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Escrow Agreement JUS-TOB6 - California
| Escrow Agreement Form. This is a California form and can be used in Tobacco Litigation And Enforcement Office Of The Attorney General Statewide . |
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STATE OF CALIFORNIA DEPARTMENT OF JUSTICE ESCROW AGREEMENT JUS-TOB6 (2/04) Page 1 OF 13 ESCROW AGREEMENT This Escrow Agreement is made and entered into this (the "Company") and day of , 20__, by (the "Escrow Agent"). WITNESSETH: WHEREAS, a number of States have enacted Non-Participating Manufacturer Statutes ("NPM Statutes") that require Tobacco Product Manufacturers that have not entered into the Master Settlement Agreement to establish Qualified Escrow Funds, and WHEREAS, the Company is a Tobacco Product Manufacturer that has not entered into the Master Settlement Agreement and intends to comply with such NPM Statutes by establishing Qualified Escrow Funds with respect to states where the Company's tobacco products are sold. NOW THEREFORE, in consideration of the mutual promises contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the undersigned parties hereto agree as follows: SECTION 1. Appointment of Escrow Agent. The Company hereby appoints to serve as Escrow Agent under this Escrow Agreement on the terms and conditions set forth herein. The Escrow Agent warrants that it is a federally or state chartered financial institution organized and existing under the laws of the State of , having assets of at least one billion dollars ($1,000,000,000), and is not an Affiliate of any Tobacco Product Manufacturer as defined in the NPM Statute. By its execution hereof, the Escrow Agent hereby accepts such appointment and agrees to perform its duties and obligations set forth herein. SECTION 2. Definitions. (a) Capitalized terms used in this Escrow Agreement and not otherwise defined herein or in the Beneficiary State's NPM Statutes shall have the meaning given to such terms in the Master Settlement Agreement. American LegalNet, Inc. www.FormsWorkFlow.com STATE OF CALIFORNIA DEPARTMENT OF JUSTICE ESCROW AGREEMENT JUS-TOB6 (2/04) page 2 OF 13 (b) "Account" means an escrow account consisting of segregated sub-accounts for each Beneficiary State maintained by the Escrow Agent as a Qualified Escrow Fund in which the funds required to be placed in a Qualified Escrow Fund are deposited in compliance with this Escrow Agreement. (c) "Beneficiary State" means a State that is a party to the Master Settlement Agreement for whose benefit funds are being escrowed pursuant to this Escrow Agreement. For purposes of this Escrow Agreement, the initial Beneficiary States are those listed in Attachment "A" hereto which is hereby incorporated herein by reference, and those other States that the Company and the Escrow Agent may hereafter agree to include as Beneficiary States. Escrow Agent is authorized to include other Beneficiary States under this Agreement by written notice from the Company and is further authorized to revise Attachment "A" from time to time to reflect additions as instructed by the Company. (d) "Master Settlement Agreement" means the settlement agreement (and related documents) entered into on November 23, 1998 by numerous States and major United States Tobacco Product Manufacturers, a copy of which has been provided to the Escrow Agent by the Company. (e) "NPM Statutes" or "NPM Statute" are the laws enacted in each of the States that are parties to the Master Settlement Agreement and that require a Non-Participating Manufacturer to establish a Qualified Escrow Fund. The Company shall provide a copy of the NPM Statutes for each Beneficiary State under this Escrow Agreement to the Escrow Agent. (f) "Qualified Escrow Fund" means an escrow arrangement with a U.S. federal or U.S. state chartered financial institution having no affiliation with any Tobacco Product Manufacturer and having assets of at least one billion dollars ($1,000,000,000) where such arrangement requires that the financial institution hold the escrowed funds' principal for the benefit of Releasing Parties and prohibits the Tobacco Product Manufacturer placing the funds into escrow from using, accessing or directing the use of the funds' principal except as consistent with the applicable NPM Statute. American LegalNet, Inc. www.FormsWorkFlow.com STATE OF CALIFORNIA DEPARTMENT OF JUSTICE ESCROW AGREEMENT JUS-TOB6 (2/04) page 3 OF 13 SECTION 3. The Escrow Fund and Release of Funds Therefrom. (a) From time to time the Company shall tender to the Escrow Agent for deposit in the Account the funds which the Company is required to place into a Qualified Escrow Fund pursuant to the NPM Statutes of each Beneficiary State. (b) All funds received by the Escrow Agent pursuant to the terms of this Escrow Agreement shall be held, invested and disbursed in accordance with the terms and conditions of this Escrow Agreement and the NPM Statutes. (c) For each Beneficiary State in which the Company's tobacco products were sold after enactment of that State's NPM Statute, by April 15 of the year following each year of such enactment, the Company shall deliver to the Escrow Agent for deposit pursuant to this section the following amounts as such amounts are adjusted for inflation pursuant to Exhibit C of the Master Settlement Agreement) --1999: $.0094241 per Unit Sold; 2000: $.0104712 per Unit Sold; for each of 2001 and 2002: $.0136125 per Unit Sold; for each of 2003 through 2006: $.0167539 per Unit Sold; for each of 2007 and each year thereafter: $.0188482 per Unit Sold. For the year in which the NPM Statute was first enacted, the amount due by April 15 of the following year shall be based only on those Units Sold on and after the statute's effective date. (d) Segregated Multi-State Subaccounts: (i) The Company shall designate to the Escrow Agent the amount to be placed in the Account and each sub-account for each Beneficiary State based on the Units Sold therein in accordance with the applicable Beneficiary State's NPM Statute. All funds shall be held by the Escrow Agent in sub-accounts separate and apart from all other funds and sub-accounts of each Beneficiary State, the Escrow Agent, and the Company. The Escrow Agent shall allocate all funds as designated by the Company and received by the Escrow Agent among the following Beneficiary States, each with its own separate, segregated sub-account and own sub-account number, as follows: Sub-account number 1 (Name of Beneficiary State) Sub-account number 2 (Name of Beneficiary State) Sub-account number 3 (Name of Beneficiary State) Sub-account number 4 (Name of Beneficiary State) Sub-account number 5 (Name of Beneficiary St
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