Escrow Agreement

ESCROW AGREEMENT This Escrow Agreement is made and entered into this _______ day of _______________, 20___, by ___________________________________________________ (the "Company") and _____________________________________________________ (the "Escrow Agent") 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 ("NPM Statute") that require Tobacco Product Manufacturers that have not entered into the Master Settlement Agreement (referred to as "Non-Participating Tobacco Manufacturers" or "NPMs") 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 Company's 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. IDAHO MODEL ESCROW AGREEMENT Page 1 of 20 (revised 06/20/2016) American LegalNet, Inc. www.FormsWorkFlow.com SECTION 2. Definitions. A. Capitalized terms used in this Escrow Agreement and not otherwise defined herein or in the Beneficiary State's NPM Statute shall have the meaning given to such terms in the Master Settlement Agreement. B. "Beneficiary State" 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. "Cost Basis" 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. "Face Value" 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. "Master Settlement Agreement" or "MSA" means the settlement agreement entered into in 1998 by the four largest United States' tobacco manufacturing companies (the "Original Participating Manufacturers" or "OPMs") 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, including Cigarettes, a copy of which has been provided to the Escrow Agent by the IDAHO MODEL ESCROW AGREEMENT Page 2 of 20 (revised 06/20/2016) American LegalNet, Inc. www.FormsWorkFlow.com Company and is available electronically at www.naag.org/assets/redesign/files/msa- tobacco/MSA.pdf. F. "Money Market Fund" 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. "MSA State" 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. "NPM Statute" 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. "Permitted Investments" 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. "Qualified Escrow Fund" 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 funds' 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 funds' principal except as consistent with the applicable NPM Statute and this Escrow Agreement. K. "Qualified Escrow Fund Account" or "QEF Account" 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. IDAHO MODEL ESCROW AGREEMENT Page 3 of 20 (revised 06/20/2016) American LegalNet, Inc. www.FormsWorkFlow.com L. "Qualified Escrow Fu