Agreement between Bastos of Canada ltd / Bastos du Canada ltée ("Bastos") - and - The Commissioner of Competition ("Commissioner")

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WHEREAS the Commissioner is responsible for the administration and enforcement of the
Competition Act, R.S.C. 1985, c. C-34 (the "Act"), and has commenced an Inquiry pursuant to s. 10
of the Act in regard to cigarettes and other tobacco products ("Tobacco Products") for sale to the
public, described as "light" and "mild" and variants thereof, such as, but not limited to, "extra light",
"ultra light", "extra mild" and "ultra mild" ("L/M Descriptors") in Canada;

AND WHEREAS Bastos is engaged in Canada in the manufacture and/or distribution of Tobacco
Products bearing L/M Descriptors;

THE PARTIES HEREBY AGREE AS FOLLOWS:

1. Application of this Agreement

   1.1 The provisions of this Agreement are subject to the definitions set forth in Appendix "A."

   1.2 Nothing in this Agreement is intended to modify Bastos' obligations under the Tobacco Act.

2. Cessation of Use of the L/M Descriptors

   2.1 As of December 31, 2007, Bastos will cease using L/M Descriptors on it's Tobacco Products
   and packaging, and will not manufacture Tobacco Products bearing L/M Descriptors for any
   of it's future clients. A list of Bastos' Brand Names covered by this Agreement are contained
   in Appendix "B".

3. Sale of Existing Stock

   3.1 Any Tobacco Products bearing L/M Descriptors may be sold or distributed in Canada by
   Bastos, provided they were manufactured and packaged prior to December 31, 2007.

4. Other Manufacturers and Distributors

   4.1 The Commissioner shall use reasonable best efforts to obtain from other manufacturers
   and/or distributors in Canada of Tobacco Products, comparable commitments to
   discontinue their use of L/M Descriptors not later than December, 2007.

5. General

   5.1 This Agreement is entered into without any admission of liability on the part of Bastos,
   and it does not constitute a finding of fact or law on any issue as against Bastos.

   5.2 This Agreement is entered into by Bastos solely for the purpose of voluntarily
   cooperating with a request by the Commissioner to discontinue the use of L/M
   Descriptors and in anticipation of regulatory changes under the Tobacco Act.

   5.3 This Agreement shall be governed by and interpreted in accordance with the laws of the
   Province of Quebec and the laws of Canada applicable therein.

   5.4 This Agreement may be executed in counterpart and by facsimile and each such
   counterpart shall constitute an original and all of which taken together shall constitute one
   and the same instrument, dated as of the date set forth below.

6. Modification or Default

   6.1 If Bastos believes that some modification of this Agreement is justified due to changed
   circumstances, Bastos and the Commissioner agree to engage in good faith efforts to
   resolve the matter.

   6.2 In the event of any dispute between the Parties as to the interpretation or application of
   this Agreement, including a dispute as to whether there has been a default in the
   performance of any of the obligations in this Agreement, the Parties agree to first engage
   in good faith efforts to resolve such dispute, before taking any other steps to resolve the
   dispute. In the event that Bastos does not cease use of the L/M descriptors in accordance
   with clause 2.1 of this Agreement, the Commissioner may deliver a notice of default to
   Bastos. Bastos shall have 30 days to remedy any default. If the default has not been
   remedied during such 30 day period the Commissioner may, following the expiry of the
   30 day period, file this Agreement with the Competition Tribunal for registration as a
   Consent Agreement between the Commissioner and Bastos, pursuant to s.74.12 of the
   Act. Bastos irrevocably consents to the registration of this Agreement as a Consent
   Agreement in such case and to the filing of the signed consent form which is attached as
   Appendix "C."

7. Term of this Agreement

   7.1 This Agreement shall remain in force fiom the date of its signing until such time as
   regulations pursuant to the Tobacco Act come into force prohibiting the use of L/M.
   Descriptors in regard to Tobacco Products, andlor their packaging, whereupon this
   Agreement will terminate automatically.

8. Notice

   8.1 Any notice required to be given pursuant to any terms of this Agreement is valid if given
   by facsimile transmission or registered mail to:

   1. The Commissioner:
      Sheridan Scott
      Commissioner of Competition
      Competition Bureau Canada
      Place du Portage, Phase I,
      50 Victoria Street
      Gatineau, Quebec KIA 0C9

      Telephone: 819-997-5300
      Facsimile: 819-953-5013

      With copies to:

      Jim Marshall
      Senior Counsel
      Competition Law Division
      Justice Canada
      Place du Portage, Phase I,
      50 Victoria Street
      Gatineau, Quebec KIA 0C9

      Telephone: 819-997-2834
      Facsimile: 819-953-9267

   2. Bastos:
      Mr. Gilbert Cantin
      General Manager
      Bastos du Canada Ltée.
      Bastos of Canada Ltd.
      371 Saint-Marc St.
      Louiseville, Quebec
      J5V 2G2

      Telephone: 450-638-2475
      Facsimile: 450-632-8866

Dated at Gatineau, Quebec, this 12th day of June, 2007.

____________________________
Sheridan Scott
Commissioner of Competition

Dated at Louiseville, Quebec, this 8th day of June, 2007.

____________________________
Mr. Gilbert Cantin
General Manager
Bastos du Canada Ltée./
Bastos of Canada Ltd.

Appendix "A"

Definitions

In accordance with Clause 1.1 of this Agreement, the following definitions shall apply:

A. "Agreement" means this Agreement as entered into by Bastos and the Commissioner;

B. "Bastos" means Bastos du Canada Ltée./ Bastos of Canada Ltd., a company incorporated
under the laws of Canada;

C. "Brand Name" means word(s) used by Bastos to identify its products to consumers and
includes, but is not limited to, trademark names of cigarettes and any words forming part of
such trademark names;

D. "Commissioner" means the Commissioner of Competition, appointed pursuant to section 7
of the Act, and authorized representatives of the Commissioner;

E. "L/M Descriptors" means the words "light" and "mild", and combinations and variants
thereof such as, but not limited to, "extra light," "ultra light," "extra mild" and "ultra mild"
as descriptors on cigarette packages or elsewhere;

F. "Parties" means the Commissioner and Bastos;

G. "Tobacco Products" means cigarettes, tobacco sticks and fine cut tobacco currently
distributed by Bastos;

Appendix "B"

Bastos Brand Names

In accordance with Clause 2.1 of this Agreement, the following Brand Names are covered by this
Agreement:

Cigarette Products
Smoking Light
Gipsy Light (made for Loblaws)
Selesta Light (made for Sobey's)

Appendix "C"

Consent Form

To: The Competition Tribunal

1. The Commissioner of Competition and Bastos du Canada Ltée./ Bastos of Canada Ltd.
("Bastos") consent to the filing of an Agreement dated June 8th, 2007, with the
Competition Tribunal for immediate registration as a consent agreement between the
Commissioner of Competition and Bastos pursuant to s. 74.12 of the Competition Act.

2. The name and address of the persons in respect of whom the consent agreement is made are:

Commissioner of Competition
50 Victoria Street
Gatineau, Quebec
KIA OC9

Bastos du Canada Ltée./
Bastos of Canada Ltd.
371 Saint-Marc St.
Louiseville, Quebec
J5V 2G2

Per:______________________
Sheridan Scott
Commissioner of Competition

Per:______________________
Gilbert Cantin
General Manager
Bastos du Canada Ltée./
Bastos of Canada Ltd.