which the property owned, leased or operated by it or the nature of the business conducted by it makes such qualification or license necessary, except
where the failure to be so qualified or licensed or in good standing would not prevent or materially impair the ability of Buyer to perform its obligations under this Agreement or consummate the Transactions.
Section 5.2 Authorization. Buyer has all requisite power and authority to execute and deliver this Agreement and the other
Transaction Documents to which it is party, to perform its obligations hereunder and thereunder and to consummate the Transactions. The execution, delivery and performance by Buyer of this Agreement and the other Transaction Documents to which it is
party and the consummation of the Transactions have been duly authorized by all necessary action on the part of Buyer. This Agreement has been, and at the Closing, each other Transaction Document to which Buyer is party will be, duly executed and
delivered by Buyer and, assuming this Agreement, and at the Closing, assuming each other Transaction Documents to which Buyer is a party, constitutes a legal, valid and binding obligation of the other applicable parties thereto, this Agreement
constitutes, and at the Closing each other Transaction Document will constitute, a legal, valid and binding obligation of Buyer, enforceable against Buyer in accordance with its terms, subject to the Bankruptcy and Equity Exception.
Section 5.3 Noncontravention. Neither the execution and delivery of this Agreement by Buyer, nor the consummation by Buyer of the
Transactions will (a) conflict with any provision of the Governing Documents of Buyer, (b) result in any material breach of, or constitute a material default (or event that, with the giving of notice or lapse of time, or both, would become
a material default) under, or give to any Person any rights of termination, cancellation or acceleration of any obligation pursuant to a material Contract to which Buyer is a party or (c) subject to the Consents specified in Section 3.4,
violate in any material respect any Law to which Buyer is subject.
Section 5.4 Government Authorizations. Except for
(a) required filings under any applicable Antitrust Law, (b) Consents that, if not obtained, would not have a Buyer Material Adverse Effect, and (d) Consents not required to be made until after the Closing, no Consent of, with or to
any Governmental Authority is required to be obtained or made by or with respect to Buyer or any of its Subsidiaries or Affiliates in connection with the execution and delivery of this Agreement and the other Transaction Documents to which it is
party by Buyer or the consummation by Buyer of the Transactions.
Section 5.5 Litigation. There are no Actions pending or, to
the Knowledge of Buyer, threatened, against Buyer which are material to Buyers ability to perform its obligations under this Agreement or consummate the Transactions, and there are no outstanding Orders to which Buyer is a party or by which it
is bound that are material to Buyers ability to perform its obligations under this Agreement or consummate the Transactions.
- 36 -
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
Section 5.6 Brokers Fees. Neither Buyer nor any of its Affiliates has any
Contract which may result in the obligation of Seller or any of their Affiliates (other than an Acquired Company) to pay any fees or commissions to any broker or finder as a result of the execution and delivery of this Agreement or the consummation
of the Transactions.
Section 5.7 Financial Capacity. Buyer has, and will have at Closing, sufficient cash on hand and/or
undrawn amounts available under existing lines of credit or other sources of financing necessary to consummate the Transactions and to pay in cash the Purchase Price in accordance with the terms of ARTICLE II and any other amounts to be paid by it
hereunder.
Section 5.8 Investment. Buyer is aware that the Interests being acquired by Buyer pursuant to the Transactions
have not been registered under the Securities Act or under any other applicable securities Laws. Buyer is qualified as an accredited investor as such terms is defined in Rule 501(a) promulgated under the Securities Act, and Buyer is
purchasing the Interests solely for investment and not with a view toward, or for sale in connection with, any distribution thereof within the meaning of the Securities Act, nor with any present intention of distributing or selling any of the
Interests in violation of the Securities Act or under any other applicable securities Laws. Buyer and its Subsidiaries and Affiliates will not sell or otherwise dispose of the Interests except in compliance with the registration requirements or
exemption provisions under the Securities Act and the rules and regulations promulgated thereunder, or any other applicable securities Laws. Buyer has knowledge, experience and expertise in business and financial matters and has the capability of
understanding and evaluating the risks and merits associated with Transactions. Buyer can bear the economic risk of an investment in the Interests pursuant to this Agreement and can afford a complete loss of such investment.
Section 5.9 Information. Sellers have provided Buyer with access to the facilities, books, records and personnel of the Acquired
Companies in order for Buyer to investigate the Business, the Purchased IP and the assets and properties of the Acquired Companies to make an informed investment decision to purchase the Interests and the Purchased IP and to enter into the
Transaction Documents. Buyer agrees to accept the Interests and the Purchased IP on the Closing Date based upon its own investigation, examination and determination with respect thereto as to all matters, including the representations and warranties
provided in the Transaction Documents, and acknowledges that no express or implied representations or warranties of any nature are made by or on behalf of or imputed to a Seller or any Person acting on its behalf, except as expressly set forth in
the Transaction Documents. Notwithstanding the foregoing, nothing in this Section 5.9, nor the scope of the representations and warranties set out in this Agreement or in any other Transaction Document, nor the absence of any representation or
warranty from this Agreement or from any other Transaction Document shall (or shall be deemed to) limit, modify or otherwise affect any claim or cause of action of Buyer for fraud.
- 37 -
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
ARTICLE VI
COVENANTS
Section 6.1 Conduct of Business.
(a) Each Seller covenants and agrees as to itself and as to the Acquired Companies that are its Subsidiaries and, with respect to SFNTC, as to
the Purchased IP, that, except (i) as otherwise permitted or required by this Agreement (including as described in Section 6.1 of the Disclosure Schedule), (ii) as required by any change in applicable Law following written notice
thereof to Buyer, or (iii) as otherwise approved in writing by Buyer (which approval shall not be unreasonably withheld, delayed or conditioned), during the period commencing on the date hereof and ending on the earlier of the Closing Date and
the termination of this Agreement in accordance with its terms, it will, and will cause each of the applicable Acquired Companies to: (A) conduct the Business in all material respects in the ordinary course and (B) use reasonable best
efforts to preserve intact in all material respects the business relationships and goodwill associated with the Natural American Spirit brand with the customers, suppliers, distributors, agents, retailers, Governmental Authorities and others with
whom the Acquired Companies or the Business have business relationships, (C) use reasonable best efforts to keep available the services of the employees and officers of such Acquired Company (it being understood that, in respect of clauses
(B) and (C), such reasonable best efforts will not include any requirement or obligation to pay any consideration not otherwise required to be paid by the terms of an existing Contract or offer or grant any financial accommodation or other
benefit not otherwise required to be made by the terms of an existing Contract) and (D) continue to prosecute in the ordinary course of the Business applications to register any Core Brand Elements as trademarks.
(b) From the date hereof until the earlier of the Closing Date and the termination of this Agreement in accordance with its terms, each Seller
covenants and agrees as to itself and as to the Acquired Companies that are its Subsidiaries and, with respect to SFNTC, as to the Purchased IP, that, except (i) as otherwise permitted or required by this Agreement (including as described in
Section 6.1 of the Disclosure Schedule), (ii) required by any change in applicable Law following written notice thereof to Buyer, or (iii) as otherwise approved in writing by Buyer (which approval shall not be unreasonably withheld,
delayed or conditioned), it will not, and will cause the applicable Acquired Company not to, and with respect to the Purchased IP, will not take any of the following actions:
(A) issue, sell, transfer, place a Lien on, or authorize or propose the issuance, sale, transfer or placing a Lien on,
additional shares of capital stock or other equity interests of any Acquired Company (including the Interests), or securities convertible into any such shares or interests, or any rights, warrants or options to acquire any such shares or interests
or other convertible securities (other than transfer restrictions imposed by applicable securities laws);
- 38 -
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
(B) redeem, purchase or otherwise acquire any outstanding Interests;
(C) adopt any amendment to, or amend, the Governing Documents of any Acquired Company;
(D) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, partnership or other
business organization or division;
(E) adopt a plan of complete or partial liquidation or resolutions providing for the
dissolution, restructuring, recapitalization or other similar reorganization of any Acquired Company or dissolve or liquidate any Acquired Company;
(F) cause any Acquired Company to declare, set aside or pay any dividend or other distribution in respect of its capital stock
or other equity interests, other than in cash;
(G) grant any Lien (other than granting or suffering to exist a Permitted
Lien) on any Purchased IP or material asset of an Acquired Company that will not be extinguished, as to such assets, at the Closing;
(H) incur or suffer to exist any Debt, except for any Debt for which Sellers or its Affiliates (other than the Acquired
Companies) shall be solely obligated or that will be extinguished at or prior to the Closing;
(I) other than in the
ordinary course of business, waive any claims or rights of material value to the Business;
(J) sell, pledge, assign,
transfer, lease, sublease, license or otherwise dispose of or place any Lien (other than Permitted Liens) on any material assets of any Acquired Company or the Business, other than (1) inventory and obsolete or excess assets in the ordinary
course of business or (2) pursuant to existing Contracts or pursuant to Contracts entered into after the date of this Agreement without violating the terms of this Agreement;
(K) cause any Acquired Company to (1) undertake or commit to undertake any capital expenditure in any 12-month period in
excess of $500,000 in the aggregate for all such capital expenditures that are not contemplated by the capital plans set forth in Section 6.1(b)(K) of the Disclosure Schedule, or (2) fail to make any capital expenditure contemplated by the
capital plans set forth in Section 6.1(b)(K) of the Disclosure Schedule;
- 39 -
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
(L) other than to the extent required by any existing Business Employee Plan,
(1) grant or announce any increase in the wages, salaries, compensation, bonuses, incentives, pension or other benefits payable to any Business Employee or any other individual service provider of the Acquired Companies, (2) cause any
Acquired Company to establish, adopt, amend or become a party to any new employee benefit or compensation plan, program, commitment or Contract or collective bargaining agreement or other trade union agreement or amend or terminate any existing
Business Employee Plan as applicable to Business Employees or other individual service providers of the Acquired Companies, other than annual renewals of existing Business Employee Plans in the ordinary course of business, (3) solely with
respect to Business Employees or other individual service providers of the Acquired Companies, increase or promise to increase any benefits under any Business Employee Plan, (4) accelerate any vesting or funding of compensation or benefits or
pay or fund any material compensation or benefits not otherwise due to any Business Employee or other individual service providers of the Acquired Companies, (5) grant any Business Employee or other individual service provider of the Acquired
Companies rights to severance or termination pay, or enter into any employment, consulting or severance agreement, other than customary release agreements in connection with employment terminations in the ordinary course of business, (6) hire
any new employees of the Acquired Companies unless such hiring is in the ordinary course of business to replace employees who have been terminated or who have voluntarily resigned, (7) transfer any employees of Sellers or its Affiliates to the
Acquired Companies or transfer any Business Employees from the Acquired Companies, or (8) except for communications consistent with this Agreement or as required by Law, make any broad based communications with Business Employees regarding the
compensation, benefits or other treatment that they will receive in connection with the Transactions, unless Buyer has been provided with prior notice of, and the opportunity to review and comment upon, any such communications;
(M) (1) amend or modify any material provision of a Material Contract, (2) terminate any Material Contract set forth
on Section 4.15(a)(iii), Section 4.15(a)(iv) or Section 4.15(a)(xiv) of the Disclosure Schedule, (3) other than in the ordinary course, enter into, amend or modify any Contract that would be a Material Contract if it had been
entered into, so amended or so modified prior to the date of this Agreement or (4) waive, release or assign any material rights, claims or benefits under, or discharge any counterpartys performance under, any Material Contract;
- 40 -
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
(N) manage working capital in a manner inconsistent in any material respect
with the historical ordinary course management of items of working capital;
(O) other than in the ordinary course of
business, (1) delay the satisfaction or discharge of any accounts payable or trade payables, (2) accelerate the collection of any accounts receivable, (3) revalue any assets (including without limitation writing down the value of
inventory or writing-off notes or accounts receivable) except as required by GAAP (and in which case, on notice to Buyer), (4) accelerate the delivery or sale of any product or any services or (5) offer discounts on sales of products or
premiums on purchases of raw materials;
(P) knowingly take any action that is reasonably likely to result in the
termination, suspension, material modification, revocation or nonrenewal of any Permits that are material to any Acquired Company or to the Business (taking the Acquired Companies and the Business together as a whole);
(Q) make any change with respect to any Acquired Companys or the Businesss accounting practices, policies,
principles, methods or procedures, including revenue recognition policies, other than as required by GAAP (which GAAP-required changes will be provided to Buyer in writing prior to any such change being made);
(R) other than as required by applicable Laws or as provided in Section 6.11(f), (1) make any Tax election that is
inconsistent with past practice or (2) make, revoke or change any other material Tax election, adopt or change any material Tax accounting method, practice or period, grant or request a waiver or extension of any limitation on the period for
audit and examination or assessment and collection of Tax, file any amended Tax Return or settle or compromise any contested Tax liability;
(S) other than in the ordinary course of business, cancel or fail to cause to continue in full force insurance coverage
consistent with the insurance coverage historically maintained by Sellers and their Affiliates in respect of the Business;
(T) allow any of the rights relating to any material registered Owned IP or material registered Purchased IP to lapse, be
abandoned or be surrendered;
(U) other than in the ordinary course of business, settle any Action at any Intellectual
Property-related registry anywhere in the world or any other Action, in each case in relation to any of the material registered Owned IP or Purchased IP; or
- 41 -
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
(V) agree to, authorize or take any of the foregoing actions.
(c) No Seller shall cause any Acquired Company that is not a Subsidiary to take, or omit to take, any action that would constitute a breach of
Section 6.1(a) or Section 6.1(b).
(d) Nothing contained in this Agreement will give Buyer, directly or indirectly, the right to
control or direct Sellers or any Acquired Companys operations prior to the Closing. Prior to the Closing, Sellers will exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over their
respective operations and the operations of their respective Subsidiaries.
Section 6.2 Access to Information;
Confidentiality.
(a) From the date hereof until the earlier of the Closing Date and the termination of this Agreement in accordance
with its terms, Sellers shall cause the Acquired Companies to permit Buyer and its authorized agents and Representatives, including its independent accountants, to have reasonable access to the properties, books and records of the Business during
normal business hours to review information and documentation relative to the properties, books, contracts, commitments and other records of the Business; provided that such investigation shall only be upon reasonable notice, in compliance
with all applicable Laws, and shall not unreasonably disrupt personnel and operations of the Business and shall be at Buyers sole cost and expense. All requests by Buyer for access pursuant to this Section 6.2 shall be submitted or
directed exclusively to Ronald G. Price, Vice President of Business Development of RAI Services Company, or such other individuals as Sellers may designate in writing from time to time. Neither Buyer nor any of its Representatives shall contact any
of the employees, customers, suppliers, or other parties that have business relationships with any Acquired Company or any of their respective Affiliates about the Transactions, whether in person or by telephone, mail or other means of
communication, without the specific prior authorization of Sellers.
(b) This Section 6.2 shall not require a Seller or any of
its Affiliates to permit any access, or to disclose any information, that in the reasonable, good faith judgment of such Seller would reasonably be expected to result in (i) any violation of any Contract or Law to which such Party or its
Subsidiaries is a party or is subject or cause any privilege (including attorney-client privilege) which such Party or any of its Subsidiaries would be entitled to assert to be undermined with respect to such information and such undermining of such
privilege would in such Partys good faith judgment (after consultation with outside counsel) adversely affect in any material respect such Partys position in any pending or, what such Party believes in good faith (after consultation with
outside counsel) would reasonably be expected to be, future litigation or (ii) if such Party or any of its Subsidiaries, on the one hand, and the other or any of its Subsidiaries, on the other hand, are adverse parties in a litigation, such
information being reasonably pertinent thereto; provided that, in the cases of clause (i), the Parties shall cooperate in seeking to find a way to allow disclosure of such information (including by entering into a
- 42 -
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
joint-defense or similar agreement) to the extent doing so (A) would not (in the good faith belief of the Party being requested to disclose the information) reasonably be likely to result in
the violation of any such Contract or Law or reasonably be likely to cause such privilege to be undermined with respect to such information or (B) would reasonably (in the good faith belief of the Party being requested to disclose the
information (after consultation with outside counsel)) be managed through the use of customary clean-room arrangements pursuant to which non-employee Representatives of the other Party shall be provided access to such information.
(c) No investigation, or information received, pursuant to this Section 6.2 will (i) modify any of the representations and
warranties of the Parties (or operate as a waiver of such Partys rights for indemnification for a breach of any representation or warranty), (ii) operate as a waiver of any condition set forth in ARTICLE VII or (iii) be deemed to
amend or supplement the Disclosure Schedule.
(d) The terms of the Confidentiality Agreements are incorporated into this Agreement by
reference and shall continue in full force and effect until the Closing, at which time the confidentiality obligations under each of the Confidentiality Agreements shall terminate. If, for any reason, the Closing is not consummated, the
Confidentiality Agreements shall continue in full force and effect in accordance with their respective terms.
(e) From and after the
Closing, each of the Sellers shall, and shall cause its respective Affiliates and its and their respective Representatives to, hold in confidence any and all confidential and proprietary information (other than Non-Confidential Information), whether
written or oral, to the extent such information relates to any Acquired Company or to the Business; provided, however, that nothing in this Section 6.2(e) will prevent any Seller or any of its Affiliates or Representatives from
using any confidential and proprietary information (including Licensed Shared IP) to the extent such information relates to Sellers, any Affiliate of a Seller (other than an Acquired Company), the US Business or any other business (other than the
Business) of a Seller or any of its Affiliates or Representatives. From and after the Closing, Buyer shall, and shall cause its Affiliates and its and their respective Representatives to, hold in confidence any and all confidential and proprietary
information (other than Non-Confidential Information), whether written or oral, to the extent such information relates to Sellers or to Sellers businesses (after giving effect to the consummation of the Transactions); provided,
however, that nothing in this Section 6.2(e) will prevent Buyer or any of its Affiliates or Representatives from using confidential and proprietary information (including Licensed Shared IP) to the extent such information relates to an
Acquired Company or the Business. If a Party or any of its Affiliates or its or their respective Representatives is compelled to disclose any such confidential and proprietary information by judicial or administrative process or by other
requirements of Law, or if it becomes necessary for such disclosing Party or any of its Affiliates to disclose such information in connection with any Action, the disclosing Party shall promptly notify the other Parties in writing and shall disclose
only that portion of such information as is necessary, and the disclosing Party shall provide the other Parties with such appropriate protective order or other reasonable assurance that such information will be accorded confidential treatment as
such other Parties may reasonably request.
- 43 -
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
Section 6.3 Efforts; Consents.
(a) Prior to the Closing, each Party shall use its reasonable best efforts to obtain any Consents of third Persons with respect to any
Contracts to which such Party or any Acquired Company is a party as may be necessary or appropriate for the consummation of the Transactions or required by the terms of any Contract as a result of the execution, performance or consummation of the
Transactions, provided, that notwithstanding the foregoing or anything to the contrary set forth in this Agreement, in connection with obtaining any such Consents, no Party or Acquired Company will be required to make payments to any Person
or agree to any change in the terms of any Contract. Subject to the terms and conditions of this Agreement, including Section 6.3(d), prior to the Closing, each Party shall, as promptly as practicable, use its reasonable best efforts to take,
or cause to be taken, all other actions and do, or cause to be done, all other things necessary, proper or advisable under applicable Law to consummate the Transactions. In furtherance and not in limitation of the foregoing, each Party shall
(i) make all appropriate filings and submissions with any Governmental Authority pursuant to any applicable Antitrust Law or otherwise as promptly as practicable and (ii) use reasonable best efforts to obtain as promptly as practicable the
termination of any waiting period under any applicable Antitrust Laws.
(b) In connection with, and without limiting, the efforts
referenced in Section 6.3(a), but subject to Section 6.3(d), each Party will (i) cooperate in all respects with the other Parties in connection with any filing or submission and in connection with any investigation or other inquiry,
including any Action initiated by a private party, (ii) keep the other Parties reasonably informed of any communication received by it from, or given by it to, any Governmental Authority and of any communication received or given in connection
with any proceeding by a private party, in each case regarding the Transactions and (iii) permit the other Parties to review any communication given by it to, and consult with each other in advance of any meeting or conference with, any
Governmental Authority or, in connection with any Action by a private party, with any other Person, and to the extent permitted by such applicable Governmental Authority or other Person, give the other the opportunity to attend and participate in
such meetings and conferences.
(c) In furtherance and not in limitation of the covenants of the Parties contained in Section
6.3(a) and Section 6.3(b), but without limiting Section 6.3(d), if any objections are asserted with respect to the Transactions under any Antitrust Law or if any Action is instituted (or threatened to be instituted) by any applicable
Governmental Authority or any private party challenging any of the Transactions as violative of any Antitrust Law or which would otherwise prevent, materially impede or materially delay the consummation of the Transactions, each Party shall use its
reasonable best efforts to resolve any such objections or Actions so as to permit consummation of the Transactions.
- 44 -
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
(d) Notwithstanding anything herein to the contrary, nothing in this Agreement shall require
the Buyer: (i) to propose, negotiate, commit to or effect, by consent decree, hold separate orders, or otherwise, the sale, divesture or disposition of, or holding separate (through the establishment of a trust or otherwise) such of
Buyers assets, properties or businesses or of the assets, properties or businesses of the Business as would be required to be divested in order to avoid the entry of, or to effect the dissolution of, any Order which would have the effect of
preventing, materially impeding or materially delaying the consummation of the Transactions or (ii) to litigate or contest any Action that is instituted (or threatened to be instituted) by a Governmental Authority or private party challenging
the Transactions, or to have vacated, lifted, reversed or overturned any Order, whether temporary, preliminary or permanent, that is in effect and that prohibits, prevents or restricts consummation of the Transactions (provided however
that in the event of any such litigation or contest, each Party shall cooperate in all respects with the other Parties and take any and all actions to vigorously contest and resist any such Action).
(e) The Parties shall in good faith consult with the other Parties with respect to all material antitrust defense decisions, provided that
Buyer shall control and direct the antitrust defense of the Transactions in any investigation or litigation by, or negotiations with, any Governmental Authority or other Person.
Section 6.4 Public Announcements. No Party or any Affiliate or Representative of such Party shall issue or cause the publication
of any press release or public announcement or otherwise communicate with any news media in respect of this Agreement or the Transactions without the prior written consent of the other Parties, except as may be required by Law or stock exchange
rules, in which case the Party required to publish such press release or public announcement shall allow the other Party a reasonable opportunity to comment on such press release or public announcement in advance of such publication;
provided, however, that Sellers and Buyer agree that the press release(s) announcing the entry by the Parties into this Agreement to be released by each Party immediately after the execution of this Agreement shall be in the form(s)
attached hereto as Exhibit K.
Section 6.5 Retained Names and Marks.
(a) Buyer hereby acknowledges that all right, title and interest in and to the names and marks set forth in Schedule D, together with all
variations and acronyms thereof and all trademarks, service marks, domain names, trade names, trade dress, company names and other identifiers of source or goodwill containing, incorporating or associated with any of the foregoing (the
Retained Names and Marks) are owned exclusively by the Sellers and their Affiliates, and that, except as expressly provided below, any and all right of the Acquired Companies to use the Retained Names and Marks shall terminate as
of the Closing and shall immediately revert to the Sellers and their Affiliates, along with any and all goodwill associated therewith. Buyer further acknowledges that it has no rights, and is not acquiring any rights, to use the Retained Names and
Marks, except as provided herein.
- 45 -
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
(b) Buyer will, as soon as practicable after the Closing, but in no event later than 60 days
thereafter, cause each of the Acquired Companies to file amended Governing Documents with the appropriate Governmental Authorities changing its corporate name, doing business as name, trade name and any other similar corporate identifier
to a corporate name, doing business as name, trade name or any other similar corporate identifier that does not contain any Retained Names and Marks and to supply promptly any additional information, documents and materials that may be
requested by Sellers with respect to such filings.
(c) The Acquired Companies will, for a period of 90 days after the date of the Closing,
be entitled to use, solely in connection with the operation of the Business as operated immediately prior to the Closing, all of their existing stocks of signs, letterheads, invoice stock, advertisements and promotional materials, inventory and
other documents and materials (Existing Stock) containing the Retained Names and Marks, after which date Buyer will cause the Acquired Companies to remove or obliterate all Retained Names and Marks from such Existing Stock or
cease using such Existing Stock; provided that, notwithstanding the foregoing, Buyer and the Acquired Companies shall be entitled to sell Existing Stock that exists as finished goods or inventory (including any such finished goods and
inventory that are in transit or have been delivered to wholesalers, retailers, distributors or customers of the Business) in the ordinary course until such time as Buyer or the Acquired Companies shall have either sold all such Existing Stock or
shall have written off and destroyed such Existing Stock in accordance with Buyers ordinary course accounting and inventory management practices. Additionally, Buyer and the Acquired Companies shall, at all times after the date of the Closing,
be entitled to refer to the historical fact that the Business was established in Santa Fe and to the related heritage, so long as such references to the Business and the Natural American Spirit brand do not suggest that the Acquired Companies are
Affiliates of any Seller Group Entity.
(d) Except as expressly provided in this Agreement, no other right to use the Retained Names and
Marks is granted to Buyer or the Acquired Companies, whether by implication or otherwise, and nothing hereunder permits Buyer or any Acquired Company to use the Retained Names and Marks on any documents, materials, products or services other than in
connection with the Existing Stock. Buyer will ensure that all uses of the Retained Names and Marks by the Acquired Companies as provided in this Section 6.5 will be only with respect to goods and services of a level of quality equal to or
greater than the quality of goods and services with respect to which the Retained Names and Marks were used in the Business prior to the Closing. Any and all goodwill generated by the use of the Retained Names and Marks under this Section 6.5
will inure solely to the benefit of Sellers and their Affiliates. In no event will Buyer or the Acquired Companies use the Retained Names and Marks in any manner that may damage or tarnish the reputation of Sellers or their Affiliates or the
goodwill associated with the Retained Names and Marks.
- 46 -
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
Section 6.6 Notification of Certain Matters; Update of Disclosure Schedule.
(a) Between the date hereof and the earlier of the Closing Date and the termination of this Agreement in accordance with its terms, each Party
will give prompt written or electronic notice to the other Parties as soon as is reasonably practicable after:
(i) it
becomes aware of the occurrence or non-occurrence of any event which will result, or has a reasonable prospect of resulting, in the failure of any condition, covenant or agreement contained in this Agreement to be complied with or satisfied
prior to or at the Closing;
(ii) receipt of any (A) written notice or, to such Partys Knowledge, oral notice,
from any Governmental Authority or (B) written communication from any other Person, in each case in connection with the Transactions alleging that such Governmental Authoritys or such other Persons consent is required in connection
the Transactions; or
(iii) commencement or receipt of a written threat of any Action relating to or involving such Party
that would have been required to be disclosed by such Party pursuant to Section 4.8 (in the case of a Seller) or Section 5.5 (in the case of Buyer) if such Action had been commenced prior to the date of this Agreement.
(b) No information delivered pursuant to Section 6.6(a) will (i) modify any of the representations and warranties of the Parties (or
operate as a waiver of such Partys rights for indemnification for a breach of any representation or warranty), (ii) operate as a waiver of any condition set forth in ARTICLE VII or (iii) be deemed to amend or supplement the
Disclosure Schedule.
(c) From time to time prior to the Closing, Sellers may, at their sole option, notify Buyer of any supplement or
amendment to the Disclosure Schedules with respect to any matter arising after the date of this Agreement and not known by Sellers as of the date of this Agreement (or if known, the magnitude or material consequences of which were not actually known
or understood, or could not reasonably be anticipated, as of the date of this Agreement) and such supplement or amendment shall be effective for purposes of determining whether the conditions set forth in Section 7.3 have been satisfied;
provided, however, that if the matter or matters disclosed on any such supplement or amendment, individually or in the aggregate, either (i) result in, or would reasonably be expected to result in, a failure of the condition set
forth in Section 7.2(a)(i) or (ii) have had or would reasonably be expected to have, a Material Adverse Effect then, in each case, Buyer may terminate this Agreement by written notice to Sellers no later than 5:00 p.m., New York time on
the tenth Business Day after, but not including, the day on which Buyer receives a supplement or amendment to the Disclosure Schedules; and provided, further, that no such supplement or amendment to the Disclosure Schedule pursuant to
this Section 6.6(c) will affect any rights or obligations of a Party pursuant to ARTICLE IX.
- 47 -
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
Section 6.7 Exclusive Dealing. During the period from the date of this Agreement
until the earlier of the Closing Date and the termination of this Agreement in accordance with its terms, each Seller shall not, and shall cause its Affiliates and its and their respective Representatives to not, (a) solicit, initiate,
knowingly encourage or accept the submission of any proposal or offer from any third party relating to the acquisition of any Acquired Company or all or substantially all or any significant part of the Business, (b) participate in any
discussions or negotiations regarding, furnish any information with respect to, assist or participate in any effort or attempt by any third party to do or seek any of the foregoing or (c) waive any provision of any non-disclosure or other
agreement entered into in connection with the Transactions. Sellers shall notify Buyer promptly of any offers or proposals of the kind described in clause (a) above. Upon the execution of this Agreement, Sellers shall promptly terminate any
third partys, and any of such third partys advisors and representatives, access to the Data Room.
Section 6.8 Post-Closing Access; Preservation of Records. For a period of 7 years from and after the Closing, Buyer will make or
cause to be made available to Sellers all books, records, Tax Returns and documents of the Acquired Companies (and the assistance of employees responsible for such books, records and documents or whose participation that Seller determine is
otherwise necessary or desirable in connection therewith) during regular business hours as may be reasonably necessary for (a) investigating, settling, preparing for the defense or prosecution of, defending or prosecuting any Action (other than
any Action between a Seller, on the one hand, and Buyer, on the other hand), or (b) preparing financial statements, reports to shareholders and reports to and filings with Governmental Authorities, including preparing statutory reports or Tax
Returns or responding to or disputing any Tax matter; provided, however, that access to such books, records, documents and employees will not interfere with the normal operations of the Acquired Companies and (in the case of records
relating to the Business Employees) will at all times be permissible by applicable data privacy Laws, and the reasonable out-of-pocket expenses of Buyer and the Acquired Companies incurred in connection therewith will be paid by Sellers. Buyer will
cause the Acquired Companies to maintain and preserve all such Tax Returns, books, records and other documents for seven years after the Closing Date and shall offer to transfer such records to Sellers at the end of such seven-year period by
providing Sellers with not less than 20 Business Days written notice of Buyers intention to destroy or dispose of such records, and Sellers shall exercise its rights to obtain such records (at Sellers sole cost and expense) within such
20 Business Day period. Notwithstanding the foregoing, this Section 6.8 shall not require Buyer or any of its Affiliates to disclose any information that in the reasonable, good faith judgment of Buyer would reasonably be expected to result in
any violation of any Law to which Buyer or its Subsidiaries is a party or is subject or cause any privilege (including attorney-client privilege) which Buyer or any of its Subsidiaries would be entitled to assert to be undermined with respect to
such information and such undermining of such privilege would in Buyers good faith judgment (after consultation with outside counsel) adversely affect in any material respect Buyers position in any pending or, what Buyer believes in good
faith (after consultation with outside counsel) would reasonably be expected to be, future litigation; provided that, in such cases the Parties shall cooperate in seeking to find a way to allow disclosure of such information (including by
entering into a joint-defense or similar agreement) to the extent doing so would not (in the good faith belief of Buyer) reasonably be likely to result in the violation of any such Law or reasonably be likely to cause such privilege to be undermined
with respect to such information.
- 48 -
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
Section 6.9 Further Assurances; Wrong Pockets; Data Room
(a) Each Party agrees that from time to time after the Closing Date, they will execute and deliver or cause their respective Affiliates
(including, with respect to Buyer, the Acquired Companies) to execute and deliver such further instruments, and take (or cause their respective Affiliates, including, with respect to Buyer, the Acquired Companies, to take) such other action, as may
be reasonably necessary to carry out the purposes and intents of this Agreement and the other Transaction Documents.
(b) Following the
Closing, in respect of any: (i) Purchased IP that has not been properly transferred to an Acquired Company, Buyer, or a Designated Buyer, or (ii) asset (other than any Intellectual Property) which is used in the Business (other than
immaterial assets that are easily replaceable and not specific to, or customized for, the Business) but which is owned by a Person other than an Acquired Company and that has not been properly transferred to an Acquired Company, Buyer or a
Designated Buyer, Sellers shall, in each case, cause all right, title and interest in and to such Purchased IP or other asset to be transferred to an Acquired Company, Buyer or a Designated Buyer (as directed by Buyer), and such transfer shall be
effected free and clear of any Liens (other than Permitted Liens) and without the requirement for Buyer or its Affiliates to pay any additional consideration or otherwise incur any Liabilities (other than those that would be incurred by any owner of
the Purchased IP or such other asset as a result of such ownership).
(c) As soon as reasonably practicable following the execution of this
Agreement, Sellers shall deliver to Buyer a true and complete electronic copy of the Data Room recorded onto CD-ROM.
Section 6.10
Employee Matters.
(a) Continued Employment. Effective as of the Closing, Buyer shall cause the Acquired Companies to
continue the employment of each Business Employee who is treated as an employee of an Acquired Company as of the Closing Date, including any Business Employee who on the Closing Date is either (i) actively employed, (ii) on long-term or
short-term disability, military leave, sick leave, family medical leave or some other approved leave of absence, or (iii) on layoff status with, or otherwise entitled to, recall rights pursuant to any Law. Each Business Employee who continues
employment with Buyer or any of the Acquired Companies immediately following the Closing is referred to herein as a Continuing Employee. From and after the Closing, Buyer shall, or shall cause one of its Affiliates (including any
Acquired Company) to, honor any existing employment Contracts with any Continuing Employee, subject to the amendment and termination provisions and other terms and conditions thereof. Notwithstanding the provisions of this Section 6.10 to the
contrary, nothing herein shall
- 49 -
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
constitute a guarantee of employment with Buyer or its Affiliates (including any Acquired Company) for any Continuing Employee for any period of time following the Closing, or restrict the right
of Buyer or its Affiliates (including any Acquired Company) to terminate the employment of any Continuing Employee following the Closing at any time or for any reason (or no reason).
(b) Employment Policies. For a period of at least 12 months following the Closing, Buyer shall, or shall cause one of its Affiliates
(including any Acquired Company), to provide benefits under employment, severance, leave of absence, vacation, annual leave, sick leave, and other similar policies to each Continuing Employee that are no less favorable in aggregate value than either
(i) the corresponding benefits provided by the Acquired Companies immediately prior to the Closing, or (ii) the corresponding benefits provided by Buyer and its Affiliates to their similarly situated employees; provided,
however, that in either such case, Buyer shall not be required to provide to Continuing Employees defined benefit pension, retiree medical, nonqualified deferred compensation or equity compensation benefits.
(c) Compensation and Benefits. For a period of at least 12 months following the Closing, Buyer shall, or shall cause one of its
Affiliates (including any Acquired Company) to, provide each Continuing Employee with salary, wages and employee benefit plans and arrangements that are no less favorable in aggregate value than either (i) the salary, wages, bonus
opportunities, long-term incentive compensation opportunities and employee benefit plans and arrangements provided by the Acquired Companies immediately prior to the Closing; or (ii) the salary, wages, bonus opportunities, long-term incentive
compensation opportunities and employee benefit plans and arrangements provided by Buyer and its Affiliates to their similarly situated employees; provided, however, that in either such case, Buyer shall not be required to provide to Continuing
Employees defined benefit pension, retiree medical, nonqualified deferred compensation or equity compensation benefits.
(d)
Bonuses.
(i) All calendar year 2015 bonus amounts under annual bonus, sales and other cash incentive plans of
Sellers or any of their respective Affiliates (including any Acquired Company) as set forth on Section 6.10(d)(i) of the Disclosure Schedule (the 2015 Bonuses) shall be calculated and paid in the ordinary course of business
to the eligible Continuing Employees; provided, however, that (A) if the Closing Date occurs following the end of the 2015 calendar year but prior to the date the 2015 Bonuses are paid in the ordinary course, the 2015 Bonuses
shall be calculated based on the actual results and performance achieved in respect of the 2015 calendar year, with such bonus amounts paid in the ordinary course (and in no event later than March 15, 2016), or (B) if the Closing Date
occurs prior to the end of the 2015 calendar year, the 2015 Bonuses shall be prorated to reflect the number of months elapsed from January 1, 2015 through the Closing Date (with full credit given to any partial month) and calculated based on
the average score of (I) the actual results and performance achieved in respect of the first half
- 50 -
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
of the 2015 calendar year, and (II) the target level of performance with respect to the second half of the 2015 calendar year, with such bonus amounts paid as soon as practicable, but not later
than the second regularly scheduled payroll date occurring on or following the Closing Date.
(ii) If the Closing does not
occur in the 2015 calendar year, Sellers or any of their respective Affiliates (including any Acquired Company) may grant annual bonuses, sales and other cash incentive plans with respect to the 2016 calendar year (the 2016
Bonuses) with respect to each Business Employee, with terms and conditions comparable to the terms and conditions of the 2015 Bonuses, with a projected aggregate target amount of the 2016 Bonuses to not materially exceed the projected
aggregate target amount of the 2015 Bonuses. All 2016 Bonuses shall be calculated and paid in the ordinary course of business to the eligible Continuing Employees; provided, however, that (A) if the Closing Date occurs following
the end of the 2016 calendar year but prior to the date the 2016 Bonuses are paid in the ordinary course, the 2016 Bonuses shall be calculated based on the actual results and performance achieved in respect of the 2016 calendar year, with such bonus
amounts paid in the ordinary course (and in no event later than March 15, 2017), or (B) if the Closing Date occurs following the commencement of the 2016 calendar year but prior to the end of the 2016 calendar year, the 2016 Bonuses shall
be prorated to reflect the number of months elapsed from January 1, 2015 through the Closing Date (with full credit given to any partial month) and calculated based on the target level of performance, with such bonus amounts paid as soon as
practicable, but not later than the second regularly scheduled payroll date occurring on or following the Closing Date.
(iii) Prior to the Closing, Sellers and their Affiliates shall take all actions necessary to effectuate the provisions of this
Section 6.10(d) to ensure that, following the Closing, (A) Sellers and their Affiliates (other than the Acquired Companies) shall bear the costs of paying the 2015 Bonuses and the 2016 Bonuses, and (B) Buyer and its Affiliates shall
not have any Liability with respect to the 2015 Bonuses and the 2016 Bonuses, other than to process such payments through the payroll systems of the appropriate Acquired Companies and to process and pay over to the appropriate Governmental Authority
any related withholding with respect thereto.
(e) Long-Term Incentive Compensation.
(i) 2013, 2014 and 2015 LTIP Awards. All long-term incentive awards granted in 2013, 2014 and 2015 by a Seller or any of
their respective Affiliates (including any Acquired Company) (other than the Game Changer Awards, discussed in Section 6.10(e)(iii) below) (the LTIP Awards) shall be calculated, vested and paid in the ordinary course of
business to the eligible Continuing Employees; provided, however, that if the Closing Date occurs prior to the end of the applicable performance period under an LTIP Award, such LTIP Award shall be calculated, vested and paid as if the
- 51 -
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
Transactions constituted a Change of Control (as defined in such LTIP Award) under such LTIP Award; provided, further, that, notwithstanding the provisions of an LTIP Award to the
contrary, if the Closing Date occurs in the 2015 calendar year, the calculation of the Earned Number (as defined in such LTIP Award) under an LTIP Award shall include actual results and performance achieved (assuming attainment of any applicable
dividend threshold) in respect of the first half of the 2015 calendar year and target performance for the second half of the 2015 calendar year.
(ii) 2016 LTIP Awards. If the Closing does not occur in the 2015 calendar year, a Seller and any of its Affiliates
(excluding any Acquired Company) may grant long-term incentive awards with respect to the 2016 calendar year (the 2016 LTIP Awards) with respect to each Business Employee (assuming each such Business Employee would have been
eligible for such an award in the ordinary course in 2016) on the following basis:
(A) the terms and conditions of the
2016 LTIP Award shall be comparable to the terms and conditions of the LTIP Awards;
(B) the projected aggregate target
amount of the 2016 LTIP Awards shall not materially exceed the projected aggregate target amount of the LTIP Awards granted in the 2015 calendar year (not including the Game Changer Awards); and
(C) the 2016 LTIP Awards shall have measurement and payment provisions, vis-a-vis the Closing Date, comparable to those
described in paragraph (i) above with respect to the LTIP Awards.
(iii) Game Changer Awards. The
long-term incentive awards granted in July 2015 by a Seller or any of its Affiliates (including any Acquired Company) (the Game Changer Awards) shall be calculated and paid in the ordinary course of business to eligible Continuing
Employees pursuant to the terms of such Game Changer Awards.
(iv) No Buyer Liability. Prior to the
Closing, Sellers and their Affiliates shall take all actions necessary to effectuate the provisions of this Section 6.10(e) to ensure that, following the Closing, (A) Sellers and their Affiliates (other than the Acquired Companies) shall
bear the costs of paying the LTIP Awards, the 2016 LTIP Awards and the Game Changer Awards, and (B) Buyer and its Affiliates shall not have any liability with respect to the LTIP Awards, the 2016 LTIP Awards, or the Game Changer Awards, other
than to process such payments through the payroll systems of the appropriate Acquired Companies and to process and pay over to the appropriate Governmental Authority any related withholding with respect thereto.
- 52 -
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
(f) Service Credit. Where applicable, Buyer shall, or shall cause its Affiliates
(including any Acquired Company) to, credit each Continuing Employees length of service with a Seller and its Affiliates (including any Acquired Company) or any of their respective predecessors, as applicable, for all purposes (including
eligibility, vesting and benefit accrual) under (i) each plan, program, policy or arrangement of Buyer and its Affiliates (including any Acquired Company) under which such Continuing Employee becomes covered following the Closing to the same
extent such service was recognized under a corresponding plan, program, policy or arrangement of a Seller or any of its Affiliates (including any Acquired Company), and (ii) applicable Law, in each case, except that such prior service credit
will not be required for purposes of benefit accruals under any defined benefit pension plan or to the extent that it results in a duplication of benefits for any Continuing Employee.
(g) Pre-Existing Conditions; Coordination. To the extent that any Continuing Employee becomes covered following the Closing by an
employee benefit plan of Buyer or any of its Affiliates that contains terms of the type described in this paragraph, Buyer shall, or shall cause its Affiliates (including any Acquired Company) to use commercially reasonable efforts to (i) waive
limitations on benefits relating to pre-existing conditions of the Continuing Employees and their eligible dependents to the extent that such limitations were waived under a similar plan, program, policy or arrangement of a Seller or any of its
Affiliates (including any Acquired Company), and (ii) recognize for purposes of annual deductible and out-of-pocket limits under group health plans applicable to each Continuing Employee, deductible and out-of-pocket expenses paid by each such
Continuing Employee and their respective dependents under a Sellers or any of its Affiliates (including any Acquired Companys) group health plans in the calendar year in which the Closing occurs.
(h) Retention Agreements. Prior to the Closing, Sellers or any of their respective Affiliates (including any Acquired Company) may grant
to certain select Business Employees retention awards that will become payable as a result of the Closing containing such terms and conditions as may be determined by such Sellers or any of their respective Affiliates (including any Acquired
Company). Prior to the Closing, Sellers and their Affiliates shall take all actions necessary to effectuate the provisions of this Section 6.10(h) to ensure that, following the Closing, (i) Sellers and their Affiliates (other than the
Acquired Companies) shall bear the costs of paying such retention awards, and (ii) Buyer and its Affiliates shall not have any liability with respect to such retention awards, other than to process such payments through the payroll systems of
the appropriate Acquired Companies and to process and pay over to the appropriate Governmental Authority any related withholding with respect thereto.
(i) Expatriate Agreements. With respect to Business Employees who, as of the Closing, receive expatriate payments or benefits from a
Seller or any of its Affiliates (an Expatriate Package, and each such employee who is a Continuing Employee, an Expatriate Employee), Buyer shall, or shall cause its Affiliates (including any Acquired Company)
to maintain a comparable Expatriate Package for each such Expatriate Employee until such
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CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
Expatriate Employee (i) returns to his or her home country (excluding any temporary return) or (ii) ceases to be employed with Buyer or any of its Affiliates (including any Acquired
Company) provided that such Expatriate Employee is returned to his or her home country. Section 6.10(i) of the Disclosure Schedule sets forth a true and accurate list of all Expatriate Employees and details of their respective Expatriate
Packages
(j) Special Rules. Notwithstanding anything to the contrary contained herein: to the extent that (i) any
applicable Law, (ii) any applicable collective bargaining agreement or other applicable agreement with a works council or economic committee, if any, or (iii) any applicable employment agreement, would require Buyer or its Affiliates
(including any Acquired Company) to provide any more favorable terms of employment (including compensation and benefits) to any Continuing Employee than those otherwise provided for by this Section 6.10 (or extend the period of time for which
the standards set forth in this Section 6.10 are required to be met), then Buyer agrees to comply, or to cause its Affiliates to comply, with its obligations under each such applicable Law or agreement.
(k) No Plan Amendments; No Third Party Beneficiaries. Notwithstanding anything in this Section 6.10 to the contrary, nothing
contained herein, whether express or implied, shall be treated as an amendment or other modification of any employee benefit plan of Buyer or its Affiliates, or shall limit the right of Buyer or its Affiliates to amend, terminate or otherwise modify
any such employee benefit plan of Buyer or its Affiliates (including any Acquired Company) following the Closing in accordance with the terms and conditions of such plans. If (i) a party other than the Parties makes a claim or takes other
action to enforce any provision in this Agreement as an amendment to any such plan, and (ii) such provision is deemed to be an amendment to such plan even though not explicitly designated as such in this Agreement, then, solely with respect to
such plan, such provision shall lapse retroactively and shall have no amendatory effect with respect thereto. The Parties acknowledge and agree that all provisions contained in this Section 6.10 are included for the sole benefit of the Parties,
and that nothing in this Agreement, whether express or implied, shall create any third party beneficiary or other rights (i) in any other Person, including, without limitation, any Continuing Employee, any participant in any employee benefit
plan of Buyer or its Affiliates (including any Acquired Company), or any dependent or beneficiary thereof, or (ii) to continued employment with Buyer or any of its Affiliates.
Section 6.11 Taxes.
(a) Seller Tax Returns. Each Seller shall prepare and timely file, or cause to be prepared and timely filed, all Tax Returns of their
respective Subsidiaries that are Acquired Companies that are due on or prior to the Closing Date or with respect to Tax periods ending on or prior to the Closing Date.
- 54 -
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
(b) Buyer Tax Returns. Buyer shall prepare and timely file, or cause to be
prepared and timely filed, all Tax Returns of the Acquired Companies that are due after the Closing Date, other than income Tax Returns with respect to Tax periods ending on or prior to the Closing Date (which returns shall be prepared by Sellers in
a manner consistent with past practices and submitted to Buyer at least 10 Business Days prior to the last permitted date for timely filing). Buyer shall pay or cause to be paid all Taxes imposed on any Acquired Company shown as due and owing on
such Tax Returns in respect to Tax periods (or portions thereof) beginning after the Closing Date.
(c) Transfer
Taxes. All applicable Transfer Taxes payable in connection with this Agreement, the Transactions or the documents giving effect to such Transactions shall be borne 50% by Buyer and 50% by Sellers. Buyer shall timely file all Tax Returns with
respect to all Transfer Taxes incurred in connection with the Transactions and, if required by applicable law, each Seller shall, and shall cause their Affiliates to, join in the execution of any such Tax Returns. Within 30 days after payment, Buyer
shall provide Seller with copies of all such returns and evidence that all such Taxes have been paid. If a Seller pays a Transfer Tax at the Closing or pursuant to a post-Closing assessment by a Tax Authority, Buyer shall reimburse such Seller for
its share of the amount of such Transfer Tax (together with interest and penalties) calculated in accordance with this Section 6.11(c) within 10 days of Sellers written demand.
(d) No 338(g) Election. Buyer shall not make, and shall cause its Affiliates not to make, an election under Section 338(g)
of the Code with respect to the purchase and sale of the Interests without the prior written consent of Sellers. If Sellers so consent to such an election under Section 338(g), Buyer shall indemnify Sellers and their respective Affiliates for
any and all additional Taxes owed by any such Seller or Affiliate resulting therefrom (as determined on a with and without basis by calculating the excess of Sellers Tax liability including the effect of such election over Sellers Tax
liability excluding the effect of such election), and, notwithstanding anything in this Agreement to the contrary, no Seller nor any of its Affiliates shall be obligated to indemnify Buyer for any Taxes incurred as a result of such election.
(e) Acts of Buyer. Without the prior written consent of Seller (which consent shall not be unreasonably withheld), Buyer
shall not, and shall not cause or permit its Affiliates or any member of the Combined Group to, (i) amend any Tax Return filed with respect to any Tax period (or portion thereof) ending on or before the Closing Date, (ii) make any Tax
election that has retroactive effect to any such Tax period (or portion thereof), or (iii) settle or compromise any Tax Claim relating to any such Tax period (or portion thereof), in each case, relating to any Acquired Company or Purchased IP.
In addition, without the prior written consent of Seller (which consent shall not be unreasonably withheld), Buyer shall not, and shall not cause or permit its Affiliates or any of the Acquired Companies to take, fail to take, or delay taking, any
other action (including any action with respect to any of the Acquired Companies that is treated as a foreign corporation for United States federal income Tax purposes), in each case, that would reasonably be expected to increase the liability for
Taxes (including any obligation to indemnify for Taxes pursuant to this Agreement) of a Seller or any of its Affiliates, change the character of any income or gain that a Seller or any of its Affiliates must report on a Tax Return, or result in a
decrease of any credits against Tax, losses or Tax basis that would otherwise be available to a Seller or any of its Affiliates.
- 55 -
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
(f) Entity Classification Elections. Notwithstanding anything to the contrary
herein, the Seller shall have the right to cause an election pursuant to Treasury Regulations Section 301.7701-3 to be filed, effective from a date on or prior to the Closing Date, for any of the Acquired Companies to be treated as a branch,
corporation or partnership for United States federal income Tax purposes; provided, however, that Sellers provide notice to Buyer at least five Business Days prior to the filing of such election. Buyer shall cooperate with the filing
of such election, including by providing any assistance, consent or signatures as reasonably requested by Seller.
(g)
Cooperation on Tax Matters.
(i) The Parties will provide one another with such information and records and make
such of its officers, directors, employees and agents available as may be reasonably be requested by a Party in connection with the preparation of any Tax Return or any Tax Claim. Buyer will promptly notify Sellers of any Tax Claim which may give
rise to a claim for indemnification against Sellers, and in any event within five Business Days after receiving notice of such Tax Claim; provided, however, that any failure by Buyer to timely notify Sellers will not prevent Buyer from
seeking any indemnification except to the extent that Sellers are actually prejudiced by the delay.
(ii) With respect to
any Tax Claim relating to a Tax period ending prior to the Closing Date or that otherwise may give rise to a claim for indemnification against Sellers (other than with respect to a Tax period ending after the Closing Date, which shall be controlled
by Buyer), Seller shall have the right at any time to assume and thereafter conduct the defense of such Tax Claim with counsel of its choice, at its sole expense; provided, however, that Sellers will not settle or compromise any Tax
Claim without the prior written consent of Buyer (which consent shall not be unreasonably withheld conditioned or delayed) unless the proposed settlement or compromise relates to a Tax period (or portion thereof) ending on or prior to the Closing
Date; and provided further that Sellers shall indemnify Buyer for any Taxes that arise in a Tax period ending after the Closing Date (or the portion of such Tax period beginning after the Closing Date) as a direct result of the settlement or
compromise of such Tax Claim and such indemnity shall survive the Closing hereunder and continue in full force and effect until the expiration of the applicable statute of limitations of any relevant Tax period affect by such settlement or
compromise and shall not be subject to the Minimum Claim Amount or other limitation on recover of Tax Claims under this Agreement. With respect to any Tax Claim that Sellers elect to assume the conduct of the defense of such Tax Claim, Sellers will
keep Buyer informed regarding the progress and substantive aspects of such Pre-Closing Tax Proceeding (including by providing copies of any notices and other documents received from or submitted to any Tax Authority in respect thereof.
- 56 -
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
(h) Sellers Liability for Taxes.
(i) Sellers shall be liable for and shall indemnify, defend and hold Buyer harmless from and against, but only to the extent
not taken into account as a liability for accrued Tax payable in calculating the Net Working Capital Adjustment: (A) any and all Taxes imposed on an Acquired Company or in respect of the Purchased IP with respect to Tax periods (or portions
thereof) ending on or before the Closing Date; (B) the Sellers share of Transfer Taxes determined under Section 6.11(c) and (C) any and all Taxes of any Tax group of a Seller or of which any Acquired Company has been a member
prior to the Closing Date that may be collected from an Acquired Company after the Closing Date.
(ii) For purposes of
determining the Tax attributable to the portion of a Tax period that begins before and ends on the Closing Date of any Tax period that begins before and ends after the Closing Date (A) the Tax shall be computed as if that portion were a
separate taxable period that ended as of the end of the Closing Date and (B) to the extent permitted or required by applicable Law, all transactions that are properly allocable to the portion of the Closing Date after the Closing (including
transactions occurring on the Closing Date after the Closing that are not in the ordinary course of business), shall be treated as having occurred at the beginning of the day immediately following Closing Date.
(iii) For the avoidance of doubt, neither Buyer nor any of its Affiliates shall be liable for, or required to pay, any Taxes of
any Seller (or any of its Affiliates) attributable to the consummation of the Transactions, including any capital gains Taxes of any Seller (or any of its Affiliates) or arising in connection with the consummation of the Transactions.
(iv) Sellers obligation to indemnify Buyer pursuant to this Section 6.11(h) shall survive the Closing hereunder and
continue in full force and effect until the expiration of the applicable statute of limitations.
(i) Except as otherwise required by
applicable Law, the Parties agree to treat all indemnification payments under ARTICLE IX or Section 6.11 as adjustments to the Purchase Price for Tax purposes.
Section 6.12 Termination of Intercompany Agreements.
(a) Sellers shall cause all Intercompany Agreements to be terminated as of immediately prior to the Closing. No such Intercompany Agreement
(including any provision thereof which purports to survive termination) will be of any further force or effect after the Closing, and all parties will be released from all Liabilities thereunder. The provisions of this Section 6.12(a) will not
apply to any Transaction Document.
- 57 -
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
(b) Sellers will cause all intercompany receivables, payables, loans and other accounts,
rights and Liabilities between an Acquired Company, on the one hand, and Sellers or any of their Affiliates (other than the Acquired Companies), on the other hand, in existence as of immediately prior to the Closing to be settled such that, as of
the Closing, there are no such intercompany receivables, payables, loans and other accounts, rights and Liabilities outstanding.
Section 6.13 Release.
(a) Effective as of the Closing, Buyer shall not, and shall cause the Acquired Companies not to, to the fullest extent permitted by applicable
Law, assert any claims, or take or bring any Actions, against any Seller or any of its Affiliates and any director or officer of the Acquired Companies, in relation to any and all actions, causes of Action, debts, accounts, bonds, bills, covenants,
contracts, controversies, agreements, Liabilities, damages, costs, expenses, demands, judgments, executions, variances, claims and other obligations of whatever kind or nature, in law, equity or otherwise, arising from, connected or related to,
caused by or based on any facts, conduct, activities, agreements, transactions, events or occurrences known or unknown, of any type, to the extent any of the foregoing is related to any breach by a Seller or any director or officer of any Acquired
Company of any fiduciary duty in their capacity as an equityholder, director or officer of any Acquired Company, which fiduciary duty breach existed, occurred, happened, arose or transpired from the date of formation or organization of the
applicable Acquired Company through the Closing Date; provided, however, that nothing in this Section 6.13(a) shall (i) affect any rights or obligations under any Transaction Document or (ii) release any Person for any
Liabilities arising from, or related to, any Action for fraud or breaches of the duty of loyalty.
(b) Effective as of the Closing, each
Seller, on behalf of itself and its Affiliates, assigns, equityholders, predecessors, successors, heirs, executors and administrators, hereby unconditionally and irrevocably releases the Acquired Companies and each of their respective officers,
directors, employees, predecessors, successors, heirs, executors and administrators from any and all Actions (and related Liabilities), and agrees not to bring or threaten to bring or otherwise join in any Actions against any such Person, relating
to, arising out of or in connection with Sellers capacity as an equityholder, of any Acquired Company; provided that nothing in this Section 6.13(b) shall (i) affect any rights or obligations under any Transaction Document or
(ii) release any Person for any Liabilities arising from, or related to, any Action for fraud or breaches of the duty of loyalty.
Section 6.14 Certain Post-Closing Corporate Actions.
(a) Corporate Actions Relating to SFRTI Holdings. On the Closing Date and immediately following the Closing, (i) Buyer will convene
a general meeting of the partners at which meeting Buyer will cause the appointment of new directors as designated by Buyer in substitution of the directors resigning from such positions pursuant to Section 2.3(b)(iii) and (ii) Buyer
shall cause the transfer of the Interests of SFRTI Holdings to be registered in the commercial register of Zurich and will provide evidence thereof to Seller BV.
- 58 -
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
(b) Corporate Actions Relating to SFNTC Italy. On the Closing Date and
immediately following the Closing, (i) Buyer will convene a shareholders meeting at which meeting Buyer will cause the appointment of new directors as designated by Buyer in substitution of the directors resigning from such positions
pursuant to Section 2.3(b)(vi) and (ii) Buyer will cause the Share Transfer Deed of SFNTC Italy to be filed with the applicable Italian Registrar of Enterprises pursuant to Article 2470 of the Italian Civil Code and will provide evidence
thereof to Seller GP.
(c) Corporate Actions Relating to SFNTC Japan. Before the Closing Date, Seller GP shall cause
SFNTC Japan to prepare a certified copy of the shareholder register of SFNTC Japan reflecting Buyer as the holder of the Interests of SFNTC Japan and on the Closing Date immediately following the Closing, Seller GP shall provide such copy to
Buyer.
Section 6.15 Payment of Transaction Expenses. Unless otherwise provided herein, regardless of whether the
Transactions are consummated, each Party shall bear its own Transaction Expenses; provided that Sellers shall bear all of the Transaction Expenses of the Acquired Companies, and, prior to the Closing, Sellers shall pay such Transaction
Expenses of the Acquired Companies.
Section 6.16 Replacement Credit Support. Buyer shall use its reasonable best efforts to
cause Seller and its Affiliates (other than the Acquired Companies) to be removed or released, effective as of the Closing, in respect of all obligations of Seller and such Affiliates under each of the guarantees, indemnities, surety bonds, letters
of credit and letters of comfort obtained by Seller and such Affiliates for the benefit of the Acquired Companies that are set forth on Section 6.16 of the Disclosure Schedule and to achieve such removal or release, shall agree to substitute
itself (or a controlled Affiliate) in the place of such Seller or its Affiliate. Sellers and their Affiliates shall take all actions reasonably requested by Buyer in connection with any such removal or release. Buyer agrees to indemnify and hold
harmless Seller and its Affiliates from and against any Losses actually incurred by Seller and its Affiliates from after the Closing under or pursuant to any such guarantee, indemnity, surety bond, letter of credit or letter of comfort.
Section 6.17 Access to Occurrence-Based Third Party Insurance Policies.
(a) With respect to events or circumstances related to an Acquired Company or the Business that occurred or existed prior to the Closing Date
and that are covered by any Seller Group Entitys third party occurrence-based liability insurance policy or workers compensation insurance policy or comparable workers compensation self-insurance, state or country programs, in any
case, in effect prior to the Closing Date (the Pre-Closing Insurance), Buyer may make claims under such policies after the Closing, subject to the terms and conditions thereof (and if such terms and conditions do not allow Buyer
to so make any such claims, Seller or its
- 59 -
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
applicable Affiliate shall do so on Buyers behalf as reasonably directed by Buyer), and each Seller shall take all such further actions as may reasonably be requested by Buyer, at
Buyers cost and expense (except as provided in Section 6.17(b) below), in connection with the tendering of such claims to the applicable third party insurers under such Pre-Closing Insurance and shall remit to Buyer the net proceeds such
Seller realizes with respect to such claims. Notwithstanding the foregoing, Buyer will be responsible for prosecuting any such tendered claims and in no event will Seller or any of its Affiliates be required to initiate or threaten to initiate any
Action against a third party insurer with respect to any such claim.
(b) Each Party and its respective Affiliates shall be solely
responsible for any deductible or self-insured retentions and any collateral requirements with respect to any events or circumstances for which they make a claim under any Pre-Closing Insurance. In the event Sellers and their respective Affiliates,
on the one hand, and Buyer, on the other hand, have bona fide claims under any Pre-Closing Insurance for which an aggregate deductible or retention is payable, the aggregate amount of the deductible or retention shall be borne by Sellers and their
respective Affiliates, on the one hand, and Buyer and its Affiliates, on the other hand, on a pro-rata basis based on the aggregate amount of such bona fide claims made under the applicable Pre-Closing Insurance. Notwithstanding the foregoing, in no
event will Buyer be entitled to make a claim under Pre-Closing Insurance, and no Seller nor any Affiliate of a Seller be obligated to assist Buyer to make any such claim, to the extent such claim would result in an increase in the deductible,
retention or collateral requirements associated with any such Pre-Closing Insurance, unless Buyer agrees to bear such increase.
Section 6.18 Entry into Other Transaction Documents. At the Closing, Sellers (or their applicable Affiliates), on the one hand,
and Buyer (or its applicable Affiliates), on the other hand, each shall enter into the Brand and Product Integrity Agreement, the Contracts Manufacturing Agreement, the Intellectual Property Transfer and License Agreement, the Leaf Supply Agreement
and the Transition Services Agreement, in each case, subject to any amendments mutually agreed by Sellers and Buyer prior to Closing.
Section 6.19 Non-Competition.
(a) RAI hereby agrees that until the fifth anniversary of the Closing Date (such period, the Restricted Period), RAI shall
not, and RAI shall cause its controlled Affiliates not to, directly or indirectly, engage or participate in a RAI Restricted Business or own any interest in, manage, control, participate in the ownership, management or control of a RAI Restricted
Business, or provide consulting services to any Person with respect to a RAI Restricted Business. RAI Restricted Business means the business of developing, designing, manufacturing, packaging, labeling, producing, distributing,
selling, marketing or promoting natural, organic and additive-free Tobacco Products, in each case for delivery, sale, resale, distribution, marketing or promotion outside the United States. In no event will a RAI Restricted Business include an
Unrestricted Business.
- 60 -
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
(b) JT hereby agrees that during the Restricted Period, JT shall not, and JT shall cause its
controlled Affiliates not to, directly or indirectly, engage or participate in a JT Restricted Business or own any interest in, manage, control, participate in the ownership, management or control of a JT Restricted Business, or provide consulting
services to any Person with respect to a JT Restricted Business. JT Restricted Business means the business of developing, designing, manufacturing, packaging, labeling, producing, distributing, selling, marketing or promoting
natural, organic and additive-free Tobacco Products, in each case for delivery, sale, resale, distribution, marketing or promotion in the United States. In no event will a JTI Restricted Business include an Unrestricted Business.
(c) Notwithstanding the foregoing, nothing in this Agreement shall prohibit or in any way limit RAI or JT or any of their respective controlled
Affiliates from:
(i) performing any of its obligations under any Transaction Document or performing any contract
manufacturing or other services at the request of or otherwise on behalf of JT and its controlled Affiliates (in the case of RAI and its controlled Affiliates) or RAI and its controlled Affiliates (in the case of JT and its controlled Affiliates);
(ii) performing any contract manufacturing services to any Person so long as such contract manufacturing services are not
performed using any Licensed Shared IP;
(iii) holding an ownership interest in or conducting the US Business (in the case
of RAI and its controlled Affiliates) or the Business (in the case of JT and its controlled Affiliates), in each case, in accordance with the terms of the Transaction Documents;
(iv) owning or acquiring an investment of not more than 5% of the then-outstanding capital stock of any publicly-held Person
whose stock is traded on a securities exchange; or
(v) owning or acquiring a Person that conducts, either directly or
indirectly, a RAI Restricted Business (in the case of RAI or its controlled Affiliates) or JT Restricted Business (in the case of JT or its controlled Affiliates) (any such Person, a Competing Person) that is the result of
(A) a merger, consolidation, share exchange, sale or purchase of assets, scheme of arrangement or similar business combination involving RAI or JT or any of their respective controlled Affiliates with any Competing Person or (B) the
acquisition of any Competing Person or any securities in any Competing Person by RAI or JT or any of their respective controlled Affiliates, provided, that, the exception to the Restrictive Covenants pursuant to this Section 6.19(c)(v)
will only apply to the extent of operations conducted by any such Competing Person prior to becoming a controlled Affiliate of RAI or JT or one of their respective controlled Affiliates, as applicable.
- 61 -
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
(d) Each of RAI and JT acknowledges and agrees that irreparable damage would occur in the
event of a violation of the provisions of this Section 6.19. Each of RAI and JT further acknowledges and agrees that the agreements contained in this Section 6.19 are an integral part of the transactions contemplated hereby, and that,
without these agreements, the other Party would not enter into this Agreement. If, at the time of enforcement of the covenants contained in this Section 6.19 (the Restrictive Covenants), a court or arbitrator shall hold that
the duration of the Restricted Period, scope or area restrictions of the Restrictive Covenants are unreasonable or otherwise unenforceable under circumstances then existing, RAI and JT agree that such court or arbitrator shall be entitled to amend
and substitute the Restricted Period, scope or area as it determines is enforceable under such circumstances for the stated duration, scope or area in the Restrictive Covenants and that, in such case, the court or arbitrator shall be allowed and
directed to revise the Restrictive Covenants to cover the maximum period, scope and area permitted by Law.
(e) Each Party agrees that
irreparable damage would occur in the event that any of the Restrictive Covenants were not performed in accordance with their specific terms or were otherwise breached for which money damages would be inadequate, and in such case, the other Party
shall be entitled to an injunction or injunctions to prevent breaches of the Restrictive Covenants and to enforce specifically the terms and provisions of the Restrictive Covenants, in addition to any other remedy to which such Party is entitled at
law or in equity, without the need to post a bond or other security and without the necessity of proving damages. The rights and remedies provided by this Section 6.19 are cumulative and in addition to any other rights and remedies that a Party
may have hereunder or at law or in equity. Notwithstanding anything contained in this Agreement to the contrary, if a Party or its controlled Affiliates breaches the Restrictive Covenants and another Party seeks and obtains an Order or other
equitable relief from any Governmental Authority of competent jurisdiction, the five-year Restricted Period will be computed from the date relief is granted to such Party instead of from the Closing Date and reduced by any time following the Closing
Date during which the breaching Party complied with its obligations hereunder.
(f) Notwithstanding anything herein to the contrary, the
Restrictive Covenants will only apply to RAI and JT and any Person that is a controlled Affiliate of RAI or JT during the Restricted Period. For the avoidance of doubt, in the event either RAI or JT becomes a controlled Affiliate of any Person,
following such event, the Restrictive Covenants will (i) only apply to RAI and its controlled Affiliates or JT or its controlled Affiliates, as the case may be, at the time that RAI or JT, as applicable, becomes a controlled Affiliate of such
Person, and (ii) will not apply to any Affiliates or Subsidiaries of such Person other than RAI and its controlled Affiliates or JT or its controlled Affiliates, as the case may be, provided, that in no event will any Licensed Shared IP
be used during the Restricted Period in contravention of the Restrictive Covenants.
- 62 -
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
ARTICLE VII
CONDITIONS TO CLOSING
Section 7.1 Conditions Precedent to Obligations of the Parties. The respective obligations of each Party to consummate the
Transactions are subject to the satisfaction (or, where legally permissible, waiver by such Party in writing) at or prior to the Closing of each of the following conditions:
(a) No Adverse Order. There shall be no Order of any Governmental Authority of competent jurisdiction that is in effect that
restrains in any material respect or prohibits the consummation of the Transactions.
(b) Antitrust Consents. Any affirmative
approval of a Governmental Authority required under any other Antitrust Law set forth in Section 7.1(b) of the Disclosure Schedule (such approvals, the Antitrust Approvals) shall have been obtained or deemed to have been
obtained under such applicable Antitrust Law.
Section 7.2 Conditions Precedent to Obligation of Sellers. The obligation of
Sellers to consummate the Transactions is subject to the satisfaction (or waiver by Sellers) at or prior to the Closing of each of the following additional conditions:
(a) Accuracy of Buyers Representations and Warranties. (i) The Fundamental Representations of Buyer shall be true and
correct in all material respects as of the Closing Date as though such representations and warranties were made as of the Closing Date (or as of the specific date referred to for any representation or warranty which specifically refers to an earlier
date, which representation or warranty shall have been so true and correct in all material respects as of such specified date), and (ii) all other representations and warranties set forth in ARTICLE V shall be true and correct (without regard
to any qualifications therein as to materiality or Buyer Material Adverse Effect) as of the Closing Date as though such representations and warranties were made as of the Closing Date (or as of the specific date referred to for any
representation or warranty which specifically refers to an earlier date, which representation or warranty shall have been so true and correct as of such specified date), except for breaches or inaccuracies of such representations or warranties that,
individually or in the aggregate, have not had and would not reasonably be expected to have a Buyer Material Adverse Effect.
(b) Covenants and Agreements of Buyer. Buyer shall have duly performed or complied with, in all material respects, all of the
covenants, obligations and conditions to be performed or complied with by it under the terms of this Agreement prior to or at Closing.
(c) Certificate. Sellers shall have received from Buyer a certificate of an executive officer of Buyer, dated the Closing Date,
to the effect that the conditions specified in Section 7.2(a) and Section 7.2(b) have been satisfied.
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CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
Section 7.3 Conditions Precedent to Obligations of Buyer. The obligation of Buyer
to consummate the Transactions is subject to the satisfaction (or waiver by Buyer) at or prior to the Closing of each of the following additional conditions:
(a) Accuracy of Sellers Representations and Warranties. (i) The Tier 1 Representations shall be true and correct in
all respects as of the Closing Date as though such Tier 1 Representations were made as of the Closing Date, (ii) the Tier 2 Representations shall be true and correct in all material respects as of the Closing Date as though such Tier 2
Representations were made as of the Closing Date (or as of the specific date referred to for any Tier 2 Representation which specifically refers to an earlier date, which Tier 2 Representation shall have been so true and correct in all material
respects as of such specified date), and (iii) the Tier 3 Representations shall be true and correct (without regard to any qualifications therein as to materiality or Material Adverse Effect) as of the Closing Date as though such
Tier 3 Representations were made as of the Closing Date (or as of the specific date referred to for any Tier 3 Representation which specifically refers to an earlier date, which Tier 3 Representation shall have been so true and correct as of such
specified date), except for breaches or inaccuracies of such Tier 3 Representations that, individually or in the aggregate, have not had and would not reasonably be expected to have a Material Adverse Effect.
(b) Covenants and Agreements of Sellers. Each Seller shall have duly performed or complied with, in all material respects, all of
the covenants, obligations and conditions to be performed or complied with by it under the terms of this Agreement prior to or at Closing.
(c) Certificate. Buyer shall have received from each Seller a certificate of an executive officer of such Seller, dated the
Closing Date, to the effect that the conditions specified in Section 7.3(a), Section 7.3(b) and Section 7.3(d) have been satisfied.
(d) No Material Adverse Effect. From the date of this Agreement until the Closing, there shall not have occurred a Material
Adverse Effect.
ARTICLE VIII
TERMINATION
Section 8.1 Termination. Notwithstanding anything in this Agreement to the contrary, this Agreement may be terminated and the
Transactions may be abandoned at any time prior to the Closing:
(a) by mutual written consent of the Parties;
(b) by any Party by giving written notice to the other Parties if the Closing shall not have occurred by February 29, 2016 (the
Outside Date); provided, that if the Antitrust Approvals have not been obtained by February 29, 2016, the Outside Date shall automatically be
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CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
extended to May 29, 2016; and provided further that the right to terminate this Agreement under this clause (b) shall not be available to any Party whose failure to fulfill any
obligation under this Agreement has been the primary cause of, or resulted in, the failure of the Closing to occur on or before such date;
(c) by either Sellers, on the one hand, or Buyer, on the other hand, by written notice to the other Parties if any Governmental Authority shall
have issued an Order or enacted a Law enjoining or otherwise prohibiting the Transactions and such Order or Law shall have become final and nonappealable; provided, that the right to terminate this Agreement under this clause (c) shall
not be available to any Party whose failure to fulfill any obligation under this Agreement has been the primary cause of, or resulted in, the issuance of such nonappealable Order or Law;
(d) by Buyer (so long as it is not then in material breach of any of its representations, warranties or covenants contained in this Agreement)
by written notice to Sellers if a breach of this Agreement by a Seller results or would result in any of the conditions set forth in Section 7.3(a) or Section 7.3(b) not being satisfied and such breach cannot be cured or, if curable,
remains uncured for a period of 30 days after such Seller has received written notice from Buyer of the occurrence of such breach (or, if earlier, the Outside Date), and such conditions have not been waived by Buyer; or
(e) by Sellers (so long as no Seller is then in material breach of any of its representations, warranties or covenants contained in this
Agreement) by written notice to Buyer if a breach of this Agreement by Buyer results or would result in any of the conditions set forth in Section 7.2(a) or Section 7.2(b) not being satisfied and such breach cannot be cured or, if curable,
remains uncured for a period of 30 days after Buyer has received written notice from Sellers of the occurrence of such breach (or, if earlier, the Outside Date), and such conditions have not been waived by Sellers.
Section 8.2 Effect of Termination.
(a) In the event of any termination of this Agreement pursuant to Section 8.1, all rights and obligations of the Parties hereunder shall
terminate without any Liability on the part of any Party or Affiliates in respect thereof, except that (i) the obligations of the Parties under Section 6.4 (Public Announcements), this Section 8.2 and ARTICLE X (including the related
definitions) of this Agreement and the Confidentiality Agreements shall remain in full force and effect and (ii) such termination shall not relieve any Party of any Liability for damages incurred or suffered by another Party for any breach of
an obligation or covenant or willful breach of a representation or warranty contained in this Agreement prior to termination to the extent such breach resulted in the failure of the Closing to occur.
(b) In the event this Agreement is terminated pursuant to (i) Section 8.1(c) to the extent related to Antitrust Laws or
(ii) Section 8.1(b) and, in each case of (i) or (ii), the conditions set forth in Section 7.1(a) (to the extent related to Antitrust Laws) or Section 7.1(b)
- 65 -
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
have not been satisfied as of the date of such termination, but all other conditions to Closing set forth in ARTICLE VII have otherwise been satisfied or waived (other than those conditions that
by their nature are to be satisfied at Closing, but which conditions would have been satisfied if the Closing Date were as of the date of such termination), then not later than five Business Days following the date of such termination, Buyer shall
pay the Sellers a termination fee equal to $175,000,000 (the Termination Fee) by wire transfer of immediately available funds pursuant to wire instructions provided by Sellers to Buyer no later than five Business Days after the
date of such termination of this Agreement. The Parties agree that:
(i) in no event shall Buyer be required to pay the
Termination Fee on more than one occasion;
(ii) if the Termination Fee is actually paid as provided in this
Section 8.2(b), it will be the sole and exclusive remedy as liquidated damages for any and all losses or damages of any nature against Buyer and each of its former, current and future Affiliates, Representatives and assignees of any of the
foregoing (collectively, the Buyer Parties) in respect of this Agreement, any agreement executed in connection with this Agreement (other than the Confidentiality Agreements), and the Transactions, including for any loss or damage
suffered as a result of the termination of this Agreement, the failure of the Transactions to be consummated or for breach or failure to perform hereunder (whether intentionally, unintentionally, or otherwise), and upon payment of the Termination
Fee no Buyer Party shall have any further liability or obligation relating to or arising out of this Agreement or the Transactions; and
(iii) the agreements contained in this Section 8.2(b) are an integral part of the transactions contemplated hereby, and
that, without these agreements, Sellers would not enter into this Agreement and the Parties expressly acknowledge and agree that in the event that Sellers are paid the Termination Fee, the receipt of the Termination Fee by Sellers shall not be
deemed a penalty, but shall be deemed to be liquidated damages for any and all Losses suffered or incurred by Sellers.
ARTICLE IX
INDEMNIFICATION
Section 9.1 Indemnification by Sellers. Subject to the limitations set forth in this ARTICLE IX, from and after the Closing,
Sellers will indemnify, defend and hold harmless Buyer and its Affiliates, officers, directors, managing directors, managers, equityholders, employees, successors and assigns (all such foregoing Persons, collectively, the Buyer
Indemnitees) from and against any and all claims, demands, assessments, losses, Liabilities, damages, deficiencies, interest and penalties, Taxes, costs and expenses, including losses resulting from the defense, settlement or compromise of
an Action or claim or demand or assessment, reasonable attorneys, accountants and expert witnesses fees, costs and expenses of investigation, and the costs and expenses of enforcing the indemnification provided hereunder
(individually, a Loss and, collectively, Losses) incurred by any Buyer Indemnitee arising out of, relating to, in connection with or resulting from:
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CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
(a) the failure of any representations or warranties made by a Seller in this Agreement or
certificate delivered in connection herewith to be true and correct as of the date hereof and as of the Closing Date as if such representation or warranty was made on and as of the Closing Date (or with respect to representations and warranties that
are made as of a specific date, the failure of such representations and warranties to be so true and correct as of such date) (provided that solely for purposes of determining the amount of Losses in respect of the failure of any such
representation or warranty to be true and correct as of any particular date, any qualifications or limitations as to materiality (whether by reference to Material Adverse Effect or otherwise) contained in such representation or warranty shall be
disregarded);
(b) any breach or failure by a Seller to perform, or cause to be performed, any of its covenants or obligations contained in
this Agreement or the Intellectual Property Transfer and License Agreement;
(c) any Debt of an Acquired Company existing as of immediately
prior to the Closing that is not taken into account in the calculation of the Estimated Purchase Price or the Purchase Price;
(d) the
operation of the US Business, whether before, at or after the Closing; and
(e) any Action that (i) is commenced on or prior to
(A) the third anniversary of the Closing Date to the extent relating to alleged personal injuries, and (B) in all other cases, the fifth anniversary of the Closing Date, (ii) is brought by (A) a Governmental Authority to enforce
legislation adopted to implement European Union Directive 2001/37/EC or European Directive 2014/40/EU or (B) a consumer, consumers or a consumer association, and (iii) arises out of any statement or claim made on or before the Closing Date
by any Acquired Company concerning NAS Products consumed or intended to be consumed outside of the United States that a NAS Product is (A) natural, (B) organic or (C) additive free, including any such statement or claim by an Acquired
Company appearing on or in any packaging, labeling, advertising, marketing materials, promotional materials, website, or elsewhere.
Section 9.2 Indemnification by Buyer. Subject to the limitations set forth in this ARTICLE IX, from and after the Closing, Buyer
will indemnify, defend and hold harmless Sellers and their respective Affiliates, officers, directors, managing directors, managers, equityholders, employees, successors and assigns (all such foregoing Persons, collectively, the Seller
Indemnitees) from and against any and all Losses incurred by any Seller Indemnitee arising out of, relating to, in connection with or resulting from:
- 67 -
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
(a) the failure of any representations or warranties made by Buyer in this Agreement or
certificate delivered in connection herewith to be true and correct as of the date hereof and as of the Closing Date as if such representation or warranty was made on and as of the Closing Date (or with respect to representations and warranties that
are made as of a specific date, the failure of such representations and warranties to be so true and correct as of such date) (provided that solely for purposes of determining the amount of Losses in respect of the failure of any such
representation or warranty to be true and correct as of any particular date, any qualifications or limitations as to materiality (whether by reference to Buyer Material Adverse Effect or otherwise) contained in such representation or warranty shall
be disregarded);
(b) any breach or failure by Buyer to perform, or cause to be performed, any of its covenants or obligations contained in
this Agreement or the Intellectual Property Transfer and License Agreement; and
(c) the operation of the Business, whether before, at or
after Closing, to the extent such Loss does not arise out of or relate to, is connected with or results from any matter for which the Buyer Indemnitees are entitled to indemnification pursuant to Section 9.1(a) through (c) and
Section 9.1(e).
Section 9.3 Survival Period; Limitations on Indemnification; Recourse for Certain Breaches.
(a) Survival.
(i) The representations and warranties contained in ARTICLE III, ARTICLE IV and in ARTICLE V or in any certificate delivered
hereunder, together with the associated rights of indemnification, shall survive until the two year anniversary of the Closing Date and shall thereupon expire, together with the associated rights of indemnification; provided that
(A) the representations and warranties set forth in Section 3.1 (Organization), Section 3.2 (Authorization),
Section 3.5 (Ownership of Interests), Section 3.7 (Brokers Fees), Section 4.1 (Organization of the Acquired Companies), Section 4.3 (Subsidiaries), Section 4.21 (Brokers Fees) Section 5.1 (Organization),
Section 5.2 (Authorization) and Section 5.6 (Brokers Fees) (collectively, the Fundamental Representations) shall survive the Closing hereunder and continue in full force and effect, together with the associated
rights of indemnification, indefinitely;
(B) the representations and warranties set forth in Section 4.12
(Intellectual Property) shall survive the Closing hereunder and continue in full force and effect, together with the associated rights of indemnification, until the three-year anniversary of the Closing Date; and
- 68 -
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
(C) the representations and warranties set forth in Section 4.10 (Tax
Matters) and Section 4.16 (Employee Matters) shall survive the Closing hereunder and continue in full force and effect, together with the associated rights of indemnification, until the expiration of the applicable statute of limitations.
(ii) Each of the covenants contained in this Agreement, together with the associated rights of indemnification, shall survive
the Closing and continue in full force and effect until performed in accordance with their terms and the statute of limitations with respect to any breach of any such covenant or agreement shall have expired.
(iii) The right to indemnification under this ARTICLE IX will apply only to those claims for indemnification for which notice
is given within the time proscribed in this Section 9.3(a).
(b) (i) No Indemnitee shall be entitled to seek indemnification
pursuant to Section 9.1(a) or Section 9.2(a) except that to the extent that the aggregate amount of Losses with respect to any claim or series of related claims for which such Indemnitee is otherwise entitled to indemnification exceeds
$50,000 (the Minimum Claim Amount), and (ii) Sellers shall only be liable for Losses with respect to any claim or series of related claims pursuant to Section 9.1(a), and Buyer shall only be liable for Losses with
respect to any claim or series of related claims pursuant to Section 9.2(a), in the event that (A) such Losses exceed the Minimum Claim Amount and (B) the aggregate amount of all Losses for which indemnification is sought against
Sellers pursuant to Section 9.1(a), or Buyer pursuant to Section 9.2(a), as the case may be, exceeds the applicable Basket, and then Sellers or Buyer, as applicable, shall be required to indemnify the applicable Indemnitee for all such
Losses from the first dollar of such Losses; provided, however, that neither the Minimum Claim Amount nor the Basket shall apply to claims for indemnification in respect of breaches of any Fundamental Representation or any
representation or warranty contained in Section 4.10 (Tax Matters). For the avoidance of doubt, the limitations on indemnification set forth in this Section 9.3(b) shall not apply to (x) claims for indemnification arising under
Section 9.1(b), Section 9.1(c), Section 9.1(d), Section 9.1(e), Section 9.2(b) or Section 9.2(c), or (y) claims for fraud.
(c) Except as provided in this Section 9.3(c), Sellers maximum aggregate Liability to Buyer Indemnitees pursuant to
Section 9.1(a), and Buyers maximum aggregate Liability to Seller Indemnitees pursuant to Section 9.2(a), shall not exceed, in either case, the Cap; provided that, notwithstanding the foregoing: (i) Sellers maximum
aggregate Liability to Buyer Indemnitees pursuant to (A) Section 9.1(a) in respect of breaches of any representation or warranty contained in Section 4.12 (Intellectual Property) shall not exceed an amount equal to $250,000,000 (less,
at the time of determination, any Losses otherwise indemnified by Sellers pursuant to Section 9.1(a)); and (B) Section 9.1(e) shall not exceed an amount equal to $250,000,000; and (ii) the Cap shall not apply to claims for
indemnification in respect of breaches of any of Fundamental Representation or any representation or warranty contained in Section 4.10 (Tax Matters). For the avoidance of doubt, the limitations on indemnification set forth in this
Section 9.3(c) shall not apply to (x) claims for indemnification arising under Section 9.1(b), Section 9.1(c), Section 9.1(d), Section 9.2(b) or Section 9.2(c), or (y) claims for fraud.
- 69 -
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
(d) Any claim made under this ARTICLE IX shall be reduced in amount by any Tax benefit
actually received with respect to such claim or as a result of the circumstances giving rise to such claim. The Parties agree that any indemnification payments made under this ARTICLE IX shall be treated for all Tax purposes as an adjustment to the
Purchase Price, unless otherwise required by applicable Law.
(e) Each Indemnitee will mitigate all Losses for which such Indemnitee is
entitled or may be entitled to indemnification hereunder to the extent required by New York Law in connection with a breach of contract. An Indemnitee will use commercially reasonable efforts to pursue available coverage under insurance policies
maintained by such Indemnitee for any Losses otherwise subject to indemnity hereunder. If an Indemnitee actually receives any insurance proceeds pursuant to indemnification or otherwise prior to being indemnified with respect to Losses under this
ARTICLE IX, the payment under this ARTICLE IX with respect to such Losses shall be reduced by the amount of such insurance proceeds or other recoveries actually received, in each case, net of any costs and expenses (including reasonable fees and
expenses of attorneys), deductibles or retentions (such net amount, a Net Recovery). If an Indemnitee actually receives any insurance proceeds pursuant to indemnification or otherwise after being indemnified with respect to all or
a portion of any Losses under this ARTICLE IX, the Indemnitee shall pay to the Indemnitor who made such payment the lesser of (i) the amount of the Net Recovery with respect to such Losses and (ii) the amount paid by such Indemnitor to the
to the Indemnitee with respect to such Losses.
(f) No Indemnitor shall be required to make any payment hereunder in respect of any Losses
which are contingent until the time that such contingent Losses cease to be contingent and no Indemnitee will be entitled to indemnification pursuant to this ARTICLE IX for any punitive or exemplary damages (other than punitive or exemplary damages
paid by the Indemnitee to a third party in connection with a Third Party Claim. Any amounts payable pursuant to the indemnification obligations under this ARTICLE IX shall be paid without duplication, and in no event shall any Party be indemnified
under different provisions of this Agreement for the same Losses (including for the avoidance of doubt any amounts taken into account in the calculation of Net Working Capital). Notwithstanding anything in this ARTICLE IX to the contrary, no claim
for indemnification may be made and no Seller shall be liable under or in respect of any claim for indemnification: (i) if the circumstances giving rise to such claim or the Losses with respect to such claim have been (A) disclosed on the
face of the Business Financial Information or (B) have been previously taken into account in the calculation of the Estimated Purchase Price or Purchase Price; or (ii) to the extent that it arises or is increased as a result of by or on
behalf of, with the express consent or at the request of Buyer or its Affiliates.
- 70 -
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
(g) To the extent a Buyer Indemnitee (i) has suffered an indemnifiable Loss pursuant to
Section 9.1(a) in respect of breaches of any representation or warranty contained in (A) the first sentence of Section 4.3(c) (Subsidiaries), (B) Section 4.4 (Financial Information), (C) the first sentence of
Section 4.6(b) (Sufficiency and Title to Tangible Assets) or (D) Section 4.7(a) (Absence of Certain Changes), but the particular Seller or Sellers obligated to indemnify such Buyer Indemnitee for such Loss, or the extent to which it
cannot be determined which Seller is obligated to provide any such indemnification, or (ii) would be entitled to indemnification under Section 9.1(a) if such representations and warranties of the Sellers had been made on a joint and
several basis, then, in each such case under (i) and (ii), such Buyer Indemnitee shall, subject to the limitations set forth herein, be permitted to seek indemnification directly from RAI pursuant to Section 10.17(a).
Section 9.4 Notice of Claims. If any of the Persons to be indemnified under this ARTICLE IX (any such Person, an
Indemnitee) has suffered or incurred any Loss, such Person shall so notify the Party from whom indemnification is sought (such Party, the Indemnitor) promptly in writing describing the event giving rise to such
Loss, the basis upon which indemnity is being sought, the amount or estimated amount of the Loss, if known or reasonably capable of estimation, and the method of computation of such Loss, all with reasonable particularity and containing a reference
to the provisions of this Agreement in respect of which such Loss shall have occurred; provided, however, that no failure to give timely or complete notice on the part of the Indemnitee in notifying the Indemnitor shall relieve the
Indemnitor from any obligation hereunder except to the extent the Indemnitor is actually materially prejudiced thereby.
Section 9.5
Procedures for Third Party Claims.
(a) If any claim or demand is made against an Indemnitee with respect to any matter, or any
Indemnitee shall otherwise learn of an assertion or of a potential claim, by any Person who is not a Party (or an Affiliate thereof) (a Third Party Claim) which may give rise to a claim for indemnification against an Indemnitor
under this Agreement, then the Indemnitee shall promptly notify the applicable Indemnitor of such Third Party Claim; provided, however, that no delay on the part of the Indemnitee in notifying the Indemnitor will relieve the Indemnitor
from any obligation hereunder unless the Indemnitor is actually prejudiced as a result thereof.
(b) The Indemnitor shall have the right,
at its option and expense, to assume the defense of any Third Party Claim with its own counsel by delivering written notice to the Indemnitee; provided, however, that Indemnitor shall not have the right to assume the defense of any
Third Party Claim that involves criminal allegations or in any manner involves any injunctive or equitable relief against the Indemnitee or any of its Affiliates that, if successful, would reasonably be expected to permanently adversely affect the
Indemnitee, any of its Affiliates or the Business or US Business, as the case may be, in any material respect. If the Indemnitor elects to assume the defense of a Third Party Claim as set forth in this Section 9.5(b), then:
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CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
(i) Indemnitee shall be entitled to participate in such defense with counsel
of its own choosing, provided that notwithstanding anything to the contrary contained in this Agreement, the Indemnitor shall not be required to pay or otherwise indemnify the Indemnitee against any attorneys fees incurred by the
Indemnitee in connection with the defense of such Third Party Claim following the Indemnitors written election to assume the defense of such Third Party Claim, unless the Indemnitee reasonably shall have concluded (upon advice of its outside
counsel) that, with respect to such Third Party Claim, the Indemnitee and the Indemnitor have different, conflicting, or adverse legal positions, defenses or interests, and in such case, the Indemnitee shall be entitled to participate in such
defense with counsel of its own choosing, and the Indemnitor shall be required to pay or otherwise indemnify the Indemnitee against attorneys fees incurred by the Indemnitee;
(ii) the Indemnitee shall make available to the Indemnitor all books, records and other documents and materials that are under
the direct or indirect control of the Indemnitee and that the Indemnitor reasonably considers necessary or desirable for the defense of such Third Party Claim;
(iii) the Indemnitee shall otherwise cooperate at the Indemnitors sole cost and expense as reasonably requested by the
Indemnitor in the defense of such Third Party Claim;
(iv) the Indemnitee shall not admit in writing any Liability with
respect to such Third Party Claim; and
(v) the Indemnitor shall not, without the written consent of the Indemnitee, which
shall not be unreasonably withheld, conditioned or delayed, settle or compromise any Third Party Claim in respect of which indemnification may be sought hereunder or consent to the entry of any judgment (A) which does not, to the extent that
the Indemnitee or any of its Affiliates may have any Liability with respect to such Third Party Claim, include as an unconditional term thereof the delivery by the claimant or plaintiff to the Indemnitee of a written unconditional full release of
the Indemnitee and its Affiliates from all Liability in respect of such Third Party Claim, (B) which includes any statement as to or an admission of fact, culpability or a failure to act, by or on behalf of the Indemnitee or any of its
Affiliates or (C) which in any manner involves any injunctive or equitable relief against the Indemnitee or any of its Affiliates.
(c) If the Indemnitor is not entitled to or elects not to assume the defense of any Third Party Claim, then with respect to such Third Party
Claim, the applicable Indemnitor will have the same rights and obligations as the Indemnitee pursuant to Section 9.5(b), and the applicable Indemnitee will have the same rights and obligations as the Indemnitor pursuant to Section 9.5(b).
- 72 -
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
Section 9.6 Exclusive Remedy. Except as set forth in Section 2.4,
Section 6.10(k) and Section 10.13 or in the case of fraud, from and after the Closing, the indemnification rights provided in this ARTICLE IX shall be the sole and exclusive remedy available to the Parties with respect to any breach of the
representations, warranties or covenants of the Parties in this Agreement.
Section 9.7 Tax Claims. Except for indemnification
for breach of the Sellers representations and warranties contained in Section 4.10 (Tax Matters) (as to which this ARTICLE IX shall apply, subject to any exceptions in respect of Section 4.10 (Tax Matters) expressly set forth in this
ARTICLE IX), indemnification for any Taxes or matter regarding Taxes shall be governed solely under Section 6.11. For the avoidance of doubt, except as provided in this Section 9.7, nothing in this ARTICLE IX shall limit or restrict in any
manner a Partys right to any remedy under or for breach of Section 6.11. Buyer shall not be entitled to seek indemnification pursuant to Section 9.1 in respect of breaches of any representation or warranty contained in
Section 4.10 (Tax Matters) or pursuant to Section 6.11(h) except to the extent not taken into account as a liability for accrued Tax payable in calculating the Net Working Capital Adjustment.
ARTICLE X
MISCELLANEOUS
Section 10.1 Parties in Interest. Except for (a) Seller Indemnitees and Buyer Indemnitees, or (b) pursuant to
Section 6.13 or Section 10.16, nothing in this Agreement, whether express or implied, will be construed to give any Person, including any employee or former employee of an Acquired Company, other than the Parties or their respective
successors and permitted assigns, any legal or equitable right, remedy, claim or benefit or remedies of any nature whatsoever, including any rights of employment for any specified period, under or by reason of under or in respect of this Agreement.
Section 10.2 Assignment. This Agreement will be binding upon and inure to the benefit of the Parties and their respective
successors and permitted assigns. No Party may assign either this Agreement or any of its rights, interests, or obligations hereunder without the express prior written consent of the other Parties, and any attempted assignment, without such consent,
will be null and void; provided, however, that Buyer may assign its rights to a controlled Affiliate of Buyer (each such assignees, a Designated Buyer) upon written notice of the same to Sellers, which assignment will not relieve
Buyer of any of its obligations hereunder. Upon the assignment contemplated hereby, each Designated Buyer shall be deemed a Buyer for purposes of this Agreement in connection with the acquisition of the Interests, Purchased IP or
other rights or property set out in the designation (and any reference to Buyer herein in connection therewith shall automatically be deemed to be a reference to such Designated Buyer) and such Designated Buyer shall
automatically be assigned the rights of Buyer under this Agreement necessary in connection with such designation.
- 73 -
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
Section 10.3 Notices. All notices, requests, demands and other communications
under this Agreement will be in writing and will be given (and will be deemed to have been duly given upon receipt) by delivery in person, by prepaid overnight courier (providing proof of delivery) or by email to the respective Parties at the
following addresses or email addresses (or at such other address for a Party as will be specified in a notice given in accordance with this Section 10.3)
(a) If to Sellers or RAI:
Reynolds American Inc.
401 North
Main Street
Winston-Salem, NC 27101
Attention: Martin L. Holton III
Email: #######@####.com
with a
copy to (which will not constitute notice):
Jones Day
222 East 41st Street
New York,
New York 10017
Attention: Randi C. Lesnick
Email: rclesnick@jonesday.com
(b) If to Buyer or JT:
JT
International SA
1 Rue de la Gabelle
1211 Geneva, Switzerland
Telephone: ## #### #####
Attention: Dr. Martin-Ralph Frauendorfer, VP; Assistant General Counsel BD & Operations
E-mail: #########################@###.com
with a copy to (which will not constitute notice):
Freshfields Bruckhaus Deringer US LLP
601 Lexington Avenue, 31st Floor
New York, New York 10022
Attention: Matthew F. Herman
Email: matthew.herman@freshfields.com
Section 10.4 Amendments and Waivers. This Agreement may not be amended, supplemented or otherwise modified except in a written
instrument executed by the Parties. No waiver by any of the Parties of any default, misrepresentation, or breach of warranty or covenant
- 74 -
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
hereunder, whether intentional or not, will extend to any prior or subsequent default, misrepresentation, or breach of warranty or covenant hereunder or affect in any way any rights arising by
virtue of any prior or subsequent such occurrence. No waiver by any of the Parties of any of the provisions hereof will be effective unless explicitly set forth in writing and executed by the Party sought to be charged with such waiver.
Section 10.5 Exhibits, Schedules and Disclosure Schedule.
(a) All Exhibits, Schedules and the Disclosure Schedule attached hereto are hereby incorporated herein by reference and made a part hereof. Any
matter disclosed pursuant to any Section of the Disclosure Schedule (or in any section of any Schedule or Exhibit to the Disclosure Schedule) whose relevance or applicability to any representation or warranty made elsewhere in this Agreement or to
information called for by any other Section of the Disclosure Schedule (or any other section of any Schedule or Exhibit to the Disclosure Schedule) is reasonably apparent on its face shall be deemed to be an exception to such representations and
warranties and to be disclosed with respect to all such other Sections of the Disclosure Schedule where it is so apparent on its face, notwithstanding the omission of a reference or cross-reference thereto.
(b) Neither the specification of any dollar amount in any representation or warranty nor the mere inclusion of any item in a Schedule or in the
Disclosure Schedule as an exception to a representation or warranty shall be deemed an admission by a Party that such item is required to be so included in a Schedule or in the Disclosure Schedule or represents an exception or material fact, event
or circumstance or that such item is reasonably likely to result in a Material Adverse Effect or that such item is outside the ordinary course of business.
Section 10.6 Construction. The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event
an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of
any of the provisions of this Agreement.
Section 10.7 Certain Acknowledgements. Except as otherwise expressly set forth in
ARTICLE III or ARTICLE IV (as qualified by the Disclosure Schedule), Sellers expressly disclaim any representations or warranties of any kind or nature, express or implied, including as to the condition, value or quality of the Business or the
assets of the Business, and Sellers disclaim any representation or warranty of merchantability, usage, suitability or fitness for any particular purposes with respect to the assets of the Business, or any part thereof, or as to the workmanship
thereof, or the absence of any defects therein, whether latent or patent, it being understood that such subject assets are being acquired AS IS, WHERE IS on the Closing Date, and in their present condition, and Buyer will rely on its own
examination and investigation thereof. Buyer acknowledges and agrees that it is not relying on any statement or representation made by or on behalf of Sellers (including any statement or representation made in any estimates,
- 75 -
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
projections, predictions, data, financial information, memoranda, presentations or any other materials or information) except as specifically set forth in ARTICLE III or ARTICLE IV (as qualified
by the Disclosure Schedule) and that no Person has been authorized by Sellers to make any representation or warranty relating to Sellers, any Acquired Company, the Purchased IP or the Business or otherwise in connection with the Transactions, except
as specifically set forth in ARTICLE III or ARTICLE IV (as qualified by the Disclosure Schedule). Sellers are relying upon Buyers acknowledgement in this Section 10.7 in entering into this Agreement, except as otherwise expressly set
forth in ARTICLE III or ARTICLE IV (as qualified by the Disclosure Schedule), no Seller nor any other Person will have or be subject to any Liability to Buyer resulting from the distribution to Buyer or its Representatives or Buyers use of any
information regarding Sellers, the Acquired Companies, the Purchased IP or the Business not expressly set forth in this Agreement, including any projections or other information provided by or on behalf of Sellers relating to the Transactions or
otherwise set forth in the Business Financial Information. Nothing in this Agreement shall, or shall be deemed to limit, any Partys ability to make a claim or bring a cause of action for fraud.
Section 10.8 Entire Agreement. This Agreement (including the Disclosure Schedule and the Exhibits and Schedules hereto), the
Transaction Documents and the Confidentiality Agreements constitute the entire agreement among the Parties with respect to the subject matter hereof and thereof and supersede any prior understandings, negotiations, agreements, discussions or
representations among the Parties of any nature, whether written or oral, to the extent they relate in any way to the subject matter hereof or thereof.
Section 10.9 Severability. If any provision of this Agreement or the application of any such provision to any Person or
circumstance shall be declared by any court of competent jurisdiction to be invalid, illegal, void or unenforceable in any respect, all other provisions of this Agreement, or the application of such provision to Persons or circumstances other than
those as to which it has been held invalid, illegal, void or unenforceable, shall nevertheless remain in full force and effect and will in no way be affected, impaired or invalidated thereby. Upon such determination that any provision, or the
application of any such provision, is invalid, illegal, void or unenforceable, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible to the fullest extent
permitted by applicable Law in an acceptable manner to the end that the Transactions are fulfilled to the greatest extent possible.
Section 10.10 Currency and Exchange Rates. Unless otherwise specifically provided in this Agreement, the Estimated Purchase Price,
the Purchase Price and all components thereof shall be calculated in U.S. dollars. Any calculation of the Estimated Purchase Price or the Purchase Price or any component thereof that requires conversion of any amount into U.S. dollars, shall, where
such sum is referable to or is to be compared to a sum in U.S. dollars, be deemed to be a reference to an equivalent amount in U.S. dollars translated at the spot rate as published in the Wall Street Journal (the Spot Rate)
on the relevant date for determination (or
- 76 -
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
the next immediately following Business Day in the event the relevant date for determination is not a Business Day), provided that in the case of any claim for indemnification made under ARTICLE
IX for which the underlying Losses are denominated in a currency other than U.S. dollars, such Losses shall be deemed for all purposes of this Agreement to be translated into U.S. dollars at the Spot Rate on the day that is two Business Days prior
to the payment of such indemnification claim by the Indemnitor.
Section 10.11 Governing Law. This Agreement and all claims
arising out of or relating to this Agreement and the Transactions shall be governed by the Law of the State of New York, without regard to the conflicts of law principles that would result in the application of any Law other than the Law of the
State of New York.
Section 10.12 Consent to Jurisdiction; Waiver of Jury Trial
(a) Each of the Parties irrevocably submits to the exclusive jurisdiction of (i) the state courts of the State of New York located in
borough of Manhattan in New York City and (ii) the United States District Court for the Southern District of New York (and the appropriate appellate courts therefrom) for the purposes of any Action arising out of or relating to this Agreement
or any transaction contemplated hereby (and agrees not to commence any Action, suit or proceeding relating hereto except in such courts). Each of the Parties further agrees that service of any process, summons, notice or document hand delivered or
sent by U.S. registered mail to such Partys respective address set forth in Section 10.3 will be effective service of process for any Action in New York with respect to any matters to which it has submitted to jurisdiction as set forth in
the immediately preceding sentence. Each of the Parties irrevocably and unconditionally waives any objection to the laying of venue of any Action arising out of or relating to this Agreement or the Transactions in (i) state courts of the State
of New York located in borough of Manhattan in New York City or (ii) the United States District Court for the Southern District of New York (and the appropriate appellate courts therefrom), and hereby further irrevocably and unconditionally
waives and agrees not to plead or claim in any such court that any such Action brought in any such court has been brought in an inconvenient forum. Notwithstanding the foregoing, each Party agrees that a final judgment in any Action so brought shall
be conclusive and may be enforced by suit on the judgment in any jurisdiction or in any other manner provided in law or in equity.
(b)
EACH OF THE PARTIES IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE TRANSACTIONS OR THE ACTIONS OF THE PARTIES IN THE NEGOTIATION,
ADMINISTRATION, PERFORMANCE OR ENFORCEMENT HEREOF.
- 77 -
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
Section 10.13 Specific Performance. Notwithstanding anything to the contrary
contained herein, the Parties agree that irreparable damage would occur in the event of a violation of any of the provisions of this Agreement or of a Partys obligations under this Agreement were not performed in accordance with their specific
terms or were otherwise breached for which money damages would be inadequate and it is accordingly agreed that the Parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms
and provisions of this Agreement, in addition to any other remedy to which they are entitled at law or in equity, without the need to post a bond or other security and without the necessity of proving damages.
Section 10.14 Bulk Sales Laws. Each Party hereby waives compliance by Sellers with the provisions of the bulk sales,
bulk transfer or similar Laws of any jurisdiction that may otherwise be applicable with respect to the sale of the Interests or Purchased IP.
Section 10.15 Counterparts. This Agreement may be executed in two or more counterparts for the convenience of the Parties, each of
which shall be deemed an original and all of which together will constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this Agreement by facsimile or portable document format shall be effective as
delivery of a manually executed counterpart to this Agreement.
Section 10.16 Transaction Privilege; Related Matters.
(a) Buyer hereby acknowledges and agrees that Jones Day has represented Sellers and certain of their Affiliates (including the Acquired
Companies) prior to the date of this Agreement, including in connection with the negotiation, preparation, execution and delivery of this Agreement and the other Transaction Documents, and that Sellers and their Affiliates (other than the Acquired
Companies) and Representatives (each a Seller Group Member and collectively, the Seller Group Members) have a reasonable expectation that, after the Closing, Jones Day will represent them in connection with any
claim or Action involving any Seller Group Member, on the one hand, and Buyer or any of its Affiliates and Representatives (each a Buyer Group Member and collectively the Buyer Group Members), on the other hand,
arising under or relating to this Agreement, any other Transaction Document or the Transactions. Buyer, on its own behalf and on behalf of the other Buyer Group Members, hereby expressly waives and agrees not to assert any conflict of interest that
may arise or be deemed to arise under applicable Law or standard of professional responsibility if, after the Closing, Jones Day represents the Seller Group Members or any of them in connection with any claim or Action arising under or relating to
this Agreement, any other Transaction Document or the Transactions.
(b) Sellers hereby acknowledge and agree that Freshfields Bruckhaus
Deringer LLP and its affiliated partnerships (Freshfields) have represented Buyer and its Affiliates prior to the date of this Agreement, including in connection with the negotiation, preparation, execution and delivery of this
Agreement and the other Transaction Documents, and that the Buyer Group Members have a reasonable expectation that, after the Closing, Freshfields will represent them in connection with any claim or Action involving any Seller Group Member, on the
one hand, and Buyer or any Buyer Group Member on the other hand, arising under or relating to this Agreement, any other Transaction Document or the Transactions. Each Seller, on its own behalf
- 78 -
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
and on behalf of the other Seller Group Members, hereby expressly waives and agrees not to assert any conflict of interest that may arise or be deemed to arise under applicable Law or standard of
professional responsibility if, after the Closing, Freshfields represents the Buyer Group Members or any of them in connection with any claim or Action arising under or relating to this Agreement, any other Transaction Document or the Transactions.
(c) Each Party irrevocably acknowledges and agrees that, from and after the Closing, any attorney-client privilege arising from
communications prior to the Closing between any one or more Representatives of the Acquired Companies, on the one hand, and Jones Day, on the other hand, to the extent related to this Agreement, any other Transaction Document or the Transactions,
shall be excluded from the property, rights, privileges, powers, franchises and other interests held by any Acquired Company under applicable Law, that such attorney-client privilege shall be deemed held solely by Sellers, and that no Buyer Group
Member shall have any right to assert, waive or otherwise alter any such attorney-client privilege at any time after the Closing. All communications involving attorney-client confidences between the Seller Group Members and the Acquired Companies,
on the one hand, and Jones Day, on the other hand, to the extent relating to the negotiation, documentation and consummation of the Transactions or any alternative thereto shall be deemed to be attorney-client confidences that belong solely to
Sellers for the benefit and on behalf of the Seller Group Members (and not the Acquired Companies or Buyer Group Members). Accordingly, the Acquired Companies and the Buyer Group Members shall not have access to any such communications or to the
files of Jones Day relating to such engagement. Further, to the extent that files of Jones Day in respect of such engagement constitute property of the client, only Sellers for the benefit and on behalf of the Seller Group Members (and not the Buyer
Group Members) shall hold such property rights and Jones Day shall have no duty whatsoever to reveal or disclose any such attorney-client communications or files to the Buyer Group Members by reason of any attorney-client relationship between Jones
Day and the Acquired Companies.
(d) The Parties hereby agree to, and to cause any Buyer Group Member or Seller Group Member, as
applicable, to, execute any document or instrument reasonably requested from time to time by the other Party in order to evidence or effectuate the intentions of the Parties reflected in this Section 10.16. This Section 10.16 is for the
benefit of the Seller Group Members and Jones Day, on the one hand, and the Buyer Group Members and Freshfields, on the other hand, and each such Person is an intended third-party beneficiary of this Section 10.16. This Section 10.16 shall
be irrevocable, and no term of this Section 10.16 may be amended, waived or modified, without the prior written consent of the Parties.
- 79 -
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
Section 10.17 Guarantees.
(a) Guaranty by RAI.
(i) To induce Buyer to enter into this Agreement, RAI hereby agrees to cause each Seller to perform all of its obligations
hereunder and under the other Transaction Documents and hereby further absolutely, unconditionally and irrevocably guarantees to Buyer the due and punctual payment by, and performance and discharge of, all of the obligations of each Seller pursuant
to this Agreement and the other Transaction Documents (collectively, the Guaranteed Seller Obligations). The liability of RAI as aforesaid shall not be released or diminished by any arrangements or alterations of terms (whether of
this Agreement or any other agreement or certificate contemplated hereby) or any forbearance, neglect or delay in seeking performance of the payment obligations hereby imposed or any granting of time for such payment. RAI hereby waives all defenses
otherwise available to a guarantor or surety other than fraud, payment or performance in full, and accord and satisfaction pursuant to a mutually executed instrument.
(ii) This guarantee is to be a continuing security of Buyer for the Guaranteed Seller Obligations that may be owed by a Seller.
This guarantee shall continue to be effective or be reinstated, as the case may be, if at any time a Seller fails to perform or pay any of the Guaranteed Seller Obligations. This is a guarantee of performance and payment and not of collection only.
(iii) RAI hereby makes, as of the date hereof and as of the Closing Date, the representations and warranties set forth in
Section 3.1 (Organization), Section 3.2 (Authorization), Section 3.3 (Noncontravention), Section 3.4 (Government Authorizations) and Section 3.6 (Litigation) as to itself.
(b) Guaranty by JT.
(i) To induce Sellers to enter into this Agreement, JT hereby agrees to cause Buyer to perform all of its obligations hereunder
and under the other Transaction Documents and hereby further absolutely, unconditionally and irrevocably guarantees to Sellers the due and punctual payment by, and performance and discharge of, all of the obligations of Buyer pursuant to this
Agreement and the other Transaction Documents (the Guaranteed Buyer Obligations). The liability of JT as aforesaid shall not be released or diminished by any arrangements or alterations of terms (whether of this Agreement or any
other agreement or certificate contemplated hereby) or any forbearance, neglect or delay in seeking performance of the payment obligations hereby imposed or any granting of time for such payment. JT hereby waives all defenses otherwise available to
a guarantor or surety other than fraud, payment or performance in full, and accord and satisfaction pursuant to a mutually executed instrument.
(ii) This guarantee is to be a continuing security of Sellers for the Guaranteed Buyer Obligations that may be owed by Buyer.
This guarantee shall continue to be effective or be reinstated, as the case may be, if at any time Buyer fails to perform or pay any of the Guaranteed Buyer Obligations. This is a guarantee of performance and payment and not of collection only.
- 80 -
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
(iii) JT hereby makes, as of the date hereof and as of the Closing Date, the
representations and warranties set forth in Section 5.1 (Organization), Section 5.2 (Authorization), Section 5.3 (Noncontravention), Section 5.4 (Government Authorizations) and Section 5.5 (Litigation) as to itself.
(c) Each Party acknowledges and agrees that this Section 10.17 is an integral and essential part of the Transactions and no Party would
have entered into this Agreement, nor would it have entered into the other Transaction Documents, without the benefit of the guarantees set forth in this Section 10.17, and each Party has relied on the execution of this Agreement by RAI and JT
as set forth on this signature page hereto in that regard.
* * *
* *
- 81 -
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed as of the date
first above written.
|
|
|
SANTA FE NATURAL TOBACCO COMPANY, INC. |
|
|
By: |
|
/s/ Robert A. Emken, Jr. |
Name: |
|
Robert A. Emken, Jr. |
Title: |
|
Secretary |
|
R. J. REYNOLDS GLOBAL PRODUCTS, INC. |
|
|
By: |
|
/s/ McDara P. Folan, III |
Name: |
|
McDara P. Folan, III |
Title: |
|
Secretary |
|
R. J. REYNOLDS TOBACCO B.V. |
|
|
By: |
|
/s/ McDara P. Folan, III |
Name: |
|
McDara P. Folan, III |
Title: |
|
Director |
|
|
By: |
|
/s/ McDara P. Folan, III |
Name: |
|
McDara P. Folan, III on behalf of Jochai J.
van Bergen |
Title: |
|
Director |
|
JT INTERNATIONAL HOLDING BV |
|
|
By: |
|
/s/ Eddy Pirard |
Name: |
|
Eddy Pirard |
Title: |
|
Executive Vice President |
|
|
By: |
|
/s/ Martin-Ralph Frauendorfer |
Name: |
|
Martin-Ralph Frauendorfer |
Title: |
|
Vice President |
[Signature Page to Purchase Agreement]
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
|
|
|
|
For purposes of Section 6.19 and Section 10.17: |
|
REYNOLDS AMERICAN INC. |
|
|
By: |
|
/s/ Thomas R. Adams |
Name: |
|
Thomas R. Adams |
Title: |
|
Executive Vice President |
|
For purposes of Section 6.19 and Section 10.17: |
|
JAPAN TOBACCO INC. |
|
|
By: |
|
/s/ Akira Saeki |
Name: |
|
Akira Saeki |
Title: |
|
Executive Deputy President |
[Signature Page to Purchase Agreement]
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
EXHIBIT A
FORM OF BRAND AND PRODUCT INTEGRITY AGREEMENT
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS OF THIS
DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
EXHIBIT A
FORM OF
BRAND AND PRODUCT INTEGRITY AGREEMENT
This BRAND AND PRODUCT INTEGRITY AGREEMENT (this Agreement), dated as of
[●], 2015 (the Effective Date), is made by and between Santa Fe Natural Tobacco Company, Inc., a New Mexico corporation (SFNTC or Seller), JT International Holding BV, a Dutch private
company with limited liability (besloten vennootschap met beperkte aansprakelijkheid) (Buyer). Seller and Buyer are separately referred to in this Agreement as a Party and, together, as the
Parties.
RECITALS
A. The Parties have entered into that certain Purchase Agreement, dated as of September 28, 2015 (as the same may be amended, the
Purchase Agreement), pursuant to which Seller will transfer to Buyer the Purchased IP.
B. The Natural American Spirit
brand has developed valuable equity and goodwill worldwide, and the Parties desire to maintain and enhance the equity and goodwill of the Natural American Spirit brand, the Purchased Trademarks and the Retained Trademarks worldwide.
C. The Parties desire to set forth the process for collaboration regarding those brands which are associated with both the Purchased
Trademarks and the Retained Trademarks so as to maintain an overall consistent worldwide brand strategy and approach.
D. It is a
condition to the consummation of the transactions contemplated by the Purchase Agreement that the Parties execute and deliver this Agreement and that this Agreement be in full force and effect on the Closing Date.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants in this Agreement and the Purchase Agreement, the Parties agree as
follows:
ARTICLE I
DEFINITIONS
Section 1.01. Generally. For purposes of this Agreement, the terms set forth in Schedule 1.01, when capitalized, will
have the meanings set forth in Schedule 1.01. Capitalized terms used in this Agreement and not otherwise defined in this Agreement will have the meanings ascribed thereto in the Purchase Agreement.
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS
OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
ARTICLE II
PRODUCT BRANDING AND QUALITY
Section 2.01. Use of Trademarks Only in the Business and for Business Products.
(a) Seller agrees that Seller will only use the Retained Trademarks in connection with the US Business.
(b) Seller agrees that Seller will only Use goods or services in connection with the US Business which bear at least one Name Mark or
Design Mark. Seller agrees that Seller will not Use goods or services in connection with the US Business that bear or are sold in packaging which bears any Trademark that is not a Retained Trademark, except for Sellers and its
Affiliates company names or as otherwise required by Law.
(c) Buyer agrees that Buyer will only use the Purchased Trademarks in
connection with the Business.
(d) Buyer agrees that Buyer will only Use goods or services in connection with the Business which bear at
least one Name Mark or Design Mark. Buyer agrees that Buyer will not Use goods or services in connection with the Business that bear or are sold in packaging which bears any Trademark that is not a Purchased Trademark, except:
(i) solely in connection with any goods or services that are a line extension of the Business, for any Trademark owned by a
Buyer or its Affiliates, provided that at least one Name Mark or Design Mark is used as the primary brand element in respect of such goods or services, and the other Trademark is materially less prominent than such Name Mark(s) and/or Design Mark(s)
and is used in a secondary manner solely to denote such goods or services are a line extension of the Business;
(ii)
solely in connection with a Brand Migration, for any Trademark owned by a Buyer or its Affiliate on the date such Brand Migration commences, provided that the Tobacco Product that is the subject of such Brand Migration does not change the overall
character of the Natural American Spirit brand or diminish the premium appearance of the products Used in connection with the Natural American Spirit brand;
(iii) Buyers and its Affiliates company names; or
(iv) as otherwise required by Law.
Section 2.02. Use of Trademarks in Current Form.
(a) Seller agrees that Seller will only use the Name Marks in the likeness or depiction set forth on Exhibit A, including only using the
Name Marks in the same or similar font as depicted on Exhibit A. Notwithstanding the foregoing sentence, Seller will be free to
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CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS
OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
alter the color, font size, and positioning of the Name Marks so long as such alterations do not change the overall character of the Name Marks or diminish the premium appearance of the products
Used in connection with such Name Marks.
(b) Seller agrees that Seller will only use the Design Marks in the exact likeness or depiction
set forth on Exhibit B until the third anniversary of the Effective Date. Notwithstanding the foregoing sentence, Seller will be free to alter the color, size, and positioning of the Design Marks so long as such alterations do not change the
overall character of the Design Marks or diminish the premium appearance of the products Used in connection with such Design Marks. Following the third anniversary of the Effective Date, Seller will be free to modernize, refresh, or update the
Design Marks so long as such alterations are substantially similar to the likenesses and depictions set forth on Exhibit B, do not change the overall character of the Design Marks, and do not diminish the premium appearance of the products
Used in connection with such Design Marks.
(c) Buyer agrees that Buyer will only use the Name Marks in the likeness or depiction set
forth on Exhibit A, including only using the Name Marks in the same or similar font as depicted on Exhibit A. Notwithstanding the foregoing sentence, Buyer will be free to alter the color, font size, and positioning of the Name Marks
so long as such alterations do not change the overall character of the Name Marks or diminish the premium appearance of the products Used in connection with such Name Marks.
(d) Buyer agrees that Buyer will only use the Design Marks in the exact likeness or depiction set forth on Exhibit B until the third
anniversary of the Effective Date. Notwithstanding the foregoing sentence, Buyer will be free to alter the color, size, and positioning of the Design Marks so long as such alterations do not change the overall character of the Design Marks or
diminish the premium appearance of the products Used in connection with such Design Marks. Following the third anniversary of the Effective Date, Buyer will be free to modernize, refresh, or update the Design Marks so long as such alterations are
substantially similar to the likenesses and depictions set forth on Exhibit B, do not change the overall character of the Design Marks, and do not diminish the premium appearance of the products Used in connection with such Design Marks.
(e) Notwithstanding anything to the contrary in this Section 2.02, the Parties will be free to alter the Design Marks for use in relation
to limited edition packaging of existing products of the Business or the U.S. Business, as applicable, so long as (i) such altered Design Marks remain substantially similar to the likenesses and depictions set forth on Exhibit
B, (ii) such alterations do not change the overall character of the Design Marks or diminish the premium appearance of the products Used in connection with such Design Marks and (iii) such limited edition packaging is
offered for sale, on a product-by-product (i.e., SKU-by-SKU) and country-by-country basis, for no single period of more than 6 consecutive months.
(f) Notwithstanding anything to the contrary in this Section 2.02, the Parties will be free to alter the Design Marks as required by Law,
so long as, to the extent allowed by
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CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS
OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
Law, such alterations are substantially similar to the likenesses and depictions set forth on Exhibit B, do not change the overall character of the Design Marks, and do not diminish the
premium appearance of the products Used in connection with such Design Marks.
(g) Notwithstanding anything to the contrary in this
Section 2.02, to the extent that applicable Law bars the use of the Name Mark NATURAL AMERICAN SPIRIT in the forms otherwise permitted by this Agreement, the Parties will be free to alter the Name Mark NATURAL AMERICAN SPIRIT as required by
Law, so long as, to the extent allowed by Law, such alterations are similar to the likenesses and depictions set forth on Exhibit A, do not change the overall character of the Name Marks, and do not diminish the premium appearance of the
products Used in connection with such Name Marks.
Section 2.03. Product Quality.
(a) Seller agrees that Seller will only Use Tobacco Products in the US Business which solely use tobacco which is, consistent with
Sellers past practice in the operation of the Business and the US Business, ***** until the ***** anniversary of the Effective Date. Thereafter, Seller will be free to alter the tobacco components of, and additives used in, such Tobacco
Products so long as such alterations do not change the overall character of such Tobacco Products or diminish the premium nature of such Tobacco Products.
(b) Buyer agrees that Buyer will only Use Tobacco Products in the Business which solely use tobacco which is, consistent with Sellers
past practice in the operation of the Business and the US Business, ***** until the ***** anniversary of the Effective Date. Thereafter, Buyer will be free to alter the tobacco components of, and additives used in, such Tobacco Products so long as
such alterations do not change the overall character of such Tobacco Products or diminish the premium nature of such Tobacco Products.
Section 2.04. Domain Names. Buyer will not, directly or indirectly, register or permit any of its Affiliates to register, any
domain that includes in whole or in part the Name Marks, or any confusingly similar names or designations, except for country-code top level domain names and social media sites for countries outside of the United States (e.g., a .fr
domain name for France); provided, however, that, after the fifth anniversary of the Effective Date, Seller will not unreasonably refuse any Buyer request to register any generic top level domain (e.g. a .net or
.cool domain name) that includes in whole or in part the Name Marks or confusingly similar names or designations.
Section 2.05. Trademark Coexistence and Cooperation.
(a) The Parties mutually believe that the continued use and registration of the Purchased Trademarks and Retained Trademarks on and in
connection with the goods and/or services relating to Sellers and Buyers respective businesses consistent with past practice is not likely to cause confusion.
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CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS
OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
(b) Seller will not object to, oppose, or otherwise challenge Buyers Use or
registration of the Purchased Trademarks outside of the United States in accordance with the terms of this Agreement, and agrees to take reasonable action to assist Buyer in obtaining protection for the Purchased Trademarks outside of the United
States. Seller agrees not to register or apply for registration of the Retained Trademarks outside of the United States.
(c) Seller
agrees to take reasonable action to prevent any confusion due to the co-existence and registration of the Retained Trademarks and the Purchased Trademarks hereunder, to notify Buyer of any actual or potential confusion that is brought to its
attention in connection with the Purchased Trademarks hereunder, and to cooperate, as is reasonable under the circumstances, to rectify any actual or potential confusion resulting therefrom.
(d) Seller will notify Buyer promptly of any circumstances that would reasonably be expected to harm the reputation of the Purchased
Trademarks.
(e) Buyer will not object to, oppose, or otherwise challenge Sellers Use or registration of the Retained Trademarks in
the United States in accordance with the terms of this Agreement, and agree to take reasonable action to assist Seller in obtaining protection for the Retained Trademarks in the United States. Buyer agrees not to register or apply for registration
of the Purchased Trademarks in the United States.
(f) Buyer agrees to take reasonable action to prevent any confusion due to the
co-existence and registration of the Retained Trademarks and the Purchased Trademarks hereunder, to notify Seller of any actual or potential confusion that is brought to its attention in connection with the Retained Trademarks hereunder, and to
cooperate, as is reasonable under the circumstances, to rectify any actual or potential confusion resulting therefrom.
(g) Buyer will
notify Seller promptly of any circumstances that would reasonably be expected to harm the reputation of the Retained Trademarks.
Section 2.06. Commitment to Compliance.
(a) Seller will ensure that its Affiliates, employees, contractors, distributors and agents comply with all obligations of this Agreement,
including the obligations of this ARTICLE II. Any act or omission by the foregoing that would be a violation of this Agreement if committed by Seller will be deemed a violation of this Agreement by Seller.
(b) Buyer will ensure that its Affiliates, employees, contractors and agents comply with all obligations of this Agreement, including the
obligations of this ARTICLE II. Any act or omission by the foregoing that would be a violation of this Agreement if committed by Buyer will be deemed a violation of this Agreement by Buyer.
A-5
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS
OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
ARTICLE III
BRAND COLLABORATION
Section 3.01. Collaboration Meetings. It is the intent of the Parties to collaborate closely to protect and enhance the equity of
the Natural American Spirit brand. To facilitate this effort, except as the Parties may otherwise agree: (a) within 30 days after the Effective Date, Seller and Buyer will each designate one senior marketing executive to coordinate
collaboration meetings, during which the executives and any other attendees (i) requested by a Party, and (ii) subject to confidentiality obligations consistent with those of this Agreement, will collaborate as described herein;
(b) the Parties will conduct such meetings twice during the first year of this Agreement, twice during the second year of this Agreement, and at least once during each subsequent year.
Section 3.02. Meeting Dates, Location, and Agenda. The date, agenda and location of collaboration meetings will be mutually agreed
upon by the Parties through their designated senior marketing executives. If the Parties are unable to reach mutual agreement for the date and location of a collaboration meeting within 30 days from beginning discussions regarding the date and
location, Buyer will have the right to reasonably determine the date and location of collaboration meetings in odd-numbered years, and Seller will have the right to reasonably determine the date and location of collaboration meetings in
even-numbered years. Upon the mutual agreement of the Parties through their designated senior marketing executives, any collaboration meeting may be held through the medium of conference telephone, video or similar form of communication equipment,
provided that all persons participating in the meeting are able to hear and speak to each other.
ARTICLE IV
CONFIDENTIALITY
Section 4.01. Confidentiality. With respect to all materials, documents, programs, data and information (the Confidential
Information) furnished by one Party (the Disclosing Party) to the other Party (the Receiving Party) or, in each case, by or to an Affiliate thereof, in connection with this Agreement and future
collaboration meetings, the Receiving Party (a) will keep the Confidential Information confidential using the same safeguards and standard of care that it uses to preserve the confidentiality of its own confidential information and will not,
without the prior written consent of the Disclosing Party, disclose any Confidential Information in any manner whatsoever and (b) will not use any Confidential Information other than in connection with the Business or the US Business or in
fulfilling any other obligations under this Agreement; provided, however, that the Receiving Party may reveal the Confidential Information to its Representatives (i) who need to know the Confidential Information for the purposes
of providing or receiving the Services, as applicable, or for fulfilling any other obligations of the Receiving Party hereunder, (ii) who are informed by the Receiving Party of the confidential nature of the Confidential Information, and
(iii) who agree to act in accordance with the terms of this Section 4.01. The Receiving Party will cause its Representatives to observe the terms of this Section 4.01, and the Receiving Party will be responsible for any
A-6
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS
OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
breach of this Section 4.01 by any of its Representatives. For the avoidance of doubt, any materials, documents, programs, data or information provided by one Party to the other Party
pursuant to the terms of the Purchase Agreement shall be subject to the confidentiality provisions of the Purchase Agreement and shall not be subject to the confidentiality provisions of this Agreement.
Section 4.02. Use and Disclosure Limitations. The obligation of confidentiality under this ARTICLE IV (Confidentiality)
will not apply to the extent that it can be established by the Receiving Party by competent proof that such Confidential Information:
(a)
was already known to or in the possession of the Receiving Party, other than under an obligation of confidentiality, at the time of receipt from the Disclosing Party;
(b) was generally available to the public or otherwise part of the public domain at the time of its receipt from the Disclosing Party;
(c) became generally available to the public or otherwise part of the public domain after its disclosure other than through any act or
omission of the Receiving Party in breach of this Agreement;
(d) was received by the Receiving Party, other than under an obligation of
confidentiality, from a third Person lawfully in possession of the Confidential Information that was itself free from any restrictions on use or obligations of confidentiality with respect to such Confidential Information; or
(e) was independently developed by the Receiving Party without reference or access to any Confidential Information of the Disclosing Party.
Section 4.03. Required Disclosure. In the event disclosure of Confidential Information is permitted by applicable Law and is
compelled by judicial or administrative process or required by operation of Law, the Receiving Party will promptly notify the Disclosing Party and otherwise cooperate, at the Disclosing Partys expense, with the Disclosing Party so that the
Disclosing Party may seek a protective order or other appropriate remedy or, in the Disclosing Partys sole discretion, waive compliance with the terms of this ARTICLE IV (Confidentiality). In the event that no such protective order or
other remedy is obtained, or that the Disclosing Party does not waive compliance with the terms of this ARTICLE IV (Confidentiality), the Receiving Party will furnish only that portion of the Confidential Information that it is advised by
counsel is legally required and will exercise all reasonable efforts to obtain reliable assurance that confidential treatment will be accorded the Confidential Information.
A-7
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS
OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
ARTICLE V
TERM AND TERMINATION
Section 5.01. Term.
(a) Subject to Section 5.01(b) and Section 5.01(c), this Agreement shall commence immediately upon the Effective Date
and shall terminate only upon the mutual written agreement of the Parties.
(b) The Parties rights and obligations under
Section 2.01, Section 2.02 and Section 2.03 shall expire on the fifth anniversary of the Effective Date, unless otherwise provided in those Sections.
(c) At any time after the fifth anniversary of the Effective Date, either party may terminate ARTICLE III and the Parties rights
and obligations thereunder on 30 days prior written notice to the other Party.
Section 5.02. Survival. Notwithstanding
anything contained in this Agreement to the contrary, ARTICLE IV (Confidentiality), this Section 5.02 and ARTICLE VI (General Provisions) will survive the expiration or termination of this Agreement and (b) the
expiration or termination of this Agreement will not act as a waiver of any breach of this Agreement or as a release of either Party from any liability or obligation incurred under this Agreement through the effective date of the expiration or
termination.
ARTICLE VI
GENERAL PROVISIONS
Section 6.01. Specific Performance. Notwithstanding anything to the contrary contained herein, the Parties agree that irreparable
damage would occur in the event of a violation of any of the provisions of this Agreement or of a Partys obligations under this Agreement were not performed in accordance with their specific terms or were otherwise breached for which money
damages would be inadequate and it is accordingly agreed that the Parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement, in addition to
any other remedy to which they are entitled at law or in equity, without the need to post a bond or other security and without the necessity of proving damages.
Section 6.02. Further Assurances. Each Party shall, and shall cause its Affiliates to, execute and deliver such additional
documents, instruments, conveyances and assurances and take such further actions as may be reasonably required to carry out the provisions hereof and give effect to the transactions contemplated by this Agreement.
Section 6.03. Independent Contractor Status. The Parties acknowledge and agree that the Parties are independent contractors in the
performance of each and every part of this Agreement and nothing herein will be construed to be inconsistent with this status. Nothing contained in this Agreement will be construed as creating a partnership, joint venture, agency, trust or other
association of any kind, each Party being individually responsible only for its obligations set forth in this Agreement.
A-8
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS
OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
Section 6.04. Parties in Interest. Nothing in this Agreement, whether express or
implied, will be construed to give any Person, including any employee or former employee of an Acquired Company, other than the Parties or their respective successors and permitted assigns, any legal or equitable right, remedy, claim or benefit or
remedies of any nature whatsoever, including any rights of employment for any specified period, under or by reason of or in respect of this Agreement.
Section 6.05. Assignment. This Agreement will be binding upon and inure to the benefit of the Parties and their respective
successors and permitted assigns. No Party may assign either this Agreement or any of its rights, interests, or obligations hereunder without the express prior written consent of the other Parties, and any attempted assignment, without such consent,
will be null and void; provided, however, that a Party may assign its rights to an Affiliate upon written notice of the same to the other Party, which assignment will not relieve the assigning Party of any of its obligations hereunder.
Section 6.06. Notices. All notices, requests, demands and other communications under this Agreement will be in writing and
will be given (and will be deemed to have been duly given upon receipt) by delivery in person, by prepaid overnight courier (providing proof of delivery) or by email to the respective Parties at the following addresses or email addresses (or at such
other address for a Party as will be specified in a notice given in accordance with this Section 6.06):
if to Seller:
Reynolds American Inc.
401 North Main Street
Winston-Salem, NC 27101
Attention: Martin L. Holton III
Email: #######@####.com
with a copy to (which will not constitute notice):
Jones Day
222 East 41st Street
New York, New York 10017
Attention: Randi C. Lesnick
Email: rclesnick@jonesday.com
if to Buyer:
JT International SA
1 Rue de la Gabelle
1211 Geneva, Switzerland
Telephone: ## #### #####
A-9
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS
OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
Attention: Dr. Martin-Ralph Frauendorfer, VP;
Assistant General Counsel
BD & Operations
E-mail: #########################@###.com
with a copy to (which will not constitute notice):
Freshfields Bruckhaus Deringer US LLP
601 Lexington Avenue, 31st Floor
New York, New York 10022
Attention: Matthew F. Herman
Email: matthew.herman@freshfields.com
Section 6.07. Amendments and Waivers. This Agreement may not be amended, supplemented or otherwise modified except in a written
instrument executed by the Parties. No waiver by any of the Parties of any default, misrepresentation, or breach of warranty or covenant hereunder, whether intentional or not, will extend to any prior or subsequent default, misrepresentation, or
breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence. No waiver by any of the Parties of any of the provisions hereof will be effective unless explicitly set forth in
writing and executed by the Party sought to be charged with such waiver.
Section 6.08. Entire Agreement. This Agreement
(including the Exhibits and Schedules hereto) the Transaction Documents and the Confidentiality Agreements constitute the entire agreement among the Parties with respect to the subject matter hereof and thereof and supersede any prior
understandings, negotiations, agreements, discussions or representations among the Parties of any nature, whether written or oral, to the extent they relate in any way to the subject matter hereof or thereof. In the event of any inconsistency
between the terms of this Agreement and the Schedules, the terms of this Agreement will control. In the event of any inconsistency between the terms of this Agreement and the Purchase Agreement, the terms of the Purchase Agreement will control.
Section 6.09. Severability. If any provision of this Agreement or the application of any such provision to any Person or
circumstance shall be declared by any court of competent jurisdiction to be invalid, illegal, void or unenforceable in any respect, all other provisions of this Agreement, or the application of such provision to Persons or circumstances other than
those as to which it has been held invalid, illegal, void or unenforceable, shall nevertheless remain in full force and effect and will in no way be affected, impaired or invalidated thereby. Upon such determination that any provision, or the
application of any such provision, is invalid, illegal, void or unenforceable, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible to the fullest extent
permitted by applicable Law in an acceptable manner to the end that the Transactions are fulfilled to the greatest extent possible.
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CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS
OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
Section 6.10. Governing Law. This Agreement and all claims arising out of or
relating to this Agreement and the Transactions shall be governed by the Law of the State of New York, without regard to the conflicts of law principles that would result in the application of any Law other than the Law of the State of New York.
Section 6.11. Consent to Jurisdiction; Waiver of Jury Trial.
(a) Each of the Parties irrevocably submits to the exclusive jurisdiction of (i) the state courts of the State of New York located in
borough of Manhattan in New York City and (ii) the United States District Court for the Southern District of New York (and the appropriate appellate courts therefrom) for the purposes of any Action arising out of or relating to this Agreement
or any transaction contemplated hereby (and agrees not to commence any Action, suit or proceeding relating hereto except in such courts). Each of the Parties further agrees that service of any process, summons, notice or document hand delivered or
sent by U.S. registered mail to such Partys respective address set forth in Section 6.06 (Notices) will be effective service of process for any Action in New York with respect to any matters to which it has submitted to
jurisdiction as set forth in the immediately preceding sentence. Each of the Parties irrevocably and unconditionally waives any objection to the laying of venue of any Action arising out of or relating to this Agreement or the Transactions in
(i) state courts of the State of New York located in borough of Manhattan in New York City or (ii) the United States District Court for the Southern District of New York (and the appropriate appellate courts therefrom), and hereby further
irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such Action brought in any such court has been brought in an inconvenient forum. Notwithstanding the foregoing, each Party agrees that a final
judgment in any Action so brought shall be conclusive and may be enforced by suit on the judgment in any jurisdiction or in any other manner provided in law or in equity.
(b) EACH OF THE PARTIES IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT
OF OR RELATING TO THIS AGREEMENT, THE TRANSACTIONS OR THE ACTIONS OF THE PARTIES IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT HEREOF.
Section 6.12. Counterparts. This Agreement may be executed in two or more counterparts for the convenience of the Parties, each of
which shall be deemed an original and all of which together will constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this Agreement by facsimile or portable document format shall be effective as
delivery of a manually executed counterpart to this Agreement.
Section 6.13. Rules of Construction. Unless the context
requires otherwise, (a) all references to Sections, Articles, Exhibits or Schedules are to the Sections, Articles, Exhibits or Schedules of or to this Agreement, (b) each accounting term not otherwise defined in this Agreement has the
meaning commonly applied to it in accordance with GAAP, (c) words in the singular include the plural and vice versa, (d) to the extent the term day or days is used, it
A-11
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS
OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
will mean calendar days unless Business Days are specified and all references to times of the day are to New York time unless otherwise specified, (e) the pronoun his refers to
the masculine, feminine and neuter, the words herein, hereby, hereof, hereunder and other words of similar import refer to this Agreement as a whole and not to any particular Section, Article, or other
subdivision, (f) the term including means including without limitation, (g) the term or will be disjunctive but not exclusive, (h) the term extent in the phrase to the extent
means the degree to which a subject or other thing extends, and such phrase will not mean simply if, (i) references to documents or other materials delivered or made available to Buyer or similar phrases
shall mean that such documents or other materials were delivered to Buyer or its Representatives or were present in the Data Room, and (j) any reference to any contract or Law is a reference to it as amended, modified and supplemented from time
to time (and, in the case of a Law, to (i) any successor provision and (ii) the rules and regulations promulgated thereunder). The headings contained in this Agreement or in any Exhibit or Schedule are for convenience of reference purposes
only and will not affect in any way the meaning or interpretation of this Agreement.
[Remainder of page left intentionally blank]
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CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS
OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
IN WITNESS WHEREOF, the undersigned hereby execute this Brand and Product Integrity Agreement
effective as of the day and year first above written.
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SANTA FE NATURAL TOBACCO COMPANY, INC. |
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JT INTERNATIONAL HOLDING BV |
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By: |
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Name: |
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Title: |
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A-13
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS
OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
Schedule 1.01 Definitions
1. |
Acquired Companies is defined in the Purchase Agreement. |
2. |
Action is defined in the Purchase Agreement. |
3. |
Affiliate is defined in the Purchase Agreement. |
4. |
Agreement is defined in the Preamble. |
5. |
Annie is defined in the Preamble. |
6. |
Brand Migration means the migration, commencing at any time after the Effective Date and continuing continuously for a period not to exceed 12 months, of consumers and traders of a particular existing
Tobacco Product (i.e., a particular product SKU) that is then being sold by Buyer in connection with a business other than the Business under a brand other than the Natural American Spirit brand and the sale of which will be discontinued at the
conclusion of such migration (the Discontinued Product), to an alternative existing Tobacco Product (i.e., a particular product SKU) that is then being sold by Buyer in connection with the Business (the Replacement
Product), through the simultaneous temporary use, solely in connection with the Discontinued Product (including on the Discontinued Products packing or polypropylene wrapping), of both (i) Trademarks and/or brand elements being
used in connection with the Discontinued Product prior to the commencement of such migration (the prominence of which will diminish over the course of such migration) and (ii) at least one Name Mark or Design Mark (the prominence of which will
increase over the course of such migration). |
7. |
Brand Product Specifications means the specifications for those Tobacco Products sold by Seller and its Affiliates in the Business immediately prior to the Effective Date. |
8. |
Business is defined in the Purchase Agreement. |
9. |
Business Day is defined in the Purchase Agreement. |
10. |
Business Trademarks means the Purchased Trademarks and the Retained Trademarks, as revised from time to time pursuant to this Agreement. |
11. |
Buyer is defined in the Preamble. |
12. |
Design Marks means those Trademarks set forth on Exhibit B (Design Marks) as revised from time to time pursuant to this Agreement. |
13. |
Effective Date is defined in the Preamble. |
14. |
Governmental Authority is defined in the Purchase Agreement. |
A-14
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS
OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
15. |
Intellectual Property is defined in the Purchase Agreement. |
16. |
Law is defined in the Purchase Agreement. |
17. |
Name Marks means those Trademarks set forth on Exhibit A (Name Marks), as revised from time to time pursuant to this Agreement. |
18. |
Party and Parties are defined in the Preamble. |
19. |
Person is defined in the Purchase Agreement. |
20. |
Purchase Agreement is defined in Paragraph A of the Recitals. |
21. |
Purchased IP is defined in the Purchase Agreement. |
22. |
Purchased Trademarks means the Name Marks, the Design Marks, any other Trademarks contained in the Purchased IP and any other Trademarks owned by Buyer or its Affiliates after the Closing Date that
are identical to or substantially similar to the Trademarks contained in the Purchased IP, as revised from time to time pursuant to this Agreement. |
23. |
Retained Trademarks means any United States Trademarks owned by Seller or its Affiliates that are identical to or substantially similar to the Purchased Trademarks, as revised from time to time
pursuant to this Agreement. |
24. |
Representative is defined in the Purchase Agreement. |
25. |
Seller is defined in the Preamble. |
26. |
Tobacco Products is defined in the Purchase Agreement. |
27. |
Trademarks means trademarks, service marks, trade dress, slogans, logos, symbols, trade names, brand names and other identifiers of source or goodwill recognized by any Governmental Authority,
including registrations and applications for registration thereof and including the goodwill symbolized thereby or associated therewith. |
28. |
Transactions is defined in the Purchase Agreement. |
29. |
US Business is defined in the Purchase Agreement. |
30. |
Use means develop, design, manufacture, package, label, deliver, sell, resell, distribute, market, or promote or otherwise use or exploit. |
A-15
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS
OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
Exhibit A Name Marks
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NATURAL AMERICAN SPIRIT, |
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ORIGINAL AMERICAN SPIRIT, |
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AMERICAN SPIRIT, in each case in the same or similar font shown below for NATURAL AMERICAN SPIRIT: |
A-16
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS
OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
Exhibit B Design Marks
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The Chief Design as shown below: |
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The Thunderbird Design as shown below: |
A-17
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
EXHIBIT B
FORM OF CONTRACT MANUFACTURING AGREEMENT
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS OF THIS
DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
EXHIBIT B
FORM OF
CONTRACT MANUFACTURING AGREEMENT
This CONTRACT MANUFACTURING AGREEMENT (this Agreement) is entered into as
of [●], 2015 (the Effective Date), by and between JT International Holding BV, a Dutch private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid) (the
Customer), and Santa Fe Natural Tobacco Company, Inc., a New Mexico corporation (the Manufacturer). The Customer and the Manufacturer are sometimes referred to in this Agreement together as the
Parties and each, individually, as a Party. Initially capitalized terms used throughout this Agreement have the meanings given to them in ARTICLE 1 below.
BACKGROUND
A. This
Agreement is being entered into concurrently with the consummation of the transactions contemplated by that certain Purchase Agreement, dated as of September 28, 2015 (as it may be amended from time to time, the Purchase
Agreement), by and among the Manufacturer; R. J. Reynolds Global Products, Inc., a Delaware corporation; R. J. Reynolds Tobacco B.V., a Dutch private company with limited liability (besloten vennootschap met beperkte
aansprakelijkheid); the Customer; and, for certain limited purposes, Reynolds American Inc., a North Carolina corporation, and Japan Tobacco Inc., a Japanese corporation (kabushiki kaisha).
B. The Manufacturer manufactures the tobacco cigarette brands, brand styles, roll-your-own and blended strip products identified on Exhibit
A (collectively, the Products) at a facility in Oxford, North Carolina (the Oxford Facility), and the Customer wishes to engage the Manufacturer to manufacture the Products at the Oxford
Facility on behalf of the Customer, which Products will be marketed, distributed and sold by the Customer (or its Affiliates) solely in the Territory.
C. The Manufacturer is willing to manufacture the Products at the Oxford Facility on behalf of the Customer pursuant to the terms and
conditions set forth in this Agreement.
B-1
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS
OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
AGREEMENT
NOW, THEREFORE, in consideration of the representations, warranties and covenants set forth in this Agreement, and for other good and valuable
consideration, the mutuality, receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
ARTICLE 1
CERTAIN DEFINED TERMS
As used in this Agreement, the following terms will have the meanings assigned to them below:
Affiliate has the meaning set forth in the Purchase Agreement.
Agreement has the meaning set forth in the Preamble.
Anti-boycott Laws means Laws of the United States that prohibit participation or cooperation with, agreements to
cooperate with and, in some cases, the provision of information in support of, any international boycott not sanctioned by the United States, such as the Arab League boycott of Israel, and including, but not limited to, Section 999 of the
United States Internal Revenue Code of 1986, and guidelines issued thereunder, and the United States Export Administration Regulations, 15 C.F.R. Part 760.
Confidential Information means: (a) information, data or materials (whether of a technical or business nature),
including that relating to research, development, know-how, inventions, Trade Secrets (including the Specifications, engineering, manufacturing, proposals and business plans, marketing plans and materials, sales, suppliers or customers, in each
case, of, or in respect of, a Party or any of its Affiliates; (b) proprietary information, data or materials of a Party or of a third Person with whom such Party has an obligation of confidence (including all such information owned by any
Affiliate of such Party), whether created by a Party or its Affiliates individually or through the efforts contemplated by this Agreement; and (c) any other information, data or Intellectual Property, not publicly known, of a Party or of a
third Person with whom such Party has an obligation of confidence (including all such information owned by any Affiliate of such Party); regardless of whether any of the foregoing set forth in clauses (a) - (c) above is observed or in oral,
written, graphic or electronic form, and whether or not marked or otherwise identified as confidential.
Customer has the meaning set forth in the Preamble.
Customer Indemnified Party has the meaning set forth in Section 6.7(a).
Denied Parties means the list of Denied Persons, the proliferation concern Entity List and the list of Unverified
Parties maintained by the United States Department of Commerce, and the list of Specially Designated Nationals and Blocked Persons maintained by OFAC, as such lists are revised and in effect from time to time.
Disclosing Party has the meaning set forth in Section 7.1(a).
Effective Date has the meaning set forth in the Preamble.
B-2
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS
OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
Export License means any Governmental Approval issued by a
Governmental Authority, including but not limited to OFAC, permitting the manufacture, export or sale of the Products hereunder.
Forecast has the meaning set forth in Section 3.1.
Force Majeure means one or more of the events described in Section 9.4.
Foreign Corrupt Practices Act means 15 U.S.C. §§ 78dd-1, et seq. and any and all amendments
thereto.
Governmental Approval means any permit, license, approval, qualification, consent or authorization
issued by a Governmental Authority.
Governmental Authority has the meaning set forth in the Purchase Agreement.
Index means the Producer Price Index for Stage of Processing Finished Goods, as compiled by the Bureau
of Labor Statistics of the United States Department of Labor (1982 = 100), or such other index as is reasonably selected by the Manufacturer.
Initial Term has the meaning set forth in Section 8.1.
Intellectual Property means information, concepts, ideas, discoveries, inventions (whether conceived or reduced to
practice, and whether or not patentable), requirements, samples of prototypical tobacco product components, data, codes and programs, graphics, designs, prints, sketches, drawings and photographs, developments, processes and methods, know-how, Trade
Secrets (including the Specifications), patent applications, patents, other intellectual property of any type (including copyrights, trademarks, and service marks), and enhancements, derivatives and improvements thereof.
Laws has the meaning set forth in the Purchase Agreement.
Leaf Supply Agreement means that certain Leaf Supply Agreement between the Parties, dated on or about the Effective
Date, as it may be amended, modified or supplemented from time to time.
Losses has the meaning set forth in the
Purchase Agreement.
Manufacturer has the meaning set forth in the Preamble.
Manufacturer Indemnified Party has the meaning set forth in Section 6.7(a).
B-3
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS
OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
Non-Conforming Products means Products that did not fall within the
control and rejection standards of the Specifications for such Products at the time title and risk of loss passed to the Customer in accordance with Section 5.2.
Objection Period has the meaning set forth in Section 6.7(a).
OFAC means the United States Department of the Treasury, Office of Foreign Assets Control, or any successor agency,
department or unit of the federal government of the United States with regulatory authority over export/re-export transactions subject to the jurisdiction of the United States.
Oxford Facility has the meaning set forth in Background Paragraph B.
Packaging means containment materials of Products (including containment materials that provide enclosure features
of Products) for the purpose of distribution and sale to end consumers (including materials for packages, cartons and cases), and including component materials referred to as paper, paper-board, foil, formed metal, molded plastic, closures, labels,
films, tear tapes, optional pack inserts and onserts, including all graphics, holographics and printed matter on such materials.
Party or Parties has the meaning set forth in the Preamble.
Person has the meaning set forth in the Purchase Agreement.
Products has the meaning set forth in Background Paragraph B.
Prohibited Countries means countries to which products exported from the United States may not be exported or
re-exported, and with which persons subject to OFAC jurisdiction may not conduct any financial transaction, unless an Export License is obtained pursuant to statutes and regulations administered by OFAC, as such regulations are in effect from time
to time.
Purchase Agreement has the meaning set forth in Background Paragraph A.
Purchase Order means a purchase order containing the information specified in Section 3.2(a), as well as
the following information about an order for Products in accordance with this Agreement: (a) identity of Products ordered (by SKU); (b) quantity of Products ordered; (c) delivery instructions and required delivery date(s) for the
Products; (d) shipping/transfer instructions; (e) consignee identification, if any; (f) contact personnel; (g) marking requirements for packing; (h) matters including bill to and sold to; and
(i) such other requirements or information as the Customer or the Manufacturer may reasonably specify or require.
Receipt has the meaning set forth in Section 5.3.
B-4
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS
OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
Receiving Party has the meaning set forth in
Section 7.1(a).
Renewal Term has the meaning set forth in Section 8.1.
Restricted Countries means those countries in the Territory that from time to time are subject to Trade Restrictions
and for which Products are manufactured for export under this Agreement by the Manufacturer pursuant to Governmental Approvals duly issued and in effect by the applicable Governmental Authority whether within or outside the United States, including,
but not limited, to OFAC.
Restricted Parties means Persons who have been denied export privileges or who are
otherwise restricted under the United States Export Administration Regulations or with respect to whom transactions, including, but not limited to, export and financial transactions, are restricted, pursuant to applicable Trade Restrictions in force
from time to time.
SKU means a stock keeping unit designation referring to particular Product within each
region of the Territory.
Specifications means the specifications and standards used by the Manufacturer to
manufacture the Products at the Oxford Facility immediately prior to the Effective Date (including with respect to the Packaging), as contained in whatever medium such specifications and standards may be maintained for each Product, and as they may
be modified from time to time in accordance with this Agreement.
Territory means anywhere in the world
other than the United States of America, its territories, possessions and dependencies, including duty-free retail outlets located in the United States or any such territories, possession or dependencies, together with any U.S.
military bases, wherever located.
Term has the meaning set forth in Section 8.1.
Tobacco Leaf has the meaning set forth in the Leaf Supply Agreement.
Trade Restrictions means restrictions on trade and dealings with certain countries, Persons or entities, including,
but not limited to, restrictions on exports, imports, sales and supplies of products, transshipments and financial transactions imposed pursuant to export controls, trade sanctions and other trade and investment regulations of the United States or
any other Governmental Authority in force from time to time.
Trade Secret means information and data, including
Specifications, that: (a) derive independent economic value, actual or potential, from not being generally known to the public or other Persons who can obtain economic value from their disclosure and use, and (b) are the subject of efforts
that are reasonable under the circumstances to maintain their secrecy.
B-5
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS
OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
ARTICLE 2
MANUFACTURING AND RELATED RESPONSIBILITIES
2.1 Appointment. The Customer hereby appoints the Manufacturer, on a non-exclusive basis, as a contract manufacturer of the
Customers requirements for the Products for sale in the Territory, and the Manufacturer hereby accepts such appointment.
2.2
Manufacturing.
(a) The Manufacturer agrees to manufacture the Products at the Oxford Facility in accordance with the
Specifications. The Manufacturer will not be required to manufacture any product for the Customer other than the Products.
(b) Unless
otherwise agreed in writing between the Manufacturer and the Customer, the Manufacturer will purchase and be responsible for supplying all of the raw materials and product components to be used by it in manufacturing and packaging the Products in
accordance with the Specifications, including all Tobacco Leaf, and the Manufacturer will use raw materials and product components that are obtained from sources and suppliers selected by the Manufacturer.
(c) The Manufacturer will use its commercially reasonable efforts to maintain a sufficient supply of raw materials and product components
(including Tobacco Leaf) to meet the Customers Forecast in a timely manner.
2.3 Specifications.
(a) The Manufacturer is in possession of the initial Specifications for the Products.
(b) If the Customer desires to modify the Specifications for one or more of the Products, then the Customer will inform the Manufacturer in
writing of such desired modifications. The Manufacturer will reasonably cooperate with all such desired modifications; except that the Manufacturer will not be required to make any such modifications (i) if, in the good faith judgment of
the Manufacturer, such modifications would unreasonably interfere with the manufacture of its own products, (ii) *****, (iii) that require capital expenditures or other costs that would not be fully reimbursed by the Customer to the
reasonable satisfaction of the Manufacturer, or (iv) if a Governmental Approval is required for such modifications, if such Governmental Approval has not yet been obtained.
(c) The Manufacturer will inform the Customer of any changes in the Manufacturers manufacturing operations or processing conditions at
the Oxford Facility or raw materials or product components that are anticipated to affect or require a modification to the Specifications or otherwise affect on the Manufacturers ability to manufacture the volumes of Products set forth in the
Customers Forecast in a timely manner. The Manufacturer will provide the Customer with as much advance notice of any such changes as is practicable.
B-6
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS
OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
(d) With respect to any modifications to the Specifications, the Parties will conduct trials,
as appropriate and as mutually acceptable, in order to evaluate the effect of such modifications on the Products and on the consumer acceptability of the Products in the Territory, with the costs of such trials to be paid by the Party requesting the
modifications.
(e) The Specifications will include graphics, designations and indicia as mandated by relevant Laws, including all
relevant Laws within the Territory where the Products are marketed, distributed or sold. By way of example only, such graphics, designations and indicia may include any or all of the following: (i) U.S. TAX-EXEMPT, FOR USE OUTSIDE OF THE
U.S.; (ii) Made in the U.S.A. or other designation of origin; (iii) In bond. For Export Only; (iv) health warning labels for countries in which the Products will be sold; (v) identification of
contents; and (vi) identification of tax classification of contents. The Parties agree to cooperate to ensure that the applicable graphics, designations and indicia as mandated by applicable Law are part of the Specifications; however,
notwithstanding anything to the contrary in this Agreement, the Customer will be responsible for ensuring that the Specifications for the Packaging used on the Products bears all graphics, designations and indicia required by applicable Laws and
Governmental Approvals.
(f) The Customer will be solely responsible for ensuring that the Specifications comply with all applicable Laws
of the Territory into which the Products will be shipped or sold.
(g) The Parties acknowledge that, in order for the Manufacturer to meet
its obligations under this Agreement, the Manufacturer will, from time to time, carry out customary maintenance activities on the Oxford Facility and its equipment to ensure that manufactured Products and the manufacturing process in respect thereof
continue to conform to the Specifications.
2.4 Visitation and Inspection. Representatives of the Customer may, upon
reasonable notice and at times and frequencies reasonably acceptable to the Manufacturer, visit and inspect the Oxford Facility in the locations where the Products are being manufactured, packaged and stored. The Customer will bear its own expenses
with regard to any such visits, unless otherwise agreed in writing by the Parties. If requested by the Customer, the Manufacturer will cause appropriate individuals working on the activities relating to this Agreement to be available for meetings
during any such visit and inspection. The Customer will be responsible for ensuring that its representatives abide by all of the Manufacturers standard rules and procedures with regard to safety, regulatory compliance, security, personnel
matters, confidentiality, computer use and computer network use while at the Manufacturers facilities. In addition, the Customer will be responsible for ensuring that its representatives refrain from actions and conduct that interfere with the
Manufacturers business and operations, and will instruct such representatives not to conduct unauthorized activities at the Manufacturers facilities or otherwise.
B-7
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS
OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
2.5 Quality Control. Upon the Customers request, the Manufacturer will
provide samples of the Products or raw materials for the Customer to evaluate for quality control purposes, in reasonable quantities and at a reasonable frequency. The cost for providing any such samples, including shipping costs and duties, will be
borne solely by the Customer.
2.6 Limited License for Intellectual Property. The Customer hereby grants (or will cause its
Affiliates holding any applicable Intellectual Property to grant) to the Manufacturer a royalty-free, non-exclusive, non-transferrable, non-sublicensable license to use such of the Customers (or its Affiliates) Intellectual Property in
respect of the Products solely as is necessary to enable the Manufacturer to perform its obligations under this Agreement with respect to the manufacture and Packaging of the Products on behalf of the Customer.
2.7 Project Teams. Promptly after the Effective Date, each Party will designate a project team of its primary contact
individuals for purposes of this Agreement, each of which must include representatives reasonably acceptable to the other Party. Each Party will be entitled to change the members of its project team, and will notify the other Party of any such
changes. Each Partys project team will serve as the primary point of contact between the Parties for purposes of the transactions covered by this Agreement, and will be primarily responsible for facilitating the flow of information and
otherwise promoting communication, coordination and collaboration between the Parties. The project teams will conduct regular telephone, video conference or in-person meetings as deemed necessary or appropriate to exchange information regarding the
transactions covered by this Agreement, and at a minimum, the project teams will conduct monthly meetings to discuss general operations under this Agreement, including matters concerning the Products, the Forecast, inventory levels, materials
sourcing, quality control and any disputes or controversies affecting a Partys rights or obligations under this Agreement. All disputes and controversies, or other issues, identified by the project teams during any such meetings will be
promptly evaluated, addressed and remedied as soon as commercially reasonable.
ARTICLE 3
FORECASTS AND PURCHASE ORDERS
3.1 Forecasts for the Term. The Customer has forecasted its projected volumes of Products (by SKU if applicable) for each month
that the Customer expects to place Purchase Orders during the Term (as may be updated below, the Forecast), which Forecast is attached as Exhibit B. The Customer may deliver an updated Forecast from time to time
during the Term, and any such updated Forecast will be deemed to supersede and replace the original Forecast (or any previously updated Forecast) for all purposes of this Agreement; provided that the Customer may not deliver an updated
Forecast that attempts to increase the projected volumes of any particular Product for any month by more than ***** of the projected volumes for such Product for such month as reflected in the original Forecast. The Forecast is non-binding and will
be used solely for general planning and inventory control purposes.
B-8
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS
OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
3.2 Purchase Orders.
(a) From time to time during the Term, the Customer may issue (or have issued on its behalf) one or more Purchase Orders to the Manufacturer.
Unless the Parties otherwise agree in writing, the Customer will place two Purchase Orders per month (one for cigarette brands, brand styles and roll-your-own, and one for blended strip), each of which will set forth a binding order for the
applicable Products for such month. The Customers initial Purchase Orders are attached as Exhibit C. Each Purchase Order must be received by the Manufacturer at least 28 days before the requested delivery date stated therein,
except that any Purchase Order requiring delivery by air freight shipment will require delivery at the fuselage of the aircraft not less than 60 business days from the Manufacturers receipt of the applicable Purchase Order. Any terms of
a Purchase Order, sales order, invoice or other similar transaction document that are inconsistent with the terms of this Agreement will have no force or effect.
(b) The Manufacturer will schedule the production of Products based on the Customers Purchase Orders and the Forecast. If, however, the
Manufacturer determines that it cannot fill any portion of a Purchase Order by the specified delivery date, the Manufacturer will promptly notify the Customer, which notice will include proposed alternative delivery date(s) for the Products (or any
portion thereof) that are the subject of the Purchase Order. In any such case, the Parties will negotiate in good faith towards revised delivery date(s) that are reasonably acceptable to both Parties, and will confirm such finally agreed upon
delivery date(s) in writing.
(c) The Manufacturer will have the right to accept or reject, in whole or in part and at its sole
discretion, any Purchase Order placed by the Customer if: (i) the Purchase Order would require the Manufacturer to possess materials in inventory for production of Products in excess of the inventory levels set out in the Forecast, and the
Manufacturer does not otherwise possess inventory levels sufficient to fulfill the Purchase Order (except that the Manufacturers right of rejection will apply only to the extent that such inventory levels are unavailable and the
remainder of the Purchase Order will be filled); (ii) the Manufacturer is not prepared to manufacture the Products due to a change in the Specifications; (iii) the production of the Products would, in the Manufacturers good faith
belief, violate any applicable Law or relevant Governmental Approval; (iv) the production of the Products would violate the Manufacturers policy regarding stewardship of products that it distributes for commercial sale; (v) the
Manufacturer would be obligated to supply Products to a location outside of the Territory; or (vi) a Force Majeure event has occurred.
B-9
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS
OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
ARTICLE 4
PRICING AND INVOICING
4.1 Product Pricing. The Customer agrees to pay the Manufacturer the prices set forth on the attached Exhibit A for each
Product (identified by SKU if applicable) shipped pursuant to a Purchase Order.
4.2 Invoices. Unless otherwise agreed in
writing between the Parties, the Manufacturer will invoice the Customer on a monthly basis for all Products shipped under Purchase Orders during the preceding month. Each invoice will be due and payable by the Customer within 45 days of the date of
invoice.
4.3 Payments. Unless otherwise agreed in writing between the Parties, all payments will be made, without set off,
by wire transfer of immediately available funds to the account designated by the Manufacturer on its invoices or otherwise. All payments will be made in U.S. dollars. All payments made by the Customer for Products will be deemed made without
prejudice to any rights that the Customer may have under this Agreement, and will not constitute acceptance of Products or otherwise affect the Customers rights with respect to Non-Conforming Products.
ARTICLE 5
DELIVERY
AND SHIPMENT; PRODUCT INSPECTION
5.1 Delivery and Shipment. Unless otherwise agreed in writing by the Parties, the
following provisions will govern the delivery and shipment of the Products:
(a) The Manufacturer will ship Products on a first in / first
out basis as determined by the date of manufacture and will deliver the Products FOB (INCOTERMS 2010); except that the Manufacturer will maintain control of the Products until they pass the ships rail or planes fuselage.
(b) The Products will be shipped into the Territory by reputable commercial common carriers selected and contracted by either the Manufacturer
or the Customer, as determined by the Customer. The Manufacturer will arrange for shipment and delivery through its freight forwarder and prepare all necessary shipping documentation relating to the Products and be responsible for arranging loading.
Such shipping documentation will comply with all applicable Laws. The Manufacturer will be listed as shipper of the Products on corresponding export bills of lading, as well as the principal party in interest for export declaration
reporting purposes. The Customer will assist the Manufacturer in obtaining copies of all documents evidencing proof of export of the Products within 60 days after the risk of loss transfers to the Customer in accordance with Section 5.2.
(c) The Manufacturer will be responsible for proper packing of the Products for delivery to the Customers specified destination in
the Territory. All such packing and packing materials must (i) comply with handling, weight and safety requirements, in each case, in accordance with the Specifications or, if not addressed by the Specifications, as reasonably
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CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS
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instructed by the Customer, and (ii) be adequate to withstand the normal rigors of transfer, storage and distribution, and prevent damage and/or deterioration of Products prior to arrival at
the specified destination.
(d) The Manufacturer will be responsible for obtaining all applicable Export Licenses.
(e) Notwithstanding anything to the contrary in this Agreement, the Customer will pay all costs (including insurance costs) relating to
shipment (including inland freight to point of export), delivery and receipt of the Products, as well as all export and import taxes, duties and similar charges, as applicable.
5.2 Title Transfer; Risk of Loss. Notwithstanding anything to the contrary in this Agreement, title to, and risk of loss for,
the Products will pass to the Customer as soon as they pass the ships rail or planes fuselage with the commercial common carrier.
5.3 Inspection and Approval of Products; Rejection of Non-Conforming Products. Upon receipt of the Products at the port of
import in the Territory (Receipt), the Customer will have the right to inspect and approve for acceptance those Products. Such inspection and approval must be made promptly after Receipt (and, in any event, within 21 days
of Receipt). The Customer will have the right to reject Products that are Non-Conforming Products and call attention to other deficiencies in deliveries by informing the Manufacturer in writing within the 21-day inspection period, which notice must
include information about the nature and extent of the reasons why the Products should be characterized as Non-Conforming Products and include the results of any control or quality tests performed by the Buyer that indicate the Products are
Non-Conforming Products. If the Customer fails to timely notify the Manufacturer of the Customers rejection of the Products, the Customer will be deemed to have accepted those Products as conforming. The Customer may only reject and refuse
acceptance of Products that are Non-Conforming Products. Within 21 days after receiving such a notice, the Manufacturer may contest the rejection and provide documentation and other evidence relating to the quality of the applicable Products. The
Manufacturer may also inspect the Products and collect a representative sample thereof for testing and analysis. Thereafter, the Parties will confer in good faith to resolve the controversy. If any Products are finally deemed to be Non-Conforming
Products, they will be destroyed or otherwise handled pursuant to the Customers instructions, at no cost to the Customer. The Customer will not be responsible for any payment for Non-Conforming Products (and in the event that the Customer has
paid for those Non-Conforming Products, the Customer will be entitled, at the Customers election, to a credit for or refund of that payment). If the Customer requests that the Manufacturer replace or correct any Non-Conforming Products, the
Manufacturer will be responsible for promptly remanufacturing, substituting or otherwise correcting those Non-Conforming Products, and for supplying remanufactured or corrected Products at no cost to the Customer.
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CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS
OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
ARTICLE 6
REPRESENTATIONS, WARRANTIES, COVENANTS AND INDEMNITY
6.1 Warranties and Disclaimer of Warranties. THE MANUFACTURER REPRESENTS AND WARRANTS THAT PRODUCTS MANUFACTURED BY IT PURSUANT
TO THIS AGREEMENT WILL BE MANUFACTURED, PACKAGED AND TRANSFERRED IN COMPLIANCE WITH THE SPECIFICATIONS AND THE PACKING AND SHIPPING REQUIREMENTS OF THIS AGREEMENT. ANY MEASURES TAKEN TO REMEDY NON-CONFORMANCE WITH THIS REPRESENTATION AND WARRANTY
WILL BE AT THE MANUFACTURERS SOLE COST AND EXPENSE. SUBJECT TO THE FOREGOING, PRODUCTS SUPPLIED BY THE MANUFACTURER ARE PROVIDED AS IS AND WITHOUT ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED WARRANTY
OF MERCHANTABILITY OR OF FITNESS FOR ANY PARTICULAR PURPOSE.
6.2 Limitation of Remedies, Liability and Damages. NEITHER
PARTY WILL BE ENTITLED TO RECOVER FOR ANY CONSEQUENTIAL, INCIDENTAL, PUNITIVE, EXEMPLARY OR INDIRECT DAMAGES, LOST PROFITS OR OTHER BUSINESS INTERRUPTION DAMAGES, BY STATUTE, IN TORT OR BY CONTRACT.
6.3 Products for Export Only. Except for limited quantities of Products supplied only for research, quality control, evaluation
or testing purposes, the Parties represent and warrant that the Products produced by the Manufacturer for the Customer hereunder are intended to be manufactured at the Oxford Facility solely for lawful export outside of the United States and for
distribution or sale only within the Territory in accordance with the applicable Laws and Governmental Approvals. The Customer will not in any way transport, or cause to be transported, any Products to any country or territory outside of the
Territory for use, distribution, sale or otherwise. The Customer will not resell or distribute, and will not in any way assist any other Person in selling or distributing, any Products anywhere other than in the Territory.
6.4 United States Statutes and Regulations. The Parties represent and warrant that they are aware of: (a) United States
Trade Restrictions controlling exports from the United States and re-exports from third countries of United States origin goods, software and technology, including foreign made goods, software and technology with more than de minimus United
States content to Prohibited Countries, Restricted Countries and Restricted Parties, financial transactions with Denied Parties, as well as the restrictions and prohibitions under United States trade sanctions on dealings by U.S. Persons with such
countries and Persons, and is further aware that the lists of Prohibited Countries, Restricted Countries, Restricted Parties and Denied Parties may change from time to time; (b) Anti-boycott Laws; and (c) the Foreign Corrupt Practices Act.
The Parties understand their respective obligations under the Laws described above, and they agree to comply with those Laws and to take no action that might cause the other Party to be in violation of those Laws. In the event that one Party
believes, in good faith, that the other has violated any of the Laws described above, this Agreement may be
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OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
immediately terminated by the Party having such belief. Each Party further agrees that any past violations of these Laws are its sole responsibility, and that it will indemnify the other for any
penalty or fine associated with its past violation that is ascribed to the other as a result of its past actions. No equipment, computer software, technology or information obtained by one Party from the other, and no Product or component thereof,
will be made available or re-exported, directly or indirectly, except in compliance with all applicable export Laws. Additional information concerning these obligations of the Parties is set forth in Exhibit D.
6.5 Compliance with Laws. In performance of their respective obligations under this Agreement, each Party will comply with, and
will ensure that its employees and Affiliates comply with, all Laws, Governmental Approvals, regulations, agreements, licenses and consents applicable to or otherwise relating to the subject matter of this Agreement, including those referenced in
Section 6.4 and any other applicable Laws pertaining to the prohibition of corruption, bribery and the offering of inducements to public or semi-public or government officials, including the Foreign Corrupt Practices Act and the United
Kingdom Bribery Act. Without limiting the foregoing, each Party represents and warrants that it will not transfer, transship, provide, resell, export, import, re-export, distribute or dispose of any Products or components thereof or any related
technology or technical data, directly or indirectly, without first obtaining all necessary written consents, permits and authorizations and completing such formalities as may be required by any applicable Laws. Neither Party will sell or otherwise
provide any Products to any Person that it knows, believes or has reason to believe will take any action which, if done by it, would constitute a violation of any of the terms and conditions of this Agreement. The Customer will be solely responsible
for (a) ensuring compliance with all requirements of applicable Laws and Governmental Approvals with respect to the distribution, sale, marketing, advertising and taxation of the Products, including all reporting requirements, and
(b) securing all applicable Governmental Approvals and other requirements necessary for the distribution, sale, marketing, advertising and taxation of the Products in the Territory.
6.6 Audit Rights. Each Party agrees to maintain accurate and complete books and records regarding its activities under this
Agreement. Each Party agrees to keep such records in sufficient detail to enable the other Party to determine or verify such Partys compliance with this Agreement. Each Party will keep such records for a period of time as determined by its
normal document retention policies, but in any event not less than three years after the date of the transaction to which those records relate, or longer if required by applicable Law. In addition to the visitation and inspection rights set forth in
Section 2.4, during regular business hours and upon not less than five business days written notice, each Party will permit each other Party (and its representatives), at such other Partys cost and expense, to examine and audit all
of the first Partys books and records relating to its activities under this Agreement, in each case, to the extent necessary for the Party(ies) to make the foregoing determination and verification and subject to restrictions implemented in
good faith to (a) ensure compliance with applicable Law, (b) preserve any applicable privilege (including the attorney-client privilege), or (c) comply with any applicable contractual confidentiality obligations. Upon the
Customers request, the
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CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS
OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
Manufacturer will submit, within five business days after receiving such request, a copy of relevant records in relation to the services provided under this Agreement, as may be required by any
Governmental Authority in the Territory.
6.7 Indemnification.
(a) Subject to Section 6.2, the Customer agrees to indemnify, defend and hold harmless the Manufacturer, its Affiliates and its and
their respective current and former officers, directors, employees, representatives and agents (each, a Manufacturer Indemnified Party) from and against any and Losses that a Manufacturer Indemnified Party suffers or incurs
in connection with, or arising out of (i) a breach of the Customers representations, warranties, covenants or agreements set forth in this Agreement, (ii) the Customers arranging or electing to arrange shipping and delivery in
accordance with Section 5.1(b), or (iii) the marketing, advertising, distribution or sale by the Customer (or its Affiliates) of any Products, including any Losses that relate to any claimed adverse health effects or health risks
relating to the use of the Products, except that the Customer will not be required to indemnify any Manufacturer Indemnified Party for any Losses to the extent they arise out of the Manufacturers breach of any of its representations,
warranties, covenants or agreements set forth in this Agreement, including any failure to manufacture the Products in accordance with the Specifications.
(b) Subject to Section 6.2, the Manufacturer agrees to indemnify, defend and hold harmless the Customer, its Affiliates and its
and their respective current and former officers, directors, employees, representatives and agents (each, a Customer Indemnified Party) from and against any and all Losses that a Customer Indemnified Party suffers or incurs
in connection with, or arising out of the Manufacturers breach of any of its representations, warranties, covenants or agreements set forth in this Agreement, including any failure to manufacture the Products in accordance with the
Specifications.
(c) If any of the Persons to be indemnified under this Section 6.7 has suffered or incurred any Losses, such
Person shall so notify the Party from whom indemnification is sought promptly in writing in accordance with Section 9.4 or 9.5 of the Purchase Agreement, as applicable, which provisions are incorporated as if fully restated herein.
ARTICLE 7
CONFIDENTIALITY
7.1 Confidentiality Obligations.
(a) During the Term and for a period of three years thereafter, each Party receiving Confidential Information (a Receiving
Party) will maintain in confidence all Confidential Information disclosed to it by any other Party (a Disclosing Party). Notwithstanding the foregoing, but subject to Section 7.2, each of the
Partys respective obligations of confidentiality with respect to another Partys Trade Secrets, including the
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CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS
OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
Specifications, will be perpetual. No Party will use, disclose or grant the use of such Confidential Information except as expressly authorized by this Agreement. To the extent that disclosure is
authorized by this Agreement, the Receiving Party must inform its employees, representatives and contracting parties to whom disclosure is to be made of this ARTICLE 7, and instruct such Persons to hold in confidence and not make use of such
information for any purpose other than those purposes permitted by this Agreement. Each Receiving Party will use at least the same standard of care (but not less than a reasonable standard of care) as it uses to protect its own proprietary and Trade
Secret information to ensure that such employees, representatives and contracting parties do not disclose or make any unauthorized use of such Confidential Information. Each Receiving Party will promptly notify the other upon discovery of any
unauthorized use or disclosure of Confidential Information. The Receiving Party will be responsible to the Disclosing Party for any loss of Confidential Information of the Disclosing Party or breach of the provisions of this Section 7.1
by any employee, representative or contracting party of the Receiving Party.
7.2 Exceptions. The obligations of
confidentiality contained in Section 7.1 will not apply to the extent that it can be established by the Receiving Party by competent evidence that such Confidential Information: (a) was generally available to the public or otherwise
part of the public domain at the time of its receipt from the Disclosing Party; (b) becomes generally available to the public or otherwise part of the public domain after its disclosure and other than through any act or omission of the
Receiving Party in breach of this Agreement; or (c) was received by the Receiving Party, other than under an obligation of confidentiality, by a third Person lawfully in possession of the information.
7.3 Authorized Disclosure. Notwithstanding the foregoing, no Party (nor third Persons, as applicable) will be precluded from
disclosing Confidential Information to the extent it is required to do so in response to a valid order by a Governmental Authority, or to the extent it reasonably believes, on the basis of advice from outside counsel, that it is required to disclose
such Confidential Information by Law, or to the extent necessary to establish its rights under this Agreement; provided that, in the event a Party believes it is so required to disclose another Partys Confidential Information, it will
promptly provide notice of such requirement so that the Disclosing Party may seek an appropriate order or other action as it deems appropriate to prevent or limit such disclosure, and the Party required to make the disclosure will use its reasonable
efforts to preserve the confidentiality of the other Partys Confidential Information, including by cooperating with the other Party to obtain an appropriate order or other reliable assurance of confidential treatment. In any event, the Party
required to make the disclosure may disclose only that portion of another Partys Confidential Information that is legally required to be disclosed. Notwithstanding the foregoing, if any Party (or an Affiliate of such Party) is required to
include a copy of this Agreement as an exhibit to any current or periodic report filed with the U.S. Securities and Exchange Commission, such Party (or its Affiliate) may make such filing without the prior written consent of any other Party as long
as it seeks (or causes its Affiliate to seek) confidential treatment of any portions of this Agreement that, in the opinion of such filing Party, contain confidential or competitively sensitive information, regardless of whether such treatment is
obtained.
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CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS
OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
ARTICLE 8
TERM AND TERMINATION
8.1 Term of Agreement. The term of this Agreement will commence on the Effective Date and, unless earlier terminated as provided
in this ARTICLE 8, this Agreement will remain in effect until the close of business at the Oxford Facility on December 31, 2016 (the Initial Term), after which this Agreement may be renewed for an additional
six-month period (the Renewal Term and, together with the Initial Term, the Term) in accordance with Section 8.2.
8.2 Renewal Conditions. The Customer may elect to extend this Agreement through the Renewal Term by providing the Manufacturer
with written notice thereof at least 90 days before the end of the Initial Term, and the Renewal Term will take effect as of the end of the Initial Term, as long as:
(a) the Customer is not then in breach of any of its representations, warranties, covenants or agreements contained in this Agreement;
(b) the Customer has provided the Manufacturer with a forecast of its projected volumes of Products (by SKU if applicable) for which the
Customer expects to place Purchase Orders during the Renewal Term, which forecast must be prepared in the same manner as the Forecast and be acceptable to the Manufacturer in its sole discretion (if accepted, such forecast will supersede and replace
the Forecast for purposes of this Agreement during the Renewal Term); and
(c) the prices of the Products are increased in the discretion
of the Manufacturer to reflect, as closely as possible, any increase in the Index that may have occurred during the Initial Term (the Manufacturer will reflect any such increases in a new Exhibit A to this Agreement, which will supersede and
replace the previous such exhibit during the Renewal Term).
8.3 General Termination Provisions. Notwithstanding anything to
the contrary in this Agreement, this Agreement may be terminated as follows:
(a) by mutual consent of the Parties;
(b) by the Parties, in accordance with Section 6.4, 8.4, 8.5 or 8.6, subject to any cure or grace periods set
forth therein; and
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CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS
OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
(c) immediately, by a Party, by giving written notice to the other Party at any time upon the
occurrence of any of the following events: (i) the voluntary bankruptcy of the other Party, or the filing of an involuntary petition in bankruptcy against the other Party that is not dismissed within 60 days of filing, in which case, the
termination will become effective immediately upon the non-terminating Partys receipt of notice of termination or at such later date as may be specified in that notice; (ii) the other Party ceases to pay its debts as they mature in the
ordinary course of business, or makes an assignment for the benefit of its creditors, in which case, the termination will become effective immediately upon the non-terminating Partys receipt of notice of termination or at such later date as
may be specified in that notice; or (iii) a receiver is appointed for the other Party or its property, in which case, the termination will become effective immediately upon the non-terminating Partys receipt of notice of termination or at
such later date as may be specified in that notice.
8.4 Termination in Connection with Force Majeure. Notwithstanding
anything to the contrary in this Agreement, the Customer may terminate this Agreement if the Manufacturer suffers an event of Force Majeure, and such event is not alleviated to the reasonable satisfaction of the Customer within 60 days of the
Manufacturers receipt of notice of the Customers intent to terminate.
8.5 Termination in Connection with a Material
Breach. Notwithstanding anything to the contrary in this Agreement, a Party may terminate this Agreement, in the event that the other Party is in breach of any material term of this Agreement and the breaching Party fails to cure such breach
within 30 days of receipt of notice of breach from the terminating Party, or if such breach is not reasonably capable of cure within such 30-day period, such breaching Party fails to cure the breach within 60 days of receipt of notice of breach from
the terminating Party; except that the foregoing right to cure (a) will not apply to any breach by any Party involving violation of any applicable Law, Governmental Approval or any breach that is not capable of being cured, and
(b) is conditioned upon the breaching Party promptly commencing and thereafter diligently pursuing the cure to the reasonable satisfaction of the non-breaching Party.
8.6 Termination for Interference or Frustration of Purpose. If both (a) the action of any Governmental Authority prohibits
or declares unlawful or otherwise impairs, inhibits or frustrates in any material respect (i) the Customers intended use of the Products being manufactured for it under this Agreement, (ii) the Manufacturers ability to
manufacture or package Products as required under this Agreement, or (iii) any other material obligation of a Party as contemplated by this Agreement, and (b) the Parties are unable to propose a feasible way of either avoiding such
interference or of reorganizing the Parties arrangements under this Agreement so as to eliminate the effect of such interference or to minimize, or minimize the effect of, such interference to the point where it is no longer material within a
period of 60 days of a Party notifying the other Party of such interference, then the affected Party may terminate this Agreement, effective upon the earlier of (A) 30 days following receipt by the other Party of notice of termination from the
affected Party, and (B) the date on which such action of the
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Governmental Authority becomes effective. Any notice by a Party to the other Party of such interference pursuant to this Section 8.6 must include a reasonably detailed description of
the action of the Governmental Authority and the resulting prohibition, declaration of unlawfulness or material impairment, inhibition or frustration of purpose.
8.7 Effects of Termination.
(a) Upon any expiration or termination of this Agreement in accordance with its terms, this Agreement will terminate and become void and of no
further force and effect, and there will be no further liability or obligation on the part of any Party hereto. Each Partys right of termination under Sections 8.4, 8.5, and 8.6, is in addition to any other rights it may
have under this Agreement or otherwise, and the exercise of a right of termination will not constitute an election of remedies and will not relieve any Party of liability for any breach of this Agreement.
(b) Upon any expiration or termination of this Agreement:
(i) the Manufacturer agrees to: (A) deliver all finished Products to the Customer, together with a final invoice therefor;
(B) return all of the Customers Confidential Information; (C) stop producing Products for the Customer, except as the Customer may otherwise approve in writing; and (D) cooperate with the Customer in the preparation of a final
accounting of activities under this Agreement; and
(ii) the Customer agrees to: (A) promptly pay the Manufacturer for open invoices
and any other amounts owed; (B) return all of the Manufacturers Confidential Information; and (C) cooperate with the Manufacturer in the preparation of a final accounting of activities under this Agreement.
In addition, upon the request of the Manufacturer, the Customer will promptly pay the Manufacturer for all raw materials and product components (other than
Tobacco Leaf) procured by the Manufacturer in preparation for its manufacturing activities under this Agreement and for which the Manufacturer does not elect to use in its other activities; provided that the Customer will not be required to
purchase any such raw materials or product components (i) if this Agreement was terminated by the Customer pursuant to Section 8.5, or (ii) to the extent they (A) are in quantities in excess of those required to
manufacture Products in accordance with the Forecast, (B) were not stored under proper conditions, or (C) were not managed on a first in / first out basis. The Manufacturer will provide such raw materials and product components for Cost
and, upon payment therefor, the Manufacturer will deliver such raw materials and product components to the Customer in accordance with Section 5.1. The Parties arrangements with respect to Tobacco Leaf are addressed exclusively in
the Leaf Supply Agreement.
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CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS
OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
8.8 Survival. Notwithstanding anything to the contrary in this Agreement,
Section 8.7 and this Section 8.8, as well as ARTICLE 5, ARTICLE 6, ARTICLE 7 and ARTICLE 9 will continue in full force and effect and survive any expiration or termination of this Agreement.
ARTICLE 9
MISCELLANEOUS
9.1 Tax Matters. Notwithstanding anything to the contrary in this Agreement, all transfer, documentary, sales, use, stamp,
registration, value added, excise and other such taxes and fees (including any penalties) imposed in connection with the purchase of Products from the Manufacturer (if any) will be borne and paid by the Customer when due. To the extent applicable,
the Parties will cooperate with one another in good faith to obtain any tax exemption certificates that would eliminate or mitigate any obligations to pay any such taxes. The Products are intended for export outside of the United States and,
accordingly, the Parties intend that no federal or state excise taxes (if any) will be payable with respect to the Products; however, in the event any such federal or state excise taxes are levied with respect to the Products, the Customer will be
responsible for the payment thereof when due and will indemnify the Manufacturer in the event any such taxes are levied against it.
9.2 Further Assurances. Each Party agrees to enter into or execute, or procure the entering into or execution, of such
agreements, assignments or further assurances, or do such other acts as any other Party may reasonably request to carry out the terms and conditions of this Agreement.
9.3 Relationship of the Parties. For purposes of this Agreement, the Parties will be and remain independent contractors, and
this Agreement will not be construed as establishing a general agency, employment, partnership, joint venture, coalition, alliance or any other similar relationship between the Parties with regards to the relationship created by this Agreement. In
accordance with this Agreement, no Party will have the authority to make any statements, representations or commitments of any kind (whether express or implied) regarding the subject matter of this Agreement, or to take any action, which would be
binding on any other Party or create any liability or obligation on behalf of any other Party regarding the subject matter of this Agreement, without the prior written authorization of such other Party to do so. No Party will have the right to
direct or control the employees of any other Party. No Party will be liable for the debts, obligations or other liabilities of any other Party or of any of its agents, employees or contractors, including any costs for salaries, benefits or taxes.
9.4 Force Majeure. Notwithstanding anything to the contrary in this Agreement, no Party will be liable for any loss,
injury, delay, damage or other casualty suffered by any other Party due to any inability to perform any obligation hereunder, and no Party will be deemed to have defaulted under or breached this Agreement for failure or delay in fulfilling or
performing any term or provision of this Agreement (other than payment of monies due), when such failure or delay is caused by or results from causes beyond the control of the affected Party, including
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acts of God, fire, flood, storm, earthquake, explosion, epidemic, delays in transportation, shortages of trucks or vessels, shortages of fuel, shortages of raw materials, environmental
catastrophe, embargo, war, acts of war (whether war be declared or not), acts of terrorism, insurrection, riot, civil commotion, labor dispute, or acts, omissions or delays in acting by any Governmental Authority (including legislative,
administrative, judicial, police or any other official governmental acts). In the case of any delay or failure that a Party anticipates will cause an excusable delay hereunder, such Party will inform the other Party by written notice of the
anticipated effect of such delay within ten days of becoming aware of it.
9.5 Parties in Interest. Except for the
Manufacturer Indemnified Parties and the Customer Indemnified Parties, nothing in this Agreement, whether express or implied, will be construed to give any Person, including any employee or former employee of either Party, other than the Parties or
their respective successors and permitted assigns, any legal or equitable right, remedy, claim or benefit or remedies of any nature whatsoever under or by reason of under or in respect of this Agreement.
9.6 Assignment. This Agreement will be binding upon and inure to the benefit of the Parties and their respective successors and
permitted assigns. No Party may assign either this Agreement or any of its rights, interests or obligations hereunder without the express prior written consent of the other Party, and any attempted assignment, without such consent, will be null and
void; provided that the Customer may assign its rights to a subsidiary of the Customer upon written notice of the same to the Manufacturer, which assignment will not relieve the Customer of any of its obligations hereunder.
9.7 Notices. Unless otherwise provided in this Agreement, day-to-day commercial communications, such as Purchase Orders, may be
exchanged by any reasonable means. All other notices, requests, demands and other communications under this Agreement will be in writing and will be given and received if and when made in accordance with Section 10.3 of the Purchase Agreement.
9.8 Amendments and Waivers. This Agreement may not be amended, supplemented or otherwise modified except in a written
instrument executed by the Parties, except that the Manufacturer may update Exhibit A in accordance with Section 8.2(c). No waiver by any of the Parties of any default, misrepresentation or breach of warranty or covenant
hereunder, whether intentional or not, will extend to any prior or subsequent default, misrepresentation, or breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence. No
waiver by either Party of any of the provisions hereof will be effective unless explicitly set forth in writing and executed by the Party sought to be charged with such waiver.
9.9 Construction. The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises, this Agreement will be construed as if drafted jointly by the Parties and no presumption or burden of proof will arise favoring or disfavoring any Party by virtue of the authorship of any of
the provisions of this Agreement.
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OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
9.10 Entire Agreement. This Agreement (including the Exhibits hereto)
constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes any prior understandings, negotiations, agreements, discussions or representations between the Parties of any nature, whether written or
oral, to the extent they relate in any way to the subject matter hereof.
9.11 Severability. If any provision of this
Agreement or the application of any such provision to any Person or circumstance is declared by any court of competent jurisdiction to be invalid, illegal, void or unenforceable in any respect, all other provisions of this Agreement, or the
application of such provision to Persons or circumstances other than those as to which it has been held invalid, illegal, void or unenforceable, will nevertheless remain in full force and effect and will in no way be affected, impaired or
invalidated thereby. Upon such determination that any provision, or the application of any such provision, is invalid, illegal, void or unenforceable, the Parties agree to negotiate in good faith to modify this Agreement so as to effect the original
intent of the Parties as closely as possible to the fullest extent permitted by applicable Law in an acceptable manner to the end that the original purposes of this Agreement are fulfilled to the greatest extent possible.
9.12 Governing Law. This Agreement and all claims arising out of or relating to this Agreement and the transactions contemplated
hereby will be governed by the Law of the State of New York, without regard to the conflicts of law principles that would result in the application of any Law other than the Law of the State of New York.
9.13 Consent to Jurisdiction; Waiver of Jury Trial.
(a) Each of the Parties irrevocably submits to the exclusive jurisdiction of (i) the state courts of the State of New York located in the
borough of Manhattan in New York City and (ii) the United States District Court for the State of New York (and the appropriate appellate courts therefrom) for the purposes of any suit, action or other proceeding arising out of or relating to
this Agreement or any transaction contemplated hereby (and agrees not to commence any suit, action or proceeding relating hereto except in such courts). Each of the Parties further agrees that service of any process, summons, notice or document hand
delivered or sent by U.S. registered mail to such Partys respective address set forth in Section 10.3 of the Purchase Agreement will be effective service of process for any suit, action or proceeding in New York with respect to any
matters to which it has submitted to jurisdiction as set forth in the immediately preceding sentence. Each of the Parties irrevocably and unconditionally waives any objection to the laying of venue of any suit, action or proceeding arising out of or
relating to this Agreement or the transactions contemplated hereby in (i) state courts of the State of New York located in the borough of Manhattan in New York City or (ii) the United States District Court for the State of New York (and
the appropriate appellate courts therefrom), and hereby further
B-21
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS
OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such suit, action or proceeding brought in any such court has been brought in an inconvenient
forum. Notwithstanding the foregoing, each Party agrees that a final judgment in any suit, action or proceeding so brought will be conclusive and may be enforced by suit on the judgment in any jurisdiction or in any other manner provided in law or
in equity.
(b) EACH OF THE PARTIES IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED
ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREBY OR THE ACTIONS OF THE PARTIES IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT HEREOF.
9.14 Counterparts. This Agreement may be executed in two or more counterparts for the convenience of the Parties, each of which
will be deemed an original and all of which together will constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this Agreement by facsimile or portable document format will be effective as delivery of a
manually executed counterpart to this Agreement.
9.15 Exhibits. The Exhibits to this Agreement form part of and are
incorporated into this Agreement, and the Parties will act in accordance with their terms at all times during the Term. The following Exhibits are attached hereto:
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Exhibit |
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Description |
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A |
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Products and Prices |
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B |
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Product Forecast for the Term |
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C |
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Initial Purchase Orders |
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D |
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Certain United States Statutes and Regulations |
[this space left blank intentionally signature page immediately follows]
B-22
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS
OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their duly
authorized representatives to be effective as of the Effective Date.
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The Manufacturer: |
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SANTA FE NATURAL TOBACCO COMPANY, INC. |
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By: |
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Name: |
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Title: |
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The Customer: |
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JT INTERNATIONAL HOLDING BV |
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By: |
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Name: |
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Title: |
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B-23
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS
OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
EXHIBIT A
PRODUCTS AND PRICES
*****
B-24
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS
OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
EXHIBIT B
PRODUCT FORECAST FOR THE TERM
[to be provided]
B-25
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS
OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
EXHIBIT C
INITIAL PURCHASE ORDERS
[to be provided]
B-26
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS
OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
EXHIBIT D
SUPPLIES TO RESTRICTED COUNTRIES
U. S. International Trade Laws
List of Prohibited Countries
U.S.
export control laws and regulations impose a general embargo on trade with, exports to, transshipments through, and financial transactions involving the following Prohibited Countries: Cuba, Iran, Libya, Sudan, and Myanmar (Burma) (collectively,
Prohibited Countries). The Customer acknowledges that this list of Prohibited Countries changes on an irregular basis, and the Customer agrees that it is responsible for regular monitoring of changes in this list of Prohibited Countries.
Other, more limited U.S. trade embargoes also exist and the Customer agrees that it is responsible for complying with all aspects of these embargoes as described more fully on the internet site at:
http://www.treas.gov/offices/enforcement/ofac/.
Denied Parties
U.S. export controls also prohibit exports to and financial transactions with individuals, companies and organizations identified on a list of
Denied Parties specifically identified as Specially Designated Nationals (SDN), published by OFAC at (http://www.treas.gov/offices/enforcement/ofac/sdn/ index.html). Moreover, the Department of Commerce also publishes Denied
Parties, Entities and Unverified Parties lists of companies and individuals who are prohibited from involvement in U.S. export or re-export transactions (http://www.bxa.doc.gov/). Each of the lists identified
above is updated on an irregular, but sometimes frequent, basis, and the Customer agrees that it is responsible for regular monitoring of changes in these lists and compliance with requirements not to export to or conduct financial transactions with
any entity identified on these lists without an export license obtained from the U.S. government.
Anti-boycott Laws
The U.S. Department of Commerce and the U.S. Internal Revenue Service enforce Anti-boycott Laws and regulations that prohibit cooperation with
foreign embargoes that are not endorsed by the U.S. government. The U.S. Anti-boycott Laws are aimed particularly at preventing cooperation with the Arab League boycott of Israel. These laws prohibit agreements to cooperate with such boycotts and
actions to support such boycotts. These laws also require reporting to the U.S. government of operations in countries enforcing such embargoes and reporting of certain requests to cooperate with such embargoes. The Customer agrees that it will
strictly comply with the requirements of Anti-boycott Laws and regulations.
B-27
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
EXHIBIT C
FORM OF INTELLECTUAL PROPERTY TRANSFER AND LICENSE AGREEMENT
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS OF THIS
DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
EXHIBIT C
FORM OF
INTELLECTUAL PROPERTY TRANSFER AND LICENSE AGREEMENT
This INTELLECTUAL PROPERTY TRANSFER AND LICENSE AGREEMENT (this
Agreement), dated as of [●], 2015 (the Effective Date), is made by and between Santa Fe Natural Tobacco Company, Inc., a New Mexico corporation (SFNTC or Seller), JT
International Holding BV, a Dutch private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid) (Buyer). Seller and Buyer are separately referred to in this Agreement as a
Party and, together, as the Parties.
RECITALS
A. The Parties have entered into that certain Purchase Agreement, dated as of September 28, 2015 (as the same may be amended, the
Purchase Agreement), pursuant to which Seller will transfer to Buyer the Purchased IP.
B. Seller desires to sell, and
Buyer desires to buy, all right, title and interest of Seller and of its Affiliates in and to the Purchased IP, as defined in the Purchase Agreement, in all countries and places except the United States, together with the goodwill of the business
with which the Purchased Trademarks are used and which is symbolized by the Purchased Trademarks as provided herein.
C. Seller desires to
grant Buyer a license, on the terms and conditions set forth in this Agreement, to the Licensed Shared IP, and Buyer desires to accept such license.
D. It is a condition to the consummation of the transactions contemplated by the Purchase Agreement that the Parties execute and deliver this
Agreement and that this Agreement be in full force and effect on the Closing Date.
NOW, THEREFORE, in consideration of the foregoing and
the mutual covenants in this Agreement and the Purchase Agreement, the Parties agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Generally. For purposes of this Agreement, the terms set forth in Schedule 1.01, when capitalized, will
have the meanings set forth in Schedule 1.01. Capitalized terms used in this Agreement and not otherwise defined in this Agreement will have the meanings ascribed thereto in the Purchase Agreement.
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS
OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
ARTICLE II
ASSIGNMENT OF PURCHASED IP; TECHNOLOGY RIGHTS
Section 2.01. Assignment of Purchased Trademarks.
(a) Seller hereby agrees to sell, assign, transfer and convey, and will cause its Affiliates (other than the Acquired Companies) to sell,
assign, transfer and convey, to Buyer, its successors and assigns, all of Sellers and such Affiliates right, title and interest, including any and all common law rights, in and to the Purchased Trademarks, together with the goodwill of
the business of Seller and its Affiliates connected with the use of, as well as symbolized by, the Purchased Trademarks, including the right to sue and prosecute prior infringements in court and administratively.
Section 2.02. Assignment of Other Purchased IP. Seller hereby agrees to sell, assign, transfer and convey, and will cause its
Affiliates (other than the Acquired Companies) to sell, assign, transfer and convey, to Buyer, its successors and assigns, all of Sellers and such Affiliates right, title and interest, including any and all common law rights, in and to
the Other Purchased IP, together with, if any, the goodwill of the business of Seller and its Affiliates connected with the use of, as well as symbolized by, the Other Purchased IP, including the right to sue and prosecute prior infringements in
court and administratively.
Section 2.03. Assignment of co-existence agreements. Seller hereby agrees to assign, and will
cause its Affiliates (other than the Acquired Companies) to assign, to Buyer, its successors and assigns, the Transferring Trademark Agreements and any other co-existence or settlement agreement in effect as of the Effective Date to the extent such
agreement relates to the Purchased Trademarks.
Section 2.04. Licensed Shared IP.
(a) Seller hereby grants, and shall procure that the relevant Seller Group Entities grant, to Buyer and each Acquired Company,
the following licenses, all of which shall be perpetual, irrevocable, non-transferable (other than as provided in Section 2.04(b) and Section 5.05), non-sublicensable (other than as provided in Section 2.04(b)),
royalty-free and paid-up:
(i) an exclusive license to use the Blend Specifications included in the Licensed Shared IP
solely outside of the United States;
(ii) an exclusive license to use the Licensed Shared IP outside of the United States
solely in connection with the Business or as is otherwise necessary to use the Blend Specifications outside of the United States as permitted pursuant to Section 2.04(a)(i); and
(iii) to the extent not duplicative of the license set forth in Section 2.04(a)(ii), a license to use the Licensed
Shared IP outside the United States for any purpose, which license shall be exclusive until the fifth anniversary of the Effective Date and non-exclusive thereafter.
C-2
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS
OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
(b) Buyer and each Acquired Company may only transfer (including by way of assignment,
merger, change of control or otherwise) the licenses granted in Section 2.04(a) in connection with an Assignment of this Agreement permitted by Section 5.05 and may only sub-license the licenses granted in
Section 2.04(a) to their Affiliates or to any third party providing services (including the manufacture of products or product packaging) to Buyer or the Acquired Companies within the scope of such licenses from time to time.
(c) To the extent that any of the Licensed Shared IP is assigned or otherwise transferred (including by means of a sale of the shares of the
company that owns such Licensed Shared IP) by a Seller Group Entity, whether before or after Closing, Seller shall ensure that the transferee acknowledges in writing that such transfer is subject to the licenses to Buyer and the Acquired Companies
in Section 2.04(a).
Section 2.05. Delivery of Manufacturing Know-How. Without prejudice to
Section 2.3(b)(ix) of the Purchase Agreement, upon the written request of any Buyer prior to the eighteen-month anniversary of the Effective Date, Seller shall provide such Buyer with copies of documents, files and other media that comprise the
Manufacturing Know-How, solely to the extent the same then exist and are accessible to Seller using commercially reasonable endeavors and solely to the extent that substantially similar forms of the same have not previously been delivered to or are
not already in the possession of Buyer or any of its Affiliates (including the Acquired Companies).
Section 2.06. Blend
Specifications.
(a) Buyer agrees that Buyer will not use the Blend Specifications in connection with the development, design,
manufacture, packaging, labeling and/or production of Tobacco Products for delivery, sale, resale, distribution, marketing and/or promotion in the United States.
(b) Seller agrees that it will not use the Blend Specifications in connection with the development, design, manufacture, packaging, labeling
and/or production of Tobacco Products for delivery, sale, resale, distribution, marketing and/or promotion outside the United States.
Section 2.07. Product Diversion.
(a) Buyer and its Affiliates shall not sell, distribute or otherwise transfer Tobacco Products of any description employing the Purchased
Trademarks, Other Purchased IP or Licensed Shared IP in the United States or to any distributor which Buyer or its Affiliates know or have reason to know is reasonably likely to sell, distribute or otherwise transfer, either directly or indirectly,
such Tobacco Products in the United States
C-3
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS
OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
(b) Seller and its Affiliates shall not sell, distribute or otherwise transfer Tobacco
Products of any description employing the Purchased Trademarks, Other Purchased IP or the Blend Specifications outside of the United States or to any distributor which Seller or its Affiliates know or have reason to know is reasonably likely to
sell, distribute or otherwise transfer, either directly or indirectly, such Tobacco Products outside of the United States.
Section 2.08. Reservation of Rights. The licenses granted Buyer and the Acquired Companies in this Agreement are
limited to those specifically set forth in Section 2.04 (Licensed Shared IP). Buyer and the Acquired Companies will not use the Licensed Shared IP outside of the scope expressly licensed under this Agreement or the other Transaction
Documents. Nothing in this Agreement does or will be construed to grant Buyer or the Acquired Companies any rights or licenses in (a) the Licensed Shared IP not expressly granted or (b) any Intellectual Property of Seller or its Affiliates
other than the Licensed Shared IP as it exists as of the Effective Date, in each case whether by implication, estoppel or otherwise. Neither Seller nor any of its Affiliates has or will have any obligation to disclose, deliver or license to Buyer or
any of its Affiliates any Intellectual Property conceived, reduced to practice, made or created following the Effective Date, including improvements to or derivatives of the Licensed Shared IP. In addition, none of Buyer or its Affiliates has or
will have any obligation to disclose, deliver or license to Sellers or any of its Affiliates any Intellectual Property conceived, reduced to practice, made or created following the Effective Date, including improvements to or derivatives of the
Licensed Shared IP. All rights not specifically granted to Buyer and the Acquired Companies are reserved by Seller, including the right for Seller and its Affiliates to exploit and to license others to exploit the Licensed Shared IP outside of the
United States in all fields of use not exclusively licensed to Buyer and the Acquired Companies pursuant to Section 2.04(a)(i) or Section 2.04(a)(ii).
Section 2.09. Commitment to Compliance.
(a) Seller will ensure that its Affiliates, employees, contractors, distributors, sublicensees and agents comply with all obligations of this
Agreement, including the obligations of this ARTICLE II. Any act or omission by the foregoing that would be a violation of this Agreement if committed by Seller will be deemed a violation of this Agreement by Seller.
(b) Buyer will ensure that its Affiliates, employees, contractors, distributors, sublicensees and agents comply with all obligations of this
Agreement, including the obligations of this ARTICLE II. Any act or omission by the foregoing that would be a violation of this Agreement if committed by Buyer will be deemed a violation of this Agreement by Buyer.
C-4
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS
OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
ARTICLE III
CONFIDENTIALITY
Section 3.01. Confidentiality. With respect to Manufacturing Know-How and all confidential Know How and other confidential
Intellectual Property included in the Licensed Shared IP (collectively, the Confidential Information) each Buyer will, and will cause the Acquired Companies and each of its and their Affiliates and sublicensees to, (a) keep
the Confidential Information confidential using the same safeguards and standard of care that it uses to preserve the confidentiality of its own confidential information, but in no event will use less than reasonable safeguards and a reasonable
standard of care, and will not, without the prior written consent of Seller, disclose any Confidential Information in any manner whatsoever and (b) not use any Confidential Information other than in connection with the grant or exercise of its
rights under the license in Section 2.04(a) or fulfilling its obligations under this Agreement; provided, however, that Buyer, the Acquired Companies and their sublicensees may reveal the Confidential Information to their
Representatives who (i) need to know the Confidential Information for the purposes of exercising the rights or fulfilling the obligations of that Person hereunder, (ii) are informed by Buyer, the Acquired Companies or their sublicensees,
as applicable, of the confidential nature of the Confidential Information, and (iii) agree to act in accordance with the terms of this Section 3.01. Buyer, the Acquired Companies and their Affiliates and sublicensees will cause
their Representatives and applicable sublicensees to observe the terms of this Section 3.01, and Buyer will be responsible for any breach of this Section 3.01 by any such Representatives or sublicensees. For the avoidance of
doubt, any materials, documents, programs, data or information provided by one Party to the other Party pursuant to the terms of the Purchase Agreement shall be subject to the confidentiality provisions of the Purchase Agreement and shall not be
subject to the confidentiality provisions of this Agreement.
Section 3.02. Use and Disclosure Limitations. The obligation of
confidentiality under this ARTICLE III (Confidentiality) will not apply to the extent that it can be established by a Buyer by competent proof that such Confidential Information:
(a) was already known to such Buyer, other than under an obligation of confidentiality, at the time of receipt from Seller;
(b) was generally available to the public or otherwise part of the public domain at the time of receipt from Seller;
(c) became generally available to the public or otherwise part of the public domain after its disclosure other than through any act or
omission of such Buyer in breach of this Agreement; or
(d) was received by such Buyer, other than under an obligation of confidentiality,
from a third Person lawfully in possession of the Confidential Information that was itself free from any restrictions on use or obligations of confidentiality with respect to such Confidential Information; or
C-5
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS
OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
(e) was independently developed by Buyer, without reference or access to any Confidential
Information.
Section 3.03. Required Disclosure. In the event disclosure of Confidential Information is permitted by
applicable Law and any of Buyer, the Acquired Companies or their Affiliates or sublicensees is compelled to disclose Confidential Information by judicial or administrative process or required by operation of Law, Buyer will cause such Person to
promptly notify Seller and to cooperate, at Sellers expense, with Seller so that Seller may seek a protective order or other appropriate remedy or, in Sellers sole discretion, waive compliance with the terms of this ARTICLE III
(Confidentiality). In the event that no such protective order or other remedy is obtained, or that Seller does not waive compliance with the terms of this ARTICLE III (Confidentiality), Buyer will cause such Person will furnish only that
portion of the Confidential Information that it is advised by counsel is legally required and will exercise all reasonable efforts to obtain reliable assurance that confidential treatment will be accorded the Confidential Information.
ARTICLE IV
TERM AND
TERMINATION
Section 4.01. Term. This Agreement shall commence immediately upon the Effective Date and shall terminate
only upon the mutual written agreement of the Parties.
Section 4.02. Survival. Notwithstanding anything contained in this
Agreement to the contrary, ARTICLE III (Confidentiality), this Section 4.02 and ARTICLE V (General Provisions) will survive the expiration or termination of this Agreement and (b) the expiration or termination of this
Agreement will not act as a waiver of any breach of this Agreement or as a release of either Party from any liability or obligation incurred under this Agreement through the effective date of the expiration or termination.
ARTICLE V
GENERAL
PROVISIONS
Section 5.01. Specific Performance. Notwithstanding anything to the contrary contained herein, the Parties
agree that irreparable damage would occur in the event of a violation of any of the provisions of this Agreement or of a Partys obligations under this Agreement were not performed in accordance with their specific terms or were otherwise
breached for which money damages would be inadequate and it is accordingly agreed that the Parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this
Agreement, in addition to any other remedy to which they are entitled at law or in equity, without the need to post a bond or other security and without the necessity of proving damages.
C-6
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS
OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
Section 5.02. Further Assurances. Each Party shall, and shall cause its
Affiliates to, execute and deliver such additional documents, instruments, conveyances and assurances and take such further actions as may be reasonably required to carry out the provisions hereof and give effect to the transactions contemplated by
this Agreement. At Buyers expense, Seller shall execute as soon as reasonably practicable any deeds, agreements or other documents reasonably requested by Buyer to effect registration or recordal of the assignment of the Purchased IP and the
license of the Licensed Shared IP to Buyer in any jurisdiction.
Section 5.03. Independent Contractor Status. The Parties
acknowledge and agree that the Parties are independent contractors in the performance of each and every part of this Agreement and nothing herein will be construed to be inconsistent with this status. Nothing contained in this Agreement will be
construed as creating a partnership, joint venture, agency, trust or other association of any kind, each Party being individually responsible only for its obligations set forth in this Agreement.
Section 5.04. Parties in Interest. Nothing in this Agreement, whether express or implied, will be construed to give any Person,
including any employee or former employee of an Acquired Company, other than the Parties or their respective successors and permitted assigns, any legal or equitable right, remedy, claim or benefit or remedies of any nature whatsoever, including any
rights of employment for any specified period, under or by reason of or in respect of this Agreement.
Section 5.05.
Assignment. This Agreement will be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns. No Party may assign either this Agreement or any of its rights, interests, or obligations hereunder
without the express prior written consent of the other Parties, and any attempted assignment, without such consent, will be null and void; provided, however, that (a) a Party may assign its rights to an Affiliate upon written
notice of the same to the other Party, which assignment will not relieve the assigning Party of any of its obligations hereunder, (b) Buyer may assign its rights under this Agreement in connection with the transfer of all or substantially all
of Buyers assets related to the Business, and (c) Seller may assign its rights under this Agreement in connection with the transfer of all or substantially all of Sellers assets related to the US Business.
Section 5.06. Notices. All notices, requests, demands and other communications under this Agreement will be in writing and will be
given (and will be deemed to have been duly given upon receipt) by delivery in person, by prepaid overnight courier (providing proof of delivery) or by email to the respective Parties at the following addresses or email addresses (or at such other
address for a Party as will be specified in a notice given in accordance with this Section 5.06):
if to Seller:
Reynolds American Inc.
401 North Main Street
C-7
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS
OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
Winston-Salem, NC 27101
Attention: Martin L. Holton III
Email: #######@####.com
with a copy to (which will not constitute notice):
Jones Day
222 East 41st Street
New York, New York 10017
Attention: Randi C. Lesnick
Email: rclesnick@jonesday.com
if to Buyer:
JT International SA
1 Rue de la Gabelle
1211 Geneva, Switzerland
Telephone: +## #### #####
Attention: Dr. Martin-Ralph Frauendorfer, VP; Assistant General Counsel
BD & Operations
E-mail: #########################@####.com
with a copy to (which will not constitute notice):
Freshfields Bruckhaus Deringer US LLP
601 Lexington Avenue, 31st Floor
New York, New York 10022
Attention: Matthew F. Herman
Email: matthew.herman@freshfields.com
Section 5.07. Amendments and Waivers. This Agreement may not be amended, supplemented or otherwise modified except in a written
instrument executed by the Parties. No waiver by any of the Parties of any default, misrepresentation, or breach of warranty or covenant hereunder, whether intentional or not, will extend to any prior or subsequent default, misrepresentation, or
breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence. No waiver by any of the Parties of any of the provisions hereof will be effective unless explicitly set forth in
writing and executed by the Party sought to be charged with such waiver.
Section 5.08. Entire Agreement. This Agreement
(including the Exhibits and Schedules hereto) the Transaction Documents and the Confidentiality Agreements constitute the entire agreement among the Parties with respect to the subject matter hereof and thereof and supersede any prior
understandings, negotiations, agreements, discussions or representations among the Parties of any nature, whether written or oral, to the extent they relate in any way to
C-8
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS
OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
the subject matter hereof or thereof. In the event of any inconsistency between the terms of this Agreement and the Schedules, the terms of this Agreement will control. In the event of any
inconsistency between the terms of this Agreement and the Purchase Agreement, the terms of the Purchase Agreement will control.
Section 5.09. Severability. If any provision of this Agreement or the application of any such provision to any Person or
circumstance shall be declared by any court of competent jurisdiction to be invalid, illegal, void or unenforceable in any respect, all other provisions of this Agreement, or the application of such provision to Persons or circumstances other than
those as to which it has been held invalid, illegal, void or unenforceable, shall nevertheless remain in full force and effect and will in no way be affected, impaired or invalidated thereby. Upon such determination that any provision, or the
application of any such provision, is invalid, illegal, void or unenforceable, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible to the fullest extent
permitted by applicable Law in an acceptable manner to the end that the Transactions are fulfilled to the greatest extent possible.
Section 5.10. Governing Law. This Agreement and all claims arising out of or relating to this Agreement and the Transactions shall
be governed by the Law of the State of New York, without regard to the conflicts of law principles that would result in the application of any Law other than the Law of the State of New York.
Section 5.11. Consent to Jurisdiction and Waiver of Jury Trial.
(a) Each of the Parties irrevocably submits to the exclusive jurisdiction of (i) the state courts of the State of New York located in
borough of Manhattan in New York City and (ii) the United States District Court for the Southern District of New York (and the appropriate appellate courts therefrom) for the purposes of any Action arising out of or relating to this Agreement
or any transaction contemplated hereby (and agrees not to commence any Action, suit or proceeding relating hereto except in such courts). Each of the Parties further agrees that service of any process, summons, notice or document hand delivered or
sent by U.S. registered mail to such Partys respective address set forth in Section 5.06 (Notices) will be effective service of process for any Action in New York with respect to any matters to which it has submitted to
jurisdiction as set forth in the immediately preceding sentence. Each of the Parties irrevocably and unconditionally waives any objection to the laying of venue of any Action arising out of or relating to this Agreement or the Transactions in
(i) state courts of the State of New York located in borough of Manhattan in New York City or (ii) the United States District Court for the Southern District of New York (and the appropriate appellate courts therefrom), and hereby further
irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such Action brought in any such court has been brought in an inconvenient forum. Notwithstanding the foregoing, each Party agrees that a final
judgment in any Action so brought shall be conclusive and may be enforced by suit on the judgment in any jurisdiction or in any other manner provided in law or in equity.
C-9
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS
OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
(b) EACH OF THE PARTIES IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION (WHETHER
BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE TRANSACTIONS OR THE ACTIONS OF THE PARTIES IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT HEREOF.
Section 5.12. Counterparts. This Agreement may be executed in two or more counterparts for the convenience of the Parties, each of
which shall be deemed an original and all of which together will constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this Agreement by facsimile or portable document format shall be effective as
delivery of a manually executed counterpart to this Agreement.
Section 5.13. Rules of Construction. Unless the context
requires otherwise, (a) all references to Sections, Articles, Exhibits or Schedules are to the Sections, Articles, Exhibits or Schedules of or to this Agreement, (b) each accounting term not otherwise defined in this Agreement has the
meaning commonly applied to it in accordance with GAAP, (c) words in the singular include the plural and vice versa, (d) to the extent the term day or days is used, it will mean calendar days unless Business Days
are specified and all references to times of the day are to New York time unless otherwise specified, (e) the pronoun his refers to the masculine, feminine and neuter, the words herein, hereby,
hereof, hereunder and other words of similar import refer to this Agreement as a whole and not to any particular Section, Article, or other subdivision, (f) the term including means including without
limitation, (g) the term or will be disjunctive but not exclusive, (h) the term extent in the phrase to the extent means the degree to which a subject or other thing extends, and such phrase will
not mean simply if, and (i) references to documents or other materials delivered or made available to Buyer or similar phrases shall mean that such documents or other materials were delivered to Buyer or its
Representatives or were present in the Data Room, and (j) any reference to any contract or Law is a reference to it as amended, modified and supplemented from time to time (and, in the case of a Law, to (i) any successor provision and
(ii) the rules and regulations promulgated thereunder). The headings contained in this Agreement or in any Exhibit or Schedule are for convenience of reference purposes only and will not affect in any way the meaning or interpretation of this
Agreement.
[Remainder of page left intentionally blank]
C-10
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS
OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
IN WITNESS WHEREOF, the undersigned hereby execute this Intellectual Property Transfer and
License Agreement effective as of the day and year first above written.
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SANTA FE NATURAL TOBACCO COMPANY, INC. |
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By: |
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Name: |
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Title |
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JT INTERNATIONAL HOLDING BV |
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By: |
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Name: |
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Title: |
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C-11
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS
OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
Schedule 1.01 Definitions
1. |
Acquired Companies is defined in the Purchase Agreement. |
2. |
Action is defined in the Purchase Agreement. |
3. |
Affiliate is defined in the Purchase Agreement. |
4. |
Agreement is defined in the Preamble. |
5. |
Annie is defined in the Preamble. |
6. |
Blend Specifications means the specifications for those tobacco blends used in products sold by Seller and its Affiliates in the Business immediately prior to the Effective Date. |
7. |
Business is defined in the Purchase Agreement. |
8. |
Business Day is defined in the Purchase Agreement. |
9. |
Buyer is defined in the Preamble. |
10. |
Disclosure Schedule is defined in the Purchase Agreement. |
11. |
Effective Date is defined in the Preamble. |
12. |
Governmental Authority is defined in the Purchase Agreement. |
13. |
Intellectual Property is defined in the Purchase Agreement. |
14. |
Know-How is defined in the Purchase Agreement. |
15. |
Law is defined in the Purchase Agreement. |
16. |
Licensed Shared IP is defined in the Purchase Agreement. |
17. |
Lien is defined in the Purchase Agreement. |
18. |
Manufacturing Know-How is defined in the Purchase Agreement. |
19. |
Order is defined in the Purchase Agreement. |
20. |
Other Purchased IP means all Purchased IP other than the Purchased Trademarks. |
21. |
Party and Parties are defined in the Preamble. |
C-12
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS
OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
22. |
Person is defined in the Purchase Agreement. |
23. |
Purchase Agreement is defined in Paragraph A of the Recitals. |
24. |
Purchased IP is defined in the Purchase Agreement. |
25. |
Purchased Trademarks means the Trademarks contained in the Purchased IP and set forth on Exhibit A. |
26. |
Representative is defined in the Purchase Agreement. |
27. |
Seller is defined in the Preamble. |
28. |
Seller Group Entity is defined in the Purchase Agreement. |
29. |
Tobacco Products is defined in the Purchase Agreement. |
30. |
Trademark is defined in the Purchase Agreement. |
31. |
Transactions is defined in the Purchase Agreement. |
32. |
Transferring Trademark Agreements means the co-existence, settlement and other similar agreements relating to the Purchased Trademarks that are set forth at items 12 to 16 (inclusive) of
Section 4.6(b) of the Disclosure Schedule. |
33. |
US Business is defined in the Purchase Agreement. |
C-13
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS
OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
Exhibit A Purchased Trademarks
(see attached)
C-14
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS
OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
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TMID |
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Trademark |
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Country |
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Application No |
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Application Date |
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Registration No |
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Registration Date |
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Owner |
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Status |
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Design Image |
3484 |
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AMERICAN SPIRIT |
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European Union |
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010827269 |
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23-Apr-2012 |
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010827269 |
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03-Sep-2012 |
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Santa Fe Natural Tobacco Company, Inc. |
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Registered |
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3520 |
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AMERICAN SPIRIT |
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Germany |
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302012006154.0 |
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13-Jul-2012 |
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302012006154 |
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26-Jul-2012 |
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Santa Fe Natural Tobacco Company, Inc. |
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Registered |
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3966 |
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AMERICAN SPIRIT |
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Hong Kong |
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303350961 |
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27-Mar-2015 |
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Santa Fe Natural Tobacco Company, Inc. |
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Pending |
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3957 |
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AMERICAN SPIRIT |
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Israel |
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273369 |
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26-Mar-2015 |
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Santa Fe Natural Tobacco Company, Inc. |
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Pending |
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3487 |
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AMERICAN SPIRIT |
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Japan |
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2012-34453 |
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27-Apr-2012 |
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5559710 |
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22-Feb-2013 |
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Santa Fe Natural Tobacco Company, Inc. |
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Registered |
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3830 |
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AMERICAN SPIRIT |
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Korea (South) |
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40-2014-19092 |
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21-Mar-2014 |
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40-1079225 |
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05-Jan-2015 |
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Santa Fe Natural Tobacco Company, Inc. |
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Registered |
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3545 |
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AMERICAN SPIRIT |
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Switzerland |
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53637/2012 |
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28-Mar-2012 |
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632.998 |
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15-Aug-2012 |
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Santa Fe Natural Tobacco Company, Inc. |
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Registered |
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3992 |
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AMERICAN SPIRIT |
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Taiwan |
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104023003 |
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27-Apr-2015 |
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Santa Fe Natural Tobacco Company, Inc. |
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Pending |
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3274 |
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AMESPI |
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Japan |
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2011-3634 |
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21-Jan-2011 |
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5417558 |
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10-Jun-2011 |
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Santa Fe Natural Tobacco Company, Inc. |
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Registered |
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3275 |
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AMESPI in Katakana |
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Japan |
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2011-3635 |
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21-Jan-2011 |
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5417559 |
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10-Jun-2011 |
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Santa Fe Natural Tobacco Company, Inc. |
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Registered |
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3754 |
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Chinese Characters with Tobacco Chief Logo |
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China |
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13396112 |
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21-Oct-2013 |
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Santa Fe Natural Tobacco Company, Inc. |
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Pending |
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3774 |
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NAS & TOBACCO CHIEF LOGO (CHINA 2013) |
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China |
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13654272 |
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03-Dec-2013 |
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Santa Fe Natural Tobacco Company, Inc. |
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Pending |
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3776 |
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NAS BESIDE TOBACCO CHIEF (CHINA 2013) |
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China |
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13654271 |
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03-Dec-2013 |
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Santa Fe Natural Tobacco Company, Inc. |
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Pending |
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3769 |
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NAS (Side by Side 2013) |
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Israel |
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260853 |
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26-Nov-2013 |
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260853 |
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02-Jul-2015 |
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Santa Fe Natural Tobacco Company, Inc. |
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Registered |
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C-15
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS
OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
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3770 |
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NAS (Upper Left 2013) |
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Israel |
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260838 |
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26-Nov-2013 |
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260838 |
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02-Jul-2015 |
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Santa Fe Natural Tobacco Company, Inc. |
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Registered |
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3781 |
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NAS WITH TOBACCO CHIEF BESIDE (CHINA 2013) |
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China |
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13654267 |
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03-Dec-2013 |
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Santa Fe Natural Tobacco Company, Inc. |
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Pending |
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3780 |
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NAS with TOBACCO CHIEF LOGO (China 2013 purple) |
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China |
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13654268 |
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03-Dec-2013 |
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Santa Fe Natural Tobacco Company, Inc. |
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Pending |
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3470 |
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NATURAL AMERICAN SPIRIT |
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Argentina |
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3160253 |
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25-Apr-2012 |
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2590149 |
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30-Aug-2013 |
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Santa Fe Natural Tobacco Company, Inc. |
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Registered |
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74 |
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NATURAL AMERICAN SPIRIT |
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Australia |
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841646 |
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06-Jul-2000 |
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841646 |
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24-May-2001 |
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Santa Fe Natural Tobacco Company, Inc. |
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Registered |
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3491 |
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NATURAL AMERICAN SPIRIT |
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Brazil |
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840115547 |
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07-May-2012 |
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840115547 |
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05-May-2015 |
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Santa Fe Natural Tobacco Company, Inc. |
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Registered |
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80 |
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NATURAL AMERICAN SPIRIT |
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Canada |
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850 852 |
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15-Jul-1997 |
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TMA 544,349 |
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01-May-2001 |
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Santa Fe Natural Tobacco Company, Inc. |
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Registered |
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3504 |
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NATURAL AMERICAN SPIRIT |
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Croatia |
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Z20120020 |
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10-Jan-2012 |
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Z20120020 |
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04-Oct-2012 |
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Santa Fe Natural Tobacco Company, Inc. |
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Registered |
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173 |
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NATURAL AMERICAN SPIRIT |
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Ecuador |
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115515 |
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10-Jul-2001 |
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19494-03 DNPI |
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12-Sep-2002 |
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Santa Fe Natural Tobacco Company, Inc. |
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Registered |
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142 |
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NATURAL AMERICAN SPIRIT |
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European Union |
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000018002 |
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01-Apr-1996 |
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000018002 |
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03-Feb-1998 |
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Santa Fe Natural Tobacco Company, Inc. |
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Registered |
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176 |
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NATURAL AMERICAN SPIRIT |
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France |
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00.3056381 |
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03-Oct-2000 |
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00.3056381 |
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16-Mar-2001 |
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Santa Fe Natural Tobacco Company, Inc. |
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Registered |
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3473 |
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NATURAL AMERICAN SPIRIT |
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Germany |
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302012004208.2/18 |
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17-Apr-2012 |
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302012004208 |
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23-May-2012 |
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Santa Fe Natural Tobacco Company, Inc. |
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Registered |
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381 |
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NATURAL AMERICAN SPIRIT |
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Hong Kong |
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300149337 |
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30-Jan-2004 |
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300149337 |
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30-Jan-2004 |
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Santa Fe Natural Tobacco Company, Inc. |
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Registered |
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2706 |
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NATURAL AMERICAN SPIRIT |
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Hong Kong |
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301118321 |
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16-May-2008 |
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301118321 |
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16-May-2008 |
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Santa Fe Natural Tobacco Company, Inc. |
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Registered |
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3194 |
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NATURAL AMERICAN SPIRIT |
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Israel |
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228867 |
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11-Apr-2010 |
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228867 |
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17-May-2011 |
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Santa Fe Natural Tobacco Company, Inc. |
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Registered |
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3423 |
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NATURAL AMERICAN SPIRIT |
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Israel |
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243097 |
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15-Dec-2011 |
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243097 |
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30-Jun-2013 |
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Santa Fe Natural Tobacco Company, Inc. |
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Registered |
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178 |
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NATURAL AMERICAN SPIRIT |
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Italy |
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RM2000C006972 |
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22-Nov-2000 |
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903391 |
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07-Aug-2003 |
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Santa Fe Natural Tobacco Company, Inc. |
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Registered |
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C-16
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS
OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
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179 |
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NATURAL AMERICAN SPIRIT |
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Japan |
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06-042399 |
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25-Apr-1994 |
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4092665 |
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12-Dec-1997 |
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Santa Fe Natural Tobacco Company, Inc. |
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Registered |
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311 |
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NATURAL AMERICAN SPIRIT |
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Japan |
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09-129047 |
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18-Sep-1998 |
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4189518 |
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18-Sep-1998 |
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Santa Fe Natural Tobacco Company, Inc. |
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Registered |
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1773 |
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NATURAL AMERICAN SPIRIT |
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Korea (South) |
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40-2004-50895 |
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10-Nov-2004 |
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681265 |
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11-Oct-2006 |
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Santa Fe Natural Tobacco Company, Inc. |
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Registered |
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290 |
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NATURAL AMERICAN SPIRIT |
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Liechtenstein |
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2002/717 |
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04-Jul-2002 |
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12658 |
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04-Jul-2002 |
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Santa Fe Natural Tobacco Company, Inc. |
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Registered |
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1775 |
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NATURAL AMERICAN SPIRIT |
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Macao |
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N/15426 |
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26-Nov-2004 |
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N/015426 |
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09-Nov-2005 |
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Santa Fe Natural Tobacco Company, Inc. |
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Registered |
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1155 |
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NATURAL AMERICAN SPIRIT |
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Monaco |
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25483 |
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11-Jun-2004 |
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04.24154 |
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11-Jun-2004 |
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Santa Fe Natural Tobacco Company, Inc. |
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Registered |
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185 |
|
NATURAL AMERICAN SPIRIT |
|
New Zealand |
|
624438 |
|
04-Oct-2000 |
|
624438 |
|
04-Oct-2000 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
186 |
|
NATURAL AMERICAN SPIRIT |
|
New Zealand |
|
248075 |
|
13-Apr-1995 |
|
248075 |
|
09-May-1997 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
194 |
|
NATURAL AMERICAN SPIRIT |
|
Norway |
|
19972004 |
|
11-Mar-1997 |
|
197515 |
|
14-May-1999 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
3485 |
|
NATURAL AMERICAN SPIRIT |
|
Russian Federation |
|
2012714477 |
|
04-May-2012 |
|
493479 |
|
08-Aug-2013 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
384 |
|
NATURAL AMERICAN SPIRIT |
|
Singapore |
|
T04/01202D |
|
03-Feb-2004 |
|
T04/01202D |
|
03-Feb-2004 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
2479 |
|
NATURAL AMERICAN SPIRIT |
|
South Africa |
|
2007/03434 |
|
21-Feb-2007 |
|
2007/03434 |
|
23-Aug-2010 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
190 |
|
NATURAL AMERICAN SPIRIT |
|
Switzerland |
|
01589/1996 |
|
08-Mar-1996 |
|
443.066 |
|
24-Jun-1997 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
2725 |
|
NATURAL AMERICAN SPIRIT |
|
Taiwan |
|
97031064 |
|
01-Jul-2008 |
|
01364857 |
|
01-Jun-2009 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
313 |
|
NATURAL AMERICAN SPIRIT |
|
Thailand |
|
|
|
20-Nov-1996 |
|
KOR94372 |
|
28-Jun-1999 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
3868 |
|
NATURAL AMERICAN SPIRIT & Design |
|
Bermuda |
|
53800 |
|
30-Jul-2014 |
|
53800 |
|
26-Aug-2015 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Pending |
|
|
C-17
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS
OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3843 |
|
NATURAL AMERICAN SPIRIT & Design |
|
Caribbean Netherlands |
|
5959 |
|
22-May-2014 |
|
|
|
|
|
Santa Fe Natural Tobacco Company, Inc. |
|
Pending |
|
|
|
|
|
|
|
|
|
|
|
|
174 |
|
NATURAL AMERICAN SPIRIT & Design |
|
Ecuador |
|
115524 |
|
10-Jul-2001 |
|
19496-03 DNPI |
|
12-Sep-2002 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
3870 |
|
NATURAL AMERICAN SPIRIT & Design |
|
Egypt |
|
305456 |
|
03-Aug-2014 |
|
|
|
|
|
Santa Fe Natural Tobacco Company, Inc. |
|
Pending |
|
|
|
|
|
|
|
|
|
|
|
|
3847 |
|
NATURAL AMERICAN SPIRIT & Design |
|
Indonesia |
|
D002014032219 |
|
02-Jul-2014 |
|
|
|
|
|
Santa Fe Natural Tobacco Company, Inc. |
|
Pending |
|
|
|
|
|
|
|
|
|
|
|
|
2113 |
|
NATURAL AMERICAN SPIRIT & Design |
|
Korea (South) |
|
40-2004-50902 |
|
10-Nov-2004 |
|
681266 |
|
11-Oct-2006 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
3229 |
|
NATURAL AMERICAN SPIRIT & Design |
|
Mexico |
|
1,112,850 |
|
18-Aug-2010 |
|
1,191,525 |
|
26-Nov-2010 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
1156 |
|
NATURAL AMERICAN SPIRIT & Design |
|
Monaco |
|
25484 |
|
11-Jun-2004 |
|
04.24155 |
|
11-Jun-2004 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
C-18
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS
OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3849 |
|
NATURAL AMERICAN SPIRIT & Design |
|
Panama |
|
232587-01 |
|
10-Jun-2014 |
|
232587 01 |
|
10-Jun-2014 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
3848 |
|
NATURAL AMERICAN SPIRIT & Design |
|
Tunisia |
|
TN/E/2014/00608 |
|
05-Jun-2014 |
|
|
|
|
|
Santa Fe Natural Tobacco Company, Inc. |
|
Pending |
|
|
|
|
|
|
|
|
|
|
|
|
3871 |
|
NATURAL AMERICAN SPIRIT & Design |
|
United Arab Emirates |
|
215429 |
|
06-Aug-2014 |
|
|
|
|
|
Santa Fe Natural Tobacco Company, Inc. |
|
Pending |
|
|
|
|
|
|
|
|
|
|
|
|
77 |
|
NATURAL AMERICAN SPIRIT & Design (+ Thunderbird) |
|
Austria |
|
AM 6446/2000 |
|
05-Sep-2000 |
|
192 952 |
|
27-Dec-2000 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
82 |
|
NATURAL AMERICAN SPIRIT & Design (+ Thunderbird) |
|
European Union |
|
23002 |
|
01-Apr-1996 |
|
000023002 |
|
02-Feb-1998 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
189 |
|
NATURAL AMERICAN SPIRIT & Design (+ Thunderbird) |
|
Switzerland |
|
01590/1996 |
|
08-Mar-1996 |
|
443.951 |
|
16-Jul-1997 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
3920 |
|
NATURAL AMERICAN SPIRIT & Design (2014) |
|
Japan |
|
2015-2328 |
|
13-Jan-2015 |
|
|
|
|
|
Santa Fe Natural Tobacco Company, Inc. |
|
Pending |
|
|
C-19
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS
OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
112 |
|
NATURAL AMERICAN SPIRIT & Design (celadon) |
|
European Union |
|
002279990 |
|
27-Jun-2001 |
|
002279990 |
|
23-Aug-2002 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
240 |
|
NATURAL AMERICAN SPIRIT & Design (celadon) |
|
Germany |
|
30072177 |
|
27-Sep-2000 |
|
30072177 |
|
06-Feb-2001 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
287 |
|
NATURAL AMERICAN SPIRIT & Design (celadon) |
|
Japan |
|
2002-053643 |
|
27-Jun-2002 |
|
4679737 |
|
06-Jun-2003 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
294 |
|
NATURAL AMERICAN SPIRIT & Design (celadon) |
|
Liechtenstein |
|
|
|
04-Jul-2002 |
|
12660 |
|
04-Jul-2002 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
275 |
|
NATURAL AMERICAN SPIRIT & Design (celadon) |
|
Switzerland |
|
05367/2002 |
|
17-Jun-2002 |
|
512.928 |
|
17-Jun-2002 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
3755 |
|
NATURAL AMERICAN SPIRIT & Design (China 2013) |
|
China |
|
13396111 |
|
21-Oct-2013 |
|
|
|
|
|
Santa Fe Natural Tobacco Company, Inc. |
|
Pending |
|
|
|
|
|
|
|
|
|
|
|
|
196/WA-AL |
|
NATURAL AMERICAN SPIRIT & Design (package image) |
|
Albania |
|
|
|
|
|
697 381A |
|
25-Jun-1998 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
196/WA-AM |
|
NATURAL AMERICAN SPIRIT & Design (package image) |
|
Armenia |
|
|
|
|
|
697 381A |
|
25-Jun-1998 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
C-20
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS
OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
196/WA-HR |
|
NATURAL AMERICAN SPIRIT & Design (package image) |
|
Croatia |
|
|
|
|
|
697 381A |
|
25-Jun-1998 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
196/WA-CU |
|
NATURAL AMERICAN SPIRIT & Design (package image) |
|
Cuba |
|
|
|
|
|
697 381A |
|
25-Jun-1998 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
196/WA-KG |
|
NATURAL AMERICAN SPIRIT & Design (package image) |
|
Kyrgyzstan |
|
|
|
|
|
697 381A |
|
25-Jun-1998 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
196/WA-MK |
|
NATURAL AMERICAN SPIRIT & Design (package image) |
|
Macedonia |
|
|
|
|
|
697 381A |
|
25-Jun-1998 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
196/WA-MD |
|
NATURAL AMERICAN SPIRIT & Design (package image) |
|
Moldova |
|
|
|
|
|
697 381A |
|
25-Jun-1998 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
196/WA-MN |
|
NATURAL AMERICAN SPIRIT & Design (package image) |
|
Mongolia |
|
|
|
|
|
697 381A |
|
25-Jun-1998 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
196/WA-ME |
|
NATURAL AMERICAN SPIRIT & Design (package image) |
|
Montenegro |
|
|
|
|
|
697 381A |
|
25-Jun-1998 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
196/WA-MA |
|
NATURAL AMERICAN SPIRIT & Design (package image) |
|
Morocco |
|
|
|
|
|
697 381A |
|
25-Jun-1998 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
196/WA-RU |
|
NATURAL AMERICAN SPIRIT & Design (package image) |
|
Russian Federation |
|
|
|
|
|
697 381A |
|
25-Jun-1998 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
C-21
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS
OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
196/WA-YU |
|
NATURAL AMERICAN SPIRIT & Design (package image) |
|
Serbia |
|
|
|
|
|
697 381A |
|
25-Jun-1998 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
196/WA-UA |
|
NATURAL AMERICAN SPIRIT & Design (package image) |
|
Ukraine |
|
|
|
|
|
697 381A |
|
25-Jun-1998 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
196/W |
|
NATURAL AMERICAN SPIRIT & Design (package image) |
|
WIPO |
|
|
|
|
|
697 381A |
|
25-Jun-1998 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
97 |
|
NATURAL AMERICAN SPIRIT & Design (turquoise) |
|
European Union |
|
002280048 |
|
27-Jun-2001 |
|
002280048 |
|
23-Aug-2002 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
241 |
|
NATURAL AMERICAN SPIRIT & Design (turquoise) |
|
Germany |
|
30072150 |
|
27-Sep-2000 |
|
30072150 |
|
14-Feb-2001 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
286 |
|
NATURAL AMERICAN SPIRIT & Design (turquoise) |
|
Japan |
|
2002-053642 |
|
27-Jun-2002 |
|
4679736 |
|
06-Jun-2003 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
293 |
|
NATURAL AMERICAN SPIRIT & Design (turquoise) |
|
Liechtenstein |
|
|
|
04-Jul-2002 |
|
12659 |
|
04-Jul-2002 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
276 |
|
NATURAL AMERICAN SPIRIT & Design (turquoise) |
|
Switzerland |
|
05369/2002 |
|
17-Jun-2002 |
|
512.929 |
|
17-Jun-2002 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
C-22
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS
OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
127 |
|
NATURAL AMERICAN SPIRIT & Design (yellow) |
|
European Union |
|
002279966 |
|
27-Jun-2001 |
|
002279966 |
|
23-Aug-2002 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
242 |
|
NATURAL AMERICAN SPIRIT & Design (yellow) |
|
Germany |
|
30072149 |
|
27-Sep-2000 |
|
30072149 |
|
07-Feb-2001 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
288 |
|
NATURAL AMERICAN SPIRIT & Design (yellow) |
|
Japan |
|
2002-053644 |
|
27-Jun-2002 |
|
4679738 |
|
06-Jun-2003 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
295 |
|
NATURAL AMERICAN SPIRIT & Design (yellow) |
|
Liechtenstein |
|
|
|
04-Jul-2002 |
|
12661 |
|
04-Jul-2002 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
274 |
|
NATURAL AMERICAN SPIRIT & Design (yellow) |
|
Switzerland |
|
05370/2002 |
|
17-Jun-2002 |
|
512.930 |
|
17-Jun-2002 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
2555 |
|
NATURAL AMERICAN SPIRIT & Device w/Thunderbird 2013 |
|
China |
|
6348147 |
|
29-Oct-2007 |
|
6348147 |
|
07-Jan-2012 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
3629 |
|
NATURAL AMERICAN SPIRIT & Device w/Thunderbird 2013 |
|
China |
|
12424753 |
|
15-Apr-2013 |
|
|
|
|
|
Santa Fe Natural Tobacco Company, Inc. |
|
Pending |
|
|
C-23
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS
OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
C-24
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS
OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3549 |
|
NATURAL AMERICAN SPIRIT (Light Yellow) |
|
Switzerland |
|
53642/2012 |
|
28-Mar-2012 |
|
632.994 |
|
15-Aug-2012 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
3479 |
|
NATURAL AMERICAN SPIRIT (Maroon) |
|
European Union |
|
010828325 |
|
23-Apr-2012 |
|
010828325 |
|
20-Sep-2012 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
3481 |
|
NATURAL AMERICAN SPIRIT (Orange) |
|
European Union |
|
010827483 |
|
23-Apr-2012 |
|
010827483 |
|
20-Sep-2012 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
3547 |
|
NATURAL AMERICAN SPIRIT (Orange) |
|
Switzerland |
|
56340/2012 |
|
28-Mar-2012 |
|
632.996 |
|
15-Aug-2012 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
182 |
|
NATURAL AMERICAN SPIRIT (stacked) |
|
Japan |
|
06-042400 |
|
25-Apr-1994 |
|
4092666 |
|
12-Dec-1997 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
3129 |
|
NOTHING IS EVERYTHING www.amespijp & Design |
|
Japan |
|
2009-094845 |
|
15-Dec-2009 |
|
5320091 |
|
30-Apr-2010 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
3483 |
|
ORIGINAL AMERICAN SPIRIT |
|
European Union |
|
010827335 |
|
23-Apr-2012 |
|
010827335 |
|
03-Sep-2012 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
3521 |
|
ORIGINAL AMERICAN SPIRIT |
|
Germany |
|
302012006155.9 |
|
13-Jul-2012 |
|
302012006155 |
|
26-Jul-2012 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
3488 |
|
ORIGINAL AMERICAN SPIRIT |
|
Japan |
|
2012-34454 |
|
27-Apr-2012 |
|
5559711 |
|
22-Feb-2013 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
3831 |
|
ORIGINAL AMERICAN SPIRIT |
|
Korea (South) |
|
40-2014-19093 |
|
21-Mar-2014 |
|
40-1079226 |
|
05-Jan-2015 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
C-25
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS
OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3546 |
|
ORIGINAL AMERICAN SPIRIT |
|
Switzerland |
|
56368/2012 |
|
28-Mar-2012 |
|
632.997 |
|
15-Aug-2012 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
3771 |
|
SHARE THE LOVE |
|
Japan |
|
2013-092481 |
|
26-Nov-2013 |
|
5667538 |
|
09-May-2014 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
181 |
|
THE ORIGINAL AMERICAN SPIRIT |
|
Japan |
|
02-072514 |
|
26-Jun-1990 |
|
2524106 |
|
28-Apr-1993 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
259 |
|
THUNDERBIRD |
|
European Union |
|
002737062 |
|
17-Jun-2002 |
|
002737062 |
|
11-Mar-2003 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
2535 |
|
THUNDERBIRD |
|
India |
|
1605849 |
|
26-Sep-2007 |
|
1605849 |
|
23-Dec-2010 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
2536 |
|
THUNDERBIRD |
|
India |
|
1605851 |
|
26-Sep-2007 |
|
1605851 |
|
23-Dec-2010 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
285 |
|
THUNDERBIRD |
|
Japan |
|
2002-053641 |
|
27-Jun-2002 |
|
4648816 |
|
28-Feb-2003 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
3606 |
|
THUNDERBIRD |
|
Japan |
|
2013-6401 |
|
01-Feb-2013 |
|
5594614 |
|
28-Jun-2013 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
291 |
|
THUNDERBIRD |
|
Liechtenstein |
|
|
|
04-Jul-2002 |
|
12582 |
|
04-Jul-2002 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
277 |
|
THUNDERBIRD |
|
Switzerland |
|
05332/2002 |
|
14-Jun-2002 |
|
501.939 |
|
29-Aug-2002 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
73 |
|
Thunderbird Pyramid Logo |
|
Australia |
|
842713 |
|
17-Jul-2000 |
|
842713 |
|
24-May-2001 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
3775 |
|
TOBACCO CHIEF (CHINA / PURPLE 2013) |
|
China |
|
13654269 |
|
03-Dec-2013 |
|
13654269 |
|
21-Feb-2015 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
C-26
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS
OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3469 |
|
Tobacco Chief Logo |
|
Argentina |
|
3160248 |
|
25-Apr-2012 |
|
2590146 |
|
30-Aug-2013 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
187 |
|
Tobacco Chief Logo |
|
Australia |
|
838745 |
|
13-Jun-2000 |
|
838745 |
|
29-Oct-2001 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
3492 |
|
Tobacco Chief Logo |
|
Brazil |
|
840115555 |
|
07-May-2012 |
|
840115555 |
|
05-May-2015 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
81 |
|
Tobacco Chief Logo |
|
Canada |
|
850851 |
|
15-Jul-1997 |
|
503087 |
|
28-Oct-1998 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
3476 |
|
Tobacco Chief Logo |
|
Croatia |
|
Z20120021A |
|
10-Jan-2012 |
|
Z20120021 |
|
01-Oct-2012 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
172 |
|
Tobacco Chief Logo |
|
Ecuador |
|
115523 |
|
10-Jul-2001 |
|
16925-02 DNPI |
|
17-Apr-2002 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
157 |
|
Tobacco Chief Logo |
|
European Union |
|
000672923 |
|
11-Nov-1997 |
|
000672923 |
|
14-Jul-1999 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
C-27
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS
OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
238 |
|
Tobacco Chief Logo |
|
Germany |
|
39647155 |
|
30-Oct-1996 |
|
39647155 |
|
18-Mar-1997 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
2705 |
|
Tobacco Chief Logo |
|
Hong Kong |
|
301118330 |
|
16-May-2008 |
|
301118330 |
|
16-May-2008 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
382 |
|
Tobacco Chief Logo |
|
Hong Kong |
|
300148851 |
|
17-Jan-2004 |
|
300148851 |
|
29-Jan-2004 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
2533 |
|
Tobacco Chief Logo |
|
India |
|
1605852 |
|
26-Sep-2007 |
|
1605852 |
|
26-Sep-2007 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
2534 |
|
Tobacco Chief Logo |
|
India |
|
1605853 |
|
26-Sep-2007 |
|
1605853 |
|
23-Dec-2010 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
3195 |
|
Tobacco Chief Logo |
|
Israel |
|
228868 |
|
11-Apr-2010 |
|
228868 |
|
17-May-2011 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
3422 |
|
Tobacco Chief Logo |
|
Israel |
|
243098 |
|
15-Dec-2011 |
|
243098 |
|
30-Jun-2013 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
C-28
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS
OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
312 |
|
Tobacco Chief Logo |
|
Japan |
|
09-130927 |
|
18-Sep-1998 |
|
4189521 |
|
18-Sep-1998 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
180 |
|
Tobacco Chief Logo |
|
Japan |
|
06-085251 |
|
24-Oct-1996 |
|
3250928 |
|
31-Jan-1997 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
1772 |
|
Tobacco Chief Logo |
|
Korea (South) |
|
40-2004-50894 |
|
10-Nov-2004 |
|
635891 |
|
20-Oct-2005 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
292 |
|
Tobacco Chief Logo |
|
Liechtenstein |
|
|
|
04-Jul-2002 |
|
12583 |
|
04-Jul-2002 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
1776 |
|
Tobacco Chief Logo |
|
Macao |
|
N/15425 |
|
26-Nov-2004 |
|
N/15425 |
|
08-Mar-2005 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
1157 |
|
Tobacco Chief Logo |
|
Monaco |
|
25485 |
|
11-Jun-2004 |
|
04.24156 |
|
11-Jun-2004 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
3486 |
|
Tobacco Chief Logo |
|
Russian Federation |
|
2012714478 |
|
04-May-2012 |
|
489092 |
|
07-Jun-2013 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
C-29
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS
OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
383 |
|
Tobacco Chief Logo |
|
Singapore |
|
T04/01200H |
|
03-Feb-2004 |
|
T04/01200H |
|
03-Feb-2004 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
2478 |
|
Tobacco Chief Logo |
|
South Africa |
|
2007/03433 |
|
21-Feb-2007 |
|
2007/03433 |
|
25-Mar-2013 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
278 |
|
Tobacco Chief Logo |
|
Switzerland |
|
05368/2002 |
|
17-Jun-2002 |
|
505.043 |
|
17-Jun-2002 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
2724 |
|
Tobacco Chief Logo |
|
Taiwan |
|
97031063 |
|
01-Jul-2008 |
|
1364856 |
|
01-Jun-2009 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
3475 |
|
Tobacco Chief Logo |
|
Turkey |
|
2012/36582 |
|
17-Apr-2012 |
|
2012 36582 |
|
17-Apr-2012 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
|
|
|
|
|
|
|
|
|
|
3773 |
|
TOBACCO CHIEF LOGO (China 2013) |
|
China |
|
13654273 |
|
03-Dec-2013 |
|
13654273 |
|
21-Feb-2015 |
|
Santa Fe Natural Tobacco Company, Inc. |
|
Registered |
|
|
C-30
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
EXHIBIT D
FORM OF LEAF SUPPLY AGREEMENT
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
EXHIBIT D
FORM OF LEAF SUPPLY AGREEMENT
This LEAF SUPPLY AGREEMENT (this Agreement) is entered into as of [●], 2015 (the Effective
Date), by and between JT International Holding BV, a Dutch private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid) (the Buyer), and Santa Fe Natural Tobacco
Company, Inc., a New Mexico corporation (the Supplier). The Buyer and the Supplier are sometimes referred to in this Agreement together as the Parties and each, individually, as a
Party. Initially capitalized terms used throughout this Agreement have the meanings given to them in ARTICLE 1 below.
BACKGROUND
A. This
Agreement is being entered into concurrently with the consummation of the transactions contemplated by that certain Purchase Agreement, dated as of September 28, 2015 (as it may be amended from time to time, the Purchase
Agreement), by and among the Supplier; R. J. Reynolds Global Products, Inc., a Delaware corporation; R. J. Reynolds Tobacco B.V., a Dutch private company with limited liability (besloten vennootschap met beperkte
aansprakelijkheid); the Buyer; and, for certain limited purposes, Reynolds American Inc., a North Carolina corporation, and JT Japan Tobacco Inc., a Japanese corporation (kabushiki kaisha).
B. The Parties are concurrently entering into that certain Contract Manufacturing Agreement, dated as of the date hereof (the
CMA), pursuant to which, among other things, the Buyer has appointed the Supplier as the Buyers non-exclusive manufacturer of the Buyers requirements for certain cigarette brands, brand styles, roll-your-own and
blended strip products to be marketed, distributed and sold by the Buyer (or its Affiliates) in the Territory (as defined below).
C. To
accommodate the Buyers (and its Affiliates) needs for Tobacco Leaf (as defined below) as it transitions manufacturing under the CMA to its own facilities and thereafter, the Buyer wishes to acquire Tobacco Leaf from the Supplier, and the
Supplier wishes to supply such Tobacco Leaf to the Buyer (or its Affiliates), all upon the terms and conditions set forth in this Agreement.
AGREEMENT
NOW,
THEREFORE, in consideration of the representations, warranties and covenants set forth in this Agreement, and for other good and valuable consideration, the mutuality, receipt and sufficiency of which are hereby acknowledged, the Parties agree as
follows:
D-1
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
ARTICLE 1
CERTAIN DEFINED TERMS
As used in this Agreement, the following terms will have the meanings assigned to them below:
Additional Tobacco Leaf means (a) U.S. grown Organic flue-cured tobacco leaf, (b) Purity Residue Clean
(PRC) tobacco leaf, or (c) any tobacco leaf grown or originating from sources in the Territory, as applicable.
Additional Tobacco Leaf Commitment has the meaning set forth in Section 3.2.
Additional Tobacco Leaf Program means, collectively, the commitments and contracts entered into by the Supplier and
its Affiliates with respect to a particular Crop Year for the procurement of Additional Tobacco Leaf.
Affiliate
has the meaning set forth in the Purchase Agreement.
Agreement has the meaning set forth in the Preamble.
Anti-boycott Laws means Laws of the United States that prohibit participation or cooperation with, agreements to
cooperate with and, in some cases, the provision of information in support of, any international boycott not sanctioned by the United States, such as the Arab League boycott of Israel, and including, but not limited to, Section 999 of the
United States Internal Revenue Code of 1986, and guidelines issued thereunder, and the United States Export Administration Regulations, 15 C.F.R. Part 760.
Applicable Margin means: *****.
Buyer has the meaning set forth in the Preamble.
Buyer Indemnified Party has the meaning set forth in Section 6.6(a).
Confidential Information means: (a) information, data or materials (whether of a technical or business nature),
including that relating to research, development, know-how, inventions, Trade Secrets (including the Specifications, engineering, manufacturing, proposals and business plans, marketing plans and materials, sales, suppliers or buyers, in each case,
of, or in respect of, a Party or any of its Affiliates; (b) proprietary information, data or materials of a Party or of a third Person with whom such Party has an obligation of confidence (including all such information owned by any Affiliate
of such Party), whether created by a Party or its Affiliates individually or through the efforts contemplated by this Agreement; and (c) any other information, data or Intellectual Property, not publicly known, of a Party or of a third Person
with whom such Party has an obligation of confidence (including all such information owned by any Affiliate of such Party); regardless of whether any of the foregoing set forth in clauses (a) - (c) above is observed or in oral, written, graphic
or electronic form, and whether or not marked or otherwise identified as confidential.
D-2
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
Core Tobacco Leaf means (a) U.S. grown Organic burley tobacco
leaf, or (b) Purity Residue Clean (PRC) perique tobacco leaf, as applicable.
Core Tobacco Leaf Commitment
has the meaning set forth in Section 3.1.
CMA has the meaning set forth in Background Paragraph B.
Cost means the sum, without duplication, of (a) the price paid by the Supplier or its Affiliates to procure
Tobacco Leaf from farmers or other sources, (b) all costs incurred by the Supplier or its Affiliates in connection with receiving, labeling, preparing, processing, packing, testing, shipping, transferring, warehousing, storing, maintaining
(including quality control measures), handling and delivering the Tobacco Leaf up to and including the Value Date, and (c) all other fully allocated costs incurred by the Supplier or its Affiliates as a result of its activities associated with
the supply of Tobacco Leaf to the Buyer hereunder up to and including the Value Date, including all out-of-pocket, general and administrative, indirect and overhead costs (including those costs relating to personnel, utilities, maintenance, use and
depreciation of facilities and equipment, property taxes and other relevant taxation, compliance with relevant regulatory-related matters, transportation and inland freight costs, costs associated with use of electronic equipment and software,
processing, reasonable waste, packaging, handling, quality control and assurance matters and inspection); provided that, Costs do not include Storage Charges incurred after the Value Date.
Crop Year means each growing season for the tobacco crop from which Tobacco Leaf is derived.
Denied Parties means the list of Denied Persons, the proliferation concern Entity List and the list of Unverified
Parties maintained by the United States Department of Commerce, and the list of Specially Designated Nationals and Blocked Persons maintained by OFAC, as such lists are revised and in effect from time to time.
Disclosing Party has the meaning set forth in Section 7.1(a).
Effective Date has the meaning set forth in the Preamble.
Export License means any Governmental Approval issued by a Governmental Authority, including but not limited to
OFAC, permitting the export or sale of the Tobacco Leaf hereunder.
Force Majeure means one or more of the
events described in Section 9.4.
D-3
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
Foreign Corrupt Practices Act means 15 U.S.C. §§ 78dd-1,
et seq. and any and all amendments thereto.
Governmental Approval means any permit, license, approval,
qualification, consent or authorization issued by a Governmental Authority.
Governmental Authority has the
meaning set forth in the Purchase Agreement.
Green Leaf means Tobacco Leaf in its raw, unprocessed form.
Initial Term has the meaning set forth in Section 8.1.
Intellectual Property means information, concepts, ideas, discoveries, inventions (whether conceived or reduced to
practice, and whether or not patentable), requirements, samples of prototypical tobacco product components, data, codes and programs, graphics, designs, prints, sketches, drawings and photographs, developments, processes and methods, know-how, Trade
Secrets (including the Specifications), patent applications, patents, other intellectual property of any type (including copyrights, trademarks, and service marks), and enhancements, derivatives and improvements thereof.
Laws has the meaning set forth in the Purchase Agreement.
Losses has the meaning set forth in the Purchase Agreement.
Non-Conforming Tobacco Leaf means Tobacco Leaf that did not fall within the control and rejection standards of the
Specifications for such Tobacco Leaf at the time title and risk of loss passed to the Buyer in accordance with Section 5.2.
Objection Period has the meaning set forth in Section 6.6(a).
OFAC means the United States Department of the Treasury, Office of Foreign Assets Control, or any successor agency,
department or unit of the federal government of the United States with regulatory authority over export/re-export transactions subject to the jurisdiction of the United States.
Organic, when used to describe Tobacco Leaf, means that such Tobacco Leaf meets the applicable criteria to be
marketed as organic in a particular jurisdiction, as established by the United States Department of Agriculture (with respect to the United States) or other applicable Governmental Authority for the relevant jurisdiction of the
Territory, as such criteria may be amended, modified or supplemented from time to time, which criteria, as in effect immediately prior to the Effective Date, are described on Exhibit A for the jurisdictions set forth therein.
Party or Parties has the meaning set forth in the Preamble.
D-4
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
Person has the meaning set forth in the Purchase Agreement.
Prohibited Countries means countries to which products exported from the United States may not be exported or
re-exported, and with which persons subject to OFAC jurisdiction may not conduct any financial transaction, unless an Export License is obtained pursuant to statutes and regulations administered by OFAC, as such regulations are in effect from time
to time.
Purchase Agreement has the meaning set forth in Background Paragraph A.
Purity Residue Clean (PRC), when used to describe Tobacco Leaf, means that such Tobacco Leaf meets the criteria set
forth on Exhibit B.
Receipt has the meaning set forth in Section 5.3.
Receiving Party has the meaning set forth in Section 7.1(a).
Renewal Term has the meaning set forth in Section 8.1.
Restricted Countries means those countries in the Territory that from time to time are subject to Trade Restrictions
and for which Tobacco Leaf is supplied for export under this Agreement by the Supplier pursuant to Governmental Approvals duly issued and in effect by the applicable Governmental Authority whether within or outside the United States, including, but
not limited, to OFAC.
Restricted Parties means Persons who have been denied export privileges or who are
otherwise restricted under the United States Export Administration Regulations or with respect to whom transactions, including, but not limited to, export and financial transactions, are restricted, pursuant to applicable Trade Restrictions in force
from time to time.
Specifications means (a) from the Effective Date through the Specifications Change
Date, the specifications and standards used by the Supplier with respect to processing and packing the Tobacco Leaf immediately prior to the Effective Date (including with respect to acceptable levels of insect infestation and the presence of odors
or flavors from external sources), and (b) from and after the Specifications Change Date through the end of the Term, the new specifications and standards submitted by the Customer with respect to processing and packing the Tobacco Leaf, in
each case, including whether the particular Tobacco Leaf meets the criteria to be characterized as Organic or Purity Residue Clean (PRC), as applicable.
Specifications Change Date means the later of (a) the date on which the CMA expires or is terminated, and
(b) the date that is 30 days after the date on which the Supplier has approved any new specifications and standards submitted by the Buyer in writing for processing and packing the Tobacco Leaf (which approval will be granted by the Supplier as
long as the
D-5
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
new specifications and standards are both (i) within the Suppliers processing and packaging capabilities and (ii) otherwise consistent in all material respects with the
specifications and standards referenced in clause (a) of the definition of Specifications).
Storage
Charges means all fully allocated costs incurred by the Supplier or its Affiliates after the Value Date with respect to warehousing, storing, maintaining (including quality control measures), handling and insuring the Tobacco Leaf,
including any so-called inage and outage fees and any local value added or similar tax, duty or charge, plus interest on all such fully allocated costs *****.
Supplier has the meaning set forth in the Preamble.
Supplier Indemnified Party has the meaning set forth in Section 6.6(a).
Term has the meaning set forth in Section 8.1.
Territory means anywhere in the world other than the United States of America, its territories, possessions
and dependencies, including duty-free retail outlets located in the United States or any such territories, possession or dependencies, together with any U.S. military bases, wherever located.
Tobacco Leaf means Core Tobacco Leaf or Additional Tobacco Leaf, as applicable.
Trade Restrictions means restrictions on trade and dealings with certain countries, Persons or entities, including,
but not limited to, restrictions on exports, imports, sales and supplies of products, transshipments and financial transactions imposed pursuant to export controls, trade sanctions and other trade and investment regulations of the United States or
any other Governmental Authority in force from time to time.
Trade Secret means information and data, including
Specifications, that: (a) derive independent economic value, actual or potential, from not being generally known to the public or other Persons who can obtain economic value from their disclosure and use, and (b) are the subject of efforts
that are reasonable under the circumstances to maintain their secrecy.
Value Date means the date on which the
Tobacco Leaf has been fully processed and packed and is ready for shipment, as determined by the Supplier in its reasonable discretion.
ARTICLE 2
TOBACCO
LEAF SUPPLY AND RELATED RESPONSIBILITIES
2.1 Appointment and Supply. The Buyer hereby appoints the Supplier, on a
non-exclusive basis, as a supplier of Tobacco Leaf for the Buyer and its Affiliates, and the Supplier hereby accepts such appointment. The Supplier agrees to supply Tobacco Leaf in accordance with the Specifications and the other terms and
conditions of this Agreement. The Supplier will not be required to supply any product for the Buyer hereunder other than Tobacco Leaf.
D-6
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
2.2 Specifications. The Supplier is in possession of the initial Specifications
for the Tobacco Leaf. The Supplier will inform the Buyer of any changes in the Suppliers source of Tobacco Leaf that are anticipated to affect or require a modification to the Specifications or otherwise affect the Suppliers ability to
supply the volumes of Tobacco Leaf set forth in the Buyers current Core Tobacco Leaf Commitment or Additional Tobacco Leaf Commitment, as applicable. The Supplier will provide the Buyer with as much advance notice of any such changes as is
practicable. The Buyer will be solely responsible for ensuring that the Specifications comply with all applicable Laws where the Tobacco Leaf will be shipped or sold.
2.3 Visitation and Inspection. Representatives of the Buyer may, upon reasonable notice and at times and frequencies reasonably
acceptable to the Supplier, visit and inspect the Suppliers facilities where Tobacco Leaf is being processed, packaged and stored. The Buyer will bear its own expenses with regard to any such visits, unless otherwise agreed in writing by the
Parties. If requested by the Buyer, the Supplier will cause appropriate individuals working on the activities relating to this Agreement to be available for meetings during any such visit and inspection. The Buyer will be responsible for ensuring
that its representatives abide by all of the Suppliers standard rules and procedures with regard to safety, regulatory compliance, security, personnel matters, confidentiality, computer use and computer network use while at the Suppliers
facilities. In addition, the Buyer will be responsible for ensuring that its representatives refrain from actions and conduct that interfere with the Suppliers business and operations, and will instruct such representatives not to conduct
unauthorized activities at the Suppliers facilities or otherwise.
2.4 Project Teams. Promptly after the Effective
Date, each Party will designate a project team of its primary contact individuals for purposes of this Agreement, each of which must include representatives reasonably acceptable to the other Party. Each Party will be entitled to change the members
of its project team, and will notify the other Party of any such changes. Each Partys project team will serve as the primary point of contact between the Parties for purposes of the transactions covered by this Agreement, and will be primarily
responsible for facilitating the flow of information and otherwise promoting communication, coordination and collaboration between the Parties. The project teams will conduct regular telephone, video conference or in-person meetings as deemed
necessary or appropriate to exchange information regarding the transactions covered by this Agreement, and at a minimum, the project teams will conduct quarterly meetings to discuss general operations under this Agreement, including matters
concerning the Tobacco Leaf, Core Tobacco Leaf Commitments, Additional Tobacco Leaf Commitments, inventory levels, growing and harvesting conditions, quality control, any amended, modified or supplemented criteria with respect to Organic Tobacco
Leaf, factors materially affecting Costs or Storage Charges (and the mitigation of any material increases in Costs or Storage Charges) and any disputes or controversies affecting a Partys rights or
D-7
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
obligations under this Agreement. All disputes and controversies, or other issues, identified by the project teams during any such meetings will be promptly evaluated, addressed and remedied as
soon as commercially reasonable.
ARTICLE 3
PURCHASE COMMITMENTS
3.1 Core Tobacco Leaf. Commencing with the 2017 Crop Year and continuing with respect to each Crop Year during the Term
thereafter, the Buyer agrees to provide the Supplier with a binding purchase commitment for its projected volumes of Core Tobacco Leaf from such Crop Year (including volumes, types and grades of such Core Tobacco Leaf and whether any such Core
Tobacco Leaf will be purchased as Green Leaf) not later than (i) November 1, 2016 with respect to the 2017 Crop Year, or (ii) the immediately preceding November 1 with respect to any subsequent Crop Year (each, a Core
Tobacco Leaf Commitment). Subject to adjustment as set forth in Section 3.3, the Buyer agrees to purchase from the Supplier the amount of Core Tobacco Leaf reflected in each Core Tobacco Leaf Commitment. For the avoidance of
doubt, the Buyers purchase of Core Tobacco Leaf pursuant to the Section 3.1, will not include any Core Tobacco Leaf procured by the Supplier and used by it to manufacture cigarette brands, brand styles, roll-your-own and blended strip
products on behalf of the Buyer or its Affiliates pursuant to the CMA.
3.2 Additional Tobacco Leaf. Commencing with the
2017 Crop Year and continuing with respect to each Crop Year during the Term thereafter, the Buyer may (but will not be obligated to) participate in the Additional Tobacco Leaf Program to procure Additional Tobacco Leaf. If the Buyer elects to
participate in the Additional Tobacco Leaf Program with respect to the 2017 Crop Year or any subsequent Crop Year during the Term, then the Buyer must notify the Supplier of such election, in writing, no later than (a) November 1, 2016
with respect to the 2017 Crop Year, or (b) the immediately preceding November 1 with respect to any subsequent Crop Year, which notice must include the Buyers binding purchase commitment for its requested volumes of Additional
Tobacco Leaf from such Crop Year (including types or grades of such Additional Tobacco Leaf and whether any such Additional Tobacco Leaf will be purchased as Green Leaf), in form and substance reasonably acceptable to the Supplier (each, an
Additional Tobacco Leaf Commitment). Subject to adjustment as set forth in Section 3.3, the Buyer agrees to purchase from the Supplier the amount of Additional Tobacco Leaf reflected in each Additional Tobacco Leaf
Commitment.
3.3 Adjustment. The Parties acknowledge that tobacco farming is subject to elements outside of either
Partys or any farmers reasonable control, including environmental and weather conditions and other events of Force Majeure and, consequently, the yield of Core Tobacco Leaf or Additional Tobacco Leaf may be materially different from the
yields projected or anticipated by either Party or the assumptions relied upon by the Buyer in submitting its Core Tobacco Leaf Commitment or Additional Tobacco Leaf Commitment. Based on the foregoing, the Buyers Core Tobacco Leaf Commitment
and Additional Tobacco Leaf Commitment (if any)
D-8
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
with respect to each Crop Year will automatically adjust, without any action on the part of either Party, to reflect the final yields of Core Tobacco Leaf and Additional Tobacco Leaf from each
Crop Year such that the Buyer is obligated to purchase the same proportion of Core Tobacco Leaf and Additional Tobacco Leaf as it would have been obligated to purchase had such yields remained unchanged under the Suppliers and its
Affiliates original commitments and contracts therefor; provided that no Additional Tobacco Leaf Commitment may be adjusted to reflect an increase in Additional Tobacco Leaf yield by more than ten percent (10%) from that reflected
in the Buyers original Additional Tobacco Leaf Commitment, and any increase in such yield beyond such limitation will be allocated to the Suppliers and its Affiliates commitments and contracts for such Additional Tobacco Leaf.
3.4 Excess Tobacco Leaf. On or before the expiration or earlier termination of the CMA, the Supplier will evaluate the level of
Core Tobacco Leaf and Additional Tobacco Leaf expected to be in the Suppliers inventory at that time, and offer the Buyer the option to purchase any such inventory the Supplier does not elect to use in its other activities. If the Buyer elects
to accept any such offer, then it must notify the Supplier in writing within 30 days after receipt of the offer and the purchase and sale will take place in accordance with the terms and conditions of this Agreement.
3.5 Acknowledgement. The Buyer acknowledges that the Supplier and its Affiliates will be relying on each Core Tobacco Leaf
Commitment and Additional Tobacco Leaf Commitment in making their own commitments and contracts with farmers and other sources of Core Tobacco Leaf and Additional Tobacco Leaf and, accordingly, the Buyer may not cancel or modify any Core Tobacco
Leaf Commitment or Additional Tobacco Leaf Commitment without the prior written consent of the Supplier, which may be granted or withheld in the Suppliers sole discretion.
3.6 Traceability. Upon request from the Buyer, the Supplier will furnish the Buyer with a report reasonably tracing the Tobacco
Leaf back to the farmer or other third party supplier.
3.7 Projected Costs and Storage Charges. Upon the Buyers
request (made at least ten business days before the relevant November 1), the Supplier will provide the Buyer with an estimate of the Costs and Storage Costs associated with the Buyers anticipated Core Tobacco Leaf Commitment and/or
Additional Tobacco Leaf Commitment for the relevant Crop Year, in each case, based on the Suppliers good faith assumptions and projections and used solely for illustrative purposes. No such estimate will, or will be deemed to, affect the
actual Costs and Storage Charges payable by the Buyer with respect to any such Core Tobacco Leaf Commitment and/or Additional Tobacco Leaf Commitment.
D-9
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
ARTICLE 4
PRICING AND INVOICING
4.1 Tobacco Pricing. With respect to all Tobacco Leaf, the Buyer agrees to pay the Supplier the sum of:
(a) the Cost of such Tobacco Leaf, plus
(b) an amount equal to (x) the Cost of Such Tobacco Leaf, multiplied by (y) the Applicable Margin, plus
(c) Storage Charges, but only with respect to each full calendar month elapsed between the Value Date and the date the Tobacco Leaf is
delivered in accordance with Section 5.1 (e.g., no Storage Charges would be included where the Value Date is January 1 and delivery is made on or before January 31).
For the avoidance of doubt, the Buyer will also be responsible for all loading, delivery, terminal, carriage and insurance charges, as well as all export and
import duties and similar taxes, in accordance with FCA (INCOTERMS 2010) in accordance with Section 5.1, whether or not invoiced by the Supplier.
4.2 Invoices. Unless otherwise agreed in writing between the Parties, the Supplier will invoice the Buyer as Tobacco Leaf is
shipped. Each invoice will be due and payable by the Buyer within 45 days of the date of invoice.
4.3 Payments. Unless
otherwise agreed in writing between the Parties, all payments will be made, without set off, by wire transfer of immediately available funds to the account designated by the Supplier on its invoices or otherwise. All payments will be made in U.S.
dollars. All payments made by the Buyer in respect of Tobacco Leaf will be deemed made without prejudice to any rights that the Buyer may have under this Agreement, and will not constitute acceptance of Tobacco Leaf or otherwise affect the
Buyers rights with respect to Non-Conforming Tobacco Leaf.
ARTICLE 5
DELIVERY AND SHIPMENT; INSPECTION
5.1 Delivery and Shipment. Unless otherwise agreed in writing by the Parties, the following provisions will govern the delivery
and shipment of the Tobacco Leaf:
(a) The Supplier will ship Tobacco Leaf on a first in / first out basis as determined by lot
date and will deliver the Tobacco Leaf FCA (INCOTERMS 2010), from the Suppliers warehouse.
(b) The Tobacco Leaf will be
shipped by reputable commercial common carriers selected and contracted by either the Supplier or the Buyer, as determined by the Buyer.
D-10
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
The Party contracting with the commercial common carrier will arrange for shipment and delivery, but the Supplier will prepare all necessary shipping documentation relating to such Tobacco Leaf
(including documentation required by the U.S. Alcohol and Tobacco Tax and Trade Bureau). Such shipping documentation will comply with all applicable Laws. With respect to Tobacco Leaf to be shipped into the Territory, (i) the Supplier will be
listed as the shipper of such Tobacco Leaf on corresponding export bills of lading, as well as the principal party in interest for export declaration reporting purposes, and (ii) Buyer will assist the Supplier in obtaining copies of
all documents evidencing proof of export within 60 days after the risk of loss transfers to the Buyer in accordance with Section 5.2.
(c) The Supplier will be responsible for proper packing of the Tobacco Leaf. All such packing and packing materials must (i) comply with
handling, weight and safety requirements, in each case, in accordance with the Specifications or, if not addressed by the Specifications, as reasonably instructed by the Buyer, and (ii) be adequate to withstand the normal rigors of transfer,
storage and distribution, and prevent damage, infestation and/or deterioration of such Tobacco Leaf prior to arrival at the specified destination.
(d) The Supplier will be responsible for obtaining all applicable Export Licenses with respect to Tobacco Leaf to be shipped into the
Territory.
(e) Notwithstanding anything to the contrary in this Agreement, the Buyer will pay all costs (including insurance costs)
relating to shipment (including inland freight to point of export), delivery and receipt of the Tobacco Leaf, as well as all export and import taxes, duties and similar charges, as applicable.
5.2 Title Transfer; Risk of Loss. Notwithstanding anything to the contrary in this Agreement, title to, and risk of loss for,
the Tobacco Leaf will pass to the Buyer when the Supplier puts the Tobacco Leaf in the hands of the initial commercial common carrier; except that, if the Tobacco Leaf is to be shipped into the Territory, title to, and risk of loss will pass
to the Buyer when the Tobacco Leaf passes the ships rail or planes fuselage.
5.3 Inspection and Approval; Rejection of
Non-Conforming Tobacco Leaf. Upon receipt of the Tobacco Leaf at the port of import (for shipments into the Territory) or the initial destination point (for shipments in the U.S.) (Receipt), the Buyer will have the
right to inspect and approve for acceptance such Tobacco Leaf. Such inspection and approval must be made promptly after Receipt (and, in any event, within 21 days of Receipt). The Buyer will have the right to reject Tobacco Leaf and call attention
to other deficiencies in deliveries by informing the Supplier in writing within the 21-day inspection period, which notice must include information about the nature and extent of the reasons why the Tobacco Leaf should be characterized as
Non-Conforming Leaf and include the results of any control or quality tests performed by the Buyer that indicate the Tobacco Leaf is Non-Conforming Leaf. If the Buyer fails to timely notify the Supplier of the Buyers rejection of the Tobacco
Leaf, the Buyer will be deemed to have accepted the Tobacco Leaf as conforming. The Buyer may only reject and refuse acceptance of
D-11
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
Tobacco Leaf that is Non-Conforming Leaf. Within 21 days after receiving such a notice, the Supplier may contest the rejection and provide documentation and other evidence relating to the quality
of the applicable Tobacco Leaf. The Supplier may also inspect the Tobacco Leaf and collect a representative sample thereof for testing and analysis. Thereafter, the Parties will confer in good faith to resolve the controversy. If any Tobacco Leaf is
finally deemed to be Non-Conforming Tobacco Leaf, at the election of the Supplier, it will be destroyed or otherwise returned to the Supplier pursuant to the Suppliers instructions, at no cost to the Buyer. The Buyer will not be responsible
for any payment for Non-Conforming Tobacco Leaf (and in the event that the Buyer has paid for the Non-Conforming Tobacco Leaf, the Buyer will be entitled, at the Buyers election, to a credit for or refund of that payment).
ARTICLE 6
REPRESENTATIONS, WARRANTIES, COVENANTS AND INDEMNITY
6.1 Warranties and Disclaimer of Warranties. THE SUPPLIER REPRESENTS AND WARRANTS THAT THE TOBACCO LEAF SUPPLIED BY IT PURSUANT
TO THIS AGREEMENT WILL BE SUPPLIED, PACKAGED AND TRANSFERRED IN COMPLIANCE WITH THE SPECIFICATIONS AND THE PACKING AND SHIPPING REQUIREMENTS OF THIS AGREEMENT. ANY MEASURES TAKEN TO REMEDY NON-CONFORMANCE WITH THIS REPRESENTATION AND WARRANTY WILL
BE AT THE SUPPLIERS SOLE COST AND EXPENSE. SUBJECT TO THE FOREGOING, TOBACCO LEAF IS PROVIDED AS IS AND WITHOUT ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY OR OF FITNESS FOR
ANY PARTICULAR PURPOSE.
6.2 Limitation of Remedies, Liability and Damages. NEITHER PARTY WILL BE ENTITLED TO RECOVER FOR
ANY CONSEQUENTIAL, INCIDENTAL, PUNITIVE, EXEMPLARY OR INDIRECT DAMAGES, LOST PROFITS OR OTHER BUSINESS INTERRUPTION DAMAGES, BY STATUTE, IN TORT OR BY CONTRACT.
6.3 United States Statutes and Regulations. The Parties represent and warrant that they are aware of: (a) United States
Trade Restrictions controlling exports from the United States and re-exports from third countries of United States origin goods, software and technology, including foreign made goods, software and technology with more than de minimus United
States content to Prohibited Countries, Restricted Countries and Restricted Parties, financial transactions with Denied Parties, as well as the restrictions and prohibitions under United States trade sanctions on dealings by U.S. Persons with such
countries and Persons, and is further aware that the lists of Prohibited Countries, Restricted Countries, Restricted Parties and Denied Parties may change from time to time; (b) Anti-boycott Laws; and (c) the Foreign Corrupt Practices Act.
The Parties understand their respective obligations under the Laws described above, and they agree to comply with those Laws and to take no action that might cause the other Party to be in violation of those Laws. In the event that one Party
believes, in good faith, that the other has violated any of the Laws described above, this Agreement may be
D-12
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
immediately terminated by the Party having such belief. Each Party further agrees that any past violations of these Laws are its sole responsibility, and that it will indemnify the other for any
penalty or fine associated with its past violation that is ascribed to the other as a result of its past actions. No equipment, computer software, technology or information obtained by one Party from the other will be made available or re-exported,
directly or indirectly, except in compliance with all applicable export Laws. Additional information concerning these obligations of the Parties is set forth in Exhibit C.
6.4 Compliance with Laws. In performance of their respective obligations under this Agreement, each Party will comply with, and
will ensure that its employees and Affiliates comply with, all Laws, Governmental Approvals, regulations, agreements, licenses and consents applicable to or otherwise relating to the subject matter of this Agreement, including those referenced in
Section 6.3 and any other applicable Laws pertaining to the prohibition of corruption, bribery and the offering of inducements to public or semi-public or government officials, including the Foreign Corrupt Practices Act and the United
Kingdom Bribery Act. Without limiting the foregoing, each Party represents and warrants that it will not transfer, transship, provide, resell, export, import, re-export, distribute or dispose of any Tobacco Leaf or any related technology or
technical data, directly or indirectly, without first obtaining all necessary written consents, permits and authorizations and completing such formalities as may be required by any applicable Laws. Neither Party will sell or otherwise provide any
Tobacco Leaf to any Person that it knows, believes or has reason to believe will take any action which, if done by it, would constitute a violation of any of the terms and conditions of this Agreement. The Buyer will be solely responsible for
(a) ensuring compliance with all requirements of applicable Laws and Governmental Approvals with respect to the use, distribution, sale, marketing, advertising and taxation of the Tobacco Leaf, including all reporting requirements, and
(b) securing all applicable Governmental Approvals and other requirements necessary for the use, distribution, sale, marketing, advertising and taxation of the Tobacco Leaf.
6.5 Audit Rights. Each Party agrees to maintain accurate and complete books and records regarding its activities under this
Agreement. Each Party agrees to keep such records in sufficient detail to enable the other Party to determine or verify such Partys compliance with this Agreement. Each Party will keep such records for a period of time as determined by its
normal document retention policies, but in any event not less than three years after the date of the transaction to which those records relate, or longer if required by applicable Law. In addition to the visitation and inspection rights set forth in
Section 2.3, during regular business hours and upon not less than five business days written notice, each Party will permit each other Party (and its representatives), at such other Partys cost and expense, to examine and audit all of
the first Partys books and records relating to its activities under this Agreement, in each case, to the extent necessary for the Party(ies) to make the foregoing determination and verification and subject to restrictions implemented in good
faith to (a) ensure compliance with applicable Law, (b) preserve any applicable privilege (including the attorney-client privilege), or (c) comply with any applicable contractual confidentiality obligations.
D-13
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
6.6 Indemnification.
(a) Subject to Section 6.2, the Buyer agrees to indemnify, defend and hold harmless the Supplier, its Affiliates and its and their
respective current and former officers, directors, employees, representatives and agents (each, a Supplier Indemnified Party) from and against any and all Losses that a Supplier Indemnified Party suffers or incurs in
connection with, or arising out of (i) a breach of the Buyers representations, warranties, covenants or agreements set forth in this Agreement (including any Core Tobacco Leaf Commitment or Additional Tobacco Leaf Commitment),
(ii) the Buyers arranging or electing to arrange shipping and delivery in accordance with Section 5.1(b), or (iii) the use, distribution or sale by the Buyer (or its Affiliates) of any Tobacco Leaf, including any Losses that
relate to any claimed adverse health effects or health risks relating to the use of the Tobacco Leaf or any products into which it is incorporated, except that the Buyer will not be required to indemnify any Supplier Indemnified Party for any
Losses to the extent they arise out of the Suppliers breach of any of its representations, warranties, covenants or agreements set forth in this Agreement, including any failure to supply Tobacco Leaf in accordance with the Specifications.
(b) Subject to Section 6.2, the Supplier agrees to indemnify, defend and hold harmless the Buyer, its Affiliates and its and their
respective current and former officers, directors, employees, representatives and agents (each, a Buyer Indemnified Party) from and against any and all Losses that a Buyer Indemnified Party suffers or incurs in connection
with, or arising out of the Suppliers breach of any of its representations, warranties, covenants or agreements set forth in this Agreement, including any failure to supply Tobacco Leaf in accordance with the Specifications.
(c) If any of the Persons to be indemnified under this Section 6.6 has suffered or incurred any Losses, such Person shall so notify the
Party from whom indemnification is sought promptly in writing in accordance with Section 9.4 or 9.5 of the Purchase Agreement, as applicable, which provisions are incorporated as if fully restated herein.
ARTICLE 7
CONFIDENTIALITY
7.1
Confidentiality Obligations.
(a) During the Term and for a period of three years thereafter, each Party receiving Confidential
Information (a Receiving Party) will maintain in confidence all Confidential Information disclosed to it by any other Party (a Disclosing Party). Notwithstanding the foregoing, but subject to
Section 7.2, each of the Partys respective obligations of confidentiality with respect to another Partys Trade Secrets, including the Specifications, will be perpetual. No Party will use, disclose or grant the use of such
Confidential Information except as expressly authorized by this Agreement. To the extent that disclosure is authorized by this Agreement, the Receiving Party must inform its employees,
D-14
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
representatives and contracting parties to whom disclosure is to be made of this ARTICLE 7, and instruct such Persons to hold in confidence and not make use of such information for any
purpose other than those purposes permitted by this Agreement. Each Receiving Party will use at least the same standard of care (but not less than a reasonable standard of care) as it uses to protect its own proprietary and Trade Secret information
to ensure that such employees, representatives and contracting parties do not disclose or make any unauthorized use of such Confidential Information. Each Receiving Party will promptly notify the other upon discovery of any unauthorized use or
disclosure of Confidential Information. The Receiving Party will be responsible to the Disclosing Party for any loss of Confidential Information of the Disclosing Party or breach of the provisions of this Section 7.1 by any employee,
representative or contracting party of the Receiving Party.
7.2 Exceptions. The obligations of confidentiality contained in
Section 7.1 will not apply to the extent that it can be established by the Receiving Party by competent evidence that such Confidential Information: (a) was generally available to the public or otherwise part of the public domain at the
time of its receipt from the Disclosing Party; (b) becomes generally available to the public or otherwise part of the public domain after its disclosure and other than through any act or omission of the Receiving Party in breach of this
Agreement; or (c) was received by the Receiving Party, other than under an obligation of confidentiality, by a third Person lawfully in possession of the information.
7.3 Authorized Disclosure. Notwithstanding the foregoing, no Party (nor third Persons, as applicable) will be precluded from
disclosing Confidential Information to the extent it is required to do so in response to a valid order by a Governmental Authority, or to the extent it reasonably believes, on the basis of advice from outside counsel, that it is required to disclose
such Confidential Information by Law, or to the extent necessary to establish its rights under this Agreement; provided that, in the event a Party believes it is so required to disclose another Partys Confidential Information, it will
promptly provide notice of such requirement so that the Disclosing Party may seek an appropriate order or other action as it deems appropriate to prevent or limit such disclosure, and the Party required to make the disclosure will use its reasonable
efforts to preserve the confidentiality of the other Partys Confidential Information, including by cooperating with the other Party to obtain an appropriate order or other reliable assurance of confidential treatment. In any event, the Party
required to make the disclosure may disclose only that portion of another Partys Confidential Information that is legally required to be disclosed. Notwithstanding the foregoing, if any Party (or an Affiliate of such Party) is required to
include a copy of this Agreement as an exhibit to any current or periodic report filed with the U.S. Securities and Exchange Commission, such Party (or its Affiliate) may make such filing without the prior written consent of any other Party as long
as it seeks (or causes its Affiliate to seek) confidential treatment of any portions of this Agreement that, in the opinion of such filing Party, contain confidential or competitively sensitive information, regardless of whether such treatment is
obtained.
D-15
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
ARTICLE 8
TERM AND TERMINATION
8.1 Term of Agreement. The term of this Agreement will commence on the Effective Date and, unless earlier terminated as provided
in this ARTICLE 8, will remain in effect until the three-year anniversary of the Effective Date (the Initial Term), after which this Agreement will automatically renew for successive one-year periods (each, a
Renewal Term and, collectively with the Initial Term and all other Renewal Terms, the Term), unless either Party provides the other with written notice of its intent not to so renew this Agreement
at least 90 days prior the scheduled expiration date of the Initial Term or then-current Renewal Term, as applicable.
8.2 General
Termination Provisions. Notwithstanding anything to the contrary in this Agreement, this Agreement may be terminated as follows:
(a) by mutual consent of the Parties;
(b) by the Parties, in accordance with Section 6.3, 8.3 or 8.4, subject to any cure or grace periods set forth therein;
and
(c) immediately, by a Party, by giving written notice to the other Party at any time upon the occurrence of any of the following
events: (i) the voluntary bankruptcy of the other Party, or the filing of an involuntary petition in bankruptcy against the other Party that is not dismissed within 60 days of filing, in which case, the termination will become effective
immediately upon the non-terminating Partys receipt of notice of termination or at such later date as may be specified in that notice; (ii) the other Party ceases to pay its debts as they mature in the ordinary course of business, or
makes an assignment for the benefit of its creditors, in which case, the termination will become effective immediately upon the non-terminating Partys receipt of notice of termination or at such later date as may be specified in that notice;
or (iii) a receiver is appointed for the other Party or its property, in which case, the termination will become effective immediately upon the non-terminating Partys receipt of notice of termination or at such later date as may be
specified in that notice.
8.3 Termination in Connection with a Material Breach. Notwithstanding anything to the contrary in
this Agreement, a Party may terminate this Agreement, in the event that the other Party is in breach of any material term of this Agreement and the breaching Party fails to cure such breach within 30 days of receipt of notice of breach from the
terminating Party, or if such breach is not reasonably capable of cure within such 30-day period, such breaching Party fails to cure the breach within 60 days of receipt of notice of breach from the terminating Party; except that the
foregoing right to cure (a) will not apply to any breach by any Party involving violation of any applicable Law, Governmental Approval or any breach that is not capable of being cured, and (b) is conditioned upon the breaching Party
promptly commencing and thereafter diligently pursuing the cure to the reasonable satisfaction of the non-breaching Party.
D-16
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
8.4 Termination for Interference or Frustration of Purpose. If both
(a) the action of any Governmental Authority prohibits or declares unlawful or otherwise impairs, inhibits or frustrates in any material respect (i) the Buyers intended use of the Tobacco Leaf being supplied for it under this
Agreement, (ii) the Suppliers ability to supply or package the Tobacco Leaf as required under this Agreement, or (iii) any other material obligation of a Party as contemplated by this Agreement, and (b) the Parties are unable to
propose a feasible way of either avoiding such interference or of reorganizing the Parties arrangements under this Agreement so as to eliminate the effect of such interference or to minimize, or minimize the effect of, such interference to the
point where it is no longer material within a period of 60 days of a Party notifying the other Party of such interference, then the affected Party may terminate this Agreement, effective upon the earlier of (A) 30 days following receipt by the
other Party of notice of termination from the affected Party, and (B) the date on which such action of the Governmental Authority becomes effective. Any notice by a Party to the other Party of such interference pursuant to this Section
8.4 must include a reasonably detailed description of the action of the Governmental Authority and the resulting prohibition, declaration of unlawfulness or material impairment, inhibition or frustration of purpose.
8.5 Effects of Termination.
(a) Upon any expiration or termination of this Agreement in accordance with its terms, this Agreement will terminate and become void and of no
further force and effect, and there will be no further liability or obligation on the part of any Party hereto. Each Partys right of termination under Sections 8.2, 8.3 and 8.4, is in addition to any other rights it may
have under this Agreement or otherwise, and the exercise of a right of termination will not constitute an election of remedies and will not relieve any Party of liability for any breach of this Agreement.
(b) Upon any expiration or termination of this Agreement: (i) the Supplier agrees to: (A) return all of the Buyers
Confidential Information; (B) stop supplying Tobacco Leaf for the Buyer, except as the Buyer may otherwise approve in writing; and (C) cooperate with the Buyer in the preparation of a final accounting of activities under this Agreement;
and (ii) the Buyer agrees to: (A) promptly pay the Supplier for open invoices and any other amounts owed; (B) return all of the Suppliers Confidential Information; and (C) cooperate with the Supplier in the preparation of a
final accounting of activities under this Agreement.
(c) Notwithstanding anything to the contrary in this Agreement, upon any expiration
or termination of this Agreement, the Supplier and the Buyer will continue to fulfill their respective obligations under any then-existing Core Tobacco Leaf Commitment and Additional Tobacco Leaf Commitment.
8.6 Survival. Notwithstanding anything to the contrary in this Agreement, Section 8.5 and this Section 8.6, as
well as ARTICLE 5, ARTICLE 6, ARTICLE 7 and ARTICLE 9 and each then-existing Core Tobacco Leaf Commitment and Additional Tobacco Leaf Commitment (each as adjusted pursuant to Section 3.3) will continue in full
force and effect and survive any expiration or termination of this Agreement.
D-17
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
ARTICLE 9
MISCELLANEOUS
9.1 Tax Matters. Notwithstanding anything to the contrary in this Agreement, all transfer, documentary, sales, use, stamp,
registration, value added, excise and other such taxes and fees (including any penalties) imposed in connection with the purchase of Tobacco Leaf from the Supplier (if any) will be borne and paid by the Buyer when due. To the extent applicable, the
Parties will cooperate with one another in good faith to obtain any tax exemption certificates that would eliminate or mitigate any obligations to pay any such taxes.
9.2 Further Assurances. Each Party agrees to enter into or execute, or procure the entering into or execution, of such
agreements, assignments or further assurances, or do such other acts as any other Party may reasonably request to carry out the terms and conditions of this Agreement.
9.3 Relationship of the Parties. For purposes of this Agreement, the Parties will be and remain independent contractors, and
this Agreement will not be construed as establishing a general agency, employment, partnership, joint venture, coalition, alliance or any other similar relationship between the Parties with regards to the relationship created by this Agreement. In
accordance with this Agreement, no Party will have the authority to make any statements, representations or commitments of any kind (whether express or implied) regarding the subject matter of this Agreement, or to take any action, which would be
binding on any other Party or create any liability or obligation on behalf of any other Party regarding the subject matter of this Agreement, without the prior written authorization of such other Party to do so. No Party will have the right to
direct or control the employees of any other Party. No Party will be liable for the debts, obligations or other liabilities of any other Party or of any of its agents, employees or contractors, including any costs for salaries, benefits or taxes.
9.4 Force Majeure. Notwithstanding anything to the contrary in this Agreement, no Party will be liable for any loss,
injury, delay, damage or other casualty suffered by any other Party due to any inability to perform any obligation hereunder, and no Party will be deemed to have defaulted under or breached this Agreement for failure or delay in fulfilling or
performing any term or provision of this Agreement (other than payment of monies due), when such failure or delay is caused by or results from causes beyond the control of the affected Party, including acts of God, fire, flood, storm, earthquake,
explosion, epidemic, delays in transportation, shortages of trucks or vessels, shortages of fuel, shortages of raw materials (including tobacco crop shortages), environmental catastrophe, embargo, war, acts of war (whether war be declared or not),
acts of terrorism, insurrection, riot, civil commotion, labor dispute, or acts, omissions or delays in acting by any Governmental Authority (including legislative, administrative, judicial, police or any other official governmental acts). In the
case of any delay or failure that a Party anticipates will cause an excusable delay hereunder, such Party will inform the other Party by written notice of the anticipated effect of such delay within ten days of becoming aware of it.
D-18
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
9.5 Parties in Interest. Except for the Supplier Indemnified Parties and the
Buyer Indemnified Parties, nothing in this Agreement, whether express or implied, will be construed to give any Person, including any employee or former employee of either Party, other than the Parties or their respective successors and permitted
assigns, any legal or equitable right, remedy, claim or benefit or remedies of any nature whatsoever under or by reason of under or in respect of this Agreement.
9.6 Assignment. This Agreement will be binding upon and inure to the benefit of the Parties and their respective successors and
permitted assigns. No Party may assign either this Agreement or any of its rights, interests or obligations hereunder without the express prior written consent of the other Party, and any attempted assignment, without such consent, will be null and
void; provided that either Party may assign its rights and obligations under this Agreement to one or more of its Affiliates upon written notice of the same to the other Party, which assignment will not relieve the original Party of any of
its obligations hereunder.
9.7 Notices. Unless otherwise provided in this Agreement, day-to-day commercial communications
may be exchanged by any reasonable means. All other notices, requests, demands and other communications under this Agreement will be in writing and will be given and received if and when made in accordance with Section 10.3 of the Purchase
Agreement.
9.8 Amendments and Waivers. This Agreement may not be amended, supplemented or otherwise modified except in a
written instrument executed by the Parties; provided that the Supplier may from time to time furnish the Buyer with an amended Exhibit A to reflect any amendments, modifications or supplements with respect to the criteria reflected
therein. No waiver by any of the Parties of any default, misrepresentation or breach of warranty or covenant hereunder, whether intentional or not, will extend to any prior or subsequent default, misrepresentation, or breach of warranty or covenant
hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence. No waiver by either Party of any of the provisions hereof will be effective unless explicitly set forth in writing and executed by the Party
sought to be charged with such waiver.
9.9 Construction. The Parties have participated jointly in the negotiation and
drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement will be construed as if drafted jointly by the Parties and no presumption or burden of proof will arise favoring or disfavoring any
Party by virtue of the authorship of any of the provisions of this Agreement.
9.10 Entire Agreement. This Agreement
(including the Exhibits hereto) constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes any prior understandings, negotiations, agreements, discussions or representations between the Parties of
any nature, whether written or oral, to the extent they relate in any way to the subject matter hereof.
D-19
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
9.11 Severability. If any provision of this Agreement or the application of any
such provision to any Person or circumstance is declared by any court of competent jurisdiction to be invalid, illegal, void or unenforceable in any respect, all other provisions of this Agreement, or the application of such provision to Persons or
circumstances other than those as to which it has been held invalid, illegal, void or unenforceable, will nevertheless remain in full force and effect and will in no way be affected, impaired or invalidated thereby. Upon such determination that any
provision, or the application of any such provision, is invalid, illegal, void or unenforceable, the Parties agree to negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible to the
fullest extent permitted by applicable Law in an acceptable manner to the end that the original purposes of this Agreement are fulfilled to the greatest extent possible.
9.12 Governing Law. This Agreement and all claims arising out of or relating to this Agreement and the transactions contemplated
hereby will be governed by the Law of the State of New York, without regard to the conflicts of law principles that would result in the application of any Law other than the Law of the State of New York.
9.13 Consent to Jurisdiction; Waiver of Jury Trial.
(a) Each of the Parties irrevocably submits to the exclusive jurisdiction of (i) the state courts of the State of New York located in the
borough of Manhattan in New York City and (ii) the United States District Court for the State of New York (and the appropriate appellate courts therefrom) for the purposes of any suit, action or other proceeding arising out of or relating to
this Agreement or any transaction contemplated hereby (and agrees not to commence any suit, action or proceeding relating hereto except in such courts). Each of the Parties further agrees that service of any process, summons, notice or document hand
delivered or sent by U.S. registered mail to such Partys respective address set forth in Section 10.3 of the Purchase Agreement will be effective service of process for any suit, action or proceeding in New York with respect to any
matters to which it has submitted to jurisdiction as set forth in the immediately preceding sentence. Each of the Parties irrevocably and unconditionally waives any objection to the laying of venue of any suit, action or proceeding arising out of or
relating to this Agreement or the transactions contemplated hereby in (i) state courts of the State of New York located in the borough of Manhattan in New York City or (ii) the United States District Court for the State of New York (and
the appropriate appellate courts therefrom), and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such suit, action or proceeding brought in any such court has been brought in an
inconvenient forum. Notwithstanding the foregoing, each Party agrees that a final judgment in any suit, action or proceeding so brought will be conclusive and may be enforced by suit on the judgment in any jurisdiction or in any other manner
provided in law or in equity.
D-20
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
(b) EACH OF THE PARTIES IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREBY OR THE ACTIONS OF THE PARTIES IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT
HEREOF.
9.14 Counterparts. This Agreement may be executed in two or more counterparts for the convenience of the Parties,
each of which will be deemed an original and all of which together will constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this Agreement by facsimile or portable document format will be effective as
delivery of a manually executed counterpart to this Agreement.
9.15 Exhibits. The Exhibits to this Agreement form part of
and are incorporated into this Agreement, and the Parties will act in accordance with their terms at all times during the Term. The following Exhibits are attached hereto:
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|
|
Exhibit |
|
Description |
A |
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Organic Criteria |
|
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B |
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PRC Criteria |
|
|
C |
|
Certain United States Statutes and Regulations |
[this space left blank intentionally signature page immediately follows]
D-21
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their duly
authorized representatives to be effective as of the Effective Date.
|
|
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The Supplier: |
|
SANTA FE NATURAL TOBACCO COMPANY, INC. |
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By: |
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Name: |
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Title: |
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The Buyer: |
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JT INTERNATIONAL HOLDING BV |
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By: |
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Name: |
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Title: |
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D-22
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
EXHIBIT A
DESCRIPTION OF ORGANIC CRITERIA
[NTD: Exhibit to be populated immediately prior to Closing.]
D-23
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
EXHIBIT B
DESCRIPTION OF PRC CRITERIA
[NTD: Exhibit to be populated immediately prior to Closing.]
D-24
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
EXHIBIT C
SUPPLIES TO RESTRICTED COUNTRIES
U. S. International Trade Laws
List of Prohibited Countries
U.S.
export control laws and regulations impose a general embargo on trade with, exports to, transshipments through, and financial transactions involving the following Prohibited Countries: Cuba, Iran, Libya, Sudan, and Myanmar (Burma) (collectively,
Prohibited Countries). The Buyer acknowledges that this list of Prohibited Countries changes on an irregular basis, and the Buyer agrees that it is responsible for regular monitoring of changes in this list of Prohibited Countries.
Other, more limited U.S. trade embargoes also exist and the Buyer agrees that it is responsible for complying with all aspects of these embargoes as described more fully on the internet site at: http://www.treas.gov/offices/enforcement/ofac/.
Denied Parties
U.S. export
controls also prohibit exports to and financial transactions with individuals, companies and organizations identified on a list of Denied Parties specifically identified as Specially Designated Nationals (SDN), published by OFAC at
(http://www.treas.gov/offices/enforcement/ofac/sdn/ index.html). Moreover, the Department of Commerce also publishes Denied Parties, Entities and Unverified Parties lists of companies and individuals who are
prohibited from involvement in U.S. export or re-export transactions (http://www.bxa.doc.gov/). Each of the lists identified above is updated on an irregular, but sometimes frequent, basis, and the Buyer agrees that it is responsible for
regular monitoring of changes in these lists and compliance with requirements not to export to or conduct financial transactions with any entity identified on these lists without an export license obtained from the U.S. government.
Anti-boycott Laws
The U.S.
Department of Commerce and the U.S. Internal Revenue Service enforce Anti-boycott Laws and regulations that prohibit cooperation with foreign embargoes that are not endorsed by the U.S. government. The U.S. Anti-boycott Laws are aimed particularly
at preventing cooperation with the Arab League boycott of Israel. These laws prohibit agreements to cooperate with such boycotts and actions to support such boycotts. These laws also require reporting to the U.S. government of operations in
countries enforcing such embargoes and reporting of certain requests to cooperate with such embargoes. The Buyer agrees that it will strictly comply with the requirements of Anti-boycott Laws and regulations.
D-25
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
EXHIBIT E
FORM OF TRANSITION SERVICES AGREEMENT
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS OF THIS
DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
EXHIBIT E
FORM OF
TRANSITION SERVICES AGREEMENT
This TRANSITION SERVICES AGREEMENT (this Agreement), dated as of [●], 2015
(the Effective Date), is made by and among Santa Fe Natural Tobacco Company, Inc., a New Mexico corporation (SFNTC); R. J. Reynolds Global Products, Inc., a Delaware corporation (Seller GP);
R. J. Reynolds Tobacco B.V., a Dutch private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid) (Seller BV, and collectively with SFNTC and Seller GP, the Sellers and,
each individually, a Seller); and JT International Holding BV, a Dutch private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid) (Buyer). Sellers and Buyer are
separately referred to in this Agreement as a Party and, together, as the Parties.
RECITALS
A. The Parties have entered into the Purchase Agreement, dated as of September 28, 2015 (as the same may be amended, the
Purchase Agreement), pursuant to which:
|
1. |
SFNTC will transfer to Buyer (i) the Purchased IP and (ii) all of the issued outstanding interests in SFNTC Germany. |
|
2. |
Seller GP will transfer to Buyer all of the issued and outstanding equity interests of (i) SFNTC Japan and (ii) SFNTC Italy. |
|
3. |
Seller BV will transfer to Buyer (i) all of the issued and outstanding equity interests of SFRTI Holdings and (ii) one issued and outstanding share of SFNTC Belgium. |
B. The Parties desire to set forth the services to be performed, or caused to be performed, by the Parties or certain of their Affiliates in
order to allow for an orderly transition of ownership of the assets and businesses acquired by Buyer and the continued operation of such businesses, as well as the continued operation of the businesses retained by Sellers and their Affiliates, in
each case as currently conducted.
C. It is a condition to the consummation of the transactions contemplated by the Purchase Agreement
that the Parties execute and deliver this Agreement and that this Agreement be in full force and effect as of the Closing.
D. All
capitalized terms used but not defined in this Agreement will have the meanings assigned to them in the Purchase Agreement.
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS
OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants in this Agreement
and the Purchase Agreement, the Parties agree as follows:
ARTICLE I
SERVICES
Section 1.01. Provision of Services.
(a) Sellers hereby agree to provide, or to cause one or more of their Affiliates or other third parties to provide, to Buyer and certain of its
Affiliates, solely for use in connection with the Business, the Services described on Schedule I, in each case upon the terms and conditions of this Agreement.
(b) Buyer hereby agrees to provide, or to cause one or more of its Affiliates (including the Acquired Companies) or other third parties to
provide, to Sellers and certain of their Affiliates, the Services described on Schedule II, in each case upon the terms and conditions of this Agreement. Each of the services described on Schedules I and II is referred to as a
Service and, collectively, the Services.
(c) The Party or its Affiliate(s) providing Services
(each, a Provider) will provide to the Party or its Affiliate(s) receiving Services (each, a Recipient) each of the Services for the term set forth on the Schedules; provided, however, that a
Provider shall not be obligated to perform any such Service to be provided by it if and to the extent that such Service: (i) is out of the ordinary course of what has historically been (A) provided to the Recipient or one of its Affiliates
or (B) performed by the Recipient or one of its Affiliates, in each case in accordance with past practices, including, in a volume substantially greater than that which has been historically provided to or performed by the Recipient or one of
its Affiliates, (ii) would require the Provider to hire any additional personnel or make any capital expenditures, (iii) is for any operations of the Recipient other than in respect of the Business, in the case of Services to be provided
by Sellers or their Affiliates, or in respect of the operations retained by Sellers and their Affiliates, in the case of Services to be provided by Buyer or its Affiliates, or (iv) violate any applicable Law to which the Provider is subject. If
the Provider determines that it is unable to provide any Service in accordance with the terms of this Agreement as a result of the circumstances set forth in subclauses (i) through (iv) above, the Parties will cooperate in good faith to
determine the best alternative approach.
(d) Notwithstanding the contents of the Schedules, each Party agrees to respond in good faith to
any reasonable request for additional services necessary for the operation of the requesting Partys business, but not currently contemplated in the relevant Schedule, at a price to be agreed upon after good faith negotiations between the
Parties. Any such additional services so provided by a Party or its Affiliates will constitute Services under this Agreement and be subject in all respects to the provisions of this Agreement as if fully set forth on the relevant Schedule as of the
date of this Agreement.
(e) During the term of this Agreement, the Parties will cooperate in good faith in all matters relating to the
provision and receipt of Services, including as contemplated by Section 1.06. Such cooperation will include (i) subject to Section 3.01, exchanging
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CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS
OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
information reasonably requested by the other Party, (ii) subject to ARTICLE II, performing true-ups and adjustments, and (iii) subject to Section 4.03(b) and to the
extent consistent with the applicable Services, making decisions and providing consent and acceptance as promptly as practicable when such decisions, consent or acceptance are required by the terms hereof, and, as reasonably requested by the other
Party and at such other Partys sole cost and expense, using commercially reasonable efforts to obtain all third-party consents, licenses, sublicenses or approvals (Third-Party Consents) necessary or desirable in order to
permit each Party to perform its obligations under this Agreement in a timely and efficient manner. The Provider will not (A) be liable for any impairment of any Service arising from a failure by the Recipient to timely provide accurate and
complete information that is required or reasonably requested by the Provider in connection with such Service or (B) have any responsibility for verifying the correctness of any information provided by or on behalf of the Recipient in
connection with any Service. For the avoidance of doubt, to the extent the Recipient fails to provide required information, the Provider will be released from its obligation to perform any Service for which such information is required until such
time as the required information is provided. The Provider shall be entitled to make changes from time to time in the procedures, processes, resources and policies it utilizes to perform any Services; provided that (i) the Provider gives the
Recipient written notice 30 calendar days prior to any material change; (ii) such change will not materially degrade the performance (including as to timing and frequency of the applicable Service) or materially diminish the usefulness to the
Recipient of the applicable Service; and (iii) such change will not result in an increase in the Service Fee charged to the Recipient for the applicable Service.
Section 1.02. Quality and Scope of Services; Disclaimer of Warranties. Each Party shall provide the Services hereunder in
accordance with applicable Law and, except as otherwise specifically provided in the Schedules, use commercially reasonable efforts to provide the Services hereunder with the same standard of care as historically provided. Subject to
Section 1.03, each Party agrees to assign sufficient resources and qualified personnel reasonably required to provide the Services in accordance with the standards set forth in the preceding sentence. Except as expressly set forth in
this Section 1.02 or in the Schedules, no Party makes any representations or warranties of any kind, implied or expressed, with respect to the Services to be provided by such Party, including, without limitation, any warranties of
merchantability or fitness for a particular purpose, which are specifically disclaimed.
Section 1.03. Third-Party Providers.
Each Party will have the right to hire third-party subcontractors to provide all or part of any Service to be provided by such Party hereunder. Any Party that subcontracts Services shall in all cases retain responsibility for the provision to the
Party of all such Services whether subcontracted to a third party or performed by an Affiliate.
Section 1.04. Services Not
Included. It is not the intent of any Provider to render, nor of any Recipient to receive from any Provider, (a) professional advice or opinions with regard to tax, legal, treasury, finance, employment, any other business and financial
matters or the handling or addressing of environmental matters; or (b) technical advice with regard to
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CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS
OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
information technology or any other matters. No Recipient shall rely on or construe any Service rendered by or on behalf of any Provider as such professional advice, opinions or technical advice,
and each Recipient shall seek all third-party professional advice, opinions or technical advice that it may desire or need.
Section 1.05.
Access to Facilities.
(a) The Recipient shall, and shall cause its Subsidiaries to, allow the Provider and its Representatives
reasonable access to its facilities as is necessary for such Provider to fulfill its obligations under this Agreement.
(b) Except as
otherwise permitted by the Recipient in writing, each Provider shall permit only its authorized Representatives, contractors, invitees or licensees to access the Recipients facilities.
Section 1.06. Cooperation. It is understood that it will require the significant efforts of both Parties to implement this
Agreement and to ensure performance by the Parties at the agreed-upon levels and in accordance with all of the terms and conditions of this Agreement. The Parties acknowledge the transitional nature of the Services. Accordingly, as promptly as
practicable following the execution of this Agreement, each Party agrees to use reasonable best efforts to transition each Service to its own internal organization or to a third-party service provider. The Parties will cooperate, acting in good
faith and using reasonable best efforts, to effect a smooth and orderly transition of the Services provided under this Agreement from the Providers to the Recipients (including the assignment or transfer of the rights and obligations under any
third-party contracts relating to the Services); provided, however, that this Section 1.06 shall not require any Provider (whether directly or through an Affiliate or subcontractor) to incur any out-of-pocket costs or
expenses in connection with the transition of such Services to the Recipient.
Section 1.07. Data Protection. While carrying
out its duties under this Agreement, a Provider shall only process personal data received from a Recipient (a) in such a manner as is necessary to carry out those duties, (b) in accordance with the instructions of such Recipient,
(c) in accordance with applicable laws relating to the protection of information commonly known as sensitive personal information, personally identifiable information or similar terms, and (d) using appropriate
technical and organizational measures to prevent the unauthorized or unlawful processing of such personal data and/or the accidental loss or destruction of, or damage to, such personal data.
ARTICLE II
PAYMENTS
Section 2.01. Payments.
(a) In consideration of the provision of the Services, the Recipient will pay to the Provider for each such Service an amount equal to
(i) the amount set forth on the relevant
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CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS
OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
Schedule, as the same may be amended from time to time, on a Service by Service basis (the Service Fee) and (ii) any additional reasonable out-of-pocket costs or expenses
incurred by the Provider in connection with the provision of such Service for the benefit of the Recipient, in each case, with respect to the applicable price and payment period set forth on the applicable Schedule; provided, however,
that the Service Fee payable in connection with any Service that is terminated may be pro-rated if such Service is terminated prior to the end of such Services term in accordance with Section 5.02. To the extent a Service is billed
on an hourly basis, unless otherwise agreed by the Parties, the Service Fee for such Services will be [●]/hour.
(b) If at any time
the Party providing Services reasonably believes that the Service Fees contemplated by a specific Schedule are materially insufficient to compensate it for the cost of providing the related Services hereunder (taking into account, where applicable,
the Parties expectation that the Provider is to receive a 10% markup on the costs of providing certain Services), or the Party receiving Services reasonably believes that the Service Fees contemplated by a specific Schedule materially
overcompensate the Provider for such Services (such that such Provider is receiving materially in excess of the agreed markup, if any, on the costs of providing such Service), such Party shall provide documentation of such material insufficiency or
material overcompensation to the other Party as soon as possible, and the Parties will commence good faith negotiations regarding the appropriate course of action with respect to pricing of such Services for future periods; provided,
however, that neither Party shall be permitted to propose renegotiation of the Service Fees more than once during any calendar year with respect to any class of Services (e.g., finance, HR, consumer marketing, etc.).
Section 2.02. Manner and Timing of Payments. All payments will be made by the Recipient, without set-off, within 20 Business Days
after receipt of a reasonably detailed invoice. Invoices for Services will be sent by the Provider or its designee to the Recipient on a monthly basis and shall be reasonably detailed and identify the Services that are the subject of the invoice.
Amounts not paid within such 20 Business Day period will bear interest thereon at the rate of 10.0% per annum from the date such payment was due until the date of payment. All payments made by the Recipient under this Agreement will be by wire
transfer to the Providers account identified in Exhibit A or to such other account specified in writing by the Provider to the Recipient.
Section 2.03. Disputes. If the Recipient disputes in good faith any portion of the amount due on any invoice, then the Recipient
will notify the Provider in writing of the nature and basis of the dispute within 10 Business Days after the Recipients receipt of such invoice. If no notification is provided to the Provider in accordance with the immediately preceding
sentence, then the invoiced amount will be deemed to be accurate and correct and will not be subject to dispute or contest by the Recipient. In the event the Recipient provides notice of a dispute, the Parties will use their reasonable best efforts
to resolve the dispute prior to the date such payment is due. During the pendency of any such dispute each Party will continue performing its obligations under this Agreement.
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CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS
OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
Section 2.04. Taxes. Each amount payable under this Agreement, including pursuant
to Section 2.01(a), Section 2.02 and the Schedules, is expressed exclusive of any sales tax, value-added tax, goods and services tax or similar tax (Taxes) that may be imposed by a taxing authority. The
Recipient will reimburse the Provider for all Taxes (excluding any Tax based on the net income of the Provider) paid by the Provider attributable to the supply of Services, which will be separately stated on the relevant invoice.
ARTICLE III
CONFIDENTIALITY
Section 3.01. Confidentiality. With respect to all materials, documents, programs, data and information (the Confidential
Information) furnished by one Party (the Disclosing Party) to the other Party (the Receiving Party) or, in each case, by or to an Affiliate thereof, in connection with this Agreement, the Receiving
Party (a) will keep the Confidential Information confidential using the same safeguards and standard of care that it uses to preserve the confidentiality of its own confidential information and will not, without the prior written consent of the
Disclosing Party, disclose any Confidential Information in any manner whatsoever and (b) will not use any Confidential Information other than in connection with the Services or in fulfilling any other obligations under this Agreement;
provided, however, that the Receiving Party may reveal the Confidential Information to its Representatives (i) who need to know the Confidential Information for the purposes of providing or receiving the Services, as applicable,
or for fulfilling any other obligations of the Receiving Party hereunder, (ii) who are informed by the Receiving Party of the confidential nature of the Confidential Information, and (iii) who agree to act in accordance with the terms of
this Section 3.01. The Receiving Party will cause its Representatives to observe the terms of this Section 3.01, and the Receiving Party will be responsible for any breach of this Section 3.01 by any of its
Representatives. For the avoidance of doubt, any materials, documents, programs, data or information provided by one Party to the other Party pursuant to the terms of the Purchase Agreement shall be subject to the confidentiality provisions of the
Purchase Agreement and shall not be subject to the confidentiality provisions of this Agreement.
Section 3.02. Use and Disclosure
Limitations. The obligation of confidentiality under this ARTICLE III will not apply to the extent that it can be established by the Receiving Party by competent proof that such Confidential Information:
(a) was already known to or in the possession of the Receiving Party, other than under an obligation of confidentiality, at the time of
receipt from the Disclosing Party;
(b) was generally available to the public or otherwise part of the public domain at the time of its
receipt from the Disclosing Party;
(c) became generally available to the public or otherwise part of the public domain after its
disclosure other than through any act or omission of the Receiving Party in breach of this Agreement;
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CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS
OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
(d) was received by the Receiving Party, other than under an obligation of confidentiality,
from a third Person lawfully in possession of the Confidential Information that was itself free from any restrictions on use or obligations of confidentiality with respect to such Confidential Information; or
(e) was independently developed by the Receiving Party without reference or access to any Confidential Information of the Disclosing Party.
Section 3.03. Required Disclosure. In the event disclosure of Confidential Information is permitted by applicable Law and is
compelled by judicial or administrative process or required by operation of Law, the Receiving Party will promptly notify the Disclosing Party and otherwise cooperate, at the Disclosing Partys expense, with the Disclosing Party so that the
Disclosing Party may seek a protective order or other appropriate remedy or, in the Disclosing Partys sole discretion, waive compliance with the terms of this ARTICLE III. In the event that no such protective order or other remedy is
obtained, or that the Disclosing Party does not waive compliance with the terms of this ARTICLE III, the Receiving Party will furnish only that portion of the Confidential Information that it is advised by counsel is legally required and will
exercise all reasonable efforts to obtain reliable assurance that confidential treatment will be accorded the Confidential Information.
Section 3.04. Relief. The Receiving Party agrees that unauthorized disclosure or use of the Confidential Information may cause
irreparable harm and result in significant commercial damage to the Disclosing Party. The Parties agree that the Disclosing Party will be entitled to seek equitable relief, including injunction and specific performance, in the event of any breach of
the covenants regarding Confidential Information, in addition to all other remedies available at law and in equity.
ARTICLE IV
MAXIMUM LIABILITY; INDEMNIFICATION
Section 4.01. Maximum Liability; Limitation of Damages. In no event, except with respect to liability of a Party to the other
Party due to a breach of ARTICLE III, will a Partys liability to the other Party exceed the aggregate amount of Service Fees paid to such Party for Services provided under this Agreement; provided, however, that nothing
herein shall limit the liability of either Party with respect to any obligation arising under the Purchase Agreement.
Section 4.02.
Indemnification. Each Party (the Indemnifying Party) will defend, indemnify and hold the other Party and its respective Affiliates, officers, directors, employees, representatives and agents (the Indemnified
Parties) harmless from and against any loss, liability, damage or expense (including reasonable legal fees and expenses) suffered or incurred by or to which the Indemnified Parties may become subject as a result of or arising from the
Indemnifying Partys breach of this Agreement, provision of any Service hereunder or any other matter covered or contemplated by this Agreement other than for the negligence or willful misconduct of the Indemnified Parties. Notwithstanding the
foregoing, no Indemnified
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CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS
OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
Party shall be entitled to indemnification under this Agreement for lost income, revenues or profits, multiples of earnings, diminution in value, consequential, exemplary, incidental, indirect,
punitive or special damages. Any claim for indemnification hereunder will be subject to the indemnification procedures set forth in Article IX of the Purchase Agreement.
Section 4.03. Force Majeure; Inability to Perform.
(a) Notwithstanding anything to the contrary in this Agreement, no Party will be liable for any loss, injury, delay, damage or other casualty
suffered by any other Party due to any inability to perform any obligation hereunder, and no Party will be deemed to have defaulted under or breached this Agreement for failure or delay in fulfilling or performing any term or provision of this
Agreement (other than payment of monies due), when such failure or delay is caused by or results from causes beyond the control of the affected Party, including acts of God, fire, flood, storm, earthquake, explosion, epidemic, delays in
transportation, shortages of trucks or vessels, shortages of fuel, shortages of raw materials, environmental catastrophe, embargo, war, acts of war (whether war be declared or not), acts of terrorism, insurrection, riot, civil commotion, labor
dispute, or acts, omissions or delays in acting by any Governmental Authority (including legislative, administrative, judicial, police or any other official governmental acts). In the case of any delay or failure that a Party anticipates will cause
an excusable delay hereunder, such Party will inform the other Party by written notice of the anticipated effect of such delay within ten days of becoming aware of it.
(b) If the Provider is unable to obtain a Third-Party Consent that is necessary for provision of any Service, then, (i) the Provider will
promptly notify the Recipient of the failure to obtain such Third-Party Consent, (ii) neither the Provider nor any of its Affiliates will have any obligation hereunder with respect to any Service for which such Third-Party Consent is required
or any liability whatsoever to the Recipient for the failure to provide any such Service and (iii) the Recipient will have no obligation to pay the Service Fee for any Service that the Provider is consequently unable to, and does not, provide.
ARTICLE V
TERM AND
TERMINATION
Section 5.01. Term. Notwithstanding anything contained herein to the contrary, a Recipient may permanently
discontinue any Services in whole or in part by giving no less than 30 calendar days advance written notice to the Provider of such discontinuance, which notice will specify the date as of which such Services are to be permanently discontinued
(the Termination Date). If any Services are permanently discontinued by the Recipient in accordance with the foregoing sentence, this Agreement will terminate as to such Services as of the Termination Date thereof and if all
Services have been so discontinued, this Agreement will terminate as of the Termination Date of the last category of Services, in each case without further action and in each case subject to any outstanding payment obligations of the Parties.
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CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS
OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
Section 5.02. Termination. This Agreement may be terminated by the mutual written
agreement of the Parties. In the event:
(a) that a Party fails to pay for any or all Services in accordance with the terms of this
Agreement (unless such payment is disputed by the Recipient in good faith in accordance with Section 2.03), then any non-defaulting Party will have the right, at its sole discretion, to terminate the
applicable Service(s) and/or this Agreement and its participation with the defaulting Party under this Agreement if the defaulting Party has failed to pay all amounts owed under this Agreement (other than amounts disputed in good faith in accordance
with Section 2.03) within five Business Days after receiving written notice of such default; or
(b) of any default by either
Party, in any material respect, in the due performance or observance by it of any of the other terms, covenants or agreements contained in this Agreement, then any non-defaulting Party will have the right, at its sole discretion, to terminate the
applicable Service(s) and/or this Agreement and its participation with the defaulting Party under this Agreement if the defaulting Party has failed to cure the default within 20 Business Days after receiving written notice of such default.
Section 5.03. Survival. Notwithstanding anything contained in this Agreement to the contrary, (a) ARTICLE II,
ARTICLE III, ARTICLE IV, this Section 5.03 and ARTICLE VI will survive the expiration or termination of this Agreement and (b) the expiration or termination of this Agreement will not act as a waiver of any
breach of this Agreement or as a release of either Party from any liability or obligation incurred under this Agreement through the effective date of the expiration or termination.
ARTICLE VI
GENERAL
PROVISIONS
Section 6.01. Representations and Warranties. Each Party represents and warrants to the other that, as of the
date hereof, it is not aware of any Third-Party Consent that is necessary for the provision of any Service by it that has not been obtained.
Section 6.02. Intellectual Property Rights.
(a) The Recipient acknowledges that, with respect to Intellectual Property owned by or licensed to the Provider or its Affiliates and which is
accessed or used by Recipient or its Affiliates in the course of receiving or using the Services (the Provider IP): (i) the Provider IP is and shall remain the sole property of the Provider, the relevant Affiliate of the
Provider or their licensors (as the case may be); and (ii) as between the Parties, the Provider shall own all Intellectual Property rights subsisting in any and all adaptations, modifications or enhancements of the Provider IP made in the
course of receiving or using the Services and the Recipient hereby assigns to Provider, by way of present and future assignment, any such Intellectual Property rights which vest automatically in the Recipient.
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CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS
OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
(b) The Provider hereby grants to the Recipient and its Affiliates a non-exclusive license to
use the Providers Intellectual Property solely to the extent necessary for the receipt and use of the Services.
(c) The Provider
acknowledges that, with respect to Intellectual Property owned by or licensed to the Recipient or its Affiliates and which is accessed or used by Provider or its Affiliates in the course of providing the Services (the Recipient
IP): (i) the Recipient IP is and shall remain the sole property of the Recipient, the relevant Affiliate of the Recipient or their licensors (as the case may be); and (ii) as between the Parties, the Recipient shall own all
Intellectual Property rights subsisting in any and all adaptations, modifications or enhancements of the Recipient IP made in the course of providing the Services and the Provider hereby assigns to Recipient, by way of present and future assignment,
any such Intellectual Property rights which vest automatically in the Recipient.
(d) The Recipient hereby grants to the Provider a
non-exclusive license to use the Recipients Intellectual Property solely to the extent necessary for the provision of the Services.
Section 6.03. Recordkeeping and Audit Matters. Each Provider will, upon five Business Days prior written notice, grant the
applicable Recipient reasonable access to audit such Providers records relating to the performance of such Provider under the terms of this Agreement and to the computation of, and resolution of disputes relating to, amounts charged to such
Recipient for the Services it received pursuant to this Agreement. Such audits shall occur during normal business hours, not more frequently than twice during the term of this Agreement, and must be conducted within 60 days after the expiration or
termination of this Agreement. If such an audit reveals a credit due to the Recipient, then (a) if the credit due is revealed during the term of this Agreement, the Provider will provide a credit for the applicable amount on a subsequent
monthly invoice provided to the Recipient and within 30 days after receipt of the applicable audit report and (b) if the credit due is revealed after the termination of this Agreement, the Provider will issue a check to the Recipient for the
applicable amount within 30 days after receipt of the applicable audit report. If an audit reveals a credit due to the Provider, then the Recipient will issue a check to the Provider for the applicable amount within 30 days after receipt of the
applicable audit report.
Section 6.04. Independent Contractor Status. The Parties acknowledge and agree that the Provider and
each of its Affiliates is an independent contractor in the performance of each and every part of this Agreement and nothing herein will be construed to be inconsistent with this status. No agent or employee of the Provider will be, or will be deemed
to be, the employee or agent of the Recipient and nothing in this Agreement will be construed to make the Recipient an employer, directly or indirectly, of the Providers employees. Nothing contained in this Agreement will be construed as
creating a partnership, joint venture, agency, trust or other association of any kind, each Party being individually responsible only for its obligations set forth in this Agreement.
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CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS
OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
Section 6.05. Parties in Interest. Except for the indemnification rights under
ARTICLE IV of this Agreement, nothing in this Agreement, whether express or implied, will be construed to give any Person, other than the Parties or their respective successors and permitted assigns, any legal or equitable right, remedy,
claim or benefit or remedies of any nature whatsoever, including any rights of employment for any specified period, under or by reason of under or in respect of this Agreement.
Section 6.06. Assignment. This Agreement will be binding upon and inure to the benefit of the Parties and their respective
successors and permitted assigns. No Party may assign either this Agreement or any of its rights, interests, or obligations hereunder without the express prior written consent of the other Parties, and any attempted assignment, without such consent,
will be null and void; provided, however, that Buyer may assign its rights to a Subsidiary of Buyer upon written notice of the same to Sellers, which assignment will not relieve Buyer of any of its obligations hereunder.
Section 6.07. Notices. All notices, requests, demands and other communications under this Agreement will be in writing and will be
given (and will be deemed to have been duly given upon receipt) by delivery in person, by prepaid overnight courier (providing proof of delivery) or by email to the respective Parties at the following addresses or email addresses (or at such other
address for a Party as will be specified in a notice given in accordance with this Section 6.07):
if to Sellers:
Reynolds American Inc.
401 North Main Street
Winston-Salem, NC 27101
Attention: Martin L. Holton III
Email: #######@####.com
with a copy to (which will not constitute notice to Sellers):
Jones Day
222 East 41st Street
New York, New York 10017
Attention: Randi C. Lesnick
Email: rclesnick@jonesday.com
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CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS
OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
if to Buyer:
JT International SA
1 Rue de la Gabelle
1211 Geneva, Switzerland
Telephone: +## #### #####
Attention: Dr. Martin-Ralph Frauendorfer, VP; Assistant General Counsel BD & Operations
E-mail: #########################@####.com
with a copy to (which will not constitute notice to Buyer):
Freshfields Bruckhaus Deringer LLP
601 Lexington Avenue, 31st Floor
New York, New York 10022
Attention: Matthew F. Herman
Email: matthew.herman@freshfields.com
Section 6.08. Amendments and Waivers. This Agreement may not be amended, supplemented or otherwise modified except in a written
instrument executed by the Parties. No waiver by any of the Parties of any default, misrepresentation, or breach of warranty or covenant hereunder, whether intentional or not, will extend to any prior or subsequent default, misrepresentation, or
breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence. No waiver by any of the Parties of any of the provisions hereof will be effective unless explicitly set forth in
writing and executed by the Party sought to be charged with such waiver.
Section 6.09. Entire Agreement. This Agreement
(including the Exhibits and Schedules hereto), the Purchase Agreement and the Confidentiality Agreements constitute the entire agreement among the Parties with respect to the subject matter hereof and thereof and supersede any prior understandings,
negotiations, agreements, discussions or representations among the Parties of any nature, whether written or oral, to the extent they relate in any way to the subject matter hereof or thereof.
Section 6.10. Severability. If any provision of this Agreement or the application of any such provision to any Person or
circumstance shall be declared by any court of competent jurisdiction to be invalid, illegal, void or unenforceable in any respect, all other provisions of this Agreement, or the application of such provision to Persons or circumstances other than
those as to which it has been held invalid, illegal, void or unenforceable, shall nevertheless remain in full force and effect and will in no way be affected, impaired or invalidated thereby. Upon such determination that any provision, or the
application of any such provision, is invalid, illegal, void or unenforceable, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible to the fullest extent
permitted by applicable Law in an acceptable manner to the end that the transactions contemplated by this Agreement are fulfilled to the greatest extent possible.
E-12
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS
OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
Section 6.11. Governing Law. This Agreement and all claims arising out of or
relating to this Agreement and the transactions contemplated hereby shall be governed by the Law of the State of New York, without regard to the conflicts of law principles that would result in the application of any Law other than the Law of the
State of New York.
Section 6.12. Consent to Jurisdiction and Waiver of Jury Trial.
(a) Each of the Parties irrevocably submits to the exclusive jurisdiction of (i) the state courts of the State of New York located in
borough of Manhattan in New York City and (ii) the United States District Court for the Southern District of New York (and the appropriate appellate courts therefrom) for the purposes of any Action arising out of or relating to this Agreement
or any transaction contemplated hereby (and agrees not to commence any Action relating hereto except in such courts). Each of the Parties further agrees that service of any process, summons, notice or document hand delivered or sent by U.S.
registered mail to such Partys respective address set forth in Section 6.07 will be effective service of process for any Action in New York with respect to any matters to which it has submitted to jurisdiction as set forth in the
immediately preceding sentence. Each of the Parties irrevocably and unconditionally waives any objection to the laying of venue of any Action arising out of or relating to this Agreement in (i) state courts of the State of New York located in
borough of Manhattan in New York City or (ii) the United States District Court for the Southern District of New York (and the appropriate appellate courts therefrom), and hereby further irrevocably and unconditionally waives and agrees not to
plead or claim in any such court that any such Action brought in any such court has been brought in an inconvenient forum. Notwithstanding the foregoing, each Party agrees that a final judgment in any Action so brought shall be conclusive and may be
enforced by suit on the judgment in any jurisdiction or in any other manner provided in law or in equity.
(b) EACH OF THE PARTIES
IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF THE PARTIES IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT
HEREOF.
Section 6.13. Counterparts. This Agreement may be executed in two or more counterparts for the convenience of the
Parties, each of which shall be deemed an original and all of which together will constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this Agreement by facsimile or portable document format shall be
effective as delivery of a manually executed counterpart to this Agreement.
Section 6.14. Rules of Construction. Unless the
context requires otherwise, (a) all references to Sections, Articles, Exhibits or Schedules are to the Sections, Articles, Exhibits or
E-13
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS
OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
Schedules of or to this Agreement, (b) each accounting term not otherwise defined in this Agreement has the meaning commonly applied to it in accordance with GAAP, (c) words in the
singular include the plural and vice versa, (d) to the extent the term day or days is used, it will mean calendar days unless Business Days are specified and all references to times of the day are to New York time unless
otherwise specified, (e) the pronoun his refers to the masculine, feminine and neuter, the words herein, hereby, hereof, hereunder and other words of similar import refer to this
Agreement as a whole and not to any particular Section, Article, or other subdivision, (f) the term including means including without limitation, (g) the term or will be disjunctive but not exclusive,
(h) the term extent in the phrase to the extent means the degree to which a subject or other thing extends, and such phrase will not mean simply if, (i) references to documents or other materials
delivered or made available to Buyer or similar phrases shall mean that such documents or other materials were delivered to Buyer or its Representatives or were present in the Data Room, and (j) any reference to any
contract or Law is a reference to it as amended, modified and supplemented from time to time (and, in the case of a Law, to (i) any successor provision and (ii) the rules and regulations promulgated thereunder). The headings contained in
this Agreement or in any Exhibit or Schedule are for convenience of reference purposes only and will not affect in any way the meaning or interpretation of this Agreement.
Section 6.15. Inconsistency. In the event of any inconsistency between the terms of this Agreement and the Schedules, the terms of
this Agreement will control. In the event of any inconsistency between the terms of this Agreement and the Purchase Agreement, the terms of the Purchase Agreement will control.
[Remainder of page left intentionally blank]
E-14
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS
OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
IN WITNESS WHEREOF, the undersigned hereby execute this Transition Services Agreement
effective as of the day and year first above written.
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SANTA FE NATURAL TOBACCO COMPANY, INC. |
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By: |
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Name: |
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Title: |
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R. J. REYNOLDS GLOBAL PRODUCTS, INC. |
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By: |
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Name: |
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Title: |
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R. J. REYNOLDS TOBACCO B.V. |
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By: |
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Name: |
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Title: |
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JT INTERNATIONAL HOLDING BV |
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By: |
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Name: |
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Title: |
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By: |
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E-15
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS
OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
EXHIBIT A
Wiring Instructions
Account for delivery of the
amounts payable by Buyer:
[●]
Account for delivery
of the amounts payable by Sellers:
[●]
E-16
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS
OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
SCHEDULE I
Services to be Provided to Buyer
To the extent
billed on an hourly basis and unless otherwise agreed by the Parties, the Service Fee for the Services set forth below will be $[●]/hour.
[Note
to Draft: Prior to Closing, the Parties will agree to services to be provided to Buyer with respect to the following.]
E-17
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC. CONFIDENTIAL PORTIONS
OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
SCHEDULE II
Services to be Provided to Sellers
To the
extent billed on an hourly basis and unless otherwise agreed by the Parties, the Service Fee for the Services set forth below will be $[●]/hour.
[Note to Draft: Prior to Closing, the Parties will agree to services to be provided to Sellers with respect to the following.]
E-18
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
EXHIBIT F
FORM OF SHARE TRANSFER DEED OF SFR TOBACCO INTERNATIONAL GMBH
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
EXHIBIT F
FORM OF SHARE TRANSFER DEED OF SFR TOBACCO INTERNATIONAL GMBH
Übertragungsurkunde betreffend die Übertragung von allen Stammanteilen an der SFR Tobacco International GmbH
Transfer Deed concerning the transfer and assignment of all company shares (Stammanteile) in SFR Tobacco International GmbH
zwischen / between
R.J. Reynolds Tobacco B.V.,
[address]
der Abtretende / the Assignor
und / and
[Name], [address]
der Übernehmer / the Assignee
datiert vom / dated
Der Abtretende und der Übernehmer jeweils ein Partei und gemeinsam die Parteien.
The Assignor and the Assignee, each, a Party and, collectively, the Parties.
F-1
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
1. |
Abtretung von Stammanteilen / Assignment of Company Shares |
Der Abtretende hat sich
gemäss ein Purchase Agreement (Kaufvertrag) vom 28 September 2015 zwischen, inter alia, den Parteien (der Kaufvertrag) verpflichtet, an die Übernehmerin alle 55000 Stammanteile im Nominalwert von je CHF 100.00,
100% liberiert, an der SFR Tobacco International GmbH, eine unter schweizerischem Recht organisierte Gesellschaft, mit Sitz in Zürich, Schweiz (Firmennummer: CHE-113.229.854) (die Gesellschaft) zu übertragen und tritt hiermit und
überträgt unwiderruflich die vorgenannten Stammanteile, das Eigentum daran sowie sämtliche damit zusammenhängenden Rechte und Pflichten an den Übernehmer ab.
Pursuant to a Purchase Agreement dated September 28, 2015 between, inter alia, the Parties (the Purchase
Agreement), the Assignor undertook to transfer and assign to the Assignee all 55000 shares (Stammanteile) with a nominal value of CHF 100.00 each, 100% paid in, in SFR Tobacco International GmbH, a company incorporated under the
laws of Switzerland, with its registered office in Zurich, Switzerland (company number: CHE-113.229.854) (the Company) and hereby irrevocably transfers and assigns to the Assignee the above mentioned shares, the ownership
thereto, as well as all related rights and duties.
Die weiteren Bedingungen und Bestimmungen betreffend den Verkauf und die
Übertragung der Stammanteile der Gesellschaft (Kaufpreis, Gewährleistungen, Zusicherungen, etc.) werden ausschliesslich im Kaufvertrag geregelt.
Additional terms and conditions with respect to the sale and transfer of the shares of the Company (purchase price, warranties, covenants,
etc.) are exclusively stated in the Purchase Agreement.
2. |
Hinweis auf statutarische Bestimmungen / Reference to Provisions in the Articles of Association |
2.1. |
Nachschuss- oder Nebenleistungspflichten / Supplementary and Ancillary Contributions |
Nachschuss- oder Nebenleistungspflichten der Gesellschafter wurden in den Statuten der Gesellschaft nicht festgelegt.
No supplementary or ancillary contributions of the partners have been determined in the Companys articles of association.
F-2
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
2.2. |
Konkurrenzverbote / Non-Competition Clauses |
Konkurrenzverbote für
die Gesellschafter wurden in den Statuten der Gesellschaft nicht festgelegt.
No non-competition clauses regarding the partners are set
out in the Companys articles of association.
2.3. |
Vorhand-, Vorkaufs- und Kaufrechte der Gesellschafter oder der Gesellschaft / Rights of First Refusal, Preemptive Rights and Call Options of the Company or the Partners |
Vorhand-, Vorkaufs- und Kaufrechte wurden in den Statuten der Gesellschaft keine festgelegt.
No rights of first refusal, preemptive rights or call options of the Company or the partners are set out in the Companys articles of
association.
2.4. |
Konventionalstrafen / Penalties |
Konventionalstrafen wurden in den
Statuten der Gesellschaft nicht festgelegt.
No penalties have been set out in the Companys articles of association.
3. |
Anwendbares Recht und Gerichtsstand / Applicable Law and Jurisdiction |
Dieser Übertragungsurkunde untersteht schweizerischem materiellem Recht (mit Ausschluss des der Bestimmungen des schweizerischen
Internationalen Privatrechts und des Wiener Kaufrechts vom 11. April 1980).
This Transfer Deed shall be governed and construed by
the substantive laws of Switzerland (to the exclusion of the Swiss international private law and the Vienna Convention on the International Sale of Goods dated 11 April 1980).
Ausschliesslicher Gerichtsstand für sämtliche sich aus oder im Zusammenhang mit diesem Übertragungsurkunde ergebenden
Streitigkeiten ist der Ort am Sitz der Gesellschaft (Zürich, Schweiz).
All disputes arising out of or in connection with this
Transfer Deed shall be exclusively submitted to the ordinary courts at the registered office of the Company (Zurich, Switzerland).
F-3
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
Die englische Fassung dieses Übertragungsurkunde ist eine Übersetzung des deutschen Originaltextes
und die deutsche Fassung hat Vorrang.
The English version of this Transfer Deed is a translation of the German original, the German version shall
prevail.
R.J. Reynolds Tobacco B.V,
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[Assignee]
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F-4
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
EXHIBIT G
FORM OF SHARE TRANSFER DEED OF SANTA FE NATURAL TOBACCO COMPANY:
GERMANY GMBH
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
EXHIBIT G
FORM OF SHARE TRANSFER DEED OF SANTA FE NATURAL TOBACCO COMPANY:
GERMANY GMBH
Deed Register
Number
/
R e c o r d e d
in
[Munich] on []
Before me, the notary in the district of the Higher Regional Court (Oberlandesgericht) of [Munich]
[]
practicing in [],
the following persons appeared today:
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1. |
[], born on [], with business address [], providing proof of [his/her] identity by a valid German identity card, acting not in [his/her] own name but on
the basis of a power of attorney dated [], the original of which was available for inspection during the notarization and a certified copy of which is attached to this deed, on behalf of |
Santa Fe Natural Tobacco Company, Inc., a corporation under the laws of the US state New Mexico, with business address []
(hereinafter referred to as the Seller)
and
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2. |
[], born on [], with business address [], providing proof of [his/her] identity by a valid German identity card, acting not in [his/her] own name but on
the basis of a power of attorney dated [], the original of which was available for inspection during the notarization and a certified copy of which is attached to this deed, on behalf of |
G-1
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
JT International Holding BV, a Dutch private company with limited liability
(besloten vennootschap met beperkte aansprakelijkheid) and with business address []
(hereinafter referred to as the
Buyer)
The Buyer and Seller are hereinafter collectively referred to as the Parties.
Prior to the notarization (Beurkundung), the notary asked whether he himself, or any person associated with him for the joint exercise of their
profession, has in the past acted or is presently acting in a capacity other than that of officiating notary in the matter to be notarized. The persons appearing declared that this is not the case.
The persons appearing requested that this written record of the notarization be recorded in the English language. The notary, who is in sufficient command of
the English language, convinced himself that the persons appearing are in sufficient command of the English language. Therefore, a translation of this written record of the notarization was dispensed with.
The persons appearing requested the notarization of the following:
G-2
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
SHARE TRANSFER AGREEMENT
WHEREAS:
(A) |
The Seller holds all of the shares (Geschäftsanteile) in Santa Fe Natural Tobacco Company: Germany GmbH, a German limited liability company with seat in [], Germany, registered in the Commercial
Register of the Local Court (Amtsgericht) of [] under no. HRB [] and a registered capital of EUR [] (the Company). Annex 1 to this Agreement contains the most recent list
of shareholders of the Company dated [], setting out the shareholding structure in the Company (the shares listed in Annex 1 collectively, the German Shares). |
(B) |
By Purchase Agreement regarding, inter alia, the sale and purchase of the shares in the Company dated September 28, 2015 between, inter alia, the Seller and the Buyer (the SPA), the Seller has
sold all of the German Shares to the Buyer. |
(C) |
The Parties intend to implement the transfer and assignment of the German Shares provided for under the SPA by this Agreement. |
THE PARTIES AGREE as follows:
1.1 |
Capitalized terms used herein have the meaning set out below: |
Agreement
means this Share Transfer Agreement and its Annex.
German Shares has the meaning assigned to such term in Preamble (A).
SPA has the meaning assigned to such term in Preamble (B).
Transfer has the meaning assigned to such term in Section 2.1.
1.2 |
The headings in this Agreement do not affect its interpretation. |
2.1 |
The Seller hereby transfers and assigns (tritt ab) to the Buyer the German Shares, and the Buyer hereby accepts such transfer and assignment (the Transfer).
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2.2 |
The German Shares are transferred with all rights and obligations attaching or accruing to them. |
G-3
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
2.3 |
The Seller, being the sole shareholder of the Company, approves the assignment of the German Shares with regard to Article 6 Para. 1 of the Companys articles of association and waives the pre-emptive right
pursuant to Article 6 Para. 2 of the Companys articles of association. |
3. |
UPDATED LIST OF SHAREHOLDERS |
3.1 |
The Parties instruct the acting notary to, without undue delay after the notarization, file an updated list of shareholders of the Company with the Commercial Register, reflecting the changes in the shareholding of the
Company made by this Agreement. |
3.2 |
The Seller hereby grants the Buyer an irrevocable power of attorney to exercise all rights of a shareholder of the Company to their full extent and without limitation from the time when the assignment of the Shares
pursuant to Section 2.1 of this agreement becomes effective until the time when the Buyer is deemed to be the holder of the Shares pursuant to Section 16 para. 1 sentence 1 of the German act on limited liability companies (GmbH-Gesetz).
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4.1 |
This Agreement and the SPA constitute the entire agreement between the Parties with regard to the German Shares. |
4.2 |
Apart from the terms and conditions set out in this Agreement, the rights and obligations of the Parties with regard to the German Shares are solely and conclusively governed by the SPA. |
4.3 |
This Agreement shall not create or be deemed to create any obligations or liabilities beyond those agreed in the SPA. In particular, the Seller shall not be subject to any statutory obligations or liabilities and the
Buyer waives any such claims or rights, if any. |
4.4 |
An amendment of this Agreement is valid only if it is in writing, signed by or on behalf of each Party and, where required by applicable law, notarized. This also applies to this written form clause. |
This Agreement shall be governed by and construed in accordance
with the laws of the Federal Republic of Germany, excluding conflict of laws rules and the Convention on the International Sale of Goods (CISG).
The Company does not own real estate situated in Germany.
G-4
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
The costs of notarization and any other costs resulting from the
conclusion and implementation of this Agreement (other than taxes, including transfer taxes, which shall be allocated between the Parties as provided in the SPA) are borne by the Buyer.
A certified copy of this Agreement shall be provided to
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the competent tax authorities pursuant to § 54 EStDV; |
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Jones Day, Prinzregentenstr. 11, 80538 Munich, Germany, attention: []; and |
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Dr. Gregor von Bonin, Partner, Freshfields Bruckhaus Deringer LLP, Feldmühleplatz 1, 40545 Düsseldorf. |
The recording notary instructed the Parties appearing about the liability
for unpaid capital contributions (§§ 22, 24 of the German Limited Liability Companies Act, GmbHG) and that the Buyers trust in the correctness of the Sellers information regarding the contribution of the
share capital is not protected under statutory law. He also instructed the Parties about the liability for improper payments (§ 31 para 3 GmbHG), the liability for the difference in the case of contributions in kind (§ 9
GmbHG), the liability for collateral performances (§ 3 GmbHG) and the liability for adverse balances (§ 11 GmbHG). The notary also instructed the Parties about the statutory joint and several liability for the costs.
The Seller and the Buyer herebyto the extent legally
permissibleauthorize the notary assistants [], [] and [], all with business address at [], each of them individually, exempted from the restrictions of § 181 of the German Civil Code and entitled to grant
sub-powers of attorney, to supplement and modify the above declarations. This power of attorney may be exercised only at a recording by the officiating notary or his official deputy (Vertreter im Amt); it expires six months after the date
hereof.
G-5
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
The foregoing written record of the proceedings
together with Annex 1 was read out loud to the Parties by the notary,
was available for inspection by them, was approved by them and
signed personally by them and by the notary as follows:
G-6
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
Annex 1
Most recent list of shareholders of the Company
G-7
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
EXHIBIT H
FORM OF SHARE TRANSFER DEED OF SANTA FE NATURAL TOBACCO COMPANY
ITALY S.R.L.
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
Form subject to review and approval by the Italian Notary Public who will receive the Italian Transfer
Deed and will file it with the Register of Enterprises pursuant to Article 2470 of the Italian Civil Code.
EXHIBIT H
FORM OF QUOTA TRANSFER DEED OF SANTA FE NATURAL TOBACCO COMPANY ITALY S.R.L.
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ATTO DI TRASFERIMENTO DI QUOTE |
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DEED OF TRANSFER OF QUOTA |
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tra |
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between |
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(1) R. J. Reynolds Global Products, Inc., una società costituita ai sensi della legge
[ [, con sede legale in [ ], rappresentata come in autentica (il Venditore),
- da una parte - |
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(1) R. J. Reynolds Global Products, Inc., a company incorporated under the laws of the State of Delaware, with registered
office at [ ], represented as herein below indicated, (the Seller),
- on the one side- |
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E |
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AND |
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(2) JT International Holding BV, una società costituita ai sensi della legge svizzera con sede legale in [ ], rappresentata come in autentica (lAcquirente), |
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(2) JT International Holding BV a Dutch private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid), whose registered office is at [ ], represented
as herein below indicated (the Buyer), |
- dallaltra parte - |
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- on the other side - |
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PREMESSO CHE |
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WHEREAS |
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(A) il Venditore è proprietario ed intestatario di una quota avente un valore nominale pari ad Euro [ ] ([ ]) rappresentativa del 100% (cento per cento) del capitale sociale di
Santa Fe Natural Tobacco Company Italy S.r.l., una società a responsabilità limitata costituita ai sensi della legge italiana, con sede legale in [ ] (la Società), capitale sociale pari ad Euro
[ ] ([ ]) interamente versato, codice fiscale e numero di iscrizione al Registro delle Imprese di [ ] [ ] (di seguito, la Quota); |
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(A) the Seller is the owner and holder of the quota with a nominal value of Euro [ ] ([ ]), which represents 100% (one hundred percent) of the corporate capital of Santa Fe Natural
Tobacco Company Italy S.r.l., a limited liability company incorporated under the laws of Italy, with registered office at [ ] (the Company), corporate capital equal to Euro [ ]
([ ]) fully paid-in, number of enrolment with the Register of Enterprises of [ ] and Italian tax code [ ] (hereinafter, the Quota); |
H-1
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
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(B) il Venditore intende cedere e trasferire allAcquirente, che intende acquistare, la Quota. |
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(B) the Seller desires to sell and transfer to the Buyer, which desires to purchase, the Quota. |
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TUTTO CIÒ PREMESSO, in considerazione delle premesse di cui sopra, che costituiscono parte integrante e sostanziale del presente atto, le parti concordano quanto segue. |
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NOW, THEREFORE, in consideration of the above recitals, which are an integral part hereof, the parties hereto hereby agree as follows. |
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Articolo 1. Trasferimento della Quota. |
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Article 1. Transfer of Quota. |
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1.1 Con il presente atto, il Venditore cede e trasferisce allAcquirente, e lAcquirente acquista, la Quota a fronte di un corrispettivo di Euro [ ]. |
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1.1 By the execution of this deed, the Seller sells and transfers to the Buyer, and the Buyer purchases, the Quota for a purchase price equal to Euro [ ]. |
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1.2 Il Venditore dichiara di aver ricevuto il pagamento del prezzo della Quota e, con il presente atto, ne rilascia quietanza. |
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1.2 The Seller declares to have received the payment of the purchase price of the Quota and hereby gives the relevant receipt. |
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1.3 Fatto salvo quanto previsto dallart. 2470 c.c., la presente cessione ha effetto traslativo immediato sicché utili (inclusi quelli già maturati e non distribuiti alla data odierna), oneri e obblighi
riguardanti la Quota conseguono a vantaggio o svantaggio dellAcquirente, a far data dalla sottoscrizione del presente atto. |
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1.3 With the exception of what is provided for by Art. 2470 of the Italian Civil Code, this transfer shall be immediately effective so that profits (including those accrued and undeclared as at the date hereof), burdens and
obligations regarding the Quota shall be allocated to the advantage and disadvantage of the Buyer as of the date of execution of this deed. |
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Articolo 2. Dichiarazioni e Garanzie del Venditore. |
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Article 2. Sellers Representations and Warranties. |
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Il Venditore dichiara e garantisce allAcquirente quanto segue: |
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The Seller represents and warrants to the Buyer the following: |
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(a) La Società è validamente costituita ed esistente ai sensi della legge italiana. |
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(a) The Company has been duly incorporated and is validly existing under Italian law. |
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(b) Il Venditore dichiara di avere la titolarità piena ed esclusiva e la libera disponibilità della Quota e garantisce linesistenza di vincoli di qualsiasi natura sulla Quota, ivi compresi vincoli risultanti da
pegno, obbligazione, sequestro, privilegio, pretesa, opzione, usufrutto, onere o altri vincoli, diritti o pretese di terzi per la sua acquisizione o di qualsiasi interesse relativo alla stessa, ovvero per lemissione di ulteriori quote della
Società. |
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(b) The Seller represents to be the sole and exclusive owner of the Quota, which is freely transferable, and warrants the absence of any liens of whatsoever nature on the Quota, including liens arising out from pledge, obligation,
seizure, privileges, claims, options, usufruct, burdens or other encumbrances, rights or claims of third parties for the acquisition of any interest related to the Quota or for the issuance of other quotas of the Company. |
H-2
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
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Articolo 3. Disposizioni varie. |
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Article 3. Other Provisions. |
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3.1 Le parti si danno reciprocamente atto e convengono che la stipulazione del presente atto non ha efficacia novativa rispetto a qualsiasi ulteriore patto, contratto o convenzione intercorsi tra le medesime parti. |
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3.1 The parties expressly acknowledge and agree that the execution of this deed shall not have any novative effects (effetto novativo) on any other agreement, contract or understanding entered into between the
parties. |
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3.2 Le spese e le tasse del presente atto, ivi incluse le spese notarili, sono a carico dellAcquirente, mentre rimangono a carico del Venditore le eventuali imposte che per legge sono di sua esclusiva spettanza. |
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3.2 All costs relating to this deed, including notarial fees, shall be borne by the Buyer (other than any transfer taxes, which shall be borne 50% by the Buyer and 50% by the Seller). |
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3.3 Il presente atto è soggetto allimposta di registro in misura fissa ai sensi dellart. 11 Tariffa Parte Prima allegata al D.P.R. 26 aprile 1986, n. 131. |
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3.3 This deed is subject to registration at fixed terms in accordance with article 11 of the first part of the rate attached to D.P.R. 131/1986. |
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3.4 Limposta di registro relativa alla presente scrittura privata verrà corrisposta dallAcquirente, secondo le modalità e nei termini previsti dalla legge. |
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3.4 [Any registration fee (Imposta di Registro) in respect of this deed, shall be paid by the Buyer, at the time and in the manner provided by the law.] |
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3.5 Il presente atto, stipulato in un unico originale, viene redatto in inglese ed in italiano ed in caso di conflitto, prevarrà il testo italiano. |
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3.5 This deed, executed in one original, is drawn up in English and Italian and in the event of conflict, the Italian text will prevail. |
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3.6 Il presente atto resterà conservato negli atti del notaio autenticante al fine del rilascio a chiunque di copie, estratti e certificati, ai sensi di legge. |
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3.6 This deed is filed with the notary public for the purposes of delivering authenticated copies, excerpts and certificates pursuant to law. |
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Articolo 4. Legge applicabile |
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Article 4. Governing Law. |
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Il presente atto sarà regolato dalla legge italiana. |
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This deed is governed by the laws of Italy. |
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Letto, approvato e sottoscritto.
[], [] |
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Read, approved and undersigned.
[], [], |
H-3
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
NOTARIAL CERTIFICATION
I, the undersigned Notary in [ ], hereby certify that on the date hereof I have received in my office the attached quota transfer deed
from Mr. [Sellers signatory], duly authorized for the purposes thereof, residing at [ ] and from Mr. [Buyers signatory], duly authorized for the purposes thereof, residing at [ ];
that Mr. [Sellers signatory]s signature has been affixed in my presence and is authentic and that he is authorized, in his capacity as [legal representative / special attorney-in-fact], to executed such quota transfer deed in the
name and on behalf of SFRTI Holdings, a company incorporated under the laws of [ ], with registered office at [ ]; that Mr. [Buyers signatory]s signature has been affixed in
my presence and is authentic and that he is authorized, in his capacity as [legal representative / special attorney-in-fact], to executed such quota transfer deed in the name and on behalf of JT International Holding BV, a company
incorporated under the laws of the Netherlands, with registered office at [ ].
[Please note that if the Italian Transfer Deed is executed in Italy, the notarial certfication shall be in
Italian, and if it is executed in the USA, it shall bear also the Apostille.]
H-4
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
EXHIBIT I
FORM OF SHARE TRANSFER AGREEMENT OF SANTA FE NATURAL TOBACCO
COMPANY JAPAN K.K.
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
EXHIBIT I
FORM OF SHARE TRANSFER AGREEMENT OF SANTA FE NATURAL TOBACCO
COMPANY JAPAN K.K.
SHARE TRANSFER AGREEMENT
This SHARE TRANSFER AGREEMENT (this Agreement) is entered into as of [], by and between R. J. Reynolds Global
Products, Inc., a Delaware corporation (Seller), and [] (Buyer).
WHEREAS, Seller owns 100% of
the outstanding shares of Santa Fe Natural Tobacco Company Japan K.K., a Japanese stock corporation (kabushiki kaisha) (the Company);
WHEREAS, pursuant to a Purchase Agreement, dated September 28, 2015, between, inter alia, Seller and Buyer (the SPA),
Seller has agreed to sell, and Buyer has agreed to purchase, Sellers shares in the Company (the Shares), in each case in accordance with the provisions of the SPA; and
WHEREAS, the Parties intend to implement the transfer and assignment of the Shares provided for under the SPA by this Agreement.
NOW, THEREFORE, the parties agree as follows:
ARTICLE I.
SALE AND
PURCHASE
Section 1.01 Definitions. All capitalized terms used but not defined herein shall have the meanings given to them
in the SPA.
Section 1.02 Sale and Purchase. Subject to the terms and conditions of this Agreement, Seller hereby transfers to
Buyer, and Buyer hereby purchases and acquires on the Closing Date all of Sellers right, title and interest in, to the Shares. Closing Date shall mean [] or any other later date as may be mutually agreed upon by Seller and Buyer.
Section 1.03 Consideration. In consideration of the sale, assignment, transfer and conveyance of the Shares to Buyer under this
Agreement, on the Closing Date, Buyer shall pay JPY to Seller by wire transfer of immediately available funds to an account designated by Seller. Any and all costs for
such wire transfer shall be borne by Buyer.
I-1
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
Section 1.04 Further Assurances. On the Closing Date, Seller shall deliver to Buyer
(i) a certified copy of the minutes of the general meeting of shareholders of the Company regarding approval of the transfer of the Shares and (ii) such other documents as are reasonably required to complete the transfer of the Shares.
Before the Closing Date, Seller shall have the Company prepare a certified copy of the shareholder register of the Company reflecting Buyer as the holder of the Shares and on the Closing Date and immediately following the Closing, Seller shall
provide the same to Buyer.
ARTICLE II.
MISCELLANEOUS
Section 2.01 Amendment and Waiver. No amendment to or waiver of this Agreement shall be effective unless it shall be in writing,
identify with specificity the provisions that are thereby amended or waived and be signed by each party hereto. Any failure of a party to comply with any obligation, covenant, agreement or condition contained in this Agreement may be waived by the
other party only by a written instrument duly executed and delivered by the party granting such waiver, but such waiver or failure to insist upon strict compliance with such obligation, covenant, agreement or condition shall not operate as a waiver
of, or estoppel with respect to, any subsequent or other failure of compliance.
Section 2.02 Assignment. Neither party hereto
may transfer this Agreement or any of its rights thereunder (except for any transfer to an affiliate or in connection with a merger, consolidation or sale of all or substantially all the assets or the outstanding securities of such party, which
transfer shall not require any consent of the other parties) without the prior written consent of each other party thereto (which consent may be withheld in each such other partys sole discretion), and any such purported transfer without such
consent shall be void.
Section 2.03 Burden and Benefit. This Agreement shall be binding upon and shall inure to the benefit
of, the parties hereto and their respective successors and permitted assigns.
Section 2.04 Governing Law. This Agreement
shall be governed by and construed as to all matters, including validity, construction and performance, by and under the substantive laws of Japan.
Section 2.05 Counterparts. This Agreement may be executed in counterparts, each of which when so executed will be deemed to be an
original, and all such counterparts shall together constitute but one and the same instrument. Execution and delivery of this Agreement by exchange of facsimile copies or PDF copies bearing the signature of a party shall constitute a valid and
binding execution and delivery of this Agreement by such party.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
I-2
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and delivered as of
the date and year first above written.
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BUYER: |
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By: |
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Name: |
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Title: |
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SELLER: |
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By: |
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Name: |
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Title: |
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[Signature Page to Share Transfer Agreement]
I-3
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
EXHIBIT J
FORM OF SHARE TRANSFER AGREEMENT OF SANTA FE NATURAL TOBACCO
COMPANY BELGIUM B.V.B.
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****,
HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
EXHIBIT J
FORM OF SHARE TRANSFER AGREEMENT FOR ONE SHARE IN SANTA FE NATURAL TOBACCO
COMPANY BELGIUM BVBA
SHARE PURCHASE AGREEMENT (this Agreement)
DATED []
BETWEEN:
R. J. REYNOLDS
TOBACCO B.V., a company registered in the Netherlands with its registered office at [] (the Seller)
AND:
JT INTERNATIONAL HOLDING BV, a company registered in the Netherlands with its registered office
at [] (the Purchaser)
AND (SOLELY FOR PURPOSES OF ARTICLE 4 HEREOF):
SFR TOBACCO INTERNATIONAL GMBH, a company registered in Switzerland with its registered office at
[] (SFRTI Holdings).
WITNESSETH:
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A. |
In connection with the transfer of the assets used to conduct the Business (as defined in the Purchase Agreement, dated as of September 28, 2015, among Santa Fe Natural Tobacco Company, Inc., R. J. Reynolds Global
Products, Inc., Seller, as sellers, Purchaser, as buyer, Reynolds American Inc., as parent, and Japan Tobacco Inc., as buyer parent (the Purchase Agreement)) a local transfer agreement is being entered into regarding the Belgian
operations. |
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B. |
The Seller is the owner of one (1) share (the Share) of Santa Fe Natural Tobacco Company Belgium BVBA, a company registered in Belgium with enterprise number RPM Brussels
0567.556.601, with its registered office at Rue Royale 97 (4th floor), 1000 Brussels (Belgium) (BelCo). |
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C. |
SFRTI Holdings is presently the owner of 99 shares of BelCo which, together with the Share, constitute the entire issued share capital of BelCo. |
J-1
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****,
HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
|
D. |
The Seller wishes to sell to the Purchaser, and the Purchaser wishes to purchase from the Seller, the Share. |
NOW, THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:
Article 1 - Purchase of Ownership Interest
On the date hereof, the Seller, as legal owner, hereby sells the Share to the Purchaser, which accepts such sale, for the consideration and
upon the terms set forth in this agreement. The ownership of the Share will be transferred to the Purchaser on the date of this agreement, together with all rights attaching to the Share.
Article 2 - Purchase Price
The Purchaser
agrees to pay to the Seller, in consideration for the sale of the Share, [] Euro ( []) (Purchase Price). The Seller hereby acknowledges receipt of the Purchase Price.
Article 3 - Representations
The Seller
represents and warrants that (i) it has full and exclusive ownership of the Share, (ii) the Share is free and clear of all liens, and (iii) the Share has been duly and validly issued in compliance with Belgian law and is fully paid
up.
Article 4 - Approval from SFR Tobacco International GmbH
On the date hereof, the Seller will deliver to the Purchaser the minutes of the shareholders meeting of Belco approving the sale of the
Share from the Seller to the Purchaser, in accordance with article 9 of the articles of association of BelCo. SFRTI Holdings hereby waives any and all rights it may have in connection with the sale of the Share under the articles of association of
BelCo, Belgian law and/or any other agreement.
Article 5 - Registration in the Share Register
The Seller and the Purchaser hereby each authorize and grant power of attorney to [] and [], each acting alone and with power of
substitution, to register the transfer of the Share in the share register of BelCo as soon as reasonably possible on or after the date of this agreement.
Article 6 - Governing Law
This Agreement
and all claims arising out of or relating to this Agreement and the transactions contemplated hereunder shall be governed by the laws of the State of New York, without regard to the conflicts of law principles that would result in the application of
any law other than the laws of the State of New York.
J-2
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****,
HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
Article 7 Consent to Jurisdiction; Waiver of Jury Trial
(a) |
Each of the parties irrevocably submits to the exclusive jurisdiction of (i) the state courts of the State of New York located in borough of Manhattan in New York City and (ii) the United States District Court
for the Southern District of New York (and the appropriate appellate courts therefrom) for the purposes of any action arising out of or relating to this Agreement or any transaction contemplated hereby (and agrees not to commence any action, suit or
proceeding relating hereto except in such courts). Each of the parties further agrees that service of any process, summons, notice or document hand delivered or sent by U.S. registered mail to such Partys respective address set forth in
Section 10.3 of the Purchase Agreement will be effective service of process for any action in New York with respect to any matters to which it has submitted to jurisdiction as set forth in the immediately preceding sentence. Each of the parties
irrevocably and unconditionally waives any objection to the laying of venue of any action arising out of or relating to this Agreement or the transactions contemplated hereunder in (i) state courts of the State of New York located in borough of
Manhattan in New York City or (ii) the United States District Court for the Southern District of New York (and the appropriate appellate courts therefrom), and hereby further irrevocably and unconditionally waives and agrees not to plead or
claim in any such court that any such action brought in any such court has been brought in an inconvenient forum. Notwithstanding the foregoing, each Party agrees that a final judgment in any action so brought shall be conclusive and may be enforced
by suit on the judgment in any jurisdiction or in any other manner provided in law or in equity. |
(b) |
EACH OF THE PARTIES IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER OR THE
ACTIONS OF THE PARTIES IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT HEREOF. |
This agreement has been
executed on the date first written above.
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For: R. J. REYNOLDS TOBACCO B.V. |
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For: JT INTERNATIONAL HOLDING BV |
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By: [] Title:
[] |
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By: [] Title:
[] |
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J-3
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****,
HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
|
For: SFR TOBACCO INTERNATIONAL GMBH |
|
By: []
Title: [] |
J-4
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
EXHIBIT K
FORM OF EXECUTION DATE PRESS RELEASE
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
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Reynolds American Inc.
P.O. Box 2990
Winston-Salem, NC 27102-2990 |
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Contact: |
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David Howard (336) 741-3489 |
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RAI 2015-25 |
Reynolds American announces sale of
Natural American Spirit international businesses to JT Group
WINSTON-SALEM, N.C. Sept. 29, 2015 Reynolds American Inc. (NYSE: RAI) announced today that the international rights to the Natural
American Spirit brand name and associated trademarks, along with the international companies that distribute and market the brand outside the U.S., will be sold to the Japan Tobacco Group of companies (JT Group) in an all-cash transaction with a
value of approximately $5.0 billion.
The purchase does not include the rights to the Natural American Spirit brand name and associated trademarks in the
U.S. market, U.S. duty-free locations, U.S. territories or in U.S. military outlets, all of which will be retained by Santa Fe Natural Tobacco Company, Inc. Santa Fe is a wholly owned subsidiary of RAI.
The international companies being sold employ about 280 people, primarily in Europe and Japan. Those companies distribute and market Natural American Spirit
additive-free and organic styles of cigarettes and roll-your-own tobacco primarily in European and Asian markets. The brands largest markets are Japan, Germany and Switzerland. Natural American Spirit sells at a premium price in each of the
markets in which it competes, just as it does in the U.S. market.
Natural American Spirit has achieved excellent international growth over the past
several years, said Susan M. Cameron, RAIs president and CEO. When backed by the strength of the JT Groups international distribution, sales force and manufacturing capabilities, we believe that growth trajectory will not
only continue, but accelerate, she said.
Selling the international trademark rights to a company with an established global infrastructure was more
advantageous to RAI than investing in an international infrastructure capable of supporting Natural American Spirits growth potential, Cameron said. We believe this sale once again demonstrates our commitment to creating value for our
shareholders, and we believe the addition of Natural American Spirit to the JT Groups brand portfolio will benefit their investors as well, she said.
Cameron noted that once the transaction is complete, the international rights to all of RAIs operating companies cigarette trademarks will be
owned by international tobacco companies, allowing the RAI companies to focus on brand growth in the U.S. market.
The transactions must be approved by
regulatory authorities in a number of countries. The companies are working to attain regulatory approvals by early 2016, and the transaction will close thereafter.
K-1
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
All current international employees will become employees of the JT Group of companies following the closing of the transaction.
J.P. Morgan Securities LLC and Lazard acted as financial advisors, and Jones Day acted as legal advisor to RAI on this transaction.
Cautionary Statement Regarding Forward-Looking Statements
Statements included in this press release that are not historical in nature, including financial estimates and statements as to regulatory approvals and the
expected timing, completion and effects of the proposed transaction, constitute forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. When used in this press release,
forward-looking statements include, without limitation, statements regarding the benefits of the proposed transaction, including future financial and operating results, expectations, beliefs, intentions and future strategies, and other statements
that are not historical facts, that are signified by the words anticipate, believe, estimate, expect, intend, may, objective, outlook, plan,
project, possible, potential, should and similar expressions. These statements regarding future events or the future performance or results of RAI following the transaction inherently are subject to a
variety of risks, contingencies and uncertainties that could cause actual results, performance or achievements to differ materially from those described in or implied in the forward-looking statements.
Among the risks, contingencies and uncertainties that could cause actual results to differ from those described in the forward-looking statements or could
result in the failure of the proposed transaction to be consummated or, if consummated, could have an adverse effect on the results of operations, cash flows and financial position of RAI are the following: the occurrence of any event, change or
other circumstances giving rise to the right of a party to terminate the purchase agreement; the failure to obtain necessary regulatory approvals for the proposed transaction, or if obtained, the possibility of being subjected to conditions as a
result of regulatory approval that could reduce the expected benefits of the proposed transaction, result in a material delay in, or the abandonment of, the proposed transaction or otherwise have an adverse effect on RAI; the failure to satisfy
required closing conditions or complete the proposed transaction in a timely manner; the effect of restrictions placed on RAIs and its subsidiaries business activities, including restrictions associated with RAIs agreement not to
compete with the parent of JT Group (JT) in the business of producing, selling, distributing and developing natural, organic and additive-free combustible tobacco cigarettes and roll your own or make your own tobacco products outside of the U.S. for
a period of five years after the closing, and the limitations put on RAIs ability to pursue alternatives to the proposed transaction pursuant to the purchase agreement; the possibility of delay or prevention of the proposed transaction if
lawsuits challenging the proposed transaction are filed against RAI, the members of the RAI board of directors, JT and/or the members of the JT board of directors; RAIs obligation to indemnify JT for specified matters and to retain certain
liabilities related to the acquired business; the incurrence of significant pre- and post-transaction related costs in connection with the proposed transaction; and the effect of the announcement of the proposed transaction on the ability of RAI and
its subsidiaries to retain and hire key personnel, maintain business relationships, and on operating results and businesses generally. Discussions of additional risks, contingencies and uncertainties are contained in RAIs filings with the U.S.
Securities and Exchange Commission.
K-2
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
Due to these risks, contingencies and other uncertainties, you are cautioned not to place undue reliance on these forward-looking statements, which speak only
as of the date of this press release. Except as provided by federal securities laws, RAI is under no obligation to, and expressly disclaims any obligation, to update, alter or otherwise revise any forward-looking statements, whether written or oral,
that may be made from time to time, whether as a result of new information, future events or otherwise.
Web Disclosure
RAIs website, www.reynoldsamerican.com, is the primary source of publicly disclosed news about RAI and its operating companies. We use the website as
our primary means of distributing quarterly earnings and other company news. We encourage investors and others to register at www.reynoldsamerican.com to receive alerts when news about the company has been posted.
ABOUT US
Reynolds American Inc. (NYSE:
RAI) is the parent company of R.J. Reynolds Tobacco Company; Santa Fe Natural Tobacco Company, Inc.; American Snuff Company, LLC; Niconovum USA, Inc.; Niconovum AB; and R.J. Reynolds Vapor Company.
|
|
|
R.J. Reynolds Tobacco Company is the second-largest U.S. tobacco company. R.J. Reynolds brands include three of the best-selling cigarettes in the U.S.: Newport, Camel and Pall Mall. These brands, and its other
brands, are manufactured in a variety of styles and marketed in the U.S. |
|
|
|
Santa Fe Natural Tobacco Company, Inc. manufactures and markets Natural American Spirit 100% additive-free natural tobacco products, including styles made with organic tobacco. |
|
|
|
American Snuff Company, LLC is the nations second-largest manufacturer of smokeless tobacco products. Its leading brands are Grizzly and Kodiak. |
|
|
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Niconovum USA, Inc. and Niconovum AB market innovative nicotine replacement therapy products in the U.S. and Sweden, respectively, under the ZONNIC brand name. |
|
|
|
R.J. Reynolds Vapor Company manufactures and markets VUSE e-cigarettes, a highly differentiated vapor product. |
Copies of RAIs news releases, annual reports, SEC filings and other financial materials, including risk factors containing forward-looking information,
are available at www.reynoldsamerican.com. To learn how RAI and its operating companies are transforming the tobacco industry, go to the RAI website, Transforming Tobacco.
###
K-3
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
FOR IMMEDIATE RELEASE
Tokyo, September 29, 2015
JT
Acquires Natural American Spirit Business outside the United States
Japan Tobacco Inc. (JT) (TSE: 2914) announced today that the JT Group has
entered into an agreement with the Reynolds American Inc. group of companies (RAI) to acquire the Natural American Spirit business outside the United States which includes the trademarks and all outstanding shares of RAIs
subsidiaries outside the U.S. which sell the brand. The transaction is expected to be completed by early 2016.
1. Purpose for the Acquisition
Since its launch in the U.S. in 1982 by Santa Fe Natural Tobacco Company, Inc., the Natural American Spirit brand has provided a unique product offering and
established a special brand positioning as the only truly global additive free, premium cigarette with a marketing theme that is environmentally conscious and socially progressive. The brand has enjoyed strong growth momentum in the
U.S., Japan, Germany, Switzerland, Italy, Spain, the U.K. and others.
Natural American Spirit, which has a strong and international presence in a
premium priced category, will allow the JT Group to further extend its brand portfolio. This strong and unique brand equity combined with an energetic and experienced team of people will further strengthen our Groups business foundation,
said Mitsuomi Koizumi, President and Chief Executive Officer of the JT Group.
Notably in Japan, which now accounts for the majority of the sales volume
worldwide excluding the U.S., the brand has experienced significant growth. This investment will underpin the Groups sustainable long-term profit growth in this highly competitive market.
The existing operations of the acquired companies will be expected to remain unchanged in order to fully benefit from their extensive knowledge and
experience.
K-4
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
2. Overview of the Natural American Spirit Business outside the U.S.
|
|
|
(1) Business to be transferred |
|
- Trademarks for Natural American Spirit outside the U.S.
- RAIs nine subsidiaries
selling Natural American Spirit outside the U.S. |
|
|
(2) Operating performance of the business to be transferred |
|
Net sales: JPY 17.6 billion
Profit before income taxes: JPY 2.1 billion
(At exchange rate of 105.88, translated at YTD Average Rate. Business year ending December 2014, management basis)
|
|
|
(3) Amount of assets and liabilities to be transferred |
|
Assets: JPY 14.9 billion, 2014 Debts: JPY 4.3 billion
(At exchange rate of 119.68, translated at year-end rate. Business year ending December 2014, management basis)
|
|
|
(4) Acquisition price and payment |
|
Approx. JPY 600 billion (tentative)
Payment will be made in cash. |
3. Overview of Reynolds American Inc.
|
|
|
|
|
(1) Name |
|
REYNOLDS AMERICAN INC. |
|
|
(2) Address |
|
401 NORTH MAIN ST
WINSTON SALEM, NC 27101 USA |
|
|
(3) Representative |
|
Susan M. Cameron(CEO) |
|
|
(4) Business |
|
Reynolds American Inc. is the parent company of R.J. Reynolds Tobacco Company, Santa Fe Natural Tobacco Company, Inc. and American Snuff Company, LLC, all of which manufacture and market tobacco products. It is also the
parent company of Niconovum USA, Inc. and Niconovum AB, which market nicotine replacement therapy products; and R.J. Reynolds Vapor Company, which markets vapor products. |
|
|
(5) Paid in capital |
|
USD 6,200 million (as of December 31, 2014) |
|
|
(6) Foundation |
|
2004 |
|
|
(7) Net asset |
|
USD 4,522 million (as of December 31, 2014) |
|
|
(8) Total asset |
|
USD 15,196 million (as of December 31, 2014) |
|
|
(9) Major shareholder and holding ratio |
|
British American Tobacco plc approximately 42%
Invesco Ltd. approximately 3.4% The Vanguard Group, Inc.
approximately 3.4% (as of June 30, 2015) |
K-5
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
|
|
|
|
|
(10) Relationship with JT |
|
Capital |
|
None |
|
|
Personnel |
|
None |
|
|
Business |
|
None |
|
|
Related party status |
|
None |
4. Schedule
|
|
|
(1) Agreement date |
|
September 29, 2015 |
|
|
(2) Transfer date (planned) |
|
Early 2016 |
5. Accounting Overview
Accounting for business combinations will be applied for this transaction in accordance with IFRS.
6. Impact on Financial Performance
The transaction will
be funded by the Groups existing cash and loan facilities. The impact of this transaction on the Groups consolidated financial performance for the FY2015 is not expected at this moment.
(Reference) Consolidated Financial Outlook for FY2015 and Results for the FY2014
Units: Millions of Yen except where otherwise stated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
|
Operating Profit |
|
|
Profit attributable to owners of the parent |
|
|
Earnings per share
Unit: Yen |
|
|
|
FY2015 Forecast |
|
|
2,350,000 |
|
|
|
668,000 |
|
|
|
471,000 |
|
|
|
262.36 |
|
|
|
FY2014 Results |
|
|
2,153,970 |
|
|
|
499,757 |
|
|
|
362,919 |
|
|
|
199.67 |
|
|
|
Overview of Natural American Spirit Business outside the U.S.
Number of Employees |
About 280 (sum of nine companies, Sep, 2015) |
Sales Volume |
About 3.1 billion sticks (sum of nine companies, Dec, 2014) |
Sales Areas |
Japan, Germany, Switzerland, Italy, Spain, UK, France, Netherlands, Belgium and others |
Product |
The Natural American Spirit brand currently has nine cigarette |
K-6
CONFIDENTIAL TREATMENT REQUESTED BY REYNOLDS AMERICAN INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
###
Japan Tobacco Inc. is a leading
international tobacco company. Its products are sold in over 120 countries and its internationally recognized brands include Winston, Camel, Mevius and LD. With diversified operations, JT is also actively present in pharmaceuticals and processed
foods. The companys revenue was ¥2.154 trillion (US$17,867 million(*)) in the fiscal year ended December 31, 2014(**).
*Translated at
the rate of ¥120.55 per $1, as of December 31, 2014
**Due to a change in the accounting period from March 31 to December 31, the fiscal year
2014 covered nine months for Japanese domestic businesses and 12 months for the consolidated subsidiaries which operate the Groups international tobacco business. On a comparable full calendar year basis, revenue was ¥2.433 trillion
(US$20,186 million(*)).
Contact: |
Ryohei Sugata, General Manager |
|
Media and Investor Relations Division |
|
E-mail: jt.media.relations@jt.com |
K-7
Exhibit 99.1
|
|
|
|
|
Reynolds American Inc.
P.O. Box 2990
Winston-Salem, NC 27102-2990 |
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|
|
|
|
Contact: |
|
David Howard (336) 741-3489 |
|
RAI 2015-25 |
Reynolds American announces sale of
Natural American Spirit international businesses to JT Group
WINSTON-SALEM, N.C. Sept. 29, 2015 Reynolds American Inc. (NYSE: RAI) announced today that the international rights to the Natural
American Spirit brand name and associated trademarks, along with the international companies that distribute and market the brand outside the U.S., will be sold to the Japan Tobacco Group of companies (JT Group) in an all-cash transaction with a
value of approximately $5.0 billion.
The purchase does not include the rights to the Natural American Spirit brand name and associated trademarks in the
U.S. market, U.S. duty-free locations, U.S. territories or in U.S. military outlets, all of which will be retained by Santa Fe Natural Tobacco Company, Inc. Santa Fe is a wholly owned subsidiary of RAI.
The international companies being sold employ about 280 people, primarily in Europe and Japan. Those companies distribute and market Natural American Spirit
additive-free and organic styles of cigarettes and roll-your-own tobacco primarily in European and Asian markets. The brands largest markets are Japan, Germany and Switzerland. Natural American Spirit sells at a premium price in each of the
markets in which it competes, just as it does in the U.S. market.
Natural American Spirit has achieved excellent international growth over the past
several years, said Susan M. Cameron, RAIs president and CEO. When backed by the strength of the JT Groups international distribution, sales force and manufacturing capabilities, we believe that growth trajectory will not
only continue, but accelerate, she said.
Selling the international trademark rights to a company with an established global infrastructure was more
advantageous to RAI than investing in an international infrastructure capable of supporting Natural American Spirits growth potential, Cameron said. We believe this sale once again demonstrates our commitment to creating value for our
shareholders, and we believe the addition of Natural American Spirit to the JT Groups brand portfolio will benefit their investors as well, she said.
Cameron noted that once the transaction is complete, the international rights to all of RAIs operating companies cigarette trademarks will be
owned by international tobacco companies, allowing the RAI companies to focus on brand growth in the U.S. market.
The transactions must be approved by
regulatory authorities in a number of countries. The companies are working to attain regulatory approvals by early 2016, and the transaction will close thereafter.
All current international employees will become employees of the JT Group of companies following the closing of
the transaction.
J.P. Morgan Securities LLC and Lazard acted as financial advisors, and Jones Day acted as legal advisor to RAI on this transaction.
Cautionary Statement Regarding Forward-Looking Statements
Statements included in this press release that are not historical in nature, including financial estimates and statements as to regulatory approvals and the
expected timing, completion and effects of the proposed transaction, constitute forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. When used in this press release,
forward-looking statements include, without limitation, statements regarding the benefits of the proposed transaction, including future financial and operating results, expectations, beliefs, intentions and future strategies, and other statements
that are not historical facts, that are signified by the words anticipate, believe, estimate, expect, intend, may, objective, outlook, plan,
project, possible, potential, should and similar expressions. These statements regarding future events or the future performance or results of RAI following the transaction inherently are subject to a
variety of risks, contingencies and uncertainties that could cause actual results, performance or achievements to differ materially from those described in or implied in the forward-looking statements.
Among the risks, contingencies and uncertainties that could cause actual results to differ from those described in the forward-looking statements or could
result in the failure of the proposed transaction to be consummated or, if consummated, could have an adverse effect on the results of operations, cash flows and financial position of RAI are the following: the occurrence of any event, change or
other circumstances giving rise to the right of a party to terminate the purchase agreement; the failure to obtain necessary regulatory approvals for the proposed transaction, or if obtained, the possibility of being subjected to conditions as a
result of regulatory approval that could reduce the expected benefits of the proposed transaction, result in a material delay in, or the abandonment of, the proposed transaction or otherwise have an adverse effect on RAI; the failure to satisfy
required closing conditions or complete the proposed transaction in a timely manner; the effect of restrictions placed on RAIs and its subsidiaries business activities, including restrictions associated with RAIs agreement not to
compete with the parent of JT Group (JT) in the business of producing, selling, distributing and developing natural, organic and additive-free combustible tobacco cigarettes and roll your own or make your own tobacco products outside of the U.S. for
a period of five years after the closing, and the limitations put on RAIs ability to pursue alternatives to the proposed transaction pursuant to the purchase agreement; the possibility of delay or prevention of the proposed transaction if
lawsuits challenging the proposed transaction are filed against RAI, the members of the RAI board of directors, JT and/or the members of the JT board of directors; RAIs obligation to indemnify JT for specified matters and to retain certain
liabilities related to the acquired business; the incurrence of significant pre- and post-transaction related costs in connection with the proposed transaction; and the effect of the announcement of the proposed transaction on the ability of RAI and
its subsidiaries to retain and hire key personnel, maintain business relationships, and on operating results and businesses generally. Discussions of additional risks, contingencies and uncertainties are contained in RAIs filings with the U.S.
Securities and Exchange Commission.
Due to these risks, contingencies and other uncertainties, you are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date of this press release. Except as provided by federal securities laws, RAI is under no obligation to, and expressly disclaims any obligation, to update, alter or otherwise revise any
forward-looking statements, whether written or oral, that may be made from time to time, whether as a result of new information, future events or otherwise.
Web Disclosure
RAIs website,
www.reynoldsamerican.com, is the primary source of publicly disclosed news about RAI and its operating companies. We use the website as our primary means of distributing quarterly earnings and other company news. We encourage investors and others to
register at www.reynoldsamerican.com to receive alerts when news about the company has been posted.
ABOUT US
Reynolds American Inc. (NYSE: RAI) is the parent company of R.J. Reynolds Tobacco Company; Santa Fe Natural Tobacco Company, Inc.; American Snuff Company,
LLC; Niconovum USA, Inc.; Niconovum AB; and R.J. Reynolds Vapor Company.
|
|
|
R.J. Reynolds Tobacco Company is the second-largest U.S. tobacco company. R.J. Reynolds brands include three of the best-selling cigarettes in the U.S.: Newport, Camel and Pall Mall. These brands, and its other
brands, are manufactured in a variety of styles and marketed in the U.S. |
|
|
|
Santa Fe Natural Tobacco Company, Inc. manufactures and markets Natural American Spirit 100% additive-free natural tobacco products, including styles made with organic tobacco. |
|
|
|
American Snuff Company, LLC is the nations second-largest manufacturer of smokeless tobacco products. Its leading brands are Grizzly and Kodiak. |
|
|
|
Niconovum USA, Inc. and Niconovum AB market innovative nicotine replacement therapy products in the U.S. and Sweden, respectively, under the ZONNIC brand name. |
|
|
|
R.J. Reynolds Vapor Company manufactures and markets VUSE e-cigarettes, a highly differentiated vapor product. |
Copies of RAIs news releases, annual reports, SEC filings and other financial materials, including risk factors containing forward-looking information,
are available at www.reynoldsamerican.com. To learn how RAI and its operating companies are transforming the tobacco industry, go to the RAI website, Transforming Tobacco.
###
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