Fill - Free fillable ESCROW AGREEMENT supersedes prior escrow agreements, if any, (Columbia Gorge Community College) PDF form

OREGON MODEL ESCROW AGREEMENT

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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

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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.

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

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“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

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

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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.

L. “Qualified Escrow Fund Principal” or “QEF Principal” 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. “Qualified Escrow Fund Accumulated Principal” or “QEF Accumulated

Principal” means the aggregate amount of QEF Principal required to be held in each Beneficiary

State’s QEF Sub-Account.

N. “Qualified Escrow Fund Sub-Account” or “QEF Sub-Account” means the sub-

division of the QEF Account that holds only the QEF Principal deposited for the benefit of a

single Beneficiary State.

O. “Sales Year” means the calendar year during which the Company sold Cigarettes

in a Beneficiary State requiring the deposit of QEF Principal.

P. “United States Treasury Securities” 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

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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 in so doing, the Company shall also

provide the Escrow Agent and the Attorney General for the Beneficiary States with evidence of

that authorized appointment.

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 applicable NPM Statute, regardless of the source of the funds—

whether the funds are paid by the Company or by a third-party such as a Cigarette importer or an

entity sharing liability with the Company for making the required QEF Principal deposits.

C. For each Beneficiary State in which the Company’s Cigarettes were sold after

enactment of that Beneficiary State’s NPM Statute, 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: 0.0094241 per Unit Sold

2000: 0.0104712 per Unit Sold

2001 through 2002: 0.0136125 per Unit Sold

2003 through 2006: 0.0167539 per Unit Sold

2007 and thereafter: 0.0188482 per Unit Sold

D. The Company shall make deposits as frequently as required by the NPM Statute of

the applicable Beneficiary State. Typically, the NPM Statute requires deposits annually or

quarterly.

E. Segregated QEF Sub-Accounts:

1. The Company shall designate to the Escrow Agent the amount to be

placed in the QEF Sub-Account by Sales Year 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 QEF Sub-Accounts separate and apart

from all other funds of the Escrow Agent and the Company. The Escrow Agent shall

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allocate all funds as designated by the Company and received by the Escrow Agent

among the applicable Beneficiary States, each with its own separate, segregated QEF

Sub-Account and its own QEF Sub-Account number.

2. The Escrow Agent shall place and hold such funds in each QEF Sub-

Account for the benefit of the applicable Beneficiary State or any Releasing Party located

or residing in the applicable Beneficiary State. The Escrow Agent shall further show a

Beneficiary State’s QEF Sub-Account by Sales Year to identify the amount of QEF

Principal attributable to Units Sold in each Sales Year.

3. Within the QEF Account established under this Escrow Agreement, the

Escrow Agent shall maintain a separate QEF Sub-Account for each Beneficiary State

sufficient to enable tracking of (a) the QEF Principal allocated to each Beneficiary State,

(b) all dates, transaction descriptions, and amounts of deposits, withdrawals, interest or

other appreciation on each QEF Sub-Account, and (c) all investments of QEF Principal

held in each QEF Sub-Account. The Escrow Agent may also maintain within the QEF

Account a separate sub-account for the benefit of the Company to which interest or other

appreciation on the QEF Principal (the “Interest Account”) may be deposited.

4. Upon receipt of authorized written notice from the Company, the Escrow

Agent shall establish additional QEF Sub-Accounts for additional Beneficiary States,

which shall be subject to the terms and conditions of this Escrow Agreement.

F. The Company shall receive the interest or other appreciation on the QEF Principal

as earned, provided however, that the Escrow Agent shall not pay interest or other appreciation

on QEF Principal to the Company (i) if doing so will cause the aggregate Face Value or the

aggregate Cost Basis of the Permitted Investments in any QEF Sub-Account to drop below its

QEF Accumulated Principal amount or (ii) if the aggregate Face Value or the aggregate Cost

Basis of the Permitted Investments in any QEF Sub-Account is below its QEF Accumulated

Principal amount. Whenever any interest or other funds are payable under this Escrow

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Agreement to the Company, such payment shall be subject to the payment of the Escrow Agent’s

fees, costs and expenses as provided in Section 9.

G. The NPM Statute of each Beneficiary State governs the release of QEF Principal

from the applicable Beneficiary State’s QEF Sub-Account and permits its release only under

very limited circumstances, which include:

1. To pay a judgment or settlement on any Released Claim brought against

the Company by the applicable Beneficiary State or by any Releasing Party located or

residing in the applicable Beneficiary State.

i. Promptly after receiving a written request for release of funds under this

subsection and prior to any such release, the Escrow Agent shall provide

written notice to the Company, to the Releasing Party, and to the Attorney

General or Attorney General’s Designee of the applicable Beneficiary

State as set forth and defined in Section 13 herein. The notice shall

specify in reasonable detail the amount of the funds to be released, the

payee and the basis for the requested release (which shall be provided to

the Escrow Agent by the person requesting payment). The Company and

the Attorney General or Attorney General’s Designee of the applicable

Beneficiary State whose QEF Sub-Account would be reduced by the

requested release of funds shall provide a written response to the Escrow

Agent with copies to each other, within forty-five (45) calendar days from

the date of receipt of this notice.

ii. Should the Company or the applicable Beneficiary State timely object in

writing to a requested release of funds under this subsection, the Escrow

Agent shall not authorize the requested release of funds until such

objection has been finally resolved.

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iii. If no objection is received, the Escrow Agent shall pay the Released Claim

after the expiration of the forty-five (45) calendar day period pursuant to

payment instructions provided by the applicable Beneficiary State.

iv. The amount of funds shall be released from the QEF Sub-Account of the

applicable Beneficiary State under this subsection (a) in the order in which

they were placed into escrow and (b) only to the extent and at the time

necessary to make payments required under such judgment or settlement.

2. To the extent that the Company establishes, pursuant to sub-paragraph (ii)

below, that the amount required to be placed into escrow in a particular Sales Year for the

applicable Beneficiary State was, depending on the law of such Beneficiary State, greater

than either (A) that State’s allocable share of the total payments that the Company would

have been required to make in that year had it been a Participating Manufacturer under

the Master Settlement Agreement (as determined pursuant to section IX(i)(2) of the

Master Settlement Agreement, and before any adjustments or offsets described in Section

IX(i)(3) of that Agreement other than the Inflation Adjustment); or (B) the Master

Settlement Agreement payments, as determined pursuant to Section IX(i)(1) of that

Agreement including after final determination of all adjustments, that the Company

would have been required to make on account of such Units Sold in the Beneficiary State

had it been a Participating Manufacturer under the Master Settlement Agreement (in

either case the difference being referred to herein as the “Excess Amount”), such Excess

Amount shall be released and revert back to the Company.

i. To the extent established, the Escrow Agent shall pay the Excess Amount

to the Company upon the joint written instruction of the Company and the

Attorney General or the Attorney General’s Designee of the applicable

Beneficiary State as set forth in Section 13 or upon entry of a final

binding, non-appealable order of a court of competent jurisdiction

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handling such matter after any appeal or any right of appeal has been

exhausted.

ii. The Company shall submit in writing to the Attorney General for the

applicable Beneficiary State the Company’s calculation establishing the

Excess Amount. If the applicable Beneficiary State and the Company

cannot agree on the existence of an Excess Amount or the calculation of

the Excess Amount, the dispute shall be resolved in a court of competent

jurisdiction located in the applicable Beneficiary State, or if the laws of

any Beneficiary State so require, then under the applicable Administrative

Procedures Act of that Beneficiary State.

3. To the extent not released from escrow under sub-paragraphs 1 or 2 above,

funds shall be released from escrow and revert back to the Company twenty-five (25)

years after the date on which they were placed into escrow. At least forty-five (45) days

before the proposed date of release of such funds, the Escrow Agent shall notify the

applicable Beneficiary State in writing of the amount of QEF Principal proposed to be

released from its QEF Sub-Account and, if available, provide bank records showing the

date(s) on which such funds were deposited in the applicable QEF Sub-Account and the

age of such deposits sought to be released under this provision.

H. When the Company has made the first deposit into a QEF Sub-Account, the Escrow

Agent shall notify the Attorney General of the applicable Beneficiary State that the QEF Sub-

Account has been established and provide to the Beneficiary State a copy of this Escrow

Agreement, a copy of any instructions from the Company regarding Permitted Investments of

QEF Principal, and the amount of the deposit made for the Beneficiary State. Thereafter,

monthly, quarterly or as otherwise requested by the applicable Beneficiary State and, if no

request is made, annually by April 30 of each year, the Escrow Agent shall provide to each

applicable Beneficiary State:

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1. Any new instructions from the Company regarding Permitted

Investments of the QEF Principal, and

2. Bank statements for each Beneficiary State’s QEF Sub-Account showing:

i. the amount of deposits and withdrawals made by the Company, including

the identity of the payor(s) or payee(s), the date(s), transaction description,

and dollar amount(s) of any deposits or withdrawals,

ii. the amount of QEF Principal attributable to each Sales Year,

iii. the manner in which all QEF Principal in the QEF Sub-Account is

invested including the Face Value, Cost Basis, and market value of each

investment, a description of each investment, its date of purchase by the

Company, and its maturity date, if applicable,

iv. totals for the Face Value, Cost Basis, and market value of all cash and

investments of QEF Principal in each QEF Sub-Account, and

v. the QEF Accumulated Principal for each QEF Sub-Account, or a list of

annual Accumulated Principal for each QEF Sub-Account.

I. All amounts credited to a QEF Sub-Account, except for interest or other

appreciation on the funds, which shall be payable to the Company as provided herein, shall be

retained in such QEF Sub-Account until disbursed therefrom in accordance with the provisions

of this Escrow Agreement.

J. Notwithstanding anything to the contrary contained herein, the Escrow Agent shall

not be authorized to make distributions of QEF Principal in payment of Released Claims owed to

any Beneficiary State (or the Releasing Party located or residing in such Beneficiary State) other

than from the QEF Principal deposited in the QEF Sub-Account held for such Beneficiary State.

The Escrow Agent and the Company are prohibited from: (1) exercising set-off, recoupment, or

any other claim or right against any of the QEF Principal escrowed pursuant to this Escrow

Agreement, or (2) accessing or allowing the Company to access the QEF Sub-Account of one

Beneficiary State to remove or transfer QEF Principal to the QEF Sub-Account of another

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Beneficiary State without the written consent of the Company and the Attorneys General of all

Beneficiary States involved in the request for transfer of funds; provided however, that nothing

contained herein shall prohibit the release or transfer of any funds from the Company’s interest

account to another account upon written direction of the Company.

K. If the Company intends to sell, assign, convey, gift, or transfer in any manner any of

the Company’s rights to the funds in the QEF Account or the earning thereon (including without

limitation, the right to interest or other appreciation on QEF Principal, or the right to receive

QEF Principal as permitted under the NPM Statute) to any person or entity, the Company shall

send notification, including the name and complete address to whom such sale, assignment,

conveyance, gift, or transfer is being made, in writing to all Beneficiary States with QEF Sub-

Accounts no less than forty-five (45) days in advance of such transaction. The Company

acknowledges that a change in ownership and control over any of its rights or interests under this

Escrow Agreement cannot be completed or acknowledged by the Escrow Agent until after the

Escrow Agent shall have received all necessary U.S. Patriot Act compliance information and

completed a satisfactory regulatory compliance review. The Company further acknowledges that

a gift or transfer of its rights does not constitute an assignment of its responsibilities hereunder,

and that any sale or assignment of its rights and obligations hereunder shall first satisfy all legal

obligations of the Company under this Escrow Agreement and any applicable federal or state

laws or regulations.

L. To the extent it receives notice, the Escrow Agent shall notify all applicable

Beneficiary States: (i) if the Company asserts a change in the ownership or control of the QEF

Account or any of its QEF Sub-Accounts, (ii) if any action is taken against the funds in the QEF

Account or any of its QEF Sub-Accounts, including without limitation, forfeiture, garnishment,

liens or assignment. Notice shall be provided in writing and shall be provided as soon as

possible, but in no event later than seven (7) calendar days after the event has occurred.

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SECTION 4. Failure of Escrow Agent to Receive Instructions.

Except as to responses or objections to notice of a request for payment on any Released

Claim, which shall be governed by subsection 3.G.1 above, in the event that the Escrow Agent

fails to receive any written instructions contemplated by this Escrow Agreement, the Escrow

Agent shall refrain from taking any action required to be taken under any section of this Escrow

Agreement pursuant to written instructions until such written instructions are received by the

Escrow Agent. In so refraining, the Escrow Agent shall be fully protected from any liability

arising out of its inaction.

SECTION 5. Investment of QEF Principal by the Escrow Agent.

QEF Principal shall only be invested in Permitted Investments; provided however, that at

all times (i) the aggregate Face Value of such Permitted Investments in each QEF Sub-Account,

and (ii) the aggregate Cost Basis of such Permitted Investments in each QEF Sub-Account shall

both be equal to or greater than the QEF Accumulated Principal in each QEF Sub-Account.

Consistent with Section 3.F herein, the Escrow Agent shall not pay interest or other appreciation

on QEF Principal to the Company: (i) if doing so will cause the aggregate Face Value or the

aggregate Cost Basis of the Permitted Investments in any QEF Sub-Account to drop below its

QEF Accumulated Principal amount or (ii) if the aggregate Face Value or the aggregate Cost

Basis of the Permitted Investments in any QEF Sub-Account is below its QEF Accumulated

Principal amount. The Escrow Agent shall retain interest or other appreciation on QEF Principal

until the deficit in the aggregate Face Value and/or the aggregate Cost Basis has been cured and

shall not be permitted to set-off the Escrow Agent’s fees, costs and expenses from such interest

or other appreciation until the deficit is cured. To the greatest extent practicable, Permitted

Investments shall be administered in such a manner that QEF Principal will be available in cash

for use at the times when QEF Principal is expected to be disbursed by the Escrow Agent from

the QEF Account pursuant to the applicable NPM Statute. If the Company provides written

instructions to the Escrow Agent regarding the investment of QEF Principal, the Escrow Agent

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has no duty to follow them unless they comply with the Permitted Investments and the

maintenance of QEF Principal as required in Section 5 herein. Instructions that fail to do this are

null and void and have no effect and shall not be followed. If the Company does not provide

investment instructions that comply with the Permitted Investments and the maintenance of QEF

Principal as required in Section 5 herein, the Escrow Agent shall maintain the QEF Principal in

cash.

If the Company has pre-existing investments that are not Permitted Investments under

this Escrow Agreement, but were permitted under the prior escrow agreement, the Company may

continue to own these specific investments until they mature or are sold by the Company;

provided, however, that the aggregate Face Value in each QEF Sub-Account and the aggregate

Cost Basis in each QEF Sub-Account shall both be equal to or greater than the QEF

Accumulated Principal in each QEF Sub-Account, as required in Section 5 herein.

SECTION 6. Duties and Liabilities of Escrow Agent.

The Escrow Agent shall have no duty or obligation hereunder other than to take such

specific actions as are required of it from time to time by the provisions of this Escrow

Agreement, and it shall incur no liability hereunder or in connection herewith for anything

whatsoever other than any liability resulting from its own gross negligence or willful misconduct

or unlawful acts or omissions. The only duties and responsibilities of the Escrow Agent shall be

the duties and obligations specifically set forth in this Escrow Agreement. The Escrow Agent

has no duty to perform any calculations with respect to the proper amount to be deposited by the

Company in any given year or to ensure that the Company deposits the proper amount in or for

any given year. The Escrow Agent makes no representation as to the sufficiency of this Escrow

Agreement for the purposes in which it is intended. The Escrow Agent may further rely upon the

accuracy and completeness of documentation reasonably believed by it to be genuine and to have

been signed or presented by the proper parties.

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SECTION 7. Indemnification of Escrow Agent.

The Company shall indemnify, hold harmless and defend the Escrow Agent from and

against any and all losses, claims, liabilities, and reasonable expenses, including the reasonable

fees of its counsel, specifically including in-house counsel fees, which it may suffer or incur in

connection with the performance of its duties and obligations under this Escrow Agreement and

including any action taken under Section 19 hereof, except for those losses, claims, liabilities and

expenses resulting solely and directly from its own gross negligence, willful misconduct, or

unlawful act or omission. The Escrow Agent may seek the advice of counsel at any time, and

such reasonable attorney fees shall be in addition to the administrative fees charged by the

Escrow Agent for serving as Escrow Agent. The Escrow Agent may charge such costs against

the interest which accrues on the QEF Principal if not otherwise paid by the Company, but the

QEF Principal in any or all of the QEF Sub-Accounts shall not be charged, used as an offset, or

otherwise encumbered by the Escrow Agent or the Company. In no event shall the Escrow

Agent be liable to the Company for any indirect or consequential damages.

SECTION 8. Resignation or Removal of Escrow Agent.

The Escrow Agent may resign at any time by giving the Company and all of the

Attorneys General of the Beneficiary States covered by this Escrow Agreement ninety (90) days

prior written notice of such intention. The Company may remove the Escrow Agent, as such, by

giving the Escrow Agent and all of the Attorneys General of the Beneficiary States covered by

this Escrow Agreement ninety (90) days prior written notice of such removal. When an Escrow

Agent resigns or is removed, the Company shall execute a new Escrow Agreement with the new

Escrow Agent. Upon the effective date of its resignation or removal, the Escrow Agent shall

deliver the escrow funds held hereunder only to such successor escrow agent directed by the

written instructions of the Company, and shall provide written notice of the delivery of the

escrow funds in the QEF Account to all of the Attorneys General of the Beneficiary States

covered by this Escrow Agreement. Following receipt of the escrow funds, the new Escrow

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Agent shall immediately provide to all of the Attorneys General of the Beneficiary States

covered by this Escrow Agreement that information required by Section 3.H of the Escrow

Agreement. After the effective date of its resignation or removal, the Escrow Agent shall have

no duty with respect to the escrow funds except to hold such property in safekeeping and to

deliver same to its successor or as is directed in writing by the Company. If no successor Escrow

Agent has been appointed by the Company within ninety (90) days from the date such notice of

resignation or removal has been given, the Escrow Agent shall be entitled to tender into the

registry or custody of any court of competent jurisdiction located in the applicable Beneficiary

State all or part of the escrowed funds held for the benefit of the applicable Beneficiary State by

giving written notice of such action to the Company and all of the Attorneys General of the

Beneficiary States.

In addition, the court to which funds in the QEF Account have been tendered may order

such funds held by the State Treasurer of the underlying Beneficiary State if consented to by that

Beneficiary State.

SECTION 9. Escrow Agent Fees and Expenses.

The Company shall pay the Escrow Agent its reasonable fees and expenses, including all

reasonable expenses, charges, counsel fees, and other disbursements incurred by it or by its

attorneys, agents and employees in the performance of its duties and obligations under this

Escrow Agreement. Subject to the limitation found in Section 5 herein, fees, costs and expenses

may be paid from interest or other appreciation earned on funds held in the QEF Account, but the

QEF Principal in all QEF Sub-Accounts shall not be charged, used as an offset or otherwise

encumbered by the Escrow Agent or the Company.

SECTION 10. Intended Beneficiaries; Successors.

No persons or entities other than the Beneficiary States and the Releasing Parties located

or residing within them are intended beneficiaries of this Escrow Agreement, and only the

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Beneficiary States, the Releasing Parties, the Company and the Escrow Agent shall be entitled to

enforce the terms of this Escrow Agreement. The provisions of this Escrow Agreement shall be

binding upon and inure to the benefit of the undersigned parties hereto and their respective

successors.

SECTION 11. Governing Law.

This Escrow Agreement shall be construed in accordance with and governed by the laws

of the state where the Escrow Agent is incorporated, except that the applicable Beneficiary

State’s NPM Statute shall only be construed and applied according to, and governed by, the law

of the applicable Beneficiary State.

SECTION 12. Jurisdiction and Venue.

With the exception of any suit, action or proceeding involving a Beneficiary State or any

Releasing Party located or residing in a Beneficiary State, any suit, action or proceeding seeking

to interpret or enforce any provision of, or based on any right arising out of, this Escrow

Agreement shall be brought in a court of original jurisdiction for matters involving contract,

equity and damage claims in the state where the Escrow Agent is incorporated.

SECTION 13. Notices.

All notices required by this Escrow Agreement shall be in writing and shall be deemed to

have been received (a) immediately if sent by electronic mail transmission (with a confirming

copy sent the same business day by registered or certified mail), or by hand delivery (with signed

return receipt), or (b) the next business day if sent by nationally recognized overnight courier, in

any case to the respective addresses as follows:

If to Company:

If to the Escrow Agent:

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If to the Beneficiary State(s), to the Attorney General Offices of all Beneficiary States as

shown on Attachment A to the Escrow Agreement and incorporated herein by reference:

If the Company or the Escrow Agent changes its address for notices required by the

Escrow Agreement, that entity shall immediately notify the other undersigned party and the

Beneficiary States of that change. Written notice required by this Escrow Agreement shall be

deemed sufficient and adequate if sent to the last known address of the Company, Escrow Agent,

or the applicable Beneficiary State(s) in the manner provided under this section.

SECTION 14. Severability.

If any provision of this Escrow Agreement shall under any circumstances be deemed

invalid or inoperative, this Escrow Agreement shall be construed with the invalid or inoperative

provisions deleted and the rights and obligations of the parties shall be construed and enforced

accordingly.

SECTION 15. Amendments.

This Escrow Agreement may be amended only by written instrument executed by the

Company and the Escrow Agent; provided however, Attachment A may be amended to add

Beneficiary States and new QEF Sub-Accounts for such added Beneficiary States by written

notice to the Escrow Agent from the Company, and the Escrow Agent may amend the list of

Beneficiary States by attachment hereto. The waiver by any party of any breach of this Escrow

Agreement shall not be deemed to be or construed as a waiver of any other breach, whether

prior, subsequent or contemporaneous, of this Escrow Agreement, nor shall such waiver be

deemed to be or construed as a waiver by any other party. The Escrow Agent or the Company

shall provide a copy of each amendment to the Escrow Agreement within forty-five (45) days of

its execution to all Beneficiary States.

OREGON MODEL ESCROW AGREEMENT

Page 18 of 19 DM #7590018

SECTION 16. Counterparts.

This Escrow Agreement may be signed in any number of counterparts, each of which

shall be an original, with the same effect as if the signatures thereto were upon the same

instrument. Delivery by electronic mail of a signed counterpart shall be deemed delivery for

purposes of acknowledging acceptance hereof.

SECTION 17. Captions.

The captions herein are included for convenience of reference only and shall be ignored

in the construction and interpretation hereof.

SECTION 18. Conditions to Effectiveness.

This Escrow Agreement shall become effective when signed by the Company and

Escrow Agent.

SECTION 19. Resolution of Disputes.

In the event of any disagreement resulting in adverse claims or demands being made in

connection with the subject matter of this Escrow Agreement, the Escrow Agent may, at its

option, refuse to comply with any claims or demands on it, or refuse to take any other action

hereunder, so long as such disagreement continues. In any such event, the Escrow Agent shall

not be or become liable in any way or to any person or entity for its failure or refusal to act, and

the Escrow Agent shall be entitled to continue to so refrain from acting until (i) the rights of all

parties have been fully and finally adjudicated by a court of competent jurisdiction, or (ii) all

differences shall have been adjudged and all doubt resolved by agreement among all of the

interested persons, and the Escrow Agent shall have been notified thereof in writing signed by all

such persons. In addition to the foregoing remedies, the Escrow Agent is hereby authorized in

the event of any such disagreement, to petition any state court of competent jurisdiction located

in the capital city of the applicable Beneficiary State, or such other city as may be agreed to in

OREGON MODEL ESCROW AGREEMENT

Page 19 of 19 DM #7590018

writing by the applicable Beneficiary State, for instructions or to interplead the funds or assets so

held into such court. The undersigned parties agree to the jurisdiction of either of said courts

over their persons, waive personal service of process, and agree that service of process by

certified or registered mail, return receipt requested, to the address set forth in Section 13 shall

constitute adequate service. The Company agrees that upon final adjudication on such petition

or interpleader action, the Escrow Agent, its servants, agents, directors, employees or officers

will be relieved of further liability.

SECTION 20. Substitute Form W-9; Qualified Settlement Fund.

The Company shall provide the Escrow Agent with a correct taxpayer identification

number on the most recently published Form W-9 (or W-8 for a foreign entity) as authorized by

the U.S. Internal Revenue Service (“IRS”). The Escrow Agent shall comply with all applicable

tax filing, payment and reporting requirements, including, without limitation, those imposed

under 26 CFR 1.468B, and if requested to do so shall join in the making of the relation-back

election under such regulation.

COMPANY:

______________________________________________

By: ___________________________________________

Title: _________________________________________

Date: _________________________________________

ESCROW AGENT:

______________________________________________

By: ___________________________________________

Title: _________________________________________

Date: _________________________________________

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