Escrow Agreement

MONTANA ESCROW AGREEMENT Page 1 of 20 (Rev. 3/5/2018) ESCROW AGREEMENT This Escrow Agreement is made and entered into this day of , 20, by (the 223Company224) and (the 223Escrow Agent224) and supersedes prior escrow agreements, if any, under which the Company and the Escrow Agent are currently operating regarding the Beneficiary States listed in Attachment A and those other MSA States that the Company and the Escrow Agent subsequently agree to include as Beneficiary States under this agreement. WITNESSETH: WHEREAS, all MSA States have enacted Non-Participating Manufacturer Statutes (223NPM Statute224) that require Tobacco Product Manufacturers that have not entered into the Master Settlement Agreement (referred to as 223Non-Participating Tobacco Manufacturers224 or 223NPMs224) to establish a Qualified Escrow Fund, and WHEREAS, the Company is an NPM and intends to comply with the NPM Statute by establishing a Qualified Escrow Fund with respect to MSA States in which the Company222s Cigarettes 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 $1 Billion ($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. American LegalNet, Inc. www.FormsWorkFlow.com MONTANA ESCROW AGREEMENT Page 2 of 20 (Rev. 3/5/2018) SECTION 2. Definitions. A. Capitalized terms used in this Escrow Agreement and not otherwise defined herein or in the Beneficiary State222s NPM Statute shall have the meaning given to such terms in the Master Settlement Agreement. B. 223Beneficiary State224 means a MSA State for whose benefit funds are being escrowed pursuant to the NPM Statute. 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 MSA 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 Escrow Agreement by written notice from the Company and is further authorized to revise Attachment A from time to time to reflect additional Beneficiary States as instructed by the Company. C. 223Cost Basis224 means (i) for cash, the dollar amount deposited, and (ii) for the other Permitted Investments, the amount paid, excluding accrued interest, by the holder to buy the United States Treasury Securities or the Money Market Fund shares. These amounts may also be known as the tax basis, book value, or tax cost basis. D. 223Face Value224 means (i) for cash, the dollar amount deposited, (ii) for Money Market Funds, the number of shares held multiplied by the stated value per share, and (iii) for United States Treasury Securities, the amount of principal owed to the holder upon maturity of the security. These amounts may also be known as the par value or principal value. E. 223Master Settlement Agreement224 or 223MSA224 means the settlement agreement entered into in 1998 by the four largest United States222 tobacco manufacturing companies (the 223Original Participating Manufacturers224 or 223OPMs224) and 46 states of the United States (excluding Texas, Florida, Minnesota, and Mississippi), the District of Columbia, Guam, Northern Mariana Islands, the U.S. Virgin Islands, Puerto Rico, and American Samoa to settle certain claims against the OPMs arising out of the sale, advertising, and consumption of certain tobacco products, American LegalNet, Inc. www.FormsWorkFlow.com MONTANA ESCROW AGREEMENT Page 3 of 20 (Rev. 3/5/2018) including Cigarettes, a copy of which has been provided to the Escrow Agent by the Company and is available electronically at www.naag.org/assets/redesign/files/msa-tobacco/MSA.pdf. F. 223Money Market Fund224 means a money market mutual fund invested solely in United States Treasury Securities and/or cash and regulated under Rule 2a-7 of the Investment Company Act of 1940. G. 223MSA State224 means any one of the 46 states of the United States (excluding Texas, Florida, Minnesota, and Mississippi), the District of Columbia, Guam, Northern Mariana Islands, the U.S. Virgin Islands, Puerto Rico, and American Samoa, which jurisdictions settled under the MSA. H. 223NPM Statute224 means the law or laws, as amended, enacted in each MSA State that require a Non-Participating Manufacturer to establish a Qualified Escrow Fund. The Company shall provide a copy of the NPM Statute for each Beneficiary State under this Escrow Agreement to the Escrow Agent. I. 223Permitted Investments224 means the ways in which QEF Principal may be invested, which shall be limited to the following: (a) United States Treasury Securities, (b) cash, or (c) Money Market Fund. J. 223Qualified Escrow Fund224 means an escrow arrangement with a federally or state chartered financial institution having no affiliation with any Tobacco Product Manufacturer and having assets of at least one billion ($1,000,000,000) where such arrangement requires that such financial institution hold the escrowed funds222 principal for the benefit of Releasing Parties (as defined in the Master Settlement Agreement) and prohibits the Tobacco Product Manufacturer placing the funds into escrow from using, accessing or directing the use of the funds222 principal except as consistent with the applicable NPM Statute and this Escrow Agreement. K. 223Qualified Escrow Fund Account224 or 223QEF Account224 means an escrow account consisting of segregated sub-accounts for each Beneficiary State established by the Company and maintained by the Escrow Agent into which the deposits required under the applicable NPM Statute are made. American LegalNet, Inc. www.FormsWorkFlow.com MONTANA ESCROW AGREEMENT Page 4 of 20 (Rev. 3/5/2018) L. 223Qualified Escrow Fund Principal224 or 223QEF Principal224 means the funds required by the applicable NPM Statute to be deposited and held for the benefit of one or more Beneficiary States in the QEF Account. M. 223Qualified Escrow Fund Accumulated Principal224 or 223QEF Accumulated Principal224 means the aggregate amount of QEF Principal required to be held in each Beneficiary State222s QEF Sub-Account. N. 223Qualified Escrow Fund Sub-Account224 or 223QEF Sub-Account224 means the sub-division of the QEF Account that holds only the QEF Principal deposited for the benefit of a single Beneficiary State. O. 223Sales Year224 means the calendar year during which the Company sold Cigarettes in a Beneficiary State requiring the deposit of QEF Principal. P. 223United States Treasury Securities224 means bills, notes, and bonds issued by the United States Treasury (i) maturing no more than (20) twenty years from the date of purchase by the Company, (ii) that are direct obligations (other than an obligation subject to variation in principal repayment) of the United States government, and (iii) backed by the full faith and credit of the United States of America; provided however, that United States Treasury Securities (iv) shall not include state and local government series securities of the United States Treasury. SECTION 3. The Qualified Escrow Fund Account and Release of Funds Therefrom. A. From time to time the Company shall tender to the Escrow Agent for deposit in the QEF Account the funds that the Company is required to place into a Qualified Escrow Fund pursuant to the NPM Statute of each Beneficiary State. The Company may appoint an authorized representative or agent, acting on its behalf, to give directions permitted of the Company under this Escrow Agreement, provided that