Tobacco Documents Online

ROPES & GRAY 225 FRANKLIN STREET BOSTON 02110 cauc AaoRCSS ROPGFtALOR TIC[X NYMBLR 940519 June 16, 1981 Lee E. Stanford, Esq. Shook, Hardy & Bacon Twentieth Floor - Mercantile Bank Tower 1101 Walnut Kansas City, Missouri 64106 ~ . Re: Harvard - Tobacco Companies Settlement Dear Lee: I enclose herewith a form of Compromise Agreement re- flecting, I trust, all of the points you and I agreed during our recent meeting that we would recommend to our respective clients. I have, as promised, presented it to Harvard with~ the recommendation that it be accepted as a compromise; with some reluctance Harvard has determined that, if such an offer is promptly received, it will be accepted. The agreement contains one additional point neither of us thought of during our discussim, but which I think you will agree is consonant with our agreement. Under the ex- isting agreements, title to and the right to possession of the equipment is in the tobacco companies upon fulfillment of their obligations; those prior agreements, however, specify no arrangement among the tobacco companies inter se other than joint and several. This leaves Harvard technically subject to claims by Liggett in respect of the equipment once Harvard has delivered it to the order of the paying companies. While this exposure is probably more theoretical than real, it is appropriate for the paying companies to indemnify Harvard on this score,'and section 6(last sentence) of the Compromise Agreement contains such an indemnity. - The discharging documents are in the form of covenants not to sue, rather than releases, because of some doubts regarding the effect of a release to discharge Liggett under Massachusetts law. Section 5 of the Compromise Agreement and the form of Covenant Not to Sue are drafted to preserve Harvard's right against Liggett under Massachusetts law.

c ROPES & GRAY Lee E. Stanford, Esq. -2- June 16, 1981 You requested a further explanation regarding the George Woron bill ($5,100) and the option payments to TNT ($10,000). These were not related to the so-called Pitney-Bowes affair. Rather, at a time when Harvard and the tobacco companies were negotiating for an additional funding period for Dr. Huber's research, decisions were made by Dr. Huber (1) that the Charles- gate facility should be retained for the activities already located there, and (2) that those activities then located at the Beth Israel Hospital should be moved to, and consolidated with those then at, the Charlesgate facility. It was Dr. Huber's view that the Sixth Floor of the Charlesgate building, not then occupied by the program, would be appropriate for the activities to be moved out of Beth Israel. Harvard requested Mr. Woron to negotiate such lease, Mr. Woron already having a good relation- ship with the owner and his counsel. See letter of Henry Meadow to George Woron dated January 19, 1979. During the course of these negotiations (which could not be completed while decisions by the tobacco companies about the future of Dr. Huber's program were unmade), the owner of the Charlesgate facility insisted upon compensation for keeping the Sixth Floor open. Harvard paid the amount agreed upon ($5,000/mo.) for two months. Both the Woron bill and these "option" payments were expenditures made in order to preserve the ability of Dr. Huber's sponsors to provide for the uninterrupted continuation of his efforts. Finally, you have asked for confirmation of certain in- formation regarding the $9,530 item related to a Walsh bill. This relates to certain construction work requested by Dr. Huber and approved by Mr. Shinn~on the basis that the labor component would be split evenly between the tobacco company sponsors and NIH. See Memo of Gary L. Huber to William Kneeland dated A/3/78 and letter of Gary L. Huber to William Shinn dated 4/4/7$. The labor costs was $35,949.72, which Harvard paid. NIH paid $,17,974.72 in reimbursement to Harvard. Of the balance of $17,975, only $8,k44.15 has been paid by the tobacco companies, leaving a balance due of $9,530.85 due to Harvard. This work had no involvement with any Pitney-Bowes dispute. For your information, I am informed that the 1977 Fiat has finally been located, and will be repossessed sometime this week. As you requested, Harvard will keep the car in storage (unregistered) pending instructions from you or Bill regarding it-s disposition.

RoPES & GRAY Lee E. Stanford, Esq. -3- c June 16, 1981 If you find that I have accurately rendered our agreements into the form of "Compromise Agreement," I hope you will present the same to your clients for their approval. If I have left anything out, please let me know promptly. RKG:pad 4