Exhibit 10.1
VALUATION PAYMENT
SETTLEMENT AGREEMENT
This Agreement
is made on 20 February 2008
Between
| (1) |
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R.J. Reynolds tobacco
C.V. , a limited partnership organised under the law of
The Netherlands ( Reynolds ); and |
| (2) |
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Gallaher
limited , a company incorporated in England and Wales
with company number 1501573 and having its registered office at
Members Hill, Brooklands Road, Weybridge, Surrey KT13 0QU, England
( Gallaher ), |
| |
| |
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each a Party and together the
Parties . |
Recitals
(A) R.J. Reynolds Tobacco Holdings, Inc., the parent company
of Reynolds, and Gallaher Group plc, the parent company of
Gallaher, are parties to a Joint Venture Participation Agreement
dated 19 June 2002 pursuant to which R.J. Reynolds —
Gallaher International Sàrl ( RGI ), a Swiss
limited liability company, was formed to conduct the manufacturing,
marketing, distribution and sale of American Blend cigarette
products in specified territories.
(B) Pursuant to a Limited Liability Company Agreement dated 12
July 2002 (the LLC Agreement ), Gallaher
(Austria) GmbH and Reynolds agreed terms relating to the management
and operation of RGI on the basis that each member of RGI or its
affiliates would by 12 July 2002 have licensed or sub-licensed
to RGI various trademarks and associated rights for use on American
Blend cigarettes in specified territories.
(C) Under Trade Mark Licences dated 12 July 2002, the
Parties licensed or sub-licensed various trademarks and associated
rights owned by them to RGI (the Trade Mark Licences
).
(D) The Parties entered into a License Buyout Agreement dated
12 July 2002, as subsequently amended on 1 March 2004,
(the LBA ), pursuant to which they agreed a mechanism
for payment of an amount from one Party to the other calculated by
reference to the relative aggregate Valuations of each
Party’s trademarks and associated rights licensed or
sub-licensed to RGI under the Trade Mark Licences.
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(E) Reynolds served notice of termination of the LLC Agreement
on 15 May 2007 specifying the effective date of termination as
30 November 2007, which became the Valuation Date under the
LBA.
(F) Following exchange of the Valuations on 29
January 2008 and subsequent negotiations in accordance with
the provisions of the LBA, the Parties have agreed on the amount of
the Valuation Payment due under the LBA and on the identity of the
paying Party and wish to record the terms of their agreement on a
binding basis in this Agreement.
(G) The Parties have agreed to enter into this Agreement in
consideration of the mutual covenants and other valuable
consideration set out below.
1.
Definitions and
interpretation
1.1 In
this Agreement, the following terms shall have the following
meaning:
| (a) |
|
Agreement means this agreement as may be amended
in writing by or on behalf of the Parties from time to time. |
| (b) |
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Claim means any or all claims, potential claims,
counterclaims, potential counterclaims, rights of set-off,
indemnities, challenges, causes of action, rights or interests of
any kind or nature whatsoever (including Claims for interest or
costs), whether known or unknown, suspected or unsuspected, however
and whenever arising and in whatever capacity and jurisdiction,
whether secured, proprietary, and whether by way of contribution or
subrogation or otherwise, and whether direct or indirect, oral or
written, foreseen or unforeseen, known or unknown, latent or
patent, actual or potential, present or future and howsoever
arising. |
| (c) |
|
Effective Date means the date appearing at the
head of this Agreement. |
| (d) |
|
Valuation Payment Sum means the sum of
€ 265,000,000 (two
hundred and sixty five million Euros) payable by Gallaher to
Reynolds in accordance with clauses 2 and 3 of this Agreement. |
1.2
Terms used but not otherwise defined in this Agreement shall have
the meanings given to them in the LBA and the LLC Agreement.
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1.3 For the purposes of clauses 2 and 5 of this Agreement, any
reference to any Party includes any parents, subsidiaries,
affiliates, assigns, successors, transferees, representatives,
principals, agents, officers or directors of that Party.
1.4 Save where the context requires otherwise, clause headings are
for convenience only and shall not be taken into account in the
interpretation of this Agreement.
2.
Full and final
settlement
2.1 Subject to the terms of this Agreement, Reynolds accepts
payment of the Valuation Payment Sum in full and final settlement
of Gallaher’s obligations under the LBA.
2.2 Each Party releases and discharges the other Party from
liability for any and all Claims arising out of or in any way
relating to, whether contractual, tortious or other in respect of,
the LBA, save in relation to enforcement of obligations arising
under this Agreement.
3.
Payment
Details
3.1 Subject to clause 3.4 below, by 4pm London time on 20
April 2008, Gallaher shall initiate the transmission of
payment to Reynolds the sum of € 106,000,000 (one hundred and six million Euros)
representing 40% (forty per cent) of the Valuation Payment
Sum.
3.2 Subject to clause 3.4 below, by the dates and times specified
in (a)-(f) below, Gallaher shall initiate the transmission of
payment to Reynolds the sum of € 26,500,0
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