GUMTECH INTERNATIONAL INC \UT\
SHAREHOLDERS' AGREEMENT
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>2
<FILENAME>0002.txt
<DESCRIPTION>SHAREHOLDERS' AGREEMENT
<TEXT>

                             SHAREHOLDERS' AGREEMENT

1.   PARTIES

     This agreement is entered into by

     1.1  Swedish Match AB, 111885 Stockholm, Sweden, reg. No. 556015-0756
          ("SM") and

     1.2  Gum Tech International, Inc., a Utah corporation, 246 East Watkins
          Street, Phoenix, AZ 85004, USA ("GT")

2.   PURPOSE

     The parties have agreed to cooperate for the purpose of developing,
     manufacturing, marketing and distributing non-tobacco nicotine products
     (the "Joint Venture Purpose").

3.   NEW COMPANY

     3.1  SM has caused to be incorporated a private limited company named Speed
          8323 Limited with corporate registration number 4006562, to be named
          by the parties (the "Venture Company"). The Venture Company is
          incorporated under the laws of England with its Memorandum of
          Association and Articles of Association substantially in the form
          attached hereto as EXHIBIT 1.

     3.2  The purpose of the Venture Company shall be to engage directly or
          indirectly in business covered by the Joint Venture Purpose.

4.   MANAGEMENT

     4.1  BOARD OF DIRECTORS

          4.1.1 The board of directors of the Venture Company (the "Board of
                Directors") shall be responsible for resolving significant
                corporate matters. It shall meet at lest quarterly.

          4.1.2 The Board of Directors will have four members. Two members shall
                be designated by SM, of which one will act as chairman. Two
                members shall be designated by GT. Costs attributable to the
                work of the Board of Directors shall be borne by the parties,
                save as otherwise provided. each party shall bear the costs of
                the Directors appointed by such party.

         4.1.3 A quorum of the Board of Directors  shall be constituted  when at
               least half of the members and at least one member  designated  by
               each of SM and GT are present.
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         4.1.4 The Board shall be responsible for the overall  management of the
               Venture Company and the determination of all matters of policy.

         4.1.5 Except as provided in CLAUSE 4.1.6 below,  the Board of Directors
               shall  adopt  resolutions  by  simple  majority.  In  case  of  a
               deadlock, the chairman shall have the deciding vote.

         4.1.6 Resolutions  of the Board of Directors  regarding  the  following
               events  ("Supermajority  Events") must be supported by a majority
               vote,  which must include at least one member  designated by each
               of SM and GT.
               (a)  Issuance of new equity by the Venture Company;
               (b)  Sale  of all or  substantially  all  of  the  assets  of the
                    Venture Company;
               (c)  Dissolution or liquidation of the Venture Company;
               (d)  Engaging  in  activities  not  covered by the Joint  Venture
                    Purpose;
               (e)  Admission of a third party to the Venture Company;
               (f)  Merger of the Venture Company with or into another company;
               (g)  Sale of a controlling interest in the Venture Company; or
               (h)  Any  event  that  would  change  the  powers of the Board of
                    Directors as provided in this CLAUSE 4.1.

     4.2  EXECUTIVE MANAGEMENT

         4.2.1 The parties  undertake  to ensure that the Venture  Company  will
               have dedicated executive management. The registered office of the
               Venture  Company  will be located at the  premises  of SM at High
               Wycombe, England until the Board of Directors decides otherwise.

         4.2.2 The chief  executive  officer  reports to the Board of Directors.
               The parties have agreed that Johan Wallin will initially serve as
               CEO. The duty of the CEO shall include day to day  management and
               decisions   specifically   delegated  to  him  by  the  Board  of
               Directors.

         4.2.3 Without  authorization  of the Board of Directors,  the executive
               management may not:
               (a)  Sell,  transfer  or assign all or  substantially  all of the
                    property or assets of the Venture Company;
               (b)  Make any loans or advances;
               (c)  Borrow any sums of money;
               (d)  Assume  or  guarantee  the  payment  of any  debt  or  other
                    obligation of any person, firm or business entity;
               (e)  Make any unbudgeted capital expenditure;
               (f)  Make any unbudgeted commitment for funds;
               (g)  Make any  recommendation to the shareholders with respect to
                    distributions of capital or profits;
               (h)  Consolidate  with or merge  into any  other  corporation  or
                    business entity;
               (i)  Issue any new equity in the Venture Company;
               (j)  Acquire shares or other securities or real property from any
                    third party;
               (k)  Take any action on behalf of the Venture Company outside the
                    Joint Venture Purpose;
               (l)  Adopt annual budgets or similar plans; and
               (m)  Make any other  decision or take any other action similar to
                    the above.

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     4.3  KEY PERSONNEL

         4.3.1 GT undertakes to make the services of Gary Kehoe available to
               the Venture Company on a part time basis throughout the existence
               of the joint venture if possible and in no event less than five
               years. Gary Kehoe shall devote sufficient working hours on an as
               needed basis to the Venture Company, for which GT shall receive a
               monthly compensation from the Venture Company of $6000 as long as
               Gary Kehoe is employed by GT and $8000 if he is no longer
               employed by GT. This compensation shall cover all work to be
               carried out by Gary Kehoe, including without limitation work with
               R&D and governmental approvals and in the Board of Directors.

         4.3.2 Except in the case of Gary Kehoe's death or disability, if GT
               fails to fulfil its undertakings under CLAUSE 4.3.1 it shall
               constitute a material breach of this agreement.

5.   CAPITAL AND OWNERSHIP

     5.1  SHARE CAPITAL

         5.1.1 The share capital of the Venture Company shall be GBP 2 thousand
               and shall consist of 2,000 shares, each having a par value of GBP
               1 and one vote. All shares shall rank equally in respect of
               dividends, liquidation distributions and in every other respect.

         5.1.2 If the parties decide to increase the share capital of the
               Venture Company they shall subscribe in proportion to their
               respective share-holdings. If a party fails to subscribe to any
               new shares within 30 banking days of the issuance decision, the
               other party may elect to subscribe to such shares in addition to
               its own portion of the new shares. Such subscription by the other
               party shall be made within 60 days of the issuance decision.

     5.2  SM'S CONTRIBUTION

         5.2.1 SM shall arrange for the contribution of the equivalent of GBP
               1,020 in cash in exchange for 1,020 shares. This amount shall be
               funded at the closing of the formation of the Venture Company
               (the "Closing").

         5.2.2 SM commits to arrange for additional cash contributions of up to
               a total of USD 10 million. This contribution shall be made as
               needed at the direction of the Board of Directors and is subject
               to this Agreement remaining in full force and effect between the
               original parties on the agreed payment date. If, in the Board of
               Directors, the issue of requesting additional contribution as
               provided for in this Section is raised, a resolution by the Board
               of Directors not to request additional contribution must be
               supported by Directors representing both parties.

         5.2.3 SM shall receive a debenture with a liquidation preference in
               the amount of its additional contribution committed under CLAUSE
               5.2.2. This debenture shall not carry interest and shall be
               payable only on liquidation of the Venture Company. The debenture
               shall rank senior to any other similar instrument and the share
               capital on any liquidation.

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     5.3  GT'S CONTRIBUTION

          GT shall in exchange for 980 shares, contribute research and
          development services (as set forth in Section 6.4.2 below); expertise
          and services regarding the manufacturing of nicotine gum (as set forth
          in Section 6.4.1); consulting services of Gary Kehoe (as set forth in
          Section 4.3.1 above); an agreement not to compete in the area of
          non-tobacco nicotine products (as set forth in Section 7 below); all
          Intellectual Property (as defined below) owned or controlled by Gary
          Kehoe, GT or any of its affiliates; be responsible for securing U.S.
          governmental approvals for the manufacture of the nicotine gum and
          assist the Venture Company to the best of its ability in getting
          approvals in the U.S. and in the rest of the world.

     5.4  REINVESTMENT OF PROFITS

          During the Restricted Period (as defined in Section 9.1 below) and for
          two years thereafter, all profits of the Venture Company shall be
          reinvested in the business of the Venture Company. After the
          expiration of this period, 50 percent of the realized profits shall be
          distributed to the shareholders unless the parties otherwise agree.

6.   CONDUCT OF THE BUSINESS

     6.1  INTELLECTUAL PROPERTY

         6.1.1 All intellectual property owned or controlled by Gary Kehoe, GT,
               SM or any of their affiliates on the date hereof, relating to all
               non-tobacco nicotine products (except chewing gum products
               containing leaf tobacco) and the development, manufacture and/or
               governmental approval thereof, shall be transferred to and shall
               vest in the Venture Company (the "Intellectual Property"),
               subject to restrictions valid under applicable law or assumed by
               contract before 1 January 2000.

         6.1.2 The Intellectual Property includes without limitation patents,
               trademarks, copyrights, designs, trade secrets and other
               know-how, such as formulations and technology, relating to all
               non-tobacco nicotine products which have been or are being
               developed at the time of the Closing. The Intellectual Property
               includes but is not limited to the property listed in EXHIBIT 2.

         6.1.3 Upon dissolution of the Venture Company, all Intellectual
               Property shall be transferred back to the company or person who
               owned it prior to the Closing.

         6.1.4 All intellectual property relating to products developed under
               the R&D Agreement (as defined below), including without
               limitation patents, trademarks, copyrights, designs, trade
               secrets and other know-how, such as formulations and technology,
               as well as other intellectual property developed by or for the
               Venture Company, shall be the property of the Venture Company.

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     6.2  MARKETING

         6.2.1 The Venture Company shall have its own organization for
               marketing and distribution of its products. SM undertakes to
               supply or assist in the supply of marketing and distribution
               personnel.

         6.2.2 The Venture Company shall directly or indirectly market and
               distribute its products wherever commercially and legally
               feasible in the entire world.

         6.2.3 Notwithstanding any provisions on restrictions of competition
               herein, the Venture Company shall be entitled to enter into
               distribution or agency agreements with SM and/or GT, provided the
               terms and conditions of such agreements are no more favorable to
               SM or GT than the terms and conditions of similar agreements with
               third parties.

     6.3  AGREEMENTS BETWEEN SM AND THE VENTURE COMPANY

         6.3.1 The Venture Company shall have the option to enter into services
               agreements with SM and/or its other subsidiaries regarding the
               provision of the ancillary services below, provided the terms and
               conditions of such agreements are no more favorable to SM than
               the terms and conditions of similar agreements with third
               parties. The conditions of such services agreement shall be
               agreed separately. The Venture Company shall have the right to
               terminate any such service agreement by giving six months notice
               in writing.

         6.3.2 The services to be provided may include:

               (a)  Finance administration, such as invoicing, payment of
                    invoices and payroll administration;
               (b)  Postal services;
               (c)  IT services, such as telephones, faxes, copiers, computers,
                    computer networks and Internet site;
               (d)  Rent of premises; and
               (e)  Other services agreed between the parties.

         6.3.3 The Venture Company shall be entitled to purchase services from
               other providers.

     6.4  AGREEMENTS BETWEEN GT AND THE VENTURE COMPANY

         6.4.1 GT or the relevant of its subsidiaries shall manufacture the
               relevant nicotine products pursuant to a contract manufacturing
               agreement, the "Manufacturing Agreement", substantially in the
               form attached as EXHIBIT 3 TO THIS AGREEMENT.

         6.4.2 GT or the relevant of its subsidiaries or other affiliates shall
               continue to develop new nicotine containing products pursuant to
               a research and development agreement, the "R&D Agreement",
               substantially in the form attached as EXHIBIT 4 TO THIS
               AGREEMENT.

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7.   COMPETITION

     Except as provided in this Agreement, the parties and their affiliates will
     be prohibited from directly or indirectly engaging in any business covered
     by the Joint Venture Purpose unless the parties agree otherwise.

8.   TERMS AND CONDITIONS

     8.1  This Agreement shall become effective immediately after having been
          duly executed by the parties and shall remain in force for as long as
          at least two parties still hold shares in the Venture Company. If all
          shares in the Venture Company are acquired by one party, this
          Agreement shall terminate. This Agreement shall also terminate upon
          the completion of liquidation of the Venture Company, including the
          distribution of all its assets.

     8.2  SM and GT agree to remain in the joint venture for a period of ten
          years from the effective date hereof, subject to the provisions of
          this Agreement.

     8.3  Each party shall have the right to terminate this Agreement with
          immediate effect and cause the Venture Company to enter into
          liquidation as provided for in CLAUSE 9.5 by written notice to the
          other party within 90 days of the occurrence of one of the following
          events:

          (a)  the Venture Company shall have failed to obtain required product
               licenses for the launch of its first product in at least one
               industrialized market having an aggregate population of ten (10)
               million or more within eighteen (18) months of the effective date
               of this Agreement; or

          (b)  in respect of its first product, the Venture Company shall have
               failed to achieve a share of three (3) percent of at least one
               geographical market for the calendar quarter ending as near as
               possible to 18 months after the date of launch. For the purposes
               hereof "market" shall mean the market for chewing gum containing
               purified nicotine irrespective of the positioning, price,
               packaging and sales channels of such products.

9.   TRANSFER OF SHARES; LIQUIDATION

     9.1  RESTRICTED PERIOD

          During the first three years following the effective date of this
          Agreement (the "Restricted Period") the parties undertake not to sell,
          assign, transfer or otherwise dispose, whether directly or indirectly,
          of any of their shares in the Venture Company.

     9.2  TRANSFERS DURING RESTRICTED PERIOD

         9.2.1 Notwithstanding CLAUSE 9.1, SM may immediately elect in writing
               to purchase GT's shares in the Venture Company if an Acceleration
               Event (as defined below) occurs. At the occurrence of an
               Acceleration Event, GT shall notify SM thereof. SM's right to
               purchase GT's shares shall be exercised within 30 days of the
               receipt of notice of an Acceleration Event or within 60 days of
               the occurrence of the Acceleration Event, which ever occurs

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               later. The price to be paid for GT's shares shall be their fair
               market value at the time of the relevant Acceleration Event.

         9.2.2 An Acceleration Event shall be deemed to have occurred

               (a)  if Gary Kehoe's services cease to be available to the
                    Venture Company during the Restricted Period on the
                    conditions set out in CLAUSE 4.3.1 above;

               (b)  upon a change of control of GT without the prior written
                    consent of SM (such consent not to be unreasonably
                    withheld). The control of GT shall be deemed to have changed
                    if an entity or person or a group of related entities or
                    persons, whether directly or indirectly, acquires de facto
                    control so as to secure that material decisions of GT are
                    not taken without the consent of the acquirer(s). without
                    limitation of the foregoing, the holding of shares in GT,
                    which in the aggregate carries with it more than 50 percent
                    of the total voting rights in the share capital of GT, shall
                    be deemed conclusively to give the holder control of GT for
                    purposes of this Clause.

         9.2.3 The right of SM pursuant to Clauses 9.2.1 and 9.2.2 above shall
               be in addition to such other remedies as may be available to SM.

         9.2.4 Notwithstanding the restrictions in CLAUSE 9.1, either party
               (the "Terminating Party") may immediately elect to purchase the
               other party's shares (the "Defaulting Party") in the Venture
               Company if any of the events below ("Terminating Events") occurs.
               The Terminating Party's right to purchase the Defaulting Party's
               shares shall be exercised within 30 days of the receipt of notice
               of a Terminating Event or within 60 days of the occurrence of the
               Terminating Event, whichever occurs later. The price to be paid
               for the Defaulting Party's shares shall be their fair market
               value at the date of the relevant Terminating Event.

               (a)  The Defaulting Party becomes insolvent, enters into
                    liquidation, makes arrangements with its creditors or if
                    preparations are being made for its winding up.

               (b)  The Defaulting Party fails to remedy a material breach
                    within 30 days after written notice is given to the
                    Defaulting Party by the Terminating Party, provided that the
                    notice specifies the particulars of the breach.

         9.2.5 At the occurrence of a material breach, the Terminating Party
               may, in addition to all other available remedies, be entitled to
               damages.

     9.3  TRANSFER TO THIRD PARTIES

         9.3.1 After the Restricted Period, if a shareholder is prepared to
               sell any of its shares in the Venture Company and receives a bona
               fide purchase offer from a third party, the seller shall offer to
               sell such shares to the other shareholder (the "Offer") on the
               terms and conditions of the bona fide offer or, if not a cash
               offer, its nearest equivalent in cash. If an offer from a third
               party does not contain all necessary terms and conditions of the
               proposed purchase, in particular price and payment conditions, it
               shall not be considered as a bona fide offer for the purposes of

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               this Clause and no transfer of such shares shall be permitted to
               a third party based on such offer.

         9.3.2 The Offer shall be in writing and shall contain a copy of the
               bona fide offer, together with all of its terms and conditions
               and reasonable proof that the third party is able to complete the
               purchase on the said terms and conditions. If the other
               shareholder has not accepted the Offer in writing within 60 days
               of receipt it shall be deemed to have rejected it.

         9.3.3 If the other shareholder rejects the Offer the seller shall be
               entitled to sell its shares to the third party, provided that the
               transfer is in accordance with the terms and conditions of the
               bona fide offer. If the transfer is not completed within a period
               of 90 days of the date the seller first received the bona fide
               offer, the bona fide offer shall be deemed to have lapsed. Any
               transfer or attempted transfer by the seller of any of its shares
               in the Venture Company thereafter shall be regarded as arising
               from a new offer, subject to all of the provisions of this CLAUSE
               9.3 as if no previous bona fide offer had occurred.

     9.4  BUY OUT

         9.4.1 After the Restricted Period, either party shall be entitled to
               invoke this CLAUSE 9.4 upon the occurrence of any of the
               following events ("Buy Out Events"):

               (a)  The Venture Company shall have incurred losses on an FBT
                    basis in respect of all accounting periods including the
                    first quarter after the expiration of the Restricted Period;
                    or

               (b)  The other party is prevented due to force majeure from
                    fulfilling its obligations under this Agreement for a
                    continuous period of more than three months.

         9.4.2 If the parties have not within 90 days of the occurrence of a
               Buy Out Event reached an agreement to continue the joint venture,
               a buy out period of 30 days will occur. During the buy out
               period, either party (the "Offeror") may offer the other party
               (the "Offeree") in writing to purchase all of the Offeror's
               shares in the Venture Company. Such offer shall contain all
               necessary terms and conditions of the proposed purchase, in
               particular the price per share and terms of payment. An offer to
               purchase less than all of the said interest of a party shall not
               be valid.

         9.4.3 If the Offeree has not rejected the offer in writing within 15
               days of receipt it shall be deemed to have accepted it. If the
               Offeree rejects the offer, it shall be deemed conclusively to
               have offered to sell its shares in the Venture Company to the
               Offeror upon the same terms and conditions as set forth in the
               first offer. The Offeror shall be required to purchase the
               Offeree's interest in the Venture Company from the Offeree in
               accordance with the terms and conditions of the first offer.

         9.4.4 When ten years have passed from the effective date hereof,
               CLAUSES 9.4.2 AND 9.4.3 shall apply correspondingly each year
               even if a Buy Out Event has not occurred, provided however that
               the buy our period shall be the month of November of each year.

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         9.4.5 Completion of a transfer under this CLAUSE 9.4 shall occur
               within 30 days of the Offeror's offer.

     9.5  LIQUIDATION

         9.5.1 If, after the expiration of the Restricted Period, a Buy Out
               Event occurs and no buy out as provided for in CLAUSE 9.4 is
               completed, either party may by written notice to the other party
               cause the Venture Company to be wound up and dissolved.

         9.5.2 The procedure of the winding up and dissolution shall follow
               applicable provisions of law, except that all Intellectual
               Property shall be transferred back to the company or person who
               owned it prior to the Closing.

     9.6  ACCESSION OF THIRD PARTY TO THIS AGREEMENT

          No transfer of shares in the Venture Company to a third party may be
          completed unless and until the seller has procured written evidence
          that the new shareholder in the Venture Company has agreed in writing
          to be bound by the terms of this Agreement in lieu of the seller.

     9.7  INVALIDITY OF TRANSFER

          Any purported transfer or disposition of the shares of the Venture
          Company by the parties hereto in violation of the terms of this CLAUSE
          9 shall be void and without effect.

     9.8  FAIR MARKET VALUE

          The fair market value under this CLAUSE 9 shall be the average of the
          fair market value determined by three fully qualified independent
          auditors. The parties shall appoint one each. The auditors thus
          appointed shall jointly appoint the third auditor. If one party fails
          to appoint an auditor within 10 days of being requested to do so by
          the other party, such fully qualified independent auditor shall be
          nominated by the Stockholm Chamber of Commerce. The determination of
          the auditors shall be made within 30 days of the last appointment and
          shall be final and binding on the parties.

10.  LIMITATION OF LIABILITY

     Notwithstanding anything to the contrary in this Agreement or otherwise, in
     no event shall either of the parties be liable in damages to the other
     party for breach or otherwise under this Agreement for more than USD 10
     million.

11.  CONFIDENTIALITY

     The parties acknowledge that they and their officers, employees and agents
     will have access to information regarding the Venture Company and the
     parties which is confidential. Neither of the parties will at any time use
     or disclose any such information or any information regarding this

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     Agreement without the prior consent of the other party. This does not apply
     to information which is previously known to the public.

12.  MISCELLANEOUS

     12.1 FORCE MAJEURE

          Neither party shall be considered in breach of this Agreement if its
          performance is prevented, delayed or made unreasonably onerous because
          of labour disputes or because of non-foreseeable and insurmountable
          circumstances beyond its reasonable control and without its fault or
          negligence.

     12.2 NOTICES

          12.2.1 All notices and other communications which are required or may
                 be given under this Agreement shall be in writing and shall be
                 deemed to have been received by the other party if delivered
                 personally or upon the 5th day following its mailing by
                 registered or certified mail. All notices hereunder shall be
                 addressed as follows or to such other address as either party
                 shall have specified by notice in writing to the other.

          12.2.2 Swedish Match AB, attention General Counsel, 11885 Stockholm,
                 Sweden

          12.2.3 Gum Tech International, Inc., attention General Counsel, 246 E.
                 Watkins Street, Phoenix, AZ 85004, USA

     12.3 DISCLAIMER OF AGENCY

          Neither party shall be deemed to represent the Venture Company or to
          have the authority to represent the Venture Company in any way
          whatsoever, except as specifically agreed in accordance with CLAUSE
          6.2 above or otherwise in writing by the Board of Directors.

     12.4 ENTIRE AGREEMENT AND AMENDMENTS

          This Agreement (with Exhibits hereto) constitutes the entire agreement
          between the parties with respect to the subject matter hereof and
          supersedes any other previous agreement, oral or written. The parties
          acknowledge that there are no implied terms, requirements,
          representations or warranties applicable to the parties except as
          expressly provided in this Agreement and its Exhibits. The provisions
          hereof may not be waived, modified or supplemented except by any
          instrument in writing signed by the parties.

     12.5 GOVERNING LAW AND DISPUTE RESOLUTION

          12.5.1 This Agreement and the rights and liabilities of the parties
                 shall be governed by and be construed in accordance with the
                 laws of Sweden.

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          12.5.2 Any dispute arising out of or in relation to this Agreement
                 shall, failing agreement between the parties, be finally
                 settled by arbitration in Stockholm in accordance with the
                 Rules of the Arbitration Institute of the Stockholm Chamber of
                 Commerce. The arbitral tribunal shall be composed of a sole
                 arbitrator. The arbitration language shall be English.

     12.6 WAIVER AND SEVERABILITY

          12.6.1 Except as waived in writing by a party, no action taken
                 pursuant to this Agreement or failure to pursue the enforcement
                 of any right pursuant to this Agreement shall be deemed to
                 constitute a waiver by the party in question of compliance with
                 any covenants or promises contained herein. The waiver by
                 either party of a breach of any provision of this Agreement
                 shall not operate or be construed as a waiver of any continuing
                 or subsequent breach.

          12.6.2 If for any reason any of the provisions of this Agreement is
                 invalid or unenforceable under any rule of law or executive
                 order, such provision shall be deemed reformed or deleted, as
                 the case may be, but only to the extent necessary to comply
                 with such rule or order, and the remaining parts of this
                 Agreement shall remain in full force, provided however that
                 this does not create an unreasonable lack of balance in the
                 rights and obligations of the parties.

     12.7 RESTRICTIONS ON THE SHARES

          12.7.1 The parties agree not to encumber, charge or permit any liens
                 to attach to their interest, whether legal or beneficial, in
                 any of their shares in the Venture Company.

          12.7.2 Whenever a provision of this Agreement refers to shares in the
                 Venture Company, this shall include all other financial
                 instruments constituting interest in the Venture Company, such
                 as call options and convertible securities, except where it is
                 obvious that this was not the intent of the parties at the
                 signing of the Agreement.

13.  EXPENSES

     13.1 The Venture Company agrees to assume liability for all costs and
          expenses incurred since December 18, 1999, in developing any
          non-tobacco based nicotine products on behalf of the Venture Company,
          including but not limited to any legal fees and other related costs
          incurred by SM or GT in connection with the formation of the Venture
          Company (but not attorneys' fees or other costs in relation to the
          negotiating and/or drafting of this Agreement). The Venture Company
          agrees to reimburse any costs and expenses incurred by GT and SM
          within a reasonable period after submission to the Venture Company of
          a written itemization of such costs and expenses.

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14.  AGREEMENT PARAMOUNT

     14.1 This Agreement shall take precedence as between the parties hereto
          over the Articles of Association of the Venture Company and any other
          document, agreement or understanding to the extent permitted by law.

     14.2 The parties ensure that all their acts, whether as shareholders or
          otherwise, harmonize with the provisions of this Agreement.

This Agreement has been signed in two copies of which the parties have taken one
each.

Place: ______________  Date: ________    Place: _____________  Date: ___________

SWEDISH MATCH AB                            GUM TECH INTERNATIONAL, INC.

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                                                                       EXHIBIT 1

                            ARTICLES OF INCORPORATION



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                                                                       EXHIBIT 2

INTELLECTUAL PROPERTY

LIST OF CONTENTS

1.   Installation/Operational Qualification Protocols (WLS Gabler Mixer, WLS
     Gabler Rolling Line, Pellegrini Coating Equipment, Euromec Sorting Machine
     and Uhlmann Packaging Machine)

2.   Installation/Operational Qualification Summary Reports (WLS Gabler Mixer,
     WLS Gabler Rolling Line, Pellegrini Coating Equipment, Euromec Sorting
     Machine and Uhlmann Packaging Machine)

3.   Equipment Standard Operating Procedures (WLS Gabler Mixer, WLS Gabler
     Rolling Line, Pellegrini Coating Equipment, Euromec Sorting Machine and
     Uhlmann Packaging Machine)

4.   Quality Control Standard Operating Procedures (Packaging Line
     Pre-production Release, Manufacturing Process Quality Control Audits,
     Packaging Batch Folder Review & Release of Product and Analysis of Blister
     Pack Seal Integrity)

5.   Draft Preventive Maintenance Procedures (WLS Gabler Mixer, WLS Gabler
     Rolling Line, Pellegrini Coating Equipment, Euromec Sorting Equipment and
     Uhlmann Packaging Machine)

6.   Process Qualification Protocol (2 mg Nicotine Gum)

7.   Experimental Manufacturing Orders (all critical processes)

8.   Manufacturing Records (all critical processes)

9.   Test Data (Cleaning Studies, Uniformity of Mixture, Stability, Bio
     equivalency Study)

10.  Development Date (experimental information)

                                       14
<PAGE>
                                                                       EXHIBIT 3

                      INTERNATIONAL MANUFACTURING AGREEMENT

PARTIES: J.V. Co., an English company ("CUSTOMER")
         Address: Sword House
                  Totteridge Road, High Wycombe
                  England

         GUM TECH INTERNATIONAL, INC., a Utah corporation ("GUM TECH")
         Address: 246 East Watkins Street
                  Phoenix, Arizona  85004

RECITALS:

     A. Gum Tech manufactures and packages specialty gums and other products for
others for their sale and distribution.

     B. Customer desires to have Gum Tech manufacture and may assign Gum Tech to
package certain specialty gum products upon the terms and conditions of this
Manufacturing Agreement (this "AGREEMENT") for sale by Customer.

AGREEMENTS:

         In consideration of the mutual promises contained herein, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

     1) DEFINITIONS. For purposes of this Agreement the following terms shall
have the following meanings:

         a) "PRODUCT" or "PRODUCTS" means nicotine delivery gums.

         b) "SPECIFICATIONS" means the specifications for the Products'
formulas, packaging and labeling as set forth on the attached EXHIBIT A. In the
event that complete specifications are not attached to this Agreement at the
time it is executed, Customer shall, with the prior written consent of Gum Tech,
which consent shall not be unreasonably withhold or delayed, decide upon the
Specifications. Gum Tech shall thereby give Customer the expert advice it may
reasonably require.

     2) MANUFACTURING AND PACKAGING.

         a) Gum Tech shall manufacture the Products of commercially acceptable
quality and in accordance with [Good Manufacturing Practices and] the
Specifications. Gum Tech may, with the prior written consent of Customer and
without limiting Gum Tech's obligations under this Agreement, subcontract the
manufacturing process to an affiliate or a third party. Gum Tech shall supply

                                       15
<PAGE>
raw materials for the Product in accordance with the standards prescribed by
Customer.

         b) Should Gum Tech have to acquire any tools and/or machinery to be
able to manufacture the Products then Gum Tech shall present to Customer a list
of the required equipment with a specification of the cost thereof. Customer
shall, after approval of the equipment and cost, pay for the equipment within 30
days after receipt of invoice. Such equipment shall become and remain the
property of Customer.

         c) Customer shall have the right to inspect the production of the
Products at Gum Tech's facilities during normal business hours together with
representatives of Gum Tech.

         d) Upon the request of Customer, Gum Tech shall package the Products in
compliance with the packaging and labeling instructions in the Specifications.
Gum Tech may, with the prior written consent of Customer and without limiting
Gum Tech's obligations under this Agreement, subcontract the packaging process
to an affiliate or a third party. Gum Tech shall supply packaging materials for
the Product printed with artwork provided by Customer. Gum Tech and Customer
shall jointly agree on the volumes of packaging material to be purchased and
stored by Gum Tech at any given time. Should Gum Tech become unable to use its
stock of packaging material due to Customer's changes of the packaging design or
discontinuance of any Products then Customer shall have the obligation to
repurchase Gum Tech's stock of packaging material at cost. Gum Tech shall be
responsible for checking the wet-proof to ensure that the packaging material is
within the parameters proscribed by Customer and that it matches the artwork
provided by Customer.

     3) EXCLUSIVITY. During the term of this Agreement, Customer shall not
itself manufacture, or engage any other person or entity to manufacture, the
Product, without Gum Tech's prior written consent, provided however that Gum
Tech can deliver the volumes which Customer shall order from time to time. Gum
Tech shall not at any time, whether during the term of this Agreement or after
it has been terminated, manufacture the Product for any other entity than
Customer.

     4) CHANGE IN SPECIFICATIONS. Customer may change the Specifications for a
Product with at least 90 days prior notice to Gum Tech, provided that Customer
may not change the Specifications so substantially that the Product no longer
falls within its general description. Gum Tech shall be entitled to compensation
for additional costs which are necessary in order for Gum Tech to be able to
meet the changes of the Specifications. Before the end of the 90 day period Gum
Tech shall inform Customer of such necessary additional costs incurred by Gum
Tech and substantiate such costs in writing, which costs shall then be included
in the Price.

     5) TERM AND TERMINATION.

         a) This Agreement shall enter into force when signed by both parties
and shall apply until 31 December 2003. Unless terminated at the end of the
initial period, it shall be renewed and remain effective until terminated
pursuant to the terms hereof.

                                       16
<PAGE>
         b) A party wishing to terminate this Agreement shall give the other
party at least 16 months written notice.

         c) Notwithstanding anything to the contrary herein, either party may
terminate this Agreement immediately: (i) If the other party becomes or may
under Swedish law be presumed to have become insolvent, or enters into
liquidation, makes arrangements with its creditors or makes preparations for
liquidation or arrangements with its creditors; or (ii) If the other party
commits a material breach hereof and does not remedy such breach within 15 days
of receipt of a notice from the terminating party, giving the details of the
breach.

         d) Notwithstanding anything to the contrary herein, Customer may
immediately terminate this Agreement:

              (i) At the change of control of Gum Tech; and

              (ii) In accordance with SECTION 6(D).

         e) At the termination of this Agreement, Gum Tech shall return to
Customer all printed materials of confidential nature concerning the Products
and shall cease (i) to manufacture the Products, save for the fulfillment of
Customer's pending orders, and (ii) to use any trademark related to the
Products.

     6) FORECAST; PURCHASE ORDERS; SHIPMENT

         a) FORECAST. Customer and Gum Tech shall jointly develop a written
forecast of the Products to be ordered by Customer and packaging material to be
acquired by Gum Tech, if any, during the up-coming 90 day period and whether and
to what extent such Products shall be packaged by Gum Tech. Customer and Gum
Tech shall jointly update the Forecast every thirty (30) days during the Term.

         b) ORDERS. Customer shall order the Products from Gum Tech in writing,
each order specifying the relevant Product, whether it shall be packaged,
quantity and delivery date. Any term in any purchase order inconsistent with
this Agreement shall prevail, unless Gum Tech expressly objects to the term in
writing within a week of the receipt of the order. For the purposes of this
Agreement, Gum Tech shall be deemed to have received an order two working days
after it was faxed to Gum Tech. Gum Tech may only reject an order if delivery is
made impossible due to force majeure, if Customer is in material breach of this
Agreement or if the requested quantity materially exceeds what was projected in
the Forecast. In the latter case, Gum Tech shall only be required to use all
reasonable efforts to complete the order by the delivery date specified in the
order.

         c) SHIPPING. Gum Tech shall deliver all ordered Products which are
based on previous forecasts, within 30 days of order, "FOB Phoenix, Arizona,
U.S.A." as defined in INCOTERMS 2000. However, Gum Tech shall administer that
the Products be delivered to the customs of Customer's choice. Customer shall
recognize the receipt of the delivery of the Products without undue delay after
Customer has inspected it.

                                       17
<PAGE>
         d) DELAYS. Gum Tech shall not be liable for delays in delivery and/or
shipment of the Product if such delay derives from causes beyond Gum Tech's
control to the extent that they were unforeseeable and insurmountable and
rendered Gum Tech unable to comply with its obligations hereunder. If, in such
an event, Gum Tech is unable to make delivery to Customer for three (3) months,
Customer shall have the option of canceling all orders, including the unshipped
portion of any such orders already received and accepted by Gum Tech, by giving
10 days notice in writing thereof.

     7) PRICES; PAYMENT.

         a) PRICE. Customer will pay Gum Tech for the Product at full cost, (the
"PRICE"). Customer shall be entitled to audit Gum Tech's books to establish such
costs ("OPEN BOOKS"). Gum Tech undertakes to use its best effort to minimize
costs and negotiate prices with suppliers. Customers tariffs, duties, taxes and
levies imposed on Customer or Gum Tech by any governmental body in the United
States shall be paid by Customer. Customer shall pay or give reimbursement for
any such tariffs, duties, taxes or levies imposed on gum Tech outside the United
States in connection with the Product to or by Customer, on condition that Gum
Tech gives Customer immediate written notice thereof.

         b) PRICE REVISION. Prices shall be revised at the end of each calendar
quarter to reflect increases or decreases in the costs mentioned in Section
7.a). should however any raw material cost increase or decrease by 25 percent or
more before the end of any such period, then the prices shall immediately be
adjusted accordingly. Revised Prices shall be effective as soon as Customer has
been given a reasonable time to carry out such audit as is provided for in
Section 7.a). Such increase shall apply to orders manufactured after the
effective date of the change.

         c) PAYMENT TERMS. Customer shall pay for Products ordered and received
under this Agreement within 30 days of receipt of invoice.

     8) GUM TECH'S REPRESENTATION AND WARRANTIES

         a) PERMITS AND REGULATORY APPROVALS. Gum Tech represents and warrants
that it has all the necessary permits and licenses for the manufacture of
Product. Customer represents and warrants that, at the launch of the Product, it
will have all the necessary regulatory approvals and registrations for the sale
and distribution of the Product.

         b) PRODUCT WARRANTY.

              (i) Gum Tech represents and warrants that it shall manufacture and
package the Product in compliance with the Specifications and all applicable
laws and that the Product will be free from defects in Materials utilized by Gum
Tech in manufacturing the Product.

                                       18
<PAGE>
              (ii) Customer shall give written notice to Gum Tech of a defect
claimed to be within the scope of this warranty without undue delay of
Customer's discovery of the defect. The Product involved must be returned to Gum
Tech at its manufacturing facility or other mutually agreeable location within
five (5) business days after Customer receives the Product from the customer or
other end-user, at Customer's expense. The Product must be properly preserved,
packaged and shipped to avoid damage or degradation in transit. Gum Tech shall
have the right to conduct tests and other investigation on the returned Product,
the results of which will be shared with Customer, in order to determine whether
it in fact suffers from a defect for which Gum Tech is responsible hereunder. In
the event that a defect is discovered that is covered by this warranty, Gum Tech
shall reimburse Customer for the cost of shipping the Product and shall replace
the Product with conforming Product. Gum Tech shall not be liable for any
consequential or incidental damages caused by any defect in the Product. In the
event that no defect is discovered for which Gum Tech is responsible hereunder,
Customer shall reimburse Gum Tech for the cost of testing the returned Product.

              (iii) Notwithstanding anything to the contrary herein, Gum Tech
shall hold Customer harmless from all direct costs (including reasonable
attorney's fees) which Customer may be held liable to pay as a result of claims
or suits arising out of any injuries to person and/or damage to property due to
defects of the Products resulting from Gum Tech's or its subcontractors; failure
to follow the Specifications, provided however that Gum Tech receives notice of
such claim or suit against Gum tech without undue delay. Gum Tech shall give
Customer such support in the defense as Customer may reasonably request.

     9. LIABILITY. Without prejudice to SECTION 9(C)(III),neither party shall be
liable to the other for any indirect or consequential loss or damage.

     10. PRODUCT STANDARDS AND COMPLIANCE WITH LAWS.

         a) REGISTRATION AND APPROVALS. Customer shall be responsible for
required registrations and/or approvals of the Product. In connection therewith,
Gum Tech shall give Customer any assistance which Customer may reasonably
request, including preparing relevant documents and execute approval
applications. All such registrations and/or approvals shall be issued in the
name of Customer. If any registrations and/or approvals must be issued in the
name of Gum Tech, Customer shall give Gum Tech notice thereof. Such
registrations and/or approvals shall, if possible, be assigned or transported to
Customer by Gum Tech as soon as possible. Customer shall pay for all
registration costs.

         b) EXPORT LICENSE. Gum Tech shall be responsible for obtaining export
licenses and any other permits as may be required in order to be allowed to
export the Products.

         c) REGULATORY REQUIREMENTS. Customer agrees to advise Gum Tech to the
extent necessary with respect to all health, safety, environmental and other
standards and other legal requirements applicable to the Product.

                                       19
<PAGE>
     11) INDEMNIFICATION. Customer shall indemnify and defend Gum Tech, and Gum
Tech shall indemnify Customer from costs (including reasonable attorneys' fees)
or losses suffered by the other party as a result of a claim or action by a
third party relating to a material breach of a warranty or agreement made by the
indemnifying party in this Agreement, provided that the party seeking
indemnification notifies the indemnifying party in writing promptly of such
claim or action.

     12) INSURANCE. Each party shall maintain, during the term of this
Agreement, on occurrence basis, sufficient general liability insurance
(including products liability and contractual liability).

     13) RECALLS. If any governmental authority having jurisdiction over the
subject matters of this Agreement requires Customer to recall any Product,
Customer shall immediately notify Gum Tech and review with Gum Tech the basis
for the recall.

     14) INTELLECTUAL PROPERTY.

         a) TRADEMARKS/TRADE NAMES. The trademarks used in marketing the Product
shall be Customer's property. To the extent necessary for the performance of
this Agreement, Customer hereby grants to Gum Tech the right to reproduce and
print on the Products those trademarks and/or trade names of Customer as are
designed by Customer. Neither party shall have any right, title, or interest in
or to an of the other party's trademarks or trade names.

         b) SPECIFICATIONS. At all times, Customer shall retain ownership of and
be assigned all right, title and interest to the Specifications. Any inventions,
formulas, or other improvements to the Specifications developed by Gum Tech
shall be deemed owned by and assigned to Customer.

     15) CONFIDENTIALITY.

         a) Either party undertakes not to disclose to any third party, without
the other party's written consent, any information relating to the other party's
business ("Confidential Information"), disclosed to it by the other party,
unless required by law. The term Confidential Information shall not cover
information which is generally available to the public, except by breach of this
Agreement, was known by the party to which it is disclosed prior to the
disclosure to it by the other party, or is lawfully disclosed by a third party
under no duty of confidentiality to the disclosing party. Neither party may
disclose that it has obtained information relating to the other party's business
under this Agreement, whether the information is Confidential or not.

         b) Each party undertakes not to use any Confidential Information of the
other party for any other purpose than the purpose of this Agreement without the
prior written consent of the other party.

         c) Each party shall use its best efforts to protect the Confidential
Information of the other party in such party's possession. Each party shall

                                       20
<PAGE>
instruct its employees and any person acting on such party's behalf to treat the
other party's Confidential Information as confidential.

         d) Customer owns all rights to the Product and shall at its sole
election be entitled to copy, replicate, imitate or reverse engineer the same.

         e) The obligations under this Section shall survive the expiration or
termination of this Agreement.

     16) MISCELLANEOUS.

         a) INDEPENDENT CONTRACTORS. This Agreement does not and shall not be
construed to constitute a partnership or agency relationship, and neither party
shall have the right to obligate or bind the other party except as specifically
set forth herein.

         b) COMPLETE AGREEMENT, AMENDMENTS, NON-WAIVER. This Agreement and the
Exhibit attached hereto contain the entire understanding of the parties and may
not be modified, altered or amended except in writing signed by both parties. In
particular, no failure or delay of either party to enforce an of its rights
under this Agreement shall be deemed a waiver by such party of any of its rights
hereunder.

         c) SEVERABILITY OF PROVISIONS. If any provision of this Agreement, or
its application to any person or circumstances, is invalid or unenforceable,
then the remainder of this Agreement or the application of such provision to
other persons or circumstances shall not be affected thereby.

         d) ATTORNEYS' FEES. In the event either party hereto is required to
bring any action to enforce any provision hereof, or to secure specific
performance hereof, or to collect damages of any kind for any breach of this
Agreement, the prevailing party shall be entitled to all court costs, all
expenses arising out of or incurred by reasons of the litigation and any
reasonable attorneys' fees expended or incurred in any such proceedings, and all
costs and expenses shall be included in the judgment.

         e) NOTICES. All notices provided for by this Agreement shall be given
in writing, postage or transmission costs prepaid, and shall be addressed to the
intended recipient at the address first set forth above, or such other address
as such party may from time to time designate in writing. All notices shall be
deemed received by the intended recipient on: (1) the fifth business day after
the date placed in the mail, as certified mail, return receipt requested and
postage paid thereon; and (ii) the day that such notice is sent by fax to the
intended recipient at such fax numbers as the parties shall notify each other.

         f) GOVERNING LAW. This Agreement and each purchase order shall be
exclusively governed by the laws of Sweden, without giving effect to the choice
of law principals thereof. All disputes arising out of or in connection with
this Agreement shall be exclusively settled by arbitration in the English
language in accordance with the Rules of the International Chamber of Commerce.
The arbitral tribunal shall be composed of three arbitrators and the place of

                                       21
<PAGE>
arbitration shall be (i) Stockholm. Sweden, if Gum Tech should initiate the
proceedings or (ii) New York, N.Y., USA, if Customer should initiate the
proceedings.

         g) ASSIGNMENT. No party may assign either this Agreement or any of its
rights, interests, or obligations hereunder without the prior written approval
of the other party. Notwithstanding the foregoing, Customer shall have the right
to assign this Agreement, including all rights and obligations hereunder, to a
company directly or indirectly wholly owned by Customer.

This Agreement has been signed in two copies of which the parties have taken one
each.

GUM TECH INTERNATIONAL, INC.                J.V. Co.

By:                                         By:
    -------------------------------             --------------------------------

Name:                                       Name:
    -------------------------------             --------------------------------

                                       22
<PAGE>
                                                                       EXHIBIT A

                                 SPECIFICATIONS



                                       23
<PAGE>
                                                                       EXHIBIT 4

                       RESEARCH AND DEVELOPMENT AGREEMENT

This RESEARCH AND DEVELOPMENT AGREEMENT (hereinafter referred to as the
"Agreement") is made as of this ____ day of June, 2000 by and between GUMTECH
INTERNATIONAL, INC., a Utah corporation having a principal place of business at
246 E. Watkins Street, Phoenix, AZ 85004 (hereinafter "Gumtech") and "JOINT
VENTURE CO.", an English corporation having a principal place of business at
High Wycombe, England (hereinafter "Joint Venture Co.").

BACKGROUND

Gumtech is engaged in the business of research, design, formulation,
development, testing, marketing and sale of specialty gums, and has the
facilities, personnel, equipment and expertise for developing, manufacturing and
gaining regulatory approval for specialty gums.

Joint Venture Co. desires to develop and market various nicotine products and
Joint Venture Co. desires Gumtech to assist in the research and development of
such products.

AGREEMENT

For good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereby agree as follows:

1.   DEFINITIONS

     1.1  "Confidential Information" means information that a party deems to be
          valuable and proprietary including, but not limited to, information
          encompassed in any and all designs, product descriptions, test data,
          reports, recommendations, plans, proposals, financial information and
          other documents of every description, including patent applications,
          formulations, source code, chemical compounds, technical, commercial,
          scientific and other proprietary data, trade secrets, processes,
          documents or other information including, without limitation,
          materials, specifications, schematics, marketing data, methods and
          strategy, agreements between a party hereto and a third party,
          licenses and license applications, customer lists, credit and
          financial information, and business plans and projections of a party,
          its affiliates or any o fits officers, directors, employees, agents
          and subcontractors, whether the information is furnished in
          electronic, oral or written form. Confidential Information also
          includes information of the type described above which, though not
          specifically disclosed to one party by the other party, is made
          available to a party through that party's inspection of the other
          party's facilities or products.

     1.2  "Effective Date" means December 21, 1999, the date on which a Letter
          of Intent was executed between the parties to this Agreement.

                                       24
<PAGE>
     1.3  "Intellectual Property Rights" means all rights of a person or entity
          in, to, or arising out of (a) any U.S., international or foreign
          patent or any application therefor and any and all reissues,
          divisions, continuations, renewals, extensions and
          continuations-in-part thereof; (b) formulations, inventions (whether
          patentable or not in any country), invention disclosures,
          improvements, trade names, trade secrets, proprietary information,
          know-how, technology and technical data; (c) copyrights, copyright
          registrations, mask works, mask work registrations, and applications
          therefor in the U.S. or any foreign country, and all other rights
          corresponding thereto throughout the world; and (d) any other
          proprietary rights in technology anywhere in the world.

2.   GUMTECH RESPONSIBILITIES

     2.1  SERVICES. Gumtech agrees to provide services to Joint Venture Co.
          within the framework of research and development projects covered by
          the areas identified in EXHIBIT A (hereinafter "Project" or
          "Projects"), subject to the terms and conditions of this Agreement.
          Each Project will be defined by Joint Venture Co. as to objective,
          scope and time frame after consultation with Gumtech. Joint Venture
          Co. shall have the right to modify or discontinue a Project at any
          time by giving 60 days prior notice in writing to Gumtech. The first
          such project has been on-going since the effective date.

     2.2  METHOD OF PERFORMING SERVICES. Gumtech agrees that any services
          provided under this Agreement will conform to development, testing,
          and quality assurance guidelines that reflect prudent industry
          practices. Gumtech and not Joint Venture Co. will have the right to
          determine the method, details, and means of performing the relevant
          services, subject always, however, to instructions from Joint Venture
          Co. as to the objective and scope of such services.

     2.3  TOOLS AND INSTRUMENTALITIES. Joint Venture Co. agrees to supply any
          additional tools and instrumentalities, at Joint Ventura Co.'s sole
          expense, reasonably requested by Gumtech required to perform the
          services under this Agreement.

     2.4  WARRANTY. Gumtech warrants that all services provided to Joint Venture
          Co. under this Agreement will be provided in a good and workmanlike
          manner.

3.   COMPENSATION

     3.1  COMPENSATION. Joint Venture Co. agrees to pay Gumtech the amounts set
          forth in EXHIBIT B. Gumtech shall submit itemized invoices to Joint
          Venture Co. on a monthly basis. Joint Venture Co. must pay the amounts
          reflected in such invoices within 30 days of receipt of such invoices.

     3.2  EXPENSES. Joint Venture Co. must reimburse Gumtech for all reasonable,
          direct out-of-pocket expenses incurred in connection with the services
          to be performed under this Agreement. Out of pocket expenses include,
          but are not limited to, laboratory prototyping, scale-up and

                                       25
<PAGE>
          production validation/qualifications, labor, equipment, raw materials
          and travel. All such out-of-pocket expenses must be reflected in the
          invoices submitted to Joint Venture Co. to be reimbursable.

     3.3  STATE AND FEDERAL TAXES. Gumtech is responsible for paying all
          required state and federal taxes and other charges of whatever kind
          and making contributions to all benefit programs for any of Gumtech's
          personnel used in providing services under this Agreement.
          Specifically, without limitation, Joint Venture Co. will not be
          required to:

          3.3.1 withhold FICA (Social Security) or federal or state income tax
                from compensation payments made to Gumtech personnel;

          3.3.2 make state or federal unemployment insurance contributions or
                disability insurance contributions on Gumtech's behalf; nor

          3.3.3 obtain worker's compensation insurance on behalf of Gumtech
                personnel.

4.   CONFIDENTIALITY

     4.1  During the term of this Agreement, and in furtherance of the purpose
          of this Agreement, each party is likely to disclose Confidential
          Information to the other.

     4.2  Each party agrees that all Confidential Information received from the
          other during this period will cease to be deemed Confidential
          Information if:

         4.2.1 a party's Confidential Information is generally available to the
               public through no fault of the receiving party and without breach
               of this Agreement;

         4.2.2 a party's Confidential Information is already in the possession
               of the other party, without restriction and prior to any
               disclosure under this Agreement;

         4.2.3 a party's Confidential Information is or has been lawfully
               disclosed to the other party by a third party without breaching
               an obligation of confidentiality upon that party; or

         4.2.4 the confidentiality of that information has been terminated or
               released in a written agreement, which is signed by an officer of
               the party being requested to release the Confidential
               Information, and which specifically refers to this Agreement.

     4.3  Each party agrees:

         4.3.1 not to make public or authorize any disclosure or publication of
               Confidential Information disclosed by one party to the other
               under this Agreement, except as expressly permitted in writing by
               the disclosing party;

         4.3.2 to take all reasonable and necessary steps to assure that any
               principal, officer, agent, employee, representative, consultant,
               or any other person affiliated in any manner with the receiving

                                       26
<PAGE>
               party, does not disclose, or make public, or authorize any
               disclosure or publication, of any Confidential Information
               disclosed by one party to the other under this Agreement;

         4.3.3 not to use the Confidential Information disclosed by one party
               to the other under this Agreement in the development or operation
               of any business outside of this Agreement; and

         4.3.4 to advise the other party in writing of any and all
               misappropriations or misuse by any person of Confidential
               Information disclosed by one party to the other under this
               Agreement as soon as it becomes aware of such misappropriation or
               misuse.

     4.4  Subject to Section 6 of this Agreement, all documents or other media
          containing Confidential Information and all reproductions thereof
          (whether delivered by one party to the other or reproduced by a party
          itself) will at all times be and remain the sole and exclusive
          property of the party that discloses the documents or other media, and
          will be returned by the receiving party to an authorized
          representative of the other party immediately upon the latter party's
          written request for such return. Furthermore, no documents or other
          media containing any Confidential Information may be reproduced by a
          party without the other party's prior written authorization.

     4.5  The parties to this Agreement admit for all purposes that any
          violation or threatened violation of this Section 4 by one party will
          constitute an irreparable injury to the other party for which monetary
          damages provide no adequate remedy, and agree that, in addition to all
          other rights provided by law to which a party is entitled, that party
          will have the right to have an injunction or equivalent remedy issued
          against the other party to prevent the other party form violations or
          further violations of this Agreement.

     4.6  Each of the parties to this Agreement agrees, on behalf of itself and
          its principals, officers, agents, employees, representatives,
          consultants, or any other affiliated persons, to maintain the
          confidentiality of and not to disclose any Confidential Information
          disclosed by the other in connection with this Agreement, any other
          agreement, or any license or sublicense.

     4.7  Notwithstanding anything to the contrary in this Agreement, if
          required by law or order of any government authority, any party may
          disclose Confidential Information to the appropriate authorities to
          the extent required by such order, provided that such party shall have
          first notified the other party of such order and such other party
          shall have had a reasonable opportunity to oppose such disclosure or
          obtain a protective order (including but not limited to
          "confidentiality treatment" pursuant to U.S. securities laws)
          reasonably satisfactory to such other party to maintain the
          confidentiality of such Confidential Information.

                                       27
<PAGE>
5.   TERM AND TERMINATION OF AGREEMENT

     5.1  TERM. This Agreement is effective as of the Effective Date and will
          continue in effect until termination of the Joint Venture Agreement
          unless (a) terminated earlier as set forth below, (b) extended upon
          the mutual agreement of the parties, or (c) Gumtech's services as
          described in Exhibit A are completed.

     5.2  TERMINATION FOR DEFAULT. If any party breaches this Agreement, the
          non-breaching party may then, or at any time thereafter during which
          the breach continues, submit its intention to terminate this Agreement
          by giving the breaching party at least 30 days written notice of
          termination. Termination will be effective 30 days after delivery of
          the notice unless the breach is corrected prior to the expiration of
          the 30 day period. For purposes of this paragraph, a material breach
          of this Agreement includes, but is not limited to, negligence, fraud,
          misrepresentation, or willful misconduct by a party in connection with
          this Agreement.

     5.3  TERMINATION FOR FAILURE TO MAKE AGREED-UPON PAYMENTS. If Joint Venture
          Co. fails to pay Gumtech the compensation set forth in Section 3 of
          this Agreement on a timely basis, Gumtech will provide notice of that
          default to Joint Venture Co. Gumtech may terminate this Agreement if
          the failure to pay is not remedied by Joint Venture Co. prior to
          expiration of the 14 business day period following the date of receipt
          of the notice.

6.   INTELLECTUAL PROPERTY RIGHTS AND OWNERSHIP

     6.1  WORK PRODUCT. Joint Venture Co. acknowledges that Gumtech may be
          expected to participate in conceiving or reducing to practice
          formulations, ideas, inventions, discoveries, improvements or
          processes, whether or not patentable, and which may be directly or
          indirectly useful and/or relate to the use of any and all components,
          services, or products related to Joint Venture Co.'s business
          (hereinafter collectively referred to as the "Inventions"). Gumtech
          agrees to transfer exclusively to Joint Venture Co. all rights of
          ownership to any and all Inventions created in connection with this
          Agreement.

     6.2  Except as provided in Section 6.1, any and all work product,
          inventions, and Confidential Information produced solely by either
          party will be and remain the sole property of the conceiving party,
          and any technology that is jointly developed by Joint Venture Co. and
          Gumtech outside the scope of the services described in Exhibit A will
          be jointly owned by the parties unless the parties otherwise agree.

     6.3  Each party will promptly notify the other of any formulations,
          Inventions, materials, and Intellectual Property that arises out of
          the services performed under this Agreement. Upon request of the other
          party, each party agrees to use its best efforts to cause any of its
          personnel who performed services under this Agreement to assist in the
          filing and prosecution of patents and copyright registration and mask
          works registration applications in any and all countries of the world,
          including but not limited to, the review and execution of documents
          required or desired the performance of any other reasonable acts that,
          in the opinion of the parties, are necessary or desirable to perfect,
          protect or enforce the parties' rights.

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<PAGE>
     6.4  Joint Venture Co. and Gumtech represent and warrant to each other that
          neither will knowingly use any patented technology or proprietary
          rights owned by a third party in conjunction with this Agreement
          without appropriate authorization.

7.   RELATIONSHIP OF THE PARTIES

     7.1  For purposes of this Agreement, the relationship of Gumtech to Joint
          Venture Co. is that of an independent contractor. Neither Joint
          Venture Co. nor Gumtech will have any right or authority to bind the
          other party or to assume or create any obligation or responsibility,
          express or implied, on behalf of the other party, or in the other
          party's name, except as may be expressly permitted under this
          Agreement or subsequently agreed to in writing by the parties. Nothing
          in this Agreement is intended to create the relationship of employer
          and employee, master and servant, respondent superior, principal and
          agent between Joint Venture Co. and Gumtech, or any other legal or
          equitable relationship rendering Joint Venture Co. or Gumtech liable
          for the other party's acts or omissions.

8.   INDEMNITIES

     8.1  Each party warrants that, to the best of its knowledge, no formula,
          technique or data provided pursuant to this Agreement infringes any
          patent, copyright, trade secret, mask work, trademarks or other legal
          or equitable rights of any third party.

     8.2  Each party agrees to indemnify, defend and hold harmless the other
          party from and against any and all claims, demands, damages, expenses
          (including reasonable attorneys' fees and costs) or assertions, of any
          kind or nature whatsoever, of liability by any and all third parties,
          arising out of or in any way connected with (a) any alleged act,
          failure to act, omission, or misrepresentation by the indemnifying
          party, its officers, directors, employees or agents; or (b) any breach
          by the indemnifying party of any of the terms, conditions, warranties
          or representations contained in this Agreement or in any other
          instrument executed by the indemnifying party in connection with this
          Agreement.

9.   ASSIGNMENT

     9.1  Neither party may assign or transfer any rights, duties or obligations
          under this Agreement without the prior written consent of the other
          party, which may not be unreasonably withheld. Any purported attempt
          to assign or transfer any rights, duties or obligations without
          consent will be null and void.

10.  REPRESENTATIONS, WARRANTIES AND COVENANTS

     10.1 Joint Venture Co. and Gumtech respectively represent that they have
          taken all necessary corporate action to authorize the execution and
          consummation of this Agreement and to render the Agreement a legal,
          valid and binding obligation enforceable in accordance with its terms
          and conditions, and that the execution, delivery and performance of
          this Agreement will not result in any breach of its charter documents
          or of any instrument or license, or any violation of any law,
          regulation, order or decree, to which it is a party or by which it or

                                       29
<PAGE>
          its property is bound. Upon request, Joint Venture Co. and Gumtech
          will furnish each other with satisfactory evidence to establish the
          accuracy of the representations set forth above. Each party agrees to
          execute any other documents or agreements that might be reasonably
          necessary or desirable for the effective implementation and
          administration of this Agreement.

     10.2 Joint Venture Co. and Gumtech respectively represent that there are no
          actions, suits or proceedings existing, pending or, to the best
          knowledge of either party, threatened against, or affecting either
          party before any court, arbitrator, or governmental or administrative
          body or agency that affect the validity or enforceability of this
          Agreement or that affect the implementation or administration of this
          Agreement, which might result in any material adverse effect on the
          ability of either to perform its obligations hereunder.

     11.  GENERAL PROVISIONS

     11.1 COMPLIANCE WITH LAWS. Both parties and their representatives agree to
          comply with all applicable federal, state, and local laws, rules and
          regulations.

     11.2 NO WAIVER; REMEDIES. Any waiver of any provision of this Agreement
          will be effective only in the specific instance and for the specific
          purpose for which given. No failure on the part of either party to
          exercise, and no delay in exercising, any right, power, or privilege
          under this Agreement will operate as a waiver thereof; nor will any
          single or partial exercise of any right under this Agreement preclude
          any other or further exercise of that right or the exercise of any
          other right. The remedies provided in this Agreement are cumulative
          and not exclusive of any remedies provided by law.

     11.3 SEVERABILITY. If at any time subsequent to the Effective Date, any
          provision of this Agreement or any amendment to this Agreement is held
          by any court of competent jurisdiction to be illegal, void or
          unenforceable, that provision will be of no force and effect, but the
          illegality or unenforceability of that provision will have no effect
          upon and will not impair the validity or enforceability of any other
          provision of this Agreement or any amendment to this Agreement.

     11.4 NOTICES. Any required notices must be given in writing and must be
          delivered by personal service, by telecopier, telex, cable or by
          certified mail to the appropriate party at the address of that party
          set forth in this Agreement, or to such other address as either party
          may substitute by written notice to the other. A notice that is
          delivered in person will be effective upon the date of delivery. A
          notice that is dispatched by telecopier, telex, or cable will be
          effective 48 hours after confirmed dispatch. A notice that is mailed,
          postage prepaid, will be effective 5 days from the date it is
          deposited in the U.S. mail.

     11.5 DISPUTE RESOLUTION. Disputes arising out of or in connection with this
          Agreement shall be finally settled by arbitration in accordance with
          the rules of the Arbitration Institute of the Stockholm Chamber of
          Commerce. The proceedings shall be held in Stockholm and shall be
          conducted in English.

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<PAGE>
     11.6 GOVERNING LAW. This Agreement will be interpreted, construed and
          enforced in accordance with the laws of Sweden without reference to
          its conflict of laws provisions.

     11.7 MODIFICATION. This Agreement may be modified only by a written
          instrument signed by the parties.

     11.8 TRANSFER. This Agreement may not be assigned or transferred by either
          party, without prior approval of the other party, which may not be
          unreasonably withheld.

     11.9. INAPPLICABILITY. The parties agree that the United Nations Convention
          on Contracts for the International Sale of Goods shall not apply to
          this Agreement.

    11.10 PARAGRAPH HEADINGS. Paragraph headings are for reference only and
          will not be construed as substantive parts of this Agreement.

    11.11 INURE, COMPLETELY INTEGRATED AGREEMENT, CONSTRUCTION. This Agreement,
          together will all exhibits, represents a completely integrated and
          exclusive agreement and understanding between the parties and, as of
          its Effective Date, supersedes all prior and contemporaneous
          agreements, negotiations, representations and proposals, written or
          oral. Neither party will be bound by or liable to the other party for
          any representation, promise or inducement embodied in this Agreement
          made by any agent or person in the other's employ. In the event of any
          discrepancy, ambiguity or inconsistency between this Agreement and any
          form, correspondence or communication used by either party in
          connection herewith, the terms of this Agreement will govern. This
          Agreement may not be varied, altered, amended or supplemented, nor may
          any of its provisions be waived, except by a writing duly executed by
          authorized representatives of both Joint Venture Co. and Gumtech. This
          Agreement will be binding upon and inure to the benefit of the
          parties' respective successors, permitted assigns, and legal
          representatives, as applicable.

    11.12 FORCE MAJEURE. Neither party will be responsible or liable to the
          other party in any manner for failure or delay in performing its
          obligations under this Agreement provided for under this Agreement,
          when such failure or delay is due to any cause beyond the reasonable
          control of the party concerned, including acts of God, governmental
          orders or restrictions, war, threat of war, war-like conditions,
          hostilities, sanctions, mobilization, blockade, embargo, detention,
          revolution, riot, strike or other labor dispute, accident, fire,
          flood, or an inability to obtain fuel, power, raw materials, labor, or
          transport, provided that upon cessation of such events such party
          shall thereupon promptly perform or complete the performance of its
          obligations hereunder.

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This Agreement has been signed in two copies of which the parties have taken one
each.

GUMTECH INTERNATIONAL, INC.                JOINT VENTURE CO.


By:                                        By:
    ---------------------------------          ---------------------------------

Title:                                     Title:
       ------------------------------             ------------------------------

Date:                                      Date:
      -------------------------------            -------------------------------

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                                                                       EXHIBIT A

DESCRIPTION OF THE SERVICES AND SCHEDULE

Services will include support research and development of products that deliver
nicotine from the laboratory stage through formula prototyping and plant scale
up, and necessary documentation, preparations and governing of the government
approval application process.

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                                                                       EXHIBIT B

COMPENSATION TERMS

Joint Venture Co. will pay Gumtech an amount each month equal to $55 per hour
for any laboratory professionals providing services under this Agreement and $35
per hour for each laboratory technician providing services under this Agreement.
Gumtech will provide a written estimate of the cost to provide the services
contemplated by this Agreement prior to commencing those services and will
provide to Joint Venture Co. on a monthly basis a statement of the costs
incurred for the prior month in providing services under this Agreement. Joint
Venture Co. agrees to pay the amounts due as provided by the monthly statements
within 30 days of the date of the statement.

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</TEXT>
</DOCUMENT>
